Official corruption: a baby of neocolonialism

In Africa, bureaucrats attempt to increase their level of compensation by lobbying lawmakers and politicians and by engaging in other activities to influence the political system and maximize benefits accruing to them. Many civil servants also illegally increase their compensation by providing services to interest groups that seek favors from the government. Political coalitions seeking ways to subvert the existing rules to redistribute national income and wealth in their favor can achieve their objectives by bribing civil servants whose job is to enforce state regulations and implement national development plans. If bureaucrats discover they can earn more income from providing services to groups seeking state favors than from their regular (public) jobs, they may pay more attention to the demands of such interest groups than to the proper enforcement of state laws and regulations and the effective implementation of national development plans. “In societies where civil service compensation levels are relatively low, a significant part of the public employee's total compensation may be derived from engagement in outside activities, resulting in a significant increase in bureaucratic corruption”

The rules that regulate socio-political relations in a country have a significant impact on the ability of civil servants to seek and secure (either legally or illegally) outside income.
In nondemocratic societies, as has been shown by Mwangi Kimenyi (1987), “bureaucrats are less constrained in their employment of public resources to lobby legislators and influence those individuals with direct responsibility for determining levels of compensation for the public sector. In fact, in many African countries, most civil servants are members of the politically dominant group and have significant influence over the allocation of resources. Under these conditions, civil servants behave like interest groups whose primary objective is to put pressure on the political system in an effort to redistribute wealth to themselves”.

In countries with poorly constructed, inefficient, and non self-enforcing constitutional rules, opportunistic behavior (including rent seeking) are usually quite pervasive. In such countries, the rules that regulate socio-political interaction, have failed to adequately constrain the government. As a result, state intervention in private exchange is equally pervasive. Excessive regulation of economic activities creates many opportunities for rent seeking, including bureaucratic corruption.

Corruption has been an important subject of analysis by social scientists for many years. In the 1960s, however, two major events rekindled interest in the study of corruption, especially in developing countries. First, the development by Samuel Huntington (1968, 1990) and others of theories of modernization and political development renewed discussions on bureaucratic corruption and the role of laws and institutions in economic growth and development (Leff 1964, Huntington 1990, Myrdal 1990). Second, the economies and markets of the newly independent countries of Africa and Asia were overwhelmed by corruption, bureaucratic inefficiency, and incompetence. Since the early 1960s, researchers have devoted significant effort to the examination of bureaucratic corruption in the developing economies, paying much attention to the effects of the behavior of civil servants on economic growth and development. Despite this emphasis on the study of corruption in post-independence Africa, there has been insufficient attention paid to the problem of corruption cleanup in Africa.

Corruption in developing countries is often believed to arise from the clash or conflict between traditional values and the imported norms that accompany modernization and socio-political development. Bureaucratic corruption is seen by some researchers, then, as an unavoidable outcome of modernization and development (Alam 1989, Bayley 1966). David Bayley (1966: 720) argues that  "corruption, while being tied particularly to the act of bribery, is a general term covering the misuse of authority as a result of considerations of personal gain, which need not be monetary."  

Herbert Werlin (1973: 73) defines political corruption as the "diversion of public resources to nonpublic purposes." In Africa many people see corruption as a practical problem involving the "outright theft, embezzlement of funds or other appropriation of state property, nepotism and the granting of favours to personal acquaintances, and the abuse of public authority and position to exact payments and privileges" (Harsch 1993: 33). Joseph Nye (1967: 419) argues that corruption involves "behavior which deviates from the normal duties of a public role because of private-regarding (family, close clique), pecuniary or status gain; or violates rules against the exercise of certain types of private-regarding influence.

Jacob van Klaveren believes that a corrupt bureaucrat regards his office as a business from which he is able to extract extra-legal income. As a result, the civil servant's total compensation "does not depend on an ethical evaluation of his usefulness for the common good but precisely upon the market situation and his talents for finding the point of maximal gain on the public's demand curve” (Klaveren 1990: 26). As part of his definition of corruption, Nathaniel Leff (1964: 8) includes "bribery to obtain foreign exchange, import, export, investment or production licenses, or to avoid paying taxes."  According to Carl Friedrich (1990: 15), “individuals are said to be engaging in corruption when they are granted power by society to perform certain public duties but, as a result of the expectation of a personal reward or gain (be it monetary or otherwise), undertake actions that reduce the welfare of society or damage the public interest”.  

Bureaucratic corruption provides civil servants with the opportunity to raise their compensation above what the law prescribes. Through the practice of corruption, private entrepreneurs are able to capture and maintain monopoly positions in the economy. Politicians, who serve as wealth brokers, obtain the resources they need to purchase security and continue to monopolize the supply of legislation. The biggest loser from corruption is society as a whole. “Corruption allows inefficient producers to remain in business, encourages governments to pursue perverse economic policies, and provides opportunities to bureaucrats and politicians to enrich themselves through extorting bribes from those seeking government favors.

Thus, corruption distorts economic incentives, discourages entrepreneurship, and slows economic growth” (Mbaku 1992, Gould 1980).  

In examining bureaucratic corruption in Africa, it is important to discuss the supply side. Unless entrepreneurs and groups seeking government favors supply the bribes, then most bureaucratic corruption would be limited to nepotism, illegal levies, and the illegal appropriation of public resources. In African countries, payments from entrepreneurs seeking state favors represent an important source of extra-legal income for civil servants. A society's laws and institutions have a significant impact on the level of bureaucratic corruption. State regulatory programs can place a significant burden on business enterprises and entrepreneurship and encourage investors to seek ways to minimize these state-imposed costs. Most intervention schemes, of course, create rents that are usually competed for through a political process. Paying bribes to civil servants has emerged as an important method to compete for those rents. For profit-maximizing enterprises faced with ruinous government regulations, bureaucratic corruption can be viewed as a survival mechanism (Mbaku 1992, Harsch 1993).

It is important to distinguish between political and bureaucratic corruption. While the latter involves efforts by civil servants to enrich themselves through illegal means, the former is used by political coalitions to capture the apparatus of state or maintain a monopoly on power. Political corruption usually includes activities such as vote-rigging, registration of unqualified, dead, or non-existent voters, purchase and sale of votes, and the falsification of election results (Goodman 1990).

David Osterfeld (1992: 204-18) has argued that in a heavily regulated economy, one can find two distinct types of corruption: "expansive corruption," which involves activities that improve the competitiveness and flexibility of the market; and "restrictive corruption," which limits opportunities for productive and socially beneficial exchange. This latter type of corruption, Osterfeld (ibid.: 209-10) argues, is characterized by redistribution of income and wealth in favor of individuals or groups. Most public-sector corruption falls in the restrictive category and involves illegal appropriation of public resources for private use (e. g. outright embezzlement by a civil servant) or the illegal use of an individual's public position for his own personal enrichment. Public-sector corruption hinders the proper functioning of the market system, retards economic growth, and thus is restrictive corruption. As examples of expansive corrruption, Osterfeld (ibid.: 212-17) mentions the bribing of judges, politicians and bureaucrats by members of the private sector. The payment of bribes to the right officials, he argues, can help mitigate the harmful effects of excessive government regulation and improve economic participation.

Although certain types of corruption may have beneficial economic and political effects, corruption can permit inefficient firms to remain in business indefinitely. Contrary to Osterfeld's (1992: 213) claim, the firms offering the highest bribes are not necessarily the most economically efficient ones but the ones that are efficient at rent seeking. Indeed, in a study of the Yucatan, Margaret Goodman (1990: 642-43) found that corruption did not benefit efficient producers, but instead protected incompentent entrepreneurs. The firms that survived under institutionalized corruption were those that had become efficient at rent seeking, not at properly and effectively servicing their markets. The expertise that improved their ability to survive was their knowledge of the political process, who to bribe, and how to effectively manipulate the political system to their advantage. In addition, Goodman found that corruption in the Yucatan did not ensure new groups or entrepreneurs opportunities to enter the market. Instead, corruption allowed the old and more established groups to totally dominate and monopolize markets.

The primary emphasis in this paper is on the type of corruption that involves the purchase of state favors from bureaucrats who have been charged with the job of formulating and implementing national development plans, enforcing state regulations, and protecting private property rights. Thus, activities of interest include payment of bribes to obtain import and export licenses, foreign exchange permits, and investment and production licenses. To minimize costs imposed on their enterprises by the state, owners of capital may bribe civil servants and other members of the enforcement community in order to receive favorable tax treatment. Civil servants are also able to extort bribes from individuals and groups seeking access to government-subsidized goods and services. The resources expended by entrepreneurs on bribes represent an illegal tax on economic activity and can be viewed as an attenuation of property rights. In many African countries, incumbents do not seem to be genuinely interested in effective cleanup programs because corruption represents an important source of revenue and a means through which incumbents channel resources to supporters and to elites who use the threat of violence to extract rents (Mbaku 1992, 1994).

Much research has been done to determine the causes of bureaucratic corruption in Africa. According to David Apter (1963), African civil servants may be obliged to share the proceeds of their public offices with their kinfolk. The African extended family places significant pressure on the civil servant, forcing him to engage in corrupt and nepotic practices. Bureaucrats are believed to exploit their public positions to generate benefits for themselves, their families, and their ethnic or social cleavage. Thus, in studying corruption in Africa, researchers have tended to place emphasis on the structural and individual conditions that contribute to corrupt behavior. Investigators have identified several structural factors that contribute to bureaucratic corruption in Africa. One such structural factor is the "soft state" that is said to embody "a weak or diffuse sense of national interest and the absence of a commitment to public service" (Gould and Mukendi 1989: 434). Many researchers have argued that there appears to be an absence of a commitment to public service among citizens of many developing countries and that excessive levels of bureaucratic corruption in these economies are related to the lack of devotion to serving the public interest. In many African countries, civil service employees view public service as an opportunity for self enrichment. Pita Agbese (1992: 229-30) has observed that in post-independence Nigeria, all political coalitions and groups have been engaged in determined efforts to capture the apparatus of state in order to use the state's redistributive powers to amass wealth for themselves. Soon after capturing the government, the incumbent regime usually erects significant barriers to entry and monopolizes the supply of legislation, thus making certain that other groups do not participate in the allocation of resources. For locked-out groups, participation in the economic systems must be obtained through payment of bribes to incumbent bureaucrats, all of whom are members of the politically dominant group.

Nigeria is not the only country in Africa in which the apparatus of government has become an instrument for the enrichment of members of the politically dominant group. South Africa, long regarded by many scholars in the West as a bastion for free enterprise in Africa, has for many years promoted laws that allowed the white minority to use the redistributive powers of the state to enrich itself while sentencing the black majority to perpetual poverty and deprivation (Hazlett 1988; Mbaku 1991b, 1993; Williams 1989; Doxey 1961; Hutt 1964). Throughout Africa, from Algeria to Zaïre, bureaucrats and politicians promote perverse economic policies, which while impoverishing most of society, provide concentrated and significant benefits to the national elites and interest groups.

Incompetence and inefficiency among civil servants have been given as other institutional issues associated with bureaucratic corruption in Africa. Sustainable economic and social development requires an efficient and professional civil service. To effectively carry out national development plans and promote entrepreneurship and innovation in the economy, the government bureaucracy must be responsive to the needs of the entrepreneurial class. Additionally, public goods and services should be delivered efficiently. The implication is that the nation's civil service must be competent and possess a significant level of professionalism. Hiring decisions should be based on merit and qualification, and senior positions should be awarded only to candidates who have distinguished themselves and possess the ability and expertise to efficiently perform the duties assigned them. Civil service positions should not be used as rewards for political support or swapped for bribes, or used to meet obligations to one's ethnic cleavage. Incompetent, unqualified, and unprofessional civil servants contribute significantly to failures in development and force the country to remain essentially underdeveloped.

Shortly after independence, many African countries adopted statism as their development model. This approach to resource allocation emphasized state control and eventually turned many African governments into major economic units. Today, African governments are the primary investors, exporters, importers, and bankers. In addition, the state also employs a significant proportion of the national labor force and is quite involved in income redistribution. Through a series of regulations and statutes, the state is able to extract wealth from the poorly organized rural farm sector for use in subsidizing the relatively well-organized and politically volatile urban sector. In many African countries the beneficiaries of excessive state intervention in private exchange have been public employees whose job it is to enforce the laws. Control of an enormous amount of public resources by bureaucrats has allowed them to manipulate public policies to amass wealth for themselves at the expense of the rest of society. In several instances, bureaucrats have created artificial shortages in order to extort bribes from prospective demanders. The enforcement of state regulations and statutes in most African countries is poor, arbitrary, capricious, and ineffective. As a consequence, individuals and groups affected by the regulations are forced to engage in opportunism, including the payment of bribes to civil servants. Several scholars have cited the transformation of the post-independence African state apparatus into an instrument for the enrichment of members of the politically dominant group as a significant contributor to corruption (Agbese 1992, Ihonvbere and Ekekwe 1988).

Pervasive and chronic poverty, extremely high levels of material deprivation, and severe inequalities in the distribution of resources also have been advanced as major determinants of corruption in the African countries (Leys 1965). Many regions of the world have made significant advancements in economic and human development during the past 40 years. Yet Africa has remained essentially poor and severely deprived. Evidence shows that Africa is today the poorest region of the world (UNDP 1990, 1995). The emergence of the African military, in the post-independence period, as an important force in the allocation of resources has further distorted income distribution. “In many African countries, the armed forces receive a disproportionate share of the public budget. It is argued by many researchers that these post-independence developments have contributed significantly to increased corruption, underdevelopment, and pervasive poverty and deprivation” (Mbaku 1994).   

Some scholars believe that corruption in Africa and other developing regions arises from the existence of defective cultural norms and behaviors (Jabbra 1976). Other researchers believe that corruption in Africa is related to the clash between traditional and foreign norms that accompany modernization and industrial development. As such, corruption is seen as an unavoidable consequence of economic modernization and political development (Alam 1989, Bayley 1966).

In the majority of developing societies, individual rights are often subordinate to the rights of the group or social cleavage. As a result, loyalty to the ethnic group is considered more important than individual rights or personal accountability. In Africa, these particularistic attachments are quite strong and have been cited as important determinants of bureaucratic corruption. Individuals who become successful in the public sector or the exchange economy are expected to share the benefits with their extended family and their ethnic cleavage. Thus, a civil servant may engage in corrupt activities in an effort to meet personal obligations to members of his family or ethnic group (Alam 1989, Gould and Mukendi 1989).

In contrast, public choice theory contends that bureaucratic corruption is related primarily to government control and regulation of economic activities. Once constitutional rules have been selected and adopted, and a government established, political coalitions will try to use government to redistribute income and wealth in their favor. Unless the adopted rules effectively constrain the ability of the government to supply special-interest legislation, rent seeking will become pervasive as groups seek ways to enrich themselves at the expense of the rest of society. At the same time, civil servants will be able to extort bribes from entrepreneurs seeking ways to minimize the burden of state regulations on their enterprises and attempting to enter economic sectors closed by state intervention in markets.

Most Africans live in societies with weak, inefficient, and poorly designed constitutional rules, which provide the government with almost unlimited power to intervene in private exchange. In such economies, resource allocation is totally politicized and the civil service has replaced the market as the principal instrument for the allocation of resources. Civil servants are aware that lucrative monopoly rights created by government regulatory activities provide their owners with enormous monopoly profits. As a result, bureaucrats try to capture rents by extorting bribes from entrepreneurs who request them. Where government regulation imposes significant costs on a business, the entrepreneur can minimize those costs by paying bribes to members of the enforcement community. The bribe is expected to either exempt the business from the laws or to have the individual's enterprise taxed at a lower rate. If these restrictions on economic activity are eliminated, bureaucrats would be unable to extort bribes from entrepreneurs. Thus, bureaucratic corruption is primarily rent-seeking behavior, which is directly related to the level and exent of government activity in the economy (Mbaku 1992).