Basic guide to anti-corruption

Defining corruption

Corruption can take many forms.

For most people, the word corruption invokes the image of a government minister secretly accepting millions from a company in exchange for a public contract, or motorists paying off traffic police to avoid speeding tickets. Bribes, large or small, are the most well-recognised type of corruption, but other forms also exist.

Consider nepotism or cronyism, practices where officials extend preferential treatment – such as access to jobs, or other resources and services – to their family members, or friends and associates. Or picture the finance manager who embezzles company funds that had been entrusted to her care.

Abuse of entrusted power for private gain is a definition popularised by Transparency International – the leading global non-governmental anti-corruption movement. Whilst not without critics, this definition is widely used because it encapsulates three core elements of corruption:

1. Abuse

Corruption involves a violation of norms of conduct or professional obligations – explicit or implicit – arising from formal or other entrusted duties. The notion implies decision-making without due impartiality; counter to public policies; or more broadly against the public interest.

2. Entrusted power

Corruption arises when a person misuses the authority derived from all kinds of formal or professional roles, but also informal or traditional ones.

This phrasing covers not only public officials, but also individuals working in the private sector, media, civil society actors, religious leaders. It also covers people such as community elders who hold customary authority. 

A company employee selling commercial secrets to a competitor is an example of private sector corruption.

3. Private gain

The gain realised through corruption is private because it does not benefit the entity or the collective that the official is entrusted to represent or serve. Private gain expresses the opposite of public good. But the gain need not go directly to the official in question: it may also benefit a designated family member, friend, associate, or a political party.

Also note that anything of value can constitute a benefit: it’s not only money and material goods, but also power and influence, and other advantages – even sexual favours.

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Corruption always involves these three elements. However, it can take very different forms. The roles of different participants and beneficiaries can also vary considerably. For instance, in some cases of bribery, the bribe-giver is a willing, proactive party who seeks undue advantage. But in other settings, particularly those where corruption is systemic, people may have no choice but to pay a bribe to access public services that they are rightfully due, like health or education. And public officials themselves may be coerced into accepting bribes by their superiors or clients.

The prevailing definition of corruption as abuse of entrusted power for private gain does not differentiate among its many types and patterns. Neither does it say anything about the incentives or pressures that motivate them. However, this definition helps us to distinguish corruption from other kinds of wrongdoing, eg discrimination or mismanagement.

The definition also helps us to define related concepts, such as conflict of interest. This is a situation where an individual must choose between a private interest, on the one hand, and obligations arising from entrusted duty, on the other hand. Corruption always involves a conflict of interest, but not every conflict of interest results in an act of corruption: the person may ignore the private interest and act as duty requires.

Corruption inflicts enormous harm

The harm inflicted by corruption is globally recognised, including by the UN 2030 Agenda for Sustainable Development where the target for Goal 16 calls on states to ‘substantially reduce corruption and bribery in all their forms.’

It is extremely difficult to measure the extent of harm that corruption leads to. One reason is the so-called ‘iceberg phenomenon’, meaning that only a small portion or corrupt transactions is visible while much more is hidden. After all, most corrupt exchanges take place in secret, and very few cases are ever reported or otherwise recorded, much less prosecuted and punished.

Another reason relates to the scope of indirect damage caused by dysfunctional public sector institutions and distorted public services. Consider the difficulties in measuring the following dire consequences of corruption:

Corruption undermines development

When public officials pillage state budgets or distort public spending toward investments that yield large bribes – like major public works – less money is left for essential services such as health or education. When politicians appoint unqualified family members and political cronies to run public enterprises, the firms underperform. And as international companies tend to avoid environments where demands for bribes will increase their operating costs, the potential benefits of foreign investment may be lost.

Corruption costs lives

Without access to quality healthcare and clean water, or when buildings collapse because developers have bribed their way out of complying with safety standards, people’s lives are at risk.

Corruption harms the vulnerable and perpetuates inequality

When officials in public institutions force citizens to pay for services that should be free, the poorest and most vulnerable members of society – including women and girls – suffer disproportionately. In low-income households, small bribes to get health care can cut deep into a family’s disposable income.

Corruption undercuts human rights

Courts violate the fundamental right of access to justice when they only hear cases if parties bribe court staff and judges, or when they rule unfairly to protect the wealthy and the politically-connected.

Corruption damages the environment

Action against climate change, environmental protection and responsible management of natural resources suffer when powerful industry representatives bribe policy-makers or political parties to vote down necessary regulations.

Corruption damages democracy

Daily experience of corruption reduces public trust in state institutions and citizens’ willingness to participate in democratic processes. Citizens who perceive politicians as corrupt may not bother to vote in elections; engage in politics; or pay taxes.

Corruption fuels crime and conflict

Organised crime networks rely on corrupt officials to circumvent the rule of law in times of peace, and to supply illicit goods and service in times of conflict. High levels of corruption can exacerbate inequalities and distrust between groups, making prolonged conflict more likely, or pushing post-conflict societies back into war.

It is clear that economic and human costs of corruption are immense even if we struggle to measure them.

How to address corruption?

We are continually learning how to fight corruption more effectively.

The most commonly-seen approach is based on the assumption that weak governance systems, whether in the private or public sector, allow corruption to happen. The logic holds that, for instance, poorly-supervised accounting systems make it possible to embezzle funds; or that officials’ unchecked discretionary power to offer or refuse services, enforce laws and standards, or award contracts enables them to demand bribes. The response is to ‘fix’ the shortcomings in existing laws, procedures and institutions that create opportunities to perpetrate corrupt practices, and to improve oversight mechanisms to catch and punish wrongdoers. Ultimately, the objective is to construct an institutional anti-corruption system that includes prevention measures; measures to detect and sanction corrupt practices when they do occur; and measures to engage stakeholders in these efforts. This last point is noteworthy: whilst much of the effort to stem corruption involves improving formal governance systems, the systems’ effectiveness depends on programme or service users (and ultimately citizens more broadly) rejecting and reporting corruption, and otherwise demanding accountability of their officials and leaders.

The conventional anti-corruption approach

Anti-corruption systems containing these components can be constructed at any scale: the national level, or in specific institutions, or even in particular programmes, such as development programmes (see more about the challenges for development programming further down in the main text).

The larger the scale, the more complex the system.

National anti-corruption systems are meant to encompass a myriad of institutions and governance processes, and various segments of society in an inter-related and mutually-reinforcing network of interactions.

This approach to countering corruption has been the mainstay of anti-corruption efforts and is reflected in international anti-corruption conventions.

However, two decades of pursuing this approach has not resulted in the expected changes. The disappointing results have prompted a great deal of reflection and analysis, including theme-specific findings and recommendations featured on U4 topic pages.

For an overview of some of the lessons learned, see Twenty years of anti-corruption – a series of short texts reflecting on how UK and the the international community has approached anti-corruption work since around 2000.

Unconventional insights

Examining underlying factors and conditions for success has yielded some of the most exciting insight about anti-corruption practice to date.

Many researchers have pointed to the challenge inherent in the pivotal role of leadership in constructing and implementing anti-corruption systems. This observation relates to the notion of political will, which is viewed as indispensable for success, yet cannot be assumed.

There is considerable analysis exploring the concept and the role of political will and the pressures that shape it:

• Political economy;
• behind-the-scenes calculations and deals to maximise political advantage;
• informal obligations to donors, supporters, mentors, associates, kinship groups, etc.

Researchers have also recognised the critical role of informal rules and relationships in driving corruption by limiting individuals’ options when confronting it. Various informal constraints may apply equally to the top leadership, lowly bureaucrats, or ‘ordinary citizens’. For instance, informal social norms that value kinship ties can create pressures on public officials to extend favours to their extended family, and lead to more societal tolerance for nepotism.

Or when informal political party affiliations afford supporters access to scarce resources, they create powerful incentives for many people to join and maintain them, rather than dismantle these patron-client structures. Dubbed ‘informal’ because they operate outside the ‘formal’ or ‘official’ state laws and institutions – such systems can be extremely well-structured and hierarchical.

Consider, for instance, how rigid the rules and the structure of organised criminal networks are, and how effectively they can co-opt or even ‘capture’ and overwhelm the formal system of the state. In such a setting, the conventional, formal rule-based anti-corruption approach is unlikely to succeed without supplementary alternative strategies.

Other analysts have focused precisely on the strategic implications arising from these insights.They argue that to analyse and address high levels of corruption in contexts of scarce resources requires a different conceptual framework.

For instance, when membership in informal clientelistic networks – or simply paying bribes – is the only way to access scarce resources or solve other problems, corruption may serve a ‘useful’ function for most people. This ‘functionality’ inhibits incentives for change. Similarly, in settings where it is commonly perceived that ‘everyone’ engages in corruption to access scarce resources, it is arguably irrational and foolish not to go along, because it means losing out.

In both cases, there are few incentives to abstain from corruption unless: 1. there is an alternative, and 2. there is reason to believe that everyone else will do the same. Where such dynamics are in place, addressing corruption is also – as formulated in economic theory – a collective action problem that requires additional response strategies. This is in contrast to a principal-agent problem, which conventional anti-corruption approaches imply.

The challenges of transnational dimensions of corruption have likewise gained prominence in recent years. When corruption is driven by international dynamics – eg increasing global demand for natural resources – an anti-corruption response must look beyond national systems. It also requires addressing the complex and opaque global financial architecture that helps corrupt officials hide or launder their illicit wealth, and the role of donor countries in creating or sustaining such opportunities. U4 topics Natural resources and energy, Oil, gas, and mining and Illicit financial flows examine some of these issues.

Implications for anti-corruption reforms

The above insights have generated new perspectives on alternative and supplementary anti-corruption strategies. They do not categorically reject conventional anti-corruption approaches. Instead, they highlight the complexity of the challenge and the relevance of factors outside formal governance systems – particularly the political economy and informal structures regulating the (re)distribution of resources.

The 2020 U4 Issue How change happens in anti-corruption identifies the main trends shaping emerging policy advice. A one-hour video of four talks in 2021 on New approaches to anti-corruption also shares useful reflections.

The fact that an anti-corruption reform strategy must look beyond technocratic approaches is a common thread. By technocratic, we specifically include addressing weaknesses in laws, institutions, and governance systems through legislative and operational changes, capacity development, and other technical means. Anti-corruption measures must also respond to contextual factors – informal dynamics in particular – that both constrain and also create opportunities for engagement.

The importance of the specific reform context is broadly understood by now. Most practitioners recognise that good anti-corruption practices cannot simply be copied from one country to another. They must – at a minimum – be adapted to the new legislative and institutional framework, or they may not be ‘transplantable’ at all.However, the full extent and depth of requisite contextual knowledge – the political economy, the informal power relations, the societal norms – is only slowly becoming apparent.

Reform starts with thorough analysis

Understanding the complexity of a corruption challenge, particularly the context in which it is situated, can appear daunting. Fortunately, there are tools to diagnose the challenge. There is both already-existing data and methodologies that can be applied as needed.

The resources vary in what they aim to do. For example:

• Measure the scale or volume of corrupt practices.
• Estimate the extent of corruption risks in specific institutions or sectors.
• Identify system shortcomings that permit corruption to take place, which should be reformed.
• Analyse the political economy and social dynamics that drive corruption and impact the prospects for reform.

Practitioners should use a combination of these diagnostic approaches to construct a multi-dimensional picture of the extent and character of corruption, and the factors that perpetuate it. Such in-depth analyses indicate the opportunities and constraints for reforms, and potential allies and opponents – all of which can facilitate a strategic, evidence-based approach.

Implications for development cooperation

Development partners can address corruption in multiple ways:

Preventing corruption in donor programmes and development aid

Development partners’ first concern tends to be safeguarding their programmes and funds against leakage and corruption. They typically have robust corruption risk management systems with provisions to ensure that funds are used to advance development objectives.

These systems commonly include:

• Prevention measures at all stages of the programming.
• Ongoing monitoring of implementation.
• Hotlines for reporting misconduct.
• Periodic evaluations and audits.

For more information please see the U4 topic page on Corruption risk management, and a 2020 U4 blog post on Zero tolerance policies. U4 also offers an online course on corruption risk management for U4 partners and their collaborators.

Supporting anti-corruption reforms

Many development partners also support anti-corruption efforts in partner countries. This most often involves improving aspects of formal anti-corruption systems, or promoting broader good governance reforms that comprise elements of these systems.

All of U4’s research and training aims to support these efforts. Insights are summarised above, and laid out in the 2021 U4 Issue Reassessing donor performance in anti-corruption: Pathways to more effective practice.

'Mainstreaming' anti-corruption measures

In pursuing development objectives in health, education, justice or any other sector, development partners should consider how corruption undermines their anticipated outcomes. Known as anti-corruption mainstreaming, the approach seeks to not only prevent the misuse of programme funds, but also tackle specific corrupt practices that jeopardise programme results.

For instance, a programme may fail to reach vaccination targets if parents avoid health clinics because providers demand bribes. To succeed, a programme must not only provide the vaccines, but also address the conduct of health providers.

Mainstreaming can be challenging because it requires combining two sets of expertise: sector-specific and anti-corruption knowledge. There is a great deal of accumulated insights to assist practitioners in their efforts.See for example the U4 Brief Mainstreaming anti-corruption into sectors: Practices in U4 partner agencies, or consult emerging sector-specific guidance on U4’s topic pages.

Also check out U4’s online courses for partner staff and their collaborators:

• Addressing corruption in the health sector
• Addressing corruption in the natural resources sector
• Corruption in the justice sector

Harmonising policy streams

Development agencies promote one dimension of a country’s foreign policy that may sometimes contradict other policy streams. It is not unknown that donor countries pursue an anti-corruption agenda through development programming while at the same time ignoring corrupt business practices by its firms operating in the partner country, or politically supporting corrupt leaders.

The notion of working politically discussed earlier also implies recognising all the trajectories of interaction with partner governments that link to corruption, and aligning approaches across departments and agencies. This strategy is commonly known as policy coherence or a whole of government approach.

The whole of government approach requires development partners to examine how their domestic financial, real estate, fine art or other markets may be used to transform illicit proceeds from corruption into legitimate assets. They also have to review their policies toward global financial structures used to conceal illicit wealth. The U4 topic pages on Natural resources and energy, Oil, gas, and mining and Illicit financial flows provide some entry points for engaging with these issues.