Saturday 21 Jul 2018 | 19:49 | SYDNEY
Saturday 21 Jul 2018 | 19:49 | SYDNEY

Three faces of anti-corruption

30 September 2008 08:49

Guest blogger: Peter McCawley is a Visiting Fellow at the Indonesia Project, ANU, and former Dean of the ADB Institute, Tokyo.

Graeme Dobell's summary of the annual ANU Indonesia Update reported on discussions about corruption at the conference.  Ross McLeod and Stephen Grenville have responded with additional comments about corruption in Indonesia.

It is worth noting that in the corridors at the Update there were mixed views about the flamboyant stories of corruption which Gerry van Klinken presented. One view, which Graeme Dobell referred to, is that Indonesia's friends should speak with brutal honesty. Gerry van Klinken certainly did that. 

But brutal honesty is not always appreciated, even from friends. Another view, from one of our ANU Indonesian students, who was ashamed by the stories she heard put to me, is that the stories poked fun at Indonesia. More importantly, our Indonesian student said, anecdotes about politicians caught in hotels in the company of prostitutes provide no guidance for attempts to reform.

One can view corruption in both rich and poor countries in at least three different ways. Some see corruption as mainly a moral issue and support policies of naming and shaming leaders suspected of corruption.  Others think that legal solutions are more likely to be effective and hope that the prosecution of high-level corruptors will yield worthwhile results. 

But a third approach is to see corruption as reflecting market forces. In many poor countries in Asia, the economic incentives to bend rules are great while the penalties are often light. Vigorous markets develop for favours from politicians and officials. A key part of the campaign against corruption, therefore, must involve programs deliberately designed to destroy these markets. But markets, especially illegal markets, are often very resilient. Unless the powerful economic incentives that encourage markets in favours can be eliminated, moral and legal campaigns are likely to have but limited success.