by Director of Rhodes Business School, Prof Own Skea

Weak leadership feeds corruption

In any functioning democracy, a high degree of cooperation across all sectors and between all individuals is required

iStock-637945960.png

In any functioning democracy, a high degree of cooperation across all sectors and between all individuals is required. So, why, when we have well developed rules for a functioning democracy, including codes of governance and anti-corruption, anti-bribery and anti-money laundering laws, is bribery, corruption and a lack of ethical cooperation still so pervasive?

Dr Michael Muthukrishna, from the Department of Psychological and Behavioural Science at the London School of Economics and Political Science has co-authored several interesting articles about this, including for Nature and the online journal Evonomics. His co-authors are leading researchers in economics, psychology, behavioural science and human evolutionary biology.

“Understanding how humans sustain cooperation in large, anonymous societies remains a central question of both theo­retical and practical importance,” they write. They go on to explain that while bribery and corruption seriously undermine democracies, societies and countries, there is nothing mysterious about why they are still so pervasive. Bribery and corruption, they believe, are natural tendencies inherited through our evolutionary biology, and shared with other animals. In evolutionary terms, bribery and corruption is far more natural to us than democracy, as Muthukrishna et al explain:

“There is nothing natural about democracy. There is nothing natural about living in communities with complete strangers … There is something very natural about prioritizing your family over other people. There is something very natural about helping your friends and others in your social circle. And there is something very natural about returning favours given to you. When a leader gives his daughter a government contract, it’s nepotism. But it’s also cooperation at the level of the family.”

The trouble is that the world today is not just about family and friends. We live in large, complex societies where acts of self-centred, so-called natural cooperation undermine the large-scale functioning of modern states, as South Africa has painfully experienced.

In the 21st century, for groups of mostly unrelated humans to live and work together; to survive and thrive, governments, companies, organisations and civil society have to move beyond our basic instincts and strive for social justice and a better quality of life for all by working hard on developing strong levels of accountability, responsibility and cooperation.

In poorer economies it is arguably even more critical to fight against bribery and corruption than in richer economies. As Muthukrishna et al write: While the total quantum of corrupt money may not materially differ from one country to the next, the scale of its effect must not be underestimated. In a rich country, the difference may mean a city having 25 instead of 20 schools built. In a poor country, the difference might be between having three schools built and only ending up with one.

So what do we do about this? It’s very complex and Muthukrishna says we need to deeply delve into human nature and behaviour to understand the nuances of how even anti-corruption strategies can backfire if they are not astutely managed.

To explore this, they developed several Public Goods Games (PGGs) which experimentally model how cooperation, bribery and corruption occur. The games were played by 74 participants from diverse ethnic backgrounds, some of whom came from immigrant families. The participants were divided into groups of four to seven players. These are essentially laboratory games, and the results are experimental, with limitations as they are not informed by real world situations. However, they reveal several important points about how to think about, mitigate and prevent bribery accelerating corruption in the interests of building stronger democracies.

In one of the simplest PGGs, for example, ten people were asked to put 10 dollars into the pool on the basis that you can get three times your money back. No one was aware of who had put in their 10 dollars, but it seemed logical that all ten would put in the money and get 30 dollars out. But very quickly one individual worked out that if they put in nothing, they take home 37 dollars, which is worked out at 9 dollars x 3 given back, plus their own 10 dollars that they didn’t put in. What started to happen is that more people quickly caught onto this and hence contributed less until the pool of money diminished to nothing and everybody took home zero.

In another game, known as the Institutional Punishment Public Goods Game (IPGG) a mechanism was introduced for the punishment of non-payers/defaulters, with one player appointed as the group’s leader and given the power to punish the other players with taxes if they defaulted on their contributions. The group leader’s role was analogous to governments, taxes, police forces and other enforcing/punishing organisations. In the IPGG, where there were strong, non-corrupt leaders, contributions from all the players increased and the public goods increased.

From here they incorporated the Bribery Game (BG) into the IPGG. This time, as Muthukrishna explains, players could either keep their money for themselves or contribute to the public goods pool, and also ‘contribute’ to the leader (effec­tively, a bribe). In addition to having the power to punish non-contributors, the leader could also enforce bribes being paid. Very quickly, the leader started taking a larger share of the contributions in addition to accepting increasingly larger bribes. On average the contributions fell by 25%. End result: a powerful elite that looked after themselves, with the other players contributing as little as they could get away with.

In the next BG, where both the leaders and the players could accept bribes, the more powerful leaders in the groups were twice as likely to accept a bribe than the less powerful leaders, and three times less likely to do nothing—in other words, not accept a bribe or not punish other players for taking bribes.

To give you a tangible example: when you travel in a corrupt country and you come across a police road block, you at least hope the police official is going to do nothing and wave you through. But the more corrupt the country, the more power they have to hold you under some spurious reason or to benefit out of bribery. They are three times more likely to accept a bribe or punish you, by, for example, threatening to lock you up, even though you have done nothing wrong.

In a less corrupt or non-corrupt country, when you encounter a police road block, hand over your passport to an immigration official or walk through customs, you have far less anxiety and a far greater sense of being in a functioning democracy where the official is not looking for something from you but acting consistently in the public interest, by looking after the law-abiding citizens, apprehending the criminals and removing unroadworthy vehicles.

As we know, bribery can occur at every level and along a sliding scale, all the way to state capture, where you punish people who are doing the right thing by removing them from their office, by bringing contrived court actions against them or even threatening them. The effect is that productive, hard-working non-corrupt people spend increasing amounts of time defending themselves and dealing with the stress. This contributes to the downwards spiral of the country or organisation as their effectiveness in holding back the tide of corrupt behaviour is diminished.

What is also interesting about the game findings, is that the players who grew up in- and still live in more corrupt societies were more likely to accept a bribe, but those who grow up in—but moved to a non-corrupt societies were less likely to accept bribes.

In a democracy it goes without saying, but bears emphasising, you want to ensure your institutions are made up of women and men acting in the best interests of the country, and that they are immune to bribery. The moment you open the door to the bribery and corruption virus, it wreaks havoc on society and democracy. It leads to more and more people going on tax revolts, moving their money abroad, emigrating, not starting new businesses and investment drying up. Ethical cooperation declines, contributions decrease by 25% and more, and there is less money for the public good – like building houses and schools, or sorting out Eskom.

The overall effect is a small elite accumulates more and more wealth at the expense of everyone else; and when leaders are given positions of unfettered power where bribery is accepted, it corrupts them absolutely.

So what to do? In an attempt to model the effect of mitigation factors, Muthukrishna et al then modified the Bribery Game and introduced two different transparency measures – partial transparency where the players were able to see how much the leader of their group was contributing to the public good (but not the bribes); and full transparency where they were able to see everything the leader was doing: how much they earned and contributed, and, even, if they bribed, who they bribed and how much.

The aim was to see whether this had an impact on suppressing or mitigating corruption. A real life example is Singapore which has one of the lowest levels of corruption in the world. Here, the citizens know exactly what their leaders earn and are doing; the economy is strong, and the public goods provisioning is high.

But what happens if you are in a situation where there is strong leadership but a weak economy? Interestingly, the introduction of transparency showed the public goods provisioning still increases, though not quite to the level of the Institutional Punishing Goods Game. Rwanda’s President Paul Kagame is a case in point. He is a powerful leader and ruthless about stamping out corruption in a country with a relatively weak economy. Not everybody is happy about his methods, but it cannot be ignored that Rwanda’s public goods provisioning and its economy is growing as a result. Its capital, Kigali, is an incredibly clean city, people obey the laws and the police don’t solicit bribes.

In contrast is Zimbabwe, another country with a weak economy that had a powerful leader in President Robert Mugabe. He allowed bribery and corruption to flourish, and Zimbabwe is where it is today.

The most interesting finding though in the Bribery Game, is where there is weak leadership and poor economic potential. Even with full transparency about what the leader was receiving and contributing, it has zero effect on increasing the players’ contributions. Where there was partial transparency, i.e. where the players could see what contribution their weak, non-corrupt leader was making to the public good—most alarmingly it resulted in lower contribution levels, lower even when the transparency factor was not introduced.

What does this tell us? Anti-corruption activities can backfire in an environment of partial transparency and weak leadership. The effect on people is: ‘If he only gives that amount, and the country is going nowhere, I might as well contribute even less’.

There are critical lessons for South Africa here. People are saying that President Ramaphosa is not being decisive and that we only have partial transparency into what is going on at the leadership level and in the country, mostly through revelations at the commissions.

Hence there is an increasing call to start exercising incredibly strong leadership and full transparency to get the country on the right path, which will encourage people to invest and contribute more. If he continues to do nothing, if the prosecuting bodies do nothing and the public protector does nothing, we may find the attempts of the Zondo Commission and all the others backfiring. 

comments powered by Disqus

RW1
R1
R1

This edition

Issue 408
Current


Archive


Leadership_Mag Experience the technologies disrupting your world. Join us in #CapeTown for #AfricaCom 2019! Register now for your… https://t.co/nolH2Shs7q 7 days - reply - retweet - favorite

Leadership_Mag We’re proud to be partnering with this year’s #AfricaCom, Africa's largest connectivity and digital transformation… https://t.co/N2Uag6pVrt 10 days - reply - retweet - favorite