making local government more ethical

Spring Reading: Corrupt Cities

Corrupt Cities: A Practical Guide to Cure and Prevention, a book by Robert Klitgaard, Ronald Maclean-Abaroa, and H. Lindsey Parris (Institute for Contemporary Studies, 2000), is an excellent study and analysis of municipal anti-corruption efforts primarily outside of the United States. Much of what the authors recommend is of use in the U.S., as well.

The authors define corruption simply and broadly:  "the misuse of office for personal gain." This includes acts of omission and commission, legal and illegal activities, conduct internal to the organization (e.g., embezzlement) or external (e.g., pay to play).
They divide this into two kinds of corruption: primary corruption, breaking a rule, like a foul in sports; and secondary corruption, which is compared to "the breakdown of the rules defining and enforcing fouls." They note that too much anti-corruption effort is focused on primary corruption, that is, individual conduct, rather than systematic (what I call "institutional") corruption, which is far more damaging.

Workshops on Corruption
The authors believe in preventive measures more than punitive or moralistic campaigns. The most exciting of the preventive measures they describe is the workshop on corruption. A city begins with a workshop that includes high-level officials, major business figures, leaders of civic organizations, and an outside facilitator. The ideal number of participants in each workshop is 20 to 25. The best format is a retreat of a day or two, if possible, or two hours a day for five days in a row.

The workshop begins with a case study from another city where there has been a successful anti-corruption campaign. "Participants see that the problems can be analyzed coolly and dealt with effectively … The mere fact that both successful analysis and successful action occurred stills their skepticism and stimulates their creativity. … [This helps] participants realize that corruption is not (just or primarily) a problem of evil people but of corrupt systems. ... To members of corrupt organizations, this insight often proves therapeutic."

Once emotions are taken out of the participants' view of corruption, they are ready to begin to discuss their own situation. The same approach is taken. "After some time, people turn out to be remarkably forthcoming about the corruption that exists, how it works, and how it might be prevented — even when their analyses belie an intimate knowledge that can only be incriminating. In systematically corrupt settings, many politicians and officials hold complicated, mixed feelings about corruption. They may sincerely loath it and wish to eradicate it, while at the same time participating in it or allowing it to occur."

What the authors find is that, if officials and employees are permitted to discuss corruption in their organization analytically and without fear of reprisal, they not only describe it better than anyone else ever could, but they also are able to come up with a plan for change.

Hong Kong's Anti-Corruption Campaign
Of the anti-corruption efforts the authors focus on, Hong Kong's is the most valuable. First, let me quote a telling Hong Kong saying about institutional corruption: "Either get on the bus or run alongside the bus, but never stand in front of the bus."

Hong Kong set up the Independent Commission against Corruption, a kind of super agency to oversee anti-corruption efforts. An internal anti-corruption office had led investigations, including the examination of government employees' bank accounts, and dismissals were made on the basis of unexplained enrichment. This did not work. The next step was to shift the burden of proof to those accused, but this didn't work either. Finally the internal anti-corruption office was abolished in favor of the independent commission, and the emphasis shifted to prevention and citizen participation, although the commission also sought to "fry some big fish," signaling that the rules of the game had changed. The new commission also looked closely at practices and procedures within government and public utilities to eliminate and simplify unenforceable laws, cumbersome procedures, and ineffectual practices conducive to corruption.

The commission was guided and monitored by five citizen advisory committees, which included government critics, and dealt with policy as well as complaints. It had local offices to gather information, did grassroots education about corruption; and did  follow-up relating to its recommendations.

Dealing with Institutional Corruption
The authors show how institutional corruption can be dealt with at the same time as individual misconduct. "At the same time that the alleged transgression is investigated, a broader study should be undertaken of the class of the actions of which the transgression is an instance. For example, if alleged bribery takes place in procurement, the study interviews an array of private firms on a confidential basis and develops a description of how the system of procurement currently works, and whether corruption exists. The study also makes recommendations for change."

Anti-corruption efforts require both coordination and leadership. And, the authors say, that leadership has to have political authority, be in the public eye, and not be a  boss. The prototypes the authors describe are Hong Kong's Independent Commission against Corruption and New York City's Inspector General during the school construction scandal of the late 1980s. The IG's office employed both deterrence (including financial recovery) and opportunity blocking (debarment). It employed advisories where there were suspected improprieties, certifications by principals of firms, and an elaborate bidder pre-qualification process that provided the IG's office with information that would otherwise have taken an enormous amount of investigation to uncover.

Valuable Observations
The authors make some valuable observations about local government corruption and campaigns against it:

In a poor ethics environment, anyone operating on his own is in trouble.

"The costs of corruption are usually spread over a large number of people, usually taxpayers. Because the benefits of preventing corruption are also widespread, the logic of collective action predicts that an effective interest group will be hard to mobilize and sustain."

"New laws and rules are most welcome when they change incentives, reduce monopoly power, clarify or reduce discretion, and enhance information and accountability."

A corrupt police force can spread corruption to other agencies.

"Corruption prefers a stable, secretive environment. By creating enough discontinuity, uncertainty, and distrust, we hope to reduce corruption."

"Corruption tends to be reduced by the separation of powers; checks and balances; transparency; a good system of justice; and clearly defined roles, responsibilities, rules, and limits. … Corruption loves multiple and complex regulations with ample and unshakable official discretion."

"Done correctly, a strategy for preventing corruption can be the lever for a city's financial recovery, the reform of service delivery, and involvement of citizens. Beyond the reduction in malfeasance lies the prospect of reinventing local government."

It is important that each agency confronts the others' perception of its work.

There's a Mexican saying about government officials, "They waste a million to steal a thousand." In other words, focus on externalities and incentives generated by corrupt activities, rather than the amounts of money that change hands, which are only a small part of the problem.

An anti-corruption campaign needs to grab the low-hanging fruit, to show that it is effective; fry a few big fish, to show that it is serious; and then turn to prevention and reform of institutions, which is what is really the goal.

Municipal leaders should start not by attacking employees and lower-level officials, but by taking positive steps: rewarding efficiency and honesty, getting them involved in designing changes.

It is important to remember that corruption in government is not solely governmental, that it cannot exist without private corruption.

Robert Wechsler
Director of Research, City Ethics

DonMc says:

I read this book in the early 2000's and remember being very impressed with its practicality. Of course when you are dealing with cities as corrupt as they were, you had to stay focused and keep an eye on the effectiveness of programs, otherwise you could easily get overwhelmed.

Come to think of it, that's what is needed today more than ever in ALL ethics programs...

All too often, the only provisions that get voted on are window dressing designed to make it seem like there is a program, in response to something embarrassing and corrupt.

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