Institutions of Accountability

Friday, July 30, 1999

In many countries in the developing and postcommunist worlds, corruption impedes economic growth, undermines investor confidence, and destabilizes government institutions. How then can a country move from a situation in which corruption is the norm to one in which corruption is morally intolerable—and rare?

WHY FOCUS ON INSTITUTIONS?

If experience provides any large, overarching lesson, it is that endemic corruption cannot be reversed and controlled by way of moral crusades. People respond to incentive structures, not moral appeals. Officeholders will not abstain from corruption unless it no longer appears in their interest to behave corruptly. To control corruption, the expected benefit of obeying the law must be higher than the expected benefit of behaving corruptly. In particular, the expected costs of engaging in corruption—which are very low in an endemically corrupt society—must be dramatically increased. The only way to increase the costs of corruption is to confront officeholders with a credible prospect that corrupt conduct will be discovered and punished.


Officeholders must be confronted with a credible prospect that if they engage in corruption they will lose their offices, forfeit their ill-gotten gains, and go to prison.


If corruption is to be controlled, therefore, corrupt officials must be exposed and punished frequently and severely. Controlling corruption means making it clear to public officials that if they engage in corrupt conduct they will lose their offices, forfeit illegally acquired wealth, and go to prison.

Implementing such sanctions requires an institutional framework. Effective and durable corruption control requires multiple, reinforcing, and overlapping institutions of accountability. And for situations of endemic corruption, these need to be of three kinds: horizontal accountability (by which some agencies of government scrutinize and check others), vertical accountability (by the electorate and civil society), and external accountability (in the form of vigorous international scrutiny and support).

INSTITUTIONS OF HORIZONTAL ACCOUNTABILITY

THE LAW. The law must prohibit all forms of bribery, nepotism, and misuse of public funds. And it must require that higher-level elected officials, political appointees, civil servants, military officers, and police officers declare their assets on taking office, every year thereafter, and whenever their assets change in some significant, defined way (as through a major sale or stock transaction).

ANTICORRUPTION BODIES. Bodies must be established that can scrutinize the conduct of public officials and monitor their asset declarations to look for signs of malfeasance.

Scrutiny must be comprehensive if it is to be effective and if the threat of detection is to be credible. This requires a lot of resources: accountants, investigators, and lawyers trained in the ways that wealth is moved, accumulated, and hidden, along with computer specialists and other support staff to back them up. Not only does a countercorruption commission need a lot of well-trained staff, it needs to pay them enough to deter temptation and establish a high esprit de corps. There is no way to control corruption without spending money to build institutions.

Yet scrutiny, by itself, is not enough. If credible evidence of wrongdoing emerges, there must be the institutional means to try the suspected offenders and impose punishments on the guilty. The most common and crippling flaw in systems of corruption control is an inability to enforce this function free from interference by high levels of government. One of the most important changes introduced by Thailand’s democratic constitution of 1997 was to grant the National Commission to Counter Corruption independent prosecutorial authority, including the power to overrule the attorney general.

THE JUDICIAL SYSTEM. Like the other agencies of horizontal accountability, the judiciary must be independent if it is to be effective in controlling corruption. An effective judicial system requires well-trained, capable judges, clerks, prosecutors, and defense attorneys and enough of them to keep case loads to a level that is consistent with vigorous justice and due process. They need the support of law libraries, computerized information systems, professional bar associations, law schools, and judicial training institutes. Again, all of this takes money.

If these horizontal institutions are the nerves and muscles of corruption control, why would politicians let them function effectively? What can ensure their operational autonomy? It should be underscored that this seemingly modest problem—who will appoint, if not guard, the guardians—is absolutely fundamental. There would be much value in an exchange of ideas among developing democracies. Thailand offers an example of fresh constitutional thinking on this issue. Thailand’s constitution provides for a nonpartisan upper chamber of parliament, the Senate, whose members are elected for six-year terms (forbidding immediate succession) and are expressly forbidden to have any party membership or political appointment (including in a state enterprise). It is the nonpartisan Senate that has responsibility for appointing members of independent agencies such as the Constitutional Court, the National Commission to Counter Corruption, the Election Commission, and the State Audit Commission.

INSTITUTIONS OF VERTICAL ACCOUNTABILITY

ELECTORAL ACCOUNTABILITY. One vital, though imperfect, means for controlling corruption is a competitive and transparent electoral process. Of course, one of the most common motives for political corruption is to amass the campaign war chests necessary for reelection. And the most extreme forms of corruption often extend into the electoral process, using any means to win elections (including buying not only votes but electoral officials) precisely because so much is at stake in controlling power. If vertical accountability is to be real, then an instrument of horizontal accountability is needed in the form of an independent, electoral commission capable of displeasing the ruling party. This institution also needs resources—human, technical, and financial—and a lot of training.

AN INDEPENDENT MASS MEDIA. Transparency, virtually by definition, requires free and open flows of information. Without a free and pluralistic press, transparency is impossible. For much of the developing and postcommunist world, it will take many years to develop the needed levels of press pluralism, capacity, and responsibility, even if a climate of freedom exists.

NONGOVERNMENTAL ORGANIZATIONS. A variety of civic associations—bar associations, women’s organizations, student groups, religious bodies, election monitoring and human rights groups—may form coalitions to lobby for constitutional changes to improve governance, while also working to monitor the conduct of public officials.

EXTERNAL ACCOUNTABILITY

Two significant gaps remain in the system outlined above. One involves generating the incentives to put these institutions into place. The other involves finding the resources to enable these institutions to function. For most developing countries where corruption has been widespread, if not endemic, these problems require extensive international participation.

Scrutiny. International donors and even corporate actors need to monitor the conduct of governments and public officials with whom they do business. And because bribery requires a giver as well as a taker, honest public officials should equally have an international body to which to report offers of bribes from international firms. An institution that is universally respected ought at least to gather this information, if not investigate it. Now that the Organization for Economic Cooperation and Development has adopted a convention banning bribery in international business transactions, the time is ripe.

Support. For states that appear serious about implementing a comprehensive institutional agenda to control corruption, there will be huge resource needs. They will have to staff, equip, train, and remunerate countercorruption commissioners and investigators, auditors, judges, public prosecutors, electoral commissioners, and ombudsmen. International donors will need to help.

I recognize that I am calling for a vastly expensive institutional apparatus—and that such an apparatus cannot be constructed overnight. Yet such institutional arrangements are essential to controlling corruption, and whereas the cost of the institutions may prove high, the cost of corruption is incalculable.