Feature Article of Tuesday, 1 January 2013
Columnist: Sakyi, Kwesi Atta
-Towards a Model – Part 4 (Final)
By Kwesi Atta Sakyi
26th December 2012
As the year 2012 draws to a close, it is germane to reflect once more on our lives in order to plan ahead for the year 2013. This article is the final in the series of four articles on corruption. In this last one, as in the second, I wish to propose a model which I have dubbed the OPENS model. O stands for Organizational, P for Political, E for Economic, N for Natural resources and S for Socio-cultural factors. We can therefore safely state that corruption emanates from these five broad sources in all the countries of the world.
Organizational corruption is associated with bureaucracy, red tape and officialdom. It is a systems or structural corruption which manifests itself in the way an organization is structured, or the way it operates. This organizational corruption may also be linked to the culture of the organization. The internal or immediate micro environment of the organization may determine whether corruption exists or not. This may be a stable or competitive and turbulent environment. In most rigid and tall organizational structures in stable and less changing environments, with many levels of hierarchy, decision making is slow as many conservative procedures have to be followed, such as excessive form filling and having to produce many documents. Of importance, also are internal controls and effective risk management measures which are in place.
Organizations operating in stable and uncompetitive environments in LDCs tend to be corrupt, such as the civil service, the police, the judiciary, tax and revenue offices, local government, licensing offices, public educational institutions, and public health institutions in Ghana. The degree of freedom or decision making latitude or centralization/decentralization will also determine whether or not corruption exists. If the organization is highly centralized, it gives room for corruption. If it is also highly decentralized, there is crisis of control and lack of standardization, giving rise to petty and localized corruption. Therefore, the ideal structure is a middle way of some centralization of critical functions, and some decentralization of less critical functions. Dysfunction and atrophy, in organizations which do not undergo change, can cause corruption. This is why we need more of mixed economies and Public Private Partnerships (PPP).
Organizations which substitute technology for labour, and which tend to ignore people skills and 360º communication, may also experience heavy doses of corruption.
Political corruption becomes prevalent where too much power is concentrated in the hands of the ruling elite, where election results are manipulated and it is a foregone conclusion, where multiparty democracy is endangered, because minority political parties are crowded out of political space, and the NGOs are crippled, muzzled and given no political space. Fortunately for Ghana, our democracy is burgeoning, as there is political space for opposition political parties, and we have a lot of checks and balances in place, among the arms of government, namely the executive, legislature and judiciary.
It seems our judiciary is not doing very well in Ghana because of organizational capture and paralysis. This is because the judicial procedures are long, convoluted and obscure. Oversight in the judiciary is weak as members of the bar and bench, manipulate the system to gain personal pecuniary advantages by invoking legal technicalities. This is where we need a radical shake-up of the judiciary by the Legislature and Executive, despite their independence. We need to strengthen the gatekeeping functions. Judges and magistrates delay cases unnecessarily in order to continue exploiting clients financially. They forget the axiom of justice delayed is justice denied.
Even though judicial independence is cherished, I think the Executive and Legislature in Ghana have to move in to stop the rot in the judiciary by using their checks and balances. Political corruption can also be stopped in its tracks by considering funding the political parties. Politicians have to declare their assets prior to taking office, and after leaving office. We need more entrenched separation of powers.
Economic genesis of corruption results from lack of state intervention or state failure, whereby the state is supposed to support the unemployed and the vulnerable, such as widows, the disabled, dependants, students and old people. The state should create a lot of job openings for graduates, and consider providing transfer payments to students, the old and invalids. Government has to consider using revenues from taxes and exports to subsidize education, health, pensions and agriculture to help close the wide income gap and help redistribute income to ensure equity. Economic corruption arises whereby many people are unemployed, and the few employed people have to cater for large numbers of dependants at home. Furthermore, salaries and wages in Ghana are too low, such that workers become corrupt so as to top up their meager incomes. It is said that demand for higher wages should be backed by increases in productivity and profitability.
Employers pay according to their ability to pay and their cost structure, as well as industry standards and government guidelines. However, employers should consider paying a living wage, and not salvation or mere subsistence wages. If they do so, they create room for workers to engage in corruption. The Ghana government has tried in the past one year to streamline salaries through the Single Spine Salary Structure (SSSS), but many critics and onlookers have given a lowdown to the exercise as an exercise in futility, and perhaps a political gimmick. It is important that our leaders in Ghana look again into salary or wage structures in Ghana to bring them in line with international market standards. This calls for genuine political will on the part of our political leaders.
That will also stop the brain drain and encourage many skilled Ghanaians in the Diaspora to troop back home. In the past year, Ghana has been rocked by mighty and gargantuan political scandals, such as the judgment debts, STXgate, Woyomegate, Isofotongate, among others. These gargantuan judgment debts have been linked to political machinations and they do not augur well for the financial stability of the country. Political corruption also manifests in the tender and procurement processes involving government departments.
