29 June 1995 - 01 July 1995

Corruption in Democratic Societies: Patterns, Implications, Remedies

Chair: The Hon John Brademas

Corruption had seemed a rather unusual subject for Ditchley; but we were all aware - across a participant list of notably rich diversity - that it had within the past few years acquired a striking salience even in countries previously disposed to think their public life virtuously immune from the disease. We were unsure, and thought it unnecessary to debate at length, whether this new salience reflected rising incidence, heightened standards and expectations or increased media attention. We knew that the past was nowhere a golden age in this regard. But whether there was now more or less corruption than before, there was certainly too much; and while we acknowledged real differences of degree between sectors and between nations, no country could claim innocence and so the role exclusively of preacher to others.

We mostly managed to avoid debate on the finer shades of definition (just where did voter-pleasing political behaviour shade into non-pecuniary corruption?) and we agreed that over-lavish use of the term “corrupt”, to characterise almost any behaviour disapproved of, weakened the force of the central drive. Misuse of public office for private gain - not necessarily just financial - was the heart of the matter. Most of us however were reluctant to see the concept confined too narrowly to formally-illegal behaviour; boundaries were set also by a wider morality and by legitimate public expectations.

How much did corruption really matter? Some of the discussion noted - though without endorsing - arguments that corruption was a useful or even necessary safety-valve, a lubricant in poorly-functioning political economies; and we were fairly reminded that there were worse evils - some deeply unpleasant state systems had been notably rigorous against corruption; it was moreover not obviously wicked to bribe for a visa extricating a relative from Hitler’s or Stalin’s shadow. But these were highly special cases, and we were agreed that the only sound and workable rule was to oppose corruption everywhere. Cultural divergence no doubt affected its patterns and the comparative importance and perception of its different forms (such as nepotism in jobs) from one country to another, but any acquiescence was a slippery slope. However corruption was cloaked, it damaged outcomes - bad projects went forward, healthy competition was distorted, inferior individuals won high posts. It weakened systems - trust between colleagues evaporated, controls withered, efficiency decayed. And progressively it eroded the whole fabric of public confidence in institutions and willingness to respect the criterion of the common good. We noted that the cumulative harm in regions like sub-Saharan Africa could often be catastrophic, with for example a multiplier effect as the misuse of aid funds sapped future willingness among donor countries as well as wasting their current effort.

The prime area of opportunity and risk lay at the interface between the state and the market, where officials as trustees held monopoly power over public assets - licences, contracts, appointments or the like - of value to private business and individuals. Dangers were intensified while societies were in rapid or radical transition, with unstable norms and shifting experimentation. In general the more highly regulated the society, the greater this area and the attendant risk. There was therefore merit, wherever possible, in narrowing the interface by cutting back on the state activity which offered the temptations. But such activity could not be reduced to zero; if the functions of the state were not to become robotic and mindless there had to be some elements of intelligent discretion left to the judgement of officials (and indeed any attempt to cater for every situation by pre-set rule would not only become hugely burdensome, and thus penalise economic efficiency, but itself create new scope for corruption as short-cut decision became a benefit in its own right). Beyond a certain point the best way to deal with discretionary power was not to abolish it but to compel it to operate openly and accountably.

Our survey of cause and temptation noted the special pressures exerted by the existence, across the international system as a whole, of massive amounts of money related to traffic in illegal drugs. Another aspect of frequent difficulty was the financing of political parties. These were complexities which anti-corruption drives could not ignore, though we lacked time for their detailed discussion.

We heard examples, both within industries and at the national level, of strategies to tackle corruption in a systematic way. There was, we knew, no simple model for such strategies - they needed to be built upon careful analysis of the particular environment’s real characteristics. They needed moreover to take a pragmatic view of priorities - for example, to tackle “grand” corruption at high levels as more urgently pernicious than petty bribery - and to accept that advance must often be pragmatically gradual. Their composition had to be multi-faceted: sound law or other means of standard-setting, deterrence by the real prospect of penalty, the blocking or limiting of opportunity, the changing of behavioural incentives and the power of exposure all had complementary parts to play within a menu of possible instruments.

