How does corruption flourish?

By Henry J. Schumacher –
January 15, 2019

Corruption flourishes when someone has quasi monopoly power over a product or service and has discretion to decide how much to receive, and where accountability and transparency are weak. So, to fight corruption we—and that includes all of us—must reduce market dominance, reduce discretion and increase accountability in many ways.

Reducing dominating market positions means enabling competition; in this context we are so happy that the Philippines has competition legislation in place and has the Philippine Competition Commission to implement the law. However, it would be great if the PCC would be allowed to do its job without court interferences, in the interest of removing monopolies/duopolies/dominant market positions so that corruption can be properly addressed, reduced, and finally eliminated.

Limiting discretion means clarifying the rules of the game and making them available to everyone. This includes putting government contracts and procurement plans online, create online manuals on what is required to obtain a permit, build a house, start a business and so forth. Finally approving the Freedom of Information (FOI) bills in both houses of Congress would be another big step in the right direction. We have been talking about the FOI for too long already. Another example for reducing discretion: Simplify the tax code, make it simpler to understand and reduce thereby discretion of BIR employees.

Enhancing accountability means many things, and creative leaders in the government and the private sector use a remarkable variety of methods. One way to improve accountability is to improve the measurement of performance. Another method is listening and learning from businesses and from citizens. This includes mechanisms for public complaints, but it goes beyond the reporting of individual instances of abuse of corrupt systems. Accountability is also increased by inviting outsiders to audit, monitor and evaluate. This is exactly the reason we supported the creation of Integrity Circles as one of the main avenues to address accountability, transparency and integrity. We did this in the Integrity for Jobs (I4J) project, a project cofunded by the European Commission and the Konrad Adenauer Foundation. We started with nine local government units and eventually had 60 LGUs that were part of this endeavor. Allow me to add that Integrity Circles are composed of people working in the LGU, being involved in business, and representing civil society (in many cases the Church). But let’s not forget the press; media can be and should be an important source of accountability. The project to support integrity circles has been extended and another successful project focusing on open procurement is being implemented to enhance accountability.

What about ethics and morality? Successful leaders in the government and the private sector must set a good example. As mentioned above, the key to fight corruption are better systems that provide better incentives for imperfect human beings to perform in the public interest—and to avoid corruption.

Let me conclude by highlighting the work we are doing in the Integrity Initiative Inc. to create the Integrity Nation NOW. As mentioned in previous columns, Integrity starts with I. We need you to become part of our movement; contact me under


2 replies

  1. I would add something more regarding the low-level corruption: You need to pay the staff a decent ‘livable’ salary.

  2. Those who fears Allah would not do the bad things except those who does not fear Allah,

    Those who always remember Allah while he is sitting, walking and working will not do the bad things.

    Try it you will see the good result!
    All love ❤️

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