Saturday, July 23, 2022

The Miller and a Huge Rat (2)

"'In what can be called the theory of redistributive corruption, the state is the weaker part in the state-society relationship,' the Miller continued, 'Here, various social and economic groups, interests or individuals are organised and powerful enough to draw more benefit from the corrupt practices they engage in with the state as a counterpart, than is the state and the ruling elite. The main beneficiaries of the resources extracted, privatised and consumed are not the political and state-based elite, but state resources are depleted and distributed to various groups and interests according to the power configurations in each country.
Who, in society, will benefit the most from this kind of corruption depends on the local distribution of forces. It might be powerful ethnic or regional groups or clans who are strong enough to extract much more from the state than their fair part of public investments, development projects, international aid, regional autonomy and representation in national institutions. It might be foreign or local corporate interests that are able to buy under-priced national resources, concessions, preferential treatments, permissions, and tax exemptions. It might be the general population, individuals who are able to buy benefits like tax exemptions, subsidies, pensions, or unemployment insurance, or get preferential access to privileged schools, medical care, housing, real estate or ownership stakes in enterprises being privatised.

The loser in this game is the state and its regulating capacity. When private citizens, commercial businesses—local and international—and various interest groups—formal and informal, modern and traditional—are able to buy national and public resources cheaply, to buy exceptions, privileges, immunity and impunity through the use of kickbacks and mafia methods vis-à-vis public officials, the state will be eroded. The effect of 'redistributive' corruption is that the state is rendered incapacitated and politically impotent. The capacity of the state to extract taxes and render public services will be eroded; its ability to implement coherent policies is destroyed, as well as the state’s ability to transform the society and the economy according to political priorities and to execute rational development policies.
Furthermore, redistributive corruption will 'particularly hurt the poor' because resources are privatised and redistributed according to the ability of groups to influence policies through pressure and bribes, and not through the principle of 'one man one vote.' Resources will not be distributed according to 'universalistic' or ideological considerations of needs and fairness. Those in most need of political redistribution, in terms of basic public services like schools, health, social services, and state protection, will suffer the most when the state’s capacity is crippled.
Feudalisation is a term that has been used when weak states are manipulated by strong societies, when the state is losing control to 'civilian' forces. Feudalisation refers to the 'privatisation' and 'decentralisation' of the state, and underlines the clientelist relationship involved. Feudalisation occurs when entire geographical areas, economic sectors and/or military units are taken over by 'private' interests. In the short run, a ruler might benefit from deliberate feudalisation in terms of loyalty—from local or regional strongmen, clientelist groups or vassals—and in terms of an assured delivery of the votes for the ruling party in elections, but in the long run, the unity of the state is jeopardised.

In the alternative view, in what can be called the theory of extractive corruption, the state is the stronger part in the state-society relationship. According to this theory, the corrupted—the state or some state agent—benefits the most from corruption and the corrupter is more or less a passive player. Essentially, the ruling elite is the strongest force is society, this elite or class uses the state apparatus as its instrument to extract resources from society, and it does so for the benefit of the rulers. This theory is partly based on the operation of authoritarian countries in general, and on the experience of the neo-patrimonial states in particular.
The theory mainly applies where the state is not only the strongest force in society, but also where a ruling elite has developed into a dominant and ruling class in control of the powers of the state. The theory also emphasises the well-known remark that all power tends to corrupt, and absolute power corrupts absolutely. That is, the more political power is concentrated exclusively in the hands of a few individuals, the greater the temptation for power abuse, selfish wealth-seeking and primitive extraction.

So, what causes Corruption? There is a strong relation between the level of income—low, lower-middle, upper-middle and high—and corruption. The higher income a country, the lower is the level of corruption.
There has been formulated a 'law' or general regularity that says, that the degree of corruption varies inversely to the degree that power is consensual. That is, the more the power is legitimate, the less corruption. The level of corruption and the form it takes, is also varying rather systematically with the political setting. Corruption levels and forms vary with the regime type within which it occurs. One widely held general assumption is that the level of corruption corresponds negatively with democratisation, i.e. that the level of corruption is decreasing with increasing levels of democracy.

Then, what are the consequences of Corruption? Corruption might cause a lot of harm to society, like for instance when it leads to illegal logging of tropical rain forests and the non-observation of building codes designed to ensure public safety. Corruption may also lead to insecure citizens, speculative politicians, and administrators vacillating between huge opportunities, grave risks and much double-pressure.

In economic terms, corruption is not always bad. For instance, in the level of economic growth and the level of direct foreign investment, in highly corrupt nations. In some countries, the growth rate does not seem to suffer, as it has been kept on a high level for years despite the existence of systemic corruption. This is mainly the case of some Southeast Asian countries. In other countries, mainly in Africa, high levels of corruption, have been inhibitive to growth. The economic effects of corruption is nevertheless dependent on the type of corruption in each country, on the way corruption is organised or disorganised.
However, in countries with widespread corruption, corruption will furthermore increase the operating costs of government, revenues will leak out and the resources available for public services will wane. Governmental decision-making will be distorted, and governments will fail to deliver the much-needed public services. Another dilemma is that in non-democratic or semi-democratic (neo-patrimonial) systems, where political power is mainly used to pursue the interest of a ruling elite, an increase in the state’s efficiency might well in itself be detrimental to national development. It might imply a more efficient resource extraction for the benefit of a ruling elite.

Corruption affects the way countries are ruled. However, like with the economic consequences, the political consequences of corruption, is largely dependent on the type of corruption that takes place, and the consequences differs much according to the ways in which the extracted resources are used. In weak states, in states where the ruling elite exercises little control over who will gain how much from what kind of corruption, the legitimacy of the state as such will wane with the lack of service. Uncontrolled and unrestricted corruption will have the general effect of undermining state institutions and political legitimacy.
Strong states, on the other hand, states with exclusive and undeniable control of the economic policies, of the formal as well as the informal ways of accumulation, redistribution, and consumption. Here, any extractive corruption will be an integrated part of the overall control over the state apparatus and its operations, including the authoritative allocation of resources. Strong leaders will exercise a strong control over the various forms of corruption, and will be able to decide who will gain how much from what kind of corruption. The level of corruption can therefore be stable, predictable and acceptable to businesses and the general public. In strong states, the institutions of the state will not necessarily suffer from corruption.
Besides, the legitimacy and efficiency of the state, and consequently the general attitude towards corruption, is dependent on the overall esteem of the rule system in the eyes of the population. The political system—the political authority and the state agents—are sanctioned and obeyed by most citizens when people generally perceive of the political authority as benevolent. Legitimacy depends on the services rendered and the ability to satisfy popular demands, more than the way the state is operated. Besides, the charisma of political leaders is also important when it comes to legitimacy. Efficient states can therefore maintain a relatively high and stable level of corruption, or manage to keep the level of corruption at a low level at will. The strength of the state and the political will is what explains the low level of corruption in authoritarian countries like Singapore, Hong Kong and Taiwan.
The level of corruption and its political impact in Europe is hardly comparable to the devastating effects seen in most African and some Asian countries. In democratic countries, or more precisely in countries ruled by law and where human rights and the division of power between institutions and groups are respected and effective, the acts of political corruption may be disclosed by a free press and other media, by the opposition, by auditing and controlling bodies or by the police, and the offenders may loose office through legal procedures or in the next elections. Corruption scandals may actually sharpen the instruments of control. Therefore, democratic institutions are not necessarily threatened by isolated incidents of political corruption. They may even be strengthened if the cases of political corruption are properly dealt with. Systematic and endemic political corruption may nevertheless endanger any democratic system.

Corruption persists over long periods of time—though not necessarily two dozen centuries. Corruption is not easy to eliminate. Systemic corruption is deeply rooted in the underlying social and historical political structure.
A country’s history shapes the conditions for honesty in government: economic equality and a state that is strong enough to provide services to its citizens. The most important service a state can provide is education. Countries with higher levels of education in the past have less corruption today.
Why education? Education promotes economic equality. The linkage between equality and lower levels of corruption is well established. And education promotes the civic values that underlie 'good government' –or honesty in government. Education provides the foundation for ordinary people to take part in their governments–and to take power away from corrupt leaders.
Education empowers people to make their own way in the world without having to rely upon clientelistic leaders for their livelihood. When people depend upon 'patrons' for their well-being, their welfare, even their sustenance, is tied to their loyalty. They may 'tolerate' corruption by these leaders, either because these 'big men' defend them against others who might exploit them even more or because ordinary people do not have alternative sources of income. The patron–client relationship is founded on inequality.
Education also promotes loyalty to the state rather than to local—or tribal—leaders. When governments provide services such as education, people will associate benefits with the state and will be more likely to have a broad identity with their fellow citizens. This broader identity is the foundation of generalized trust–trust in people we don’t know who may not be like us. Higher levels of trust are strongly linked to lower corruption. A common identity, like trust, is only possible where there is greater equality. The strong aggregate relationship between trust and mean school years in 1870 (r2 = .462) suggests that education is part of the 'inequality trap,' perhaps even a surrogate measure for trust.'"

'Alas Sir!' the poor Rat interupted again, 'the miserable pittance that I take, is only from hand to mouth, and out of pure necessity to keep life and soul together,' as the Rat pleaded hunger on the one hand, the Miller threw the matter of conscience and honesty in his teeth on the other, and preach’d to him upon the topick of a political convenience, in making such pilfering knaves examples for the publick good.
'Well, sir!' says the Rat once again, 'will you consider for your own sake, that this is your own case; and that you and I are both corn merchants, and of the same fraternity; nay, and that for one grain that I take, you take a thousand.
'This is not language,' cries the Miller, in a rage, 'for an honest man to bear; but the best on’t is sirrah, your tongue’s no slander,' so he turn’d the Cat loose upon him to do that which we call in the world an execution of justice.
After carrying out his duties, walking leisurely, the puss sang,

Tikus-tikus tak kenal kenyang
[The rats were never satisfied]
Rakus-rakus, bukan kepalang
[Greedy, outrageously]
Otak tikus memang bukan otak udang
[The rats brains, indeed, were not a shrimp brains]
Kucing datang, tikus menghilang *)
[The cats came, the rats disappeared]

As a closing, Laluna said, "Corruption is widely recognized malfeasance as objectionable, not just because it flaunts norms of honesty, but because it exacerbates Inequality gap. And Allah knows best."
Citations & References:
- Inge Amundsen, Political Corruption: An Introduction to the Issues, Chr. Michelsen Institute
- Eric M. Uslaner, The Historical Roots of Corruption, Cambridge Univesity Press
- Arnold J. Heidenheimer & Michael Jihnston (ed.), Political Corruption : Concept & Contexts, Transactions Publishers
*) "Tikus-tikus Kantor" written by Iwan Fals