September 20, 2017, We in Pakistan are slowly beginning to realize that corruption and collusion don’t just take an economic and social toll, but that the institutionalization of these practices now stands as one of the greatest obstacles to economic and social development, peace, and national security. As a problem, corruption is by no means specific to our country. However, it hurts us especially, as it intensifies fiscal pressures in a severely fiscally constrained milieu and facilitates financial crimes, which interplay with existing societal and security challenges.
The prevalent corrupt practices by a minority do massive injustice to the Pakistani society. The country has several untapped strengths but governance and anti-corruption reforms are needed to unlock this potential.
When tackling corruption, we tend to go only for punitive action, which does not provide a sustainable solution. The key is to focus on building institutions and systems that limit opportunities for collusion, in the first place. Viewing the problem through the narrow lens of financial corruption is the second mistake, as ethical and intellectual corruption can be even more damaging.
As a starting point in relation to anti-corruption reform, it should be recognized that corrupt practices fall on a spectrum. At one end are ‘individual coping strategies’ or ‘subsistence corruption’. Evidence shows that corruption at this level is comparatively easier to deal with if appropriate systems of compensation and accountability are established in organizations.
At the other end of the spectrum is a kind of corruption much harder to fight. Referred to as “state capture”, this is a broader phenomenon in policy- and decision-making, where laws, regulations, and policies of a land are made to favour a select few, and where decision-makers use state resources and leverage to either gain personally or benefit their cronies. State capture is rooted in weak governance of state institutions and vested interests of the powerful elite. In such settings, systemic manipulation becomes the norm and procedures are circumvented to settle police cases, change land documents, evade tax, and get permissions and licenses. Corruption then becomes no longer the exception, but actually the ‘system’ itself. Organizations develop de facto governance systems, which enable extraction and distribution of illicit rents according to well-established shadow ‘rules’.
State capture forces decision-makers to recover ‘election investments’, when in office through patronage, graft, crony appointments, and even crony privatization. To achieve these ends, they manipulate the system, circumvent procedures, ‘partner’ with vested interests groups, and cultivate bureaucrats, who help in furthering their objectives.
As a result, state resources get channelled to the well-connected, black markets thrive, the rich-poor divide is augmented, institutions lose their leverage to target services to those in need, governance becomes exploitable, and reforms are held hostage. These malpractices help to further strengthen a country’s informal and black economies, which thrive on a range of financial crimes.
State capture is not amenable to reform within an isolated sector. Here, an anticorruption agenda needs to go beyond technocratic approaches to make deep-rooted structural changes in any country. In Pakistan, a long list of anticorruption agencies involved in public redress (the Ombudsman’s office), oversight (public accounts committees and public auditors) and investigative work (National Accountability Bureau and Federal Investigation Agency) need to be made effective. More broadly, integrity and transparency promoting measures as well as checks and balances need to be institutionalized within the state system dealing with policymaking, regulation, and oversight. Pakistan already has anti-corruption laws and institutions. What is required is the will to enforce and to make them effective. Loopholes in existing laws and institutions need to be plugged, rather than creating new institutions with similar gaps.
These changes necessitate deep-rooted systemic reform and a sustained effort aimed at strengthening institutions, which is a long-term agenda. Even with committed action, corruption cannot be rooted out in a big sweep. At this nascent stage of Pakistan’s fight against anti-corruption, four simple-to-adopt entry points are proposed:
First, the most straightforward thing to do is to honour integrity rather than allegiances within the state system. The “Secretary” is a very important institution of the state and wields enormous influence in fostering a ‘culture’ of integrity, not only within a ministry but also within the entire sector. A secretary with integrity, who promotes rule-based control on government functioning, can be the single most effective initial step in the fight against corruption.
Secondly, it should be made mandatory for ministries and government departments to use electronic filing and documentation system. This can enable visibility and transparency of decisions and proceedings in the state system. As such, it can act as an implicit mechanism of accountability, performance audit, and conflict-of-interest management. Such an instrument, if effectively deployed, could help force conformity of decisions to evidence-based rationale, provide better oversight of discretionary powers, and promote responsible behaviour in public office.
Thirdly, a whistle-blower policy should be adopted, which mandates government functionaries to report suspected integrity violations as a matter of professional obligation and personal responsibility. And lastly, the Code of Conduct for Ministers should be updated to ensure active regulation and management of conflict of interest concerns, given that often policymakers have business relationships in sectors where they are charged with policymaking responsibilities.
These four measures are the barest minimum for a sustained approach. They could act both as a starting point, as well as fuel for a long journey on the road to anti-corruption reform.