Combating Corruption Essay Philippines

Fighting Corruption in the Philippines: Models for Long-Term Success

May 16, 2012

By Steven Rood

The issue of corruption in the Philippines has once again hit international newspapers with reports that the chief justice of the Supreme Court, Renato Corona (currently undergoing an impeachment trial before the Philippine Senate), had dozens of dollar accounts with millions of dollars flowing through them. Of course, reports on corruption are continually in the Philippine media.

In the latest report of corruption in the Philippines, the chief justice of the Supreme Court, Renato Corona, was accused of holding bank accounts with millions of unreported of dollars. Photo by Karl Grobl.

As I have quoted the Political & Economic Risk Consultancy (PERC) before, “the media, even more than the courts, is the forum in which all sides try to wage their battles of defamation.”  I’ve repeatedly written about corruption, and The Asia Foundation has supported efforts to bring more clarity to the discussion – to go beyond politicized battles – most thoroughly represented in the book by Michael Johnston.

A year ago there was another impeachment case against the former ombudsman (anti-graft prosecutor) that led The Economist to ask cynically, “Progress or Payback?”  Now, one year on we are faced with the same conundrum:  Is the trial of the chief justice part of a political vendetta (since he was perceived to be protecting former President Arroyo), or just the next logical step in removing blockages to President Aquino’s successful 2010 campaign slogan, “If there’s no corruption there’s no poverty?”  The plain fact of the matter is that for those outside a small circle of decision-makers it is impossible to tell. An optimistic read could point to broader bureaucratic reforms (to which I have pointed in analyzing presidential power) while pessimists might cite PNoy’s alleged favoritism to classmates, friends, and shooting buddies.

The purpose of this blog is not to argue either the pessimistic or optimistic case. Rather, it is to try to better understand the political economy structure of corruption so as to be able to point to some directions forward.

A long-standing starting point for understanding the logic of corruption is Robert Klitgaard’s formulation: C = M + D – A (Corruption = Monopoly + Discretion – Accountability).

That is, when someone has the monopoly over decisions on how to do things (hire people, contract roads, purchase supplies) and a wide range of discretion in making decisions, there is likely to be more corruption – which can be reduced by introducing accountability mechanisms like transparency of information, independent audits, and the like. Using this heuristic, the Foundation has supported partners in the Philippines working on procurement (particularly with the Departments of Education and Health), cities whose mayors wish to reduce corruption so as to be more investor-friendly, and general civil society (including business associations) efforts to increase accountability.

A recent paper introduces a considerably more complex formal model that includes a bureaucratic decision-maker, different types of clients with differing willingness and ability to pay, and variations in rules about prices, testing, and allocation of the (abstract) good being provided. A warning to fellow non-economists:  slogging through the equations and derivations can be slow. The general logic is clear and some of the implications are interesting, such as the suggestion that “red tape” is more likely in governments serving the poor since poor people have less ability to pay than what a service is worth to them (and thus are more willing to endure red tape).

In checking the formal abstract model against what is known about corruption in the real world, the authors note success stories such as those related by Klitgaard. As is the experience with our programming in the Philippines with cities or government agencies, these anti-corruption successes “all seem to involve a person at the top of each institution who was eager to implement” reforms. But then the question arises: why aren’t such examples more frequent or sustained?  Why don’t leaders pursue these reforms more often?

Politics, of course, is the answer. Repeatedly, in the Philippines it has been demonstrated that reducing bureaucratic corruption in particular agencies, or in particular cities, is possible with the cooperation of the leaders at the top and in partnership with citizens, businesses, and NGOs. But such successes do not yet seem to touch political corruption – the use of corruption to gain, keep, and exercise power as witness the “hello garci” scandal regarding the 2004 election in the Philippines and the continued pervasiveness of money politics. This is where the analysis of Michael Johnston is valuable in laying out the logic of “Oligarchs and Clans,” which is the political economic situation in which the Philippines finds itself. This is where corruption is the most harmful to economic growth since decisions or policies of one administration tend to be arbitrarily overturned by a subsequent one (even within presidential administrations as one faction takes over, for instance, a department and uses it as a platform for the next electoral cycle rather than technocratic policy-making).

Johnston’s medium-to-long-term prescription is rooted in the need to change the relation between citizens and their elected officials. Under Oligarchs and Clans, voters tend to reward particular favors (from purchased votes to paying health expenses) rather than effective performance in managing government and delivering service. He suggests an indicator and benchmark strategy that picks services important to people (for example, education or health), develops indicators of good performance, publishes them against benchmarks, and helps citizens hold officials accountable. In a sense, this is adding direct governmental involvement to some of the ideas involved in “social accountability.”

A recent book, The Institutional Revolution by Douglas Allen, studies the effect of better measures of performance to explain changes in institutions (such as the military) at the beginning of the industrial era in Britain (roughly 1780 to 1850). For example, purchase of offices used to be the accepted method of staffing a bureaucracy, but after time, distances, tasks, and talent became more accurately measured then meritocracy could become a viable recruitment strategy. In Allen’s historical account, the “sovereign” using benchmarks and indicators was the Crown. In the current version, Johnston is proposing to “deepen democracy” in order to empower citizens to hold government accountable against objective measurements.

Put this way, reducing both the demand for and supply of corruption can take decades. With the modern pace of politics, the campaign for the May 2013 midterm elections (regarded as rehearsal for the 2016 presidential elections) is already heating up. Necessary as it might be, designing and implementing a long-term strategy is a daunting task.

This is the seventeenth posting in the series, “A Representative Professor,” a weekly series during a teaching sabbatical at Johns Hopkins University School of Advanced International Studies.

Steven Rood is The Asia Foundation’s country representative in the Philippines. He can be reached at srood@asiafound.org. The views and opinions expressed here are those of the individual author and not those of The Asia Foundation.

Related locations:Philippines, Washington DC
Related programs:Economic Opportunity, Elections, Strengthen Governance
Related topics:Corruption

Since emergence of women as a significant force in politics—how could they not be, being half of the world’s population?—two questions have dominated the field of research on women and politics. These are: Are women more or less likely to be corrupt? And how does corruption impact women as a group?

A World Bank study conducted in 150 countries in Europe, Africa and Asia reveals that “there is a link between higher representation of women in government and lower levels of corruption.” In another study, conducted by Transparency International and covering 60,000 households in more than 60 countries, it was found that “women are less likely than men to pay bribes.”

But even as it would seem that women are less likely than men to engage in corruption (whether as bribe-takers or -givers), a United Nations Development Fund for Women (Unifem) study finds that “women are more vulnerable to the impact of corruption than men particularly in public service.” For instance, “as (those holding) primary (responsibility) for child care, women have greater needs in health services (and) are subjected to sexual extortion in lieu of bribes.”

The role of women, particularly women parliamentarians, in the fight against corruption is the focus of a session in the upcoming 5th International Conference of the Global Organization of Parliamentarians Against Corruption (Gopac), which takes place here from Jan. 31 to Feb. 2.

Founded in 2002 as a result of a Global Conference in Ottawa, Canada, which brought together over 170 parliamentarians and 400 observers, the Gopac is “envisioned to be an international organization of parliamentarians dedicated to improving parliaments as institutions of oversight” and is represented by 35 countries in all regions of the world.

The Southeast Asian Parliamentarians Against Corruption, founded in 2005, is headed by Sen. Edgardo Angara.

* * *

But to return to our original questions: “Two important guiding issues on the linkages between gender and corruption,” say background materials on the Gopac meet, are: Does corruption impact men and women differently? Are women less corrupt than men in fighting corruption?

Although there is no definitive proof that women are less corrupt than men, what studies show is that “corruption can be particularly harsh on women.”

And one reason for this, says a study of the Democratic Governance Group, is that “corruption particularly harms poor sections of the population, (and since) women make up majority of the poor… (they) are likely to be affected more severely.”

Women often face social, cultural, political and institutional discrimination, it was pointed out. “Corruption can easily make it more difficult for women to access public goods and services.”

And so while our political institutions and systems are still dominated by men, cleaning up politics is as much a mission for women as it is for men. For with corruption, the lives of women and girls would be far worse, more difficult, and more unequal than it already is.

* * *

Corruption is likewise a dominant issue—more so than at any other election year—at this time when incumbents and candidates are undergoing scrutiny from voters. One reason is that the Aquino administration has made its anti-corruption drive a centerpiece program, part of a long-term effort to reformat government so that it better serves the populace, with systems geared toward public service with a minimum of politics and favor-giving.

We already see the P-Noy administration going after alleged corruption in local government, including enforcing the suspension of Cebu Gov. Gwen Garcia (who has since been replaced by an OIC governor), and launching a probe into the alleged involvement of Pangasinan Gov. Amado Espino Jr. in “jueteng” and drug smuggling.

Maybe the administration, through the Department of the Interior and Local Government, should also look into the situation in Lamitan, capital of the island-province of Basilan. The city’s vice mayor, Arleigh Eisma, has already filed a case with the Ombudsman against Mayor Roderick Furigay who, it is alleged, altered the city budget for 2012 without informing the city council about the changes.

Earlier, a case of technical malversation had been filed against Mayor Furigay, in connection with charges that he had “coerced” City Hall employees into signing papers authorizing the mayor to deduct amounts from their salaries.

Last November, Eisma, through his counsel, requested the Ombudsman to send a “special audit team” to Lamitan because the mayor has supposedly made the necessary records inaccessible to other city officials other than those identified with him. Once the special audit team is dispatched, Eisma promised, a “horde of witnesses” are willing to testify on the anomalies that the mayor is accused of.

* * *

Among the charges being lodged against Mayor Furigay is that he has been “juggling” the amounts appropriated and approved by the council with items designated for such uses as a “sports festival,” for which no formal audit has been conducted.

Another issue raised against the mayor is the misuse of funds accessed through the USAID-funded “Growth with Equity in Mindanao” (GEM) program.

A total of P2.388 million was released for the construction of a boat landing in the barangay of Calugusan. But, says a “concerned citizen,” the public could hardly benefit from the boat landing as “the project was constructed in a privately owned area,” in a lot owned by no less than the mayor.

As the writer of the “special report” points out: “The economic benefits that shall be catalyzed through the (project) would benefit most the Mayor-owner of the land.” Now here’s something for the voters of Lamitan to ponder and weigh as they make their choices.

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TAGS: At Large, corruption, opinion, Rina Jimenez-David, women

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