Sunday, November 18, 2007

Kite Runner Approach to Understanding Corruption

I spoke at NYU's Center for Global Affairs last week in the Woolworth Building on an anti-corruption panel. One big problem conceptually is that everyone has a different definition.

For example, at our recent workshop at the Carnegie Council on innovations for fighting corruption, AccountAbility's Steve Rochlin highlighted one of the difficulties surrounding discussions about corruption—defining the terms. The watchdog group Transparency International views corruption as a question of improper payments or bribery. The World Bank, the leading development agency, defines corruption as the privatization of public policy. This is a definition that makes many in the United States uncomfortable, Rochlin said, because it touches near the system of institutional lobbying that operates in American democracy. Representatives from Lockheed Martin, General Electric, and the World Bank also were on the Carnegie Council panel. You can read and listen to their comments on Policy Innovations here.

Essentially, corruption is a tax on bad governance or weak demand for good governance. As development progresses, demand for better governance tends to go up. But from the World Bank’s perspective, there is debate on the priority of economic development and anti-corruption measures, as the Bank’s mission is to promote development.

I offered what I called Kite Runner approach: All sins are a variation of theft, said the father in Khaled Hosseini's the book the Kite Runner. This is useful for a philosophical analysis as it makes it easier to grasp.

Ethicist Thomas Donaldson’s chapter “Moral Minimums for Multinationals” in Joel Rosenthal's Ethics and International Affairs reader argues that the power and weight companies have give them a responsibility to protect human rights. “Rights are the rock bottom of moral deliberation,” he writes. And the flip side of a right is a duty.

He looks at negative and positive rights and shows that the two are really not separate. Negative rights are that someone not do something—like the right to liberty. Positive rights require someone do something—like a right to sufficient food. The negative right of physical security requires positive actions such as maintenance of a police force, blurring the two. Donaldson gives us a powerful statement here:

“One’s freedom to speak freely is meaningless if one is weakened by hunger to the point of silence.”

For a company, the duty is not just to avoid depriving but also to help protect from deprivation. In the factory, a company’s duty to provide goggles is the classic example.

Looking at the ethics of lies, deception, or theft, it is clearly a bad result if these behaviors were universalized in the Kantian sense: "Act only on that maxim whereby you can at the same time will that it should be a universal law." In the context of protecting rights, it is reasonable to say that theft and deception are also inconsistent with protecting human rights, well being, and security.

Most of all, I simply don’t buy the cultural argument that corruption is acceptable. I do not know of one moral or philosophical tradition that condones lying or stealing. Human rights and moral codes against this behavior is in the most ancient of texts, including the Vedas, the Koran, Persia’s Cyrus cylinder, the Magna Carta, and the Confucian Analects.

Bryane Michael of Oxford University wrote an excellent piece in Policy Innovations called Suing Against Corruption. This is one type of stakeholder engagement.

Instead of pushing for criminalization (which creates a nation of criminals and reduces the incentive to report abuse), donors should support civil law remedies against corruption. These remedies, namely the ability to sue corrupt officials (and the government departments they represent), provide a powerful weapon against corruption. These provisions are, in the language of economics, "incentive compatible." At present, businesses have no incentive to denounce corruption because they gain little by blowing the whistle—and they lose a lot from the loss of favorable relations with government officials. But when businesses can win money from suing for damages from the solicitation of bribery, these businesses have an incentive to denounce corruption.

Branko Milanovic, a lead economist in the World Bank's research department, has written a provocative article on fighting corruption in the era of globalization here. A couple of excerpts:

Intensified trade and travel have enabled the rise of corrupt states that thrive on illegal businesses. Only by changing the rules of the same global trade that has allowed corrupt states to grow can one hope to remove this blot on globalization.

A different approach is necessary: legalize the currently illegal activities like prostitution and drug use and modify the often draconian US and European immigration laws that stimulate human trafficking. If prostitution and drugs indeed became like haircuts and candies, their production would obey the same rules: Countries that export beauty services and confectionary products are not notably more corrupt than others.

Technology to boost transparency also helps. Firms mention tracking and accounting software to reduce the distance between headquarters and far-flung operations and suppliers. And finally, blogging – bloggers in China, for example, are using the Internet to expose corrupt real estate schemes, bringing these violations to the mainstream media around the world. Carnegie, Brown, Oxford, and Demos have started a project called the Ethical Blogger Project and an accompanying blog to advance the positive contributions blogs can make.

I summarized the Carnegie Council panel discussion like this. Five important elements are necessary for fighting corruption:

Cultural questions surrounding the definition of corruption—ethical behavior is not contextual but rather universal;

Multistakeholder engagement to build accountability inside and outside the organization;

Metrics designed to measure the success of anticorruption initiatives, adding a level of transparency;

Creating awareness in far-flung operations of what is considered ethical;

Serving as exemplars of good behavior when operating in ethically challenging environments.

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