Added to this is the single sourcing in the award of contracts, such as the South Korea STX multi-billion contract for 1.3 million housing units, which fortunately for us, floundered because the Ghana Parliament did not approve it because of its questionable origins. Government needs to monitor closely the levels of inflation so that if the cost of living is low, there will be less tendency for economic-related corruption. Perhaps, the tax base needs broadening to capture those in the informal sector so that workers can pay less tax. Government needs to automate collection of revenues at the toll gates, entry points, among others. There should be regular head count of government workers to prevent ghost workers’ names on payrolls.
The staff at the Auditor and Accountant General’s office needs to be rotated often, or transferred or appraised often, in order to throw out the bad eggs who engage in corrupt practices. Currently, some senior teachers who were promoted more than four years ago have not had their salaries adjusted, for them to be put on the correct salary scales and to collect their salary arrears. The officers at the Accountant General’s office deliberately hold on to such promotions so that they can be bribed to start effecting payments to the teachers concerned. Is this transparency?
Our N in the OPENS model stands for Natural resources. One cardinal natural resource whose discovery and eventual exploitation leads to massive corruption is oil. Others might settle for diamonds, as we have had the case of blood diamonds in countries such as Liberia, Sierra Leone and Angola. In Nigeria and Angola, they had brutal civil wars. So also do we continue to have skirmishes in the Congo DR because of the country being awashed with rare earth minerals such as uranium, tantalite, diamonds, gold, copper, among others. The type of corruption which is associated with the possession of some natural resources is a serious one as these strategic reserves attract the attention of the MNCs, superpowers and foreign business predators. Nigerian oil production has been a curse rather than a blessing because of their leaders having a high propensity and proclivity for collusion and shady business deals, which rob their citizens of the enjoyment of proceeds from the sale of oil. They are simply kleptomaniacs.
The few ruling elite collude with foreign business tycoons to siphon oil wealth into the accounts of some selfish individuals, some of whom own private executive jets and mansions in foreign capitals. Natural resource corruption is geopolitical and has deep international linkages. This type of corruption can be fought only in cooperation with international agencies such as Interpol, WTO, Transparency International, EU, UN, among others. It also calls for patriotic leaders and citizenry.
S in my OPENS model stands for Socio-cultural corruption. This is a vast and ramified area, which I cannot fully exhaust in an article like this. In a country with a large population and one which is growing rapidly, corruption is a conditio sine qua non. In such a country, corruption is the order of the day and a way of life. Consider countries like India, China, Nigeria, Pakistan, among others. Social corruption also arises where men are polygamous and they have large families, including the extended family. In such collectivist societies, there is a lot of tribalism, nepotism, favouritism, among other vices.
Giving of gifts is a norm. Women in some cases are disempowered so they cannot contribute to the family income. This being the case, males are the ones who have to struggle to support large families. Men, therefore, become heavily prone to corrupt practices at work, so that they can earn extra money to meet their heavy family responsibilities. Besides, our social practices such as lavish traditional weddings, funerals and festivals mean that people have to use fair or foul means to raise enough money for such social eventualities. This is the more reason we need to emancipate and empower our women to make them economically viable citizens, by giving them access to jobs and business opportunities.
The saving ethic is not well pronounced in Ghana because of low incomes. Educationally, few people even get up to high school or college or up to first degree level. Few people in Ghana and Africa are professionals. This being the case, few people are aware of high professional ethics or the need for transparency and accountability in business. Many people cannot read or write or speak English. Such high levels of illiteracy mean that only a few people are exposed to the ill effects of corruption. Someone commented on my first article in this series that corruption is in the DNA of the African. I think I disagree with him because corruption knows no racial barrier. Even in the advanced countries, there are worse cases of corruption, especially in the corporate world. I hereby propose that we can model corruption by using an exponential function, axb, where ‘a’ is a constant representing the national culture.
Thus, the corruption function is
Corruption = log a + b (log ?xn)
I = 1
Xi - made up of corruption variables
X1 - % of population with bachelor’s degree
X2 - per capita income
X3 - % of the informal sector
X4 - % of unemployment
X5 - gender parity or equality
X6 - level of media freedom
X7 - Human Development Index
X8 - % of labour force who are professional
X9 - rate of population growth
X10 - degree of bureaucracy in government institutions
X11 - measure of pluralism or political space
X12 - perception of human rights in the country
X13 - % of forex earnings generated by natural resources
X14 - residual or unexplained factors not captured in the variables above
The ‘b’ coefficient could be assigned weights to the X variables, and they should add up to 1 or 100%. A weight assigned should reflect the importance of the variable. This could be subjective, but it could be done by aggregating views of experts or the opinion poll of the public. The summative result should be disaggregated and each variable examined for its correlation coefficient significance for corruption.
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