Corruption across international borders occupied much of our attention; and we underlined the importance of tackling the bribe-giver equally with the bribe-taker. It was deeply disquieting, for instance, that even in some highly- developed countries the giving of bribes abroad was not merely not illegal but actually tax-deductible. It was, we accepted, wrong for many reasons - including the ultimately corrosive effect upon the bribe-giver’s domestic standards and systems - that firms should behave abroad in ways they would deplore at home. Corporate codes of conduct should be consistent worldwide; and much support was voiced for legislation on the lines of the United States’ Foreign Corrupt Practices Act, whereby corrupt action by US firms or citizens abroad was a criminal offence punishable in US domestic courts. We did recognise that, despite this striking example, there were “prisoner’s-dilemma” problems about expecting individual trading nations or firms to behave well if important competitors did not; and collective international effort - including the filling of jurisdictional gaps - was therefore essential. We heard of the valuable start made by discussions in the Organisation for Economic Cooperation and Development (though an effective international bargain would need to reach beyond OECD members) and some participants urged the case for a new international convention, on the Human Rights model, to help set standards even if enforcement mechanisms were lacking.

Conditionality in the giving of development aid - the threat or actuality of withholding funds if there was widespread corruption in the recipient’s use of them - had a part to play, so most of us thought; but we acknowledged its difficulties - the total absence of corruption was an unreasonable demand, yet mere declarations of virtuous intent and rule were too easily made. In some settings the societies most vulnerable to corruption might be precisely those most in need of aid. The most fruitful basis for conditionality might perhaps be the putting in place of practical programmes towards better and more transparent governance.

Openess, we felt sure, was everywhere a key component of any effective strategy. We noted also that the rigidity and secrecy of some international banking practices operated to the protective advantage of the corrupt; and that good strategies for the identification and pursuit of corruption could be stultified if police and judicial systems themselves lacked courage or integrity, especially when the powerful were involved. Any corruption in these fields was a double evil.

Many of us sought to place special stress upon the importance of clear and secure ethical standards, personal and professional, among individual members of the public service. There was no single, nor any quick, path to the creation of well-rooted integrity; but plainly-inadequate remuneration of officials, arbitrary insecurity in post, or the absence of a sense that the general public esteemed their role were certainly obstacles to it. We suspected also that inability to identify genuinely with the national community as the key group to be served - a propensity to carry a prior loyalty to family, party or ethnic group inappropriately into the official role - was also a frequent source of difficulty; and efforts to broaden the perception of duty owed (and of public resources as truly the community’s property) could therefore be relevant in a countering strategy.

In almost all these respects public opinion, the non-governmental institutions of civil society and - especially - the media had key contributions to make in shaping attitudes, setting expectations and monitoring performance. We were nevertheless a little ambivalent about the media. They might sometimes focus more on the highly-coloured and the spicy than on the truly important; they might not themselves always be corruption-free; and there was moreover a risk that headline-catching presentation might harmfully engender a deeper degree of public mistrust in democratic institutions than the facts warranted. But these were drawbacks which probably had to be tolerated, since attempts to constrain them would mostly import worse harm. The anecdotal or episodic nature of media coverage did however indirectly underscore the need for more systematic research, and for its effective exchange, on the phenomenon of corruption.

How was the drive against corruption to be taken forward? We knew that genuine political commitment and determination, at top levels of governments and Parliaments, were essential motors, and we noted that peer pressure, for example among heads of state, could help to build and fuel them. But non-governmental endeavour, such as the striking efforts being led and fostered by Transparency International, could help importantly both in arousing concern and in disseminating ideas, techniques and experience. There was now, most of us believed, a real window of opportunity. Public attention was widely engaged, and public tolerance of corruption was salutarily in decline. There were apparent both a cogent need and an encouraging chance to persuade political and business leaderships, opinion-formers and electorates that the problems were real; that they mattered; and, crucially, that much could be done in concrete ways to tackle them effectively.

This Note reflects the Director's personal impressions of the conference. No participant is in any way committed to its content or expression.

Chairman. The Hon John Brademas
President Emeritus, New York University


Mr C J Carey CMG
Member, European Communities’ Court of Auditors (1983-92)

Detective Chief Inspector Peter J Connor
Detective Chief Inspector, Company Fraud Department, Metropolitan Police, London

Mr John A Cooke
Head of International Trade Policy Division, Department of Trade and Industry (DTI)

Mr Michael J Elliott
Diplomatic Editor, Newsweek', Central Policy Review Staff, Cabinet Office, London (1982-84)

Mr Simon Jenkins
Journalist and author, columnist, The Times (Editor 1990-92);

The Rev Professor Jack Mahoney SJ
Dixons Professor of Business Ethics and Social Responsibility, London Business School

Mrs Barbara Mills QC
Director of Public Prosecutions

Ms Cait Murphy
Business Department, The Economist, London.

Mr Stephen Nicklen
Director, Audit Support, Audit Commission, London

Mr Kevin Sparkhall
Head, Government and Institutions Department, Overseas Development Administration, London.

Ms Diana Warwick
Chief Executive, Westminster Foundation for Democracy

Mr Robert J Lindquist
Chairman, Lindquist Avey, Washington, D.C

HE General Ahmed Abdel Rahman
Chief, Administrative Control Authority, Heliopolis

Dr Peter Eigen
Chairman, Board of Directors, Transparency International (TI), Berlin

Dr Friedrich Thelen
Editor, Wirtschaftswoche, Bonn

Frau Rosemarie Wemheuer MEP
Member of the European Parliament (SDP)

Professor Ernest Savona
Professor of Criminology and Director, TRANSCRIME (Research Group on Transnational Crime), School of Law, University of Trento

Shri Sikander Bakht MP
Member of Parliament (BJP) Madhya Pradesh

Mr Toru Kuroiwa
London Bureau Chief, The Mainichi Newspapers

Mr Federico Reyes Heroles
Editor, Este Pais, Mexico City

Dr Juan Pablo Fusi
Professor of Contemporary History, Santander University

Señor Antonio Garrigues Walker
Senior Partner, J & A Garrigues Law Firm, Madrid

Dr Joaquin Romero Maura
Independent financial consultant, Paris

Professor Frank M Anechiarico
Hamilton College: Professor of Government

Mr Joseph DeLuca
Assistant Inspector General, Chief of Operations, Office of the Inspector General, New York City School Construction Authority

Dr Larry Diamond
Senior Research Fellow, Hoover Institution

Mr Leonard Garment
Head, Washington, D.C. office, Mudge, Rose, Guthrie, Alexander & Ferdon

Mrs Susanne Garment
Principal, Lee & Garment, a policy consulting firm

Professor Stephen R Graubard
Professor of History, Brown University

Mr Stephen Handelman
International affairs columnist, The Toronto Star; Associate fellow, The Harriman Institute, Columbia University, New York

Mr Fritz F Heimann
Associate General Counsel, General Electric Company, Fairfield, Connecticut

Professor Michael Johnston
Professor and Chair, Department of Political Science, Colgate University, Hamilton, New York

The Hon Philip M Kaiser
Senior Consultant SRI International

Mr Marvin F Moss
Chief of Staff to Senator Paul S. Sarbanes

Mr Donald H Rivkin
Senior Counsel, Schnader, Harrison, Segal & Lewis

Professor Susan Rose-Ackerman
Henry R Luce Professor of Law and Political Science, Yale University and co-director, Law School’s Center for Law, Economics, and
Public Policy

Professor Donald W Shriver Jr
President Emeritus, President (1975-91) and William E. Dodge Professor of Applied Christianity (1975-), Union Theological Seminary, New York

Mr Thomas D Thacher II
Vice President and Inspector General, New York City School Construction Authority

Mr David Timberman
Independent scholar and consultant on democratic development