The corruption conundrum

Cyril Almeida, a regular critic of the government, has a new column in today’s Dawn in which he poses an important question: In our anti-corruption drive, do we have some actual plan to promote? Or are we just angry for the sake of anger? This is not, of course, to accept or excuse any corruption in government. Government corruption is of the worst sort – that which exploits the trust of the people. But before we begin a massive purge of government officials, shouldn’t we have some plan to run the country?

CORRUPTION’S back. Well, back in the news anyway. (You’d have to be incredibly naive to believe it ever really went away in substantive terms.) But I am sceptical. Let me explain.

I’m sure that those with their hands jammed down the cookie jar at the moment are having a phenomenally lucrative time of it — and that is galling. The people’s representatives, those employed by the state and political appointees aren’t meant to be working to enrich themselves. That much is obvious. Equally obvious is the fact that they often do enrich themselves through graft, bribery, corruption, all of the above, whatever.

But watching and reading the anti-corruption brigade baying for the blood of corrupt officialdom, I can’t help but wonder: do they fully understand the costs? The costs both of corruption itself and of trying to take down the corrupt in government? And does the anti-corruption brigade have a plan that could work?

My scepticism is fuelled by the fact that to each of those three questions, the answer appears to be: no, they don’t.

Start with the issue of the scale of corruption: is it ten billion or a hundred billion or a thousand billion rupees a year? Is it a tenth of one per cent of GDP or one per cent or five per cent? Depending on how angry the person making the charges is and how many ‘official’ — inevitably, unnamed — sources they quote, the figure is — well, whatever they want it to be, because the truth is, no one knows.

This is terribly problematic, and here’s why. From a societal point of view, corruption matters in the main not because it exists per se or because it is morally wrong, but because of the deleterious impact it has on the provision of public goods. For instance, we spend less than half a per cent of GDP on healthcare and two per cent on education — so if corruption is eating a comparable amount of the government’s budget, that means we are losing out on educating more of our children and keeping our population in better health.

Not knowing the scale of corruption means we cannot contextualise it at the national level and so we really don’t know how big a problem it is in the first place.

OK, who are you kidding, you ask. Corruption is massive and, in any case, it doesn’t matter how much our officials are thieving, it’s the principle of the thing — our officials shouldn’t be crooks and pilferers.

Fine. Let’s switch from the economic to the political, then. How do we resolve the corruption issue? The answer generally proffered: remove the corrupt from government, of course. We don’t need ’em, they are parasites feeding off this poor, luckless land and its people. Throw them in jail.

In the current round of corruption hysteria, the targets are pretty clear: Zardari and his buddies. But if the desire to see them ousted is fulfilled, there will be a next round and in that round the target will be Sharif, the army’s chosen political ones, whoever. The reason: we can debate whether some politicians are more corrupt than others, but few would argue that any of our potential national leaders have clean hands — so the corruption monster will rear its head again.

Now to that second question, the cost of taking down a government’s leaders. The direct cost would be further political instability, but in a country that is long used to it, the temptation is to shrug and say, so what? This too shall pass.

But what many miss are the hidden costs, which in fact may outstrip whatever ‘savings’ we can get by kicking out the corrupt. Consider just one potential cost of political upheaval at the moment: the possible scuttling of the National Finance Commission award that the centre and the provinces are trying to hammer out.

The what? Not many beyond policy wonks and geeky number crunchers care about the NFC award. But the NFC is in fact one of the planks on which the federation of Pakistan survives — and is meant to thrive. Essentially, it carves up the tax revenue and distributes it between the centre and the provinces. It even gets its own article in the constitution — Article 160.

In a very direct way, the NFC award impacts on the services and goods that the state is able to provide to us, the citizenry — government can only provide what it can pay for, and it can only pay for what its budget allows. So if the people want services, and some of those services are best provided by the centre while others by the provinces, what the centre and the provinces get to spend matters fundamentally.

Agreement on resource distribution is fiendishly difficult, though — think of it as the financial Kalabagh dam. The NFC award is constitutionally supposed to be made every five years, but 17 years lapsed between the first consensus award in 1974 and the next in 1991. The reason? Political turmoil in the late ’70s and the mid ’80s. And since the 1996 NFC, the game-changing one constituted by the caretaker prime minister Malik Meraj Khalid, we have had no new award.

Shaukat Tarin is currently trying to change that, and given that there are elected provincial governments, it would be the first award hammered out by elected representatives in nearly two decades.

So if the storm brewing over corruption allegations takes down the government or the president, the righteous will be pleased, but the finance guys will be left holding their heads because the NFC award would be scuttled yet again. That would translate into the loss of very real services that the provinces are hoping to provide by getting a larger slice of the national tax pie.

