Corruption vs integrity: The battle continues

Peter Berlin, OECD Observer writer-at-large

©Integrity Action, youth community monitoring in the Palestinian Authority

Recently, a group of 15-year-old students from a girls’ secondary school in the Palestinian Authority audited the construction of a swimming pool in their town. Part of a competition organised by Integrity Action, a civil society organisation, the girls chose to do this because the local government had decided to build a male-only pool and they felt it was not meant for the whole community.

The girls visited the site and requested and examined all the papers related to the project, including the bills and the blueprints. They found that the lifeguard was unqualified and that the tiles were not of the quality specified in the contract. So they made a fuss.

The builder replaced the tiles. The town hired a real lifeguard and said it would think about adding screens for privacy and opening the pool for women on certain days.

“Working on this project was one of the most successful things we did in our lives. We were finally able to raise our voices and make them heard by decision-makers. We forced them to fix the problems!” said the students.

Fredrik Galtung, the founder and president of Integrity Action, told this story at “The Kids are Alright: Educating for Public Integrity”, a session at the OECD’s Global Anti-Corruption and Integrity Forum at the end of March.

Other sessions ranged from meetings of auditors on infrastructure, norms and standards to topics like corruption in sports, business ethics, human slavery and the law of the sea.

“Planet Integrity is not a distant dream, it’s an urgent necessity,” OECD Secretary-General Angel Gurría said in his opening remarks.

The cross-border reach of corruption and the problems it poses to national agencies was echoed repeatedly at the forum. “Slavery and human trafficking have no borders,” said Monique Villa, CEO of the Thomson Reuters Foundation and founder of TrustLaw and Trust Women.

In the session on sport, Ronan O’Laoire, Crime Prevention and Criminal Justice Officer, talked about the “perfect circle” of betting, money laundering and match fixing, with criminals in one country using the globalised betting markets to profit from sports events in other continents.

The cross-border problem is exacerbated by the speed with which the corrupt hop to new honeypots and how fast they adapt to technological and social changes, such as the dark web, e-trade and cryptocurrencies.

“Corruption is a moving target,” Mr Gurría said. “Corruption is often a faceless and borderless crime. Illicit financial flows, cybercrimes and human trafficking are the ‘dark’ side of globalisation. Tackling this must be a global priority.”

John Penrose, a British MP who has been appointed his country’s “anti-corruption champion” was worried: “We are slower than the corrupters at the moment. They are way ahead of us.”

Marcos Bonturi, who heads the OECD’s Directorate for Public Governance, said that people are our best weapon against corruption. “We have been too focused on legal implementation but we’re no longer ignoring the human dimension–how individuals see themselves and relate to society and how education can create a culture of integrity.”

He added, “But we cannot do that overnight. It takes a generation or two. We need to start now.”

That high-school students investigated the accounts of a community swimming pool and found information that led to changes is the kind of grass-roots activism that will beat corruption. But it’s an active vigilance that has to be taught, and taught while people are still young. Mr Galtung summed it up neatly: “Corruption is a skill set. Integrity is a skill set.”

NOTE: The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law.


©OECD Insights May 2018

The Economy of Influence: Integrity for Inclusive Growth

Rolf Alter, Director of the OECD Public Governance and Territorial Development Directorate @raltergov. Today is UN Anti-Corruption Day

Integrity can significantly boost inclusive growth and sustainable development, by assuring fair and efficient resource allocation, stimulating competition and investment, and fostering innovation. Curbing bribery of public officials and promoting responsible business conduct is important to create a level playing field for companies and to create equitable market conditions and an investment climate that provides fertile ground for business development, competition and innovation. For the public interest to prevail in policy making, accountability and integrity in revenue collection, public finance management and service delivery are crucial and encourage equality and prosperity of societies.

International Anti-corruption Day provides an occasion to zoom in on one factor within this debate that remains particularly unexplored: corruption and the capture of public policies by special interest groups. There is increasing evidence that voters feel disillusioned about political integrity and the intertwinement of elite networks across sectors in society. Indeed, less visible but equally or more harmful than corruption scandals is the influence of narrow interests on public decision making for their own profit. Lobbyists walk a thin line between sharing information, agenda setting and undue influence. Special interest groups inform, influence and sometimes tweak laws, policies and regulations through formal advisory boards and informal networks. Rules for the financing of political parties and electoral campaigns can be stretched and bent, which contributes to the erosion of the already alarming low trust levels in government and public institutions. Similarly, leaks on offshore tax evasion or former public officials taking up lucrative posts and board memberships in banks and multinationals have dented the reputation of elected politicians, established firms and respected countries.

The public sentiment runs deep. Over half of the citizens in developed countries distrust their government and a yawning trust gap is emerging between the elite and mass populations. Among the key factors cited by citizens to explain the prevailing distrust are “wrong incentives driving policies” and “corruption/fraud”. While levels of trust in government are low, trust in political parties is even lower. In addition, over half of the global population share the belief that their country’s government is either largely or entirely run by a few big entities acting in their own best interests.

Undue influence of narrow interest dogs public investments and infrastructure, public procurement, governance of state-owned enterprises and even trade policy. Economic growth is at stake and the toll on society is already significant. The close ties between the government, financial regulators and the financial sector, exemplified by “job carrousels”, have been widely linked to the 2008 financial and economic crisis. Moreover, ill-inspired filibustering unnecessarily delays policy reforms on tax, trade or market liberalisation. Biased policy decisions may greatly affect trade restrictions that modify the outlook of an entire sector or industry, and can hinder the diffusion of new technologies or the chances of new industry players. Corruption also leads directly to the misallocation of resources in government spending. Crossing the line towards favouritism and bribery in public procurement creates unequal access to information and government contracts, which distorts competition and market access.

Building on two decades of OECD experience in these risk areas, the new Recommendation on Public Integrity is particularly timely, as it presents a holistic approach to boost integrity in government and in society. The Recommendation promotes a risk-based approach with emphasis in promoting a cultural change. So what does this mean in practice?

It means creating a public integrity system that is built on 3 pillars. The first pillar is the system: creating a coherent and interconnected set of integrity policies and anti-corruption tools that are coordinated and avoid overlaps and gaps. Second, this integrity system needs to rely on effective accountability, building on risk based controls and real responsibility for integrity violations. This also implies transparency, open government, as was highlighted during the OECD Global Forum on Public Governance, and active participation by civil society in the public decision-making process. The third pillar of an integrity system provides for cultivating a culture of integrity. Here we refer to the recruitment, training and promotion of values of the individuals in an organisation. The intention is to appeal to the intrinsic motivation of individuals. One way of doing this is through awareness raising and educational campaigns aimed at changing values.

The 2017 OECD Global Anti-Corruption & Integrity Forum, to be held on 30 -31 March will debate and shape strategies to shield policy making from undue influence and corruption and help secure sustainable inclusive growth. It is a truly global multi-stakeholder event, involving the public and private sectors, civil society, and academia. Sectoral case studies and good practice examples from countries worldwide will further enrich the debates. The Forum will provide a platform to present new evidence and insights, to advance policies and programmes, and to strengthen commitments and partnerships for integrity-based politics and decision making.

Useful links

Registration for the 2017 Global Anti-Corruption & Integrity Forum is now open.

Click here to register.

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The serpent in the lobby

Click to learn more about the Forum
Click to learn more about the Forum

The most powerful man in the world is a gun-toting gay immigrant tobacconist married to a feminist oil executive receiving welfare benefits. He makes, modifies and abrogates laws with an ease that most politicians would envy, apart of course from the ones he pays to do his dirty business for him.

At least that’s the impression you could get from reading the press and seeing how often, and in what way, the word “lobby” is used. Generally, it’s in relation to undue influence on government decision-making, and the lobby or lobbyist is presented as inherently suspicious. Here’s a typical example from the UK’s Daily Mail: “The Frankenfood Conspiracy: Secret summit where slick lobbyists for bio-tech giants seduced Tory Ministers into changing their tune on GM food”. Even when the tone is more measured, lobbying is still implicitly pejorative.  Here’s another UK paper, the Daily Telegraph: “The BBC is biased toward the pro-immigration lobby while ignoring those with opposing views, a study has claimed”. One side of the debate is a pro-immigration lobby. The other is not an anti-immigration lobby, but a much more human, reasonable and objective-sounding  group of people with views.

There’s nothing new about this negative perception of lobbying. A 19th century edition of the Oxford English Dictionary gave this wonderfully ambiguous quote to illustrate the meaning: “What is known as lobbying by no means implies in all cases the use of money to affect legislation.” Lobbying has been a feature of US political life almost from the start, and in the 1860s, one paper wrote: “…winding in and out through the long, devious basement passage, crawling through the corridors, trailing its slimy length from gallery to committee room, at last it lies stretched at full length on the floor of Congress – this dazzling reptile, this huge, scaly serpent of the lobby.”

Whatever the semiotics, it’s obvious that lobbying has a poor reputation, made worse by the regular scandals associated with the practice, and by evidence that if you spend enough money, you can get policy made in your interest rather than for the public good. An IMF working paper established a link between extensive lobbying by firms in the financial, real estate and insurance sectors and high-risk lending practices. The IMF concluded that “prevention of future crises might require weakening political influence of the financial industry and closer monitoring of lobbying activities to understand the incentives better”.

Lobbyists themselves are aware of their poor image and many would like to see changes, according to an OECD survey of lobbying professionals published in Lobbyists, Governments and Public Trust, Volume 2: Promoting Integrity through Self-regulation. (Volume 1 reviews country experiences with government regulations designed to increase scrutiny). The type of information lobbyists believe should be disclosed includes the name of client and employer, issues lobbied and contributions. The majority of lobbyists surveyed supported mandatory disclosure of information. On the other hand, only around 5% of lobbyists thought that “overall lobbyist expenditure” should be disclosed.

Based on comparative reviews, country case studies and an analytical framework endorsed by governments, the OECD developed 10 Principles to guide decision makers regarding transparency and accountability in lobbying and to “support a level playing field in developing public policies”. On reading these I was reminded of a meeting at the OECD Forum last month where a speaker whose job was to campaign for health care reform mentioned that she was an “advocate” and not a “lobbyist”. It’s not surprising then that people involved in lobbying often prefer to describe themselves in some other way, so among other things, the Principles state that “Countries should clearly define the terms ‘lobbying’ and ‘lobbyist’ when they consider or develop rules and guidelines on lobbying”.

The meeting of the OECD Council at Ministerial Level that followed the Forum requested a “forward-looking Agenda on Trust to support an open, balanced and informed public decision-making process”. The first steps are already being taken. Today and tomorrow, the OECD’s Forum on Transparency and Integrity in Lobbying  is bringing together high level government officials and representatives from the private sector and civil society to discuss lessons learned from their experiences in designing and implementing rules and guidelines on lobbying.

Lobbyists can provide valuable data and insights. But the rest of us have the right to know who they’re getting their data and insights from and who is paying them to present information and opinion to government officials and other public employees.

Useful links

OECD work on fighting corruption in the public sector