Corruption: Perfect tool of the elite

LAHORE: Corruption has plagued every aspect of Pakistani society and caused substantial damage to its economy. Corruption is dishonest or fraudulent conduct by those in power, typically involving bribery, embezzlement, or favouritism towards friends or family members.

Pakistan has been identified as a highly corrupt country, ranking consistently low in the Corruption Perceptions Index (CPI). According to the latest report by Transparency International, Pakistan ranks 124 out of 180 countries in terms of corruption levels.

Theft, fraud, bribery; extortion, requests for kickbacks; nepotism and patronage are all manifestations of corruption that the country is facing, leading to misuse of assets in a manner that denies level playing field and that makes people feel injustice has been done.

Pakistan is facing both top and low level corruption. At the top level of corruption, big businesses grease the palms of senior state officials to receive favours. At the lower level of corruption, junior civil servants are enticed to receive side payments or bribes to facilitate administrative arrangements for their clients. The existence of corruption clearly indicates that something has gone awry in our governance system.

Corruption’s impact has been compounded by the low level performance of state-owned companies that are supposed to provide basic essential services to the people. Many are monopolies like Railways and power sector companies.

Besides these PIA and Steel Mill which once were monopolies, failed to perform according to their mandate, the private sector was inducted to plug the gap. Losses suffered by state-owned companies in Pakistan are due to a combination of corruption, nepotism, and incompetence.

In some cases, officials may be siphoning off funds or engaging in other corrupt activities. In other cases, job appointments and promotions may be based on familial connections rather than qualifications or merit.

The rationale given in defence of corruption by some is that it improves economic efficiency. This is absurd. Bribes may help those who pay it in lowering the cost of doing business, but deny level playing field to those that want to operate fairly.

In other words, this rationale is in favour of institutionalising corruption. Institutionalised corruption is a situation where corrupt practices are so deeply ingrained in the political and economic institutions of a country that they become a part of the system. This makes it difficult to root out corruption, even when there is political will to do so. It can involve practices such as bribes, kickbacks, and embezzlement, and can have a devastating impact on a country’s economy and society.

Some argue that instead of reforming the institutions in an environment where there are restrictive or bureaucratic government procedures — such as bottlenecks in paying taxes, burdensome customs procedures or difficulties in obtaining licenses — bribes could actually provide an efficient way of reducing burdensome transaction costs. But proponents of corruption sadly ignore the fact that widespread corruption denies ordinary entrepreneurs a chance to scale up as he/she cannot bear the corruption cost.

Widespread corruption often creates much larger negative effects, which can hinder the dynamic efficiency of an economy. While corruption damages a country’s development, what is not at all sufficiently understood is that, in practice, it is highly regressive and inequitable. Corruption ultimately is most vicious on the poor.

To improve service delivery in Pakistan, there needs to be a focus on promoting transparency, accountability and good governance. This can be achieved through measures such as increased public participation, independent oversight institutions, and better training and support for public officials. The competition for “juicy government ministries,” such as Works, Power, Defence, Agriculture and Water Resources increases, because these have large procurement budgets each year.