Public corruption is much more than bribery

By Rich Purtell 

The landmark US Supreme Court case Citizens United v. FEC, decided in 2010, protected free speech but unfortunately as a consequence the ruling essentially established that political corruption and bribery are synonyms.  For hundreds of years prior to that, the United States had a much broader view of corruption, more along the lines of: Any deliberate or negligent act of government which results in public loss and private gain.  More recent escalated enforcement of the Foreign Corrupt Practices Act, FCPA (first adopted in 1977) also tends to feed into the notion that bribery = corruption and corruption = bribery.  Indeed in the developing world, bribery is the much more common form of corruption.  In the developed world, more deviant tactics can be used in order for special private interests to exploit and benefit from the public, without resorting to bribery.

German Economist Robert Klitgaard published an equation in 1988 C = M + D – A and I think this really more accurately describes the corruption process in the modern, developed world.  M is monopoly power, and there are disagreements about the primary causes of monopolization power.  Central planning advocates feel that monopolizations arise naturally in free market environments.  Decentralized advocates would argue that monopoly power grows more as a result of government intervention, in forms such as: Regulations that stifle small to mid-size businesses, corporate subsidies to large businesses, and protectionist practices such as licensing.  Exploring of recent history would demonstrate that the latter causes of monopolization are much more prevalent.

D is discretion and combined with A- accountability, the two together could also be thought of as checks and balances.  Since virtually all corruption comes in the interplay of the public and private sector, D has much to do with rules of procurement of goods and services from the private sector to fulfill public needs.  These goods and services could be things such as:  construction, military hardware, medical services, etc.  The default practice for procurement is a free market based, “lowest responsible bidder” model.  Any deviations from that model, such as “standardization”, “group buying”, “best value”, or other such labels such as “strategic sourcing” need to be applied with a great deal of scrutiny.  Well trained professionals (who are not in conflict-of-interest positions) need to exercise such discretions.  In keeping with the theme of separation of powers and checks and balances, rightfully such discretions should be executed, in detail, by legislative branches of government.  We’ve deviated far from that practice here in the USA.  Discretionary rules and regulations are far too often developed by executive branch agencies. Risk assessment scenarios may not be properly vetted out and the agencies may be applying discretions more for their own self- interest rather than in the interest of the public.

Lastly as with all processes there should be real time, real world measurement and feedback for an outcome oriented approach.  This is where accountability comes in.  Beyond auditing, good accountability practices should examine various “what if” scenarios to see that there has truly been a good faith effort to reach the best end result.  Accountability also means to look for unintended consequences of discretionary practices and how those consequences may come to damage the public in the short and long term.

Putting all of this together, one should inevitably come to a “less is more” conclusion about the nature of government practices to limit corruption.  Complex discretionary practices will require ever more costly accountability processes to keep corruption in check.  Then when there are not adequate funds and resources to provide such an intensely demanded accountability, corruption skyrockets.  There is a general feeling that some government processes in the USA have become so complex that NO quantity of accountability could ever be applied to keep corruption at bay.

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