Corruption = Monopoly + Discretion Accountability

In the long term, curing systemic corruption requires better systems – in government and in the private sector. Successful leaders of government agencies and companies understand that better systems go well beyond better laws and new codes of conduct. I like the above formula. Corruption flourishes when someone has monopoly power over a good or service and has discretion to decide how much you receive and where accountability and transparency are weak. So, to fight corruption we must reduce monopoly power, reduce discretion and increase accountability in many ways.

Reducing monopoly power means enabling competition; in this context we are so happy that the Philippines has the Philippine Competition Act today and has a Philippine Competition Commission (PCC) which has a good group of commissioners. However, it would be great if the PCC were allowed to do its job without court interference, in the interest of removing monopoly/duopoly so that corruption can be properly addressed, reduced, and finally eliminated.

Limiting discretion means clarifying the rules of the game and making them available to everyone. This includes putting government contracts and procurement plans online, create online manuals on what is required to obtain a permit, build a house, start a business and so forth. Another example: Simplify the tax code, make it simpler to understand and reduce thereby the effective discretion of BIR employees.

Enhancing accountability means many things, and creative leaders in government and the private sector use a remarkable variety of methods. One way to improve accountability is to improve the measurement of performance. Another method is listening and learning from businesses and from citizens. This includes mechanisms for public complaints, but it goes beyond the reporting of individual instances of abuse to the diagnosis of corrupt systems.

Accountability is also increased by inviting outsiders to audit, monitor and evaluate. This is exactly the reason why we created Integrity Circles as one of the main avenues to address accountability, transparency and integrity.

We did this in the Integrity for Jobs (I4J) project, a project co-funded by the European Commission and the Konrad-Adenauer Foundation. We started with 9 LGUs and are happy to announce that 60 LGUs are now part of this endeavor. Cebu Province is part of this movement. Allow me to add that Integrity Circles are composed of people working in the LGU, being involved in business, and representing Civil Society (in many cases the Church). But let’s not forget the Press; media can be and should be an important source of accountability.

What about ethics and morality? Successful leaders in government and the private sector must set a good example. As mentioned above, the key to fight corruption are better systems that provide better incentives for imperfect human beings to perform in the public interest – and to avoid corruption.

Let me conclude by highlighting the work we are doing in the Integrity Initiative to create the Integrity Nation NOW. As mentioned in previous columns, Integrity starts with I. We need you to become part of our movement; contact me under Schumacher@integrityinitiative.com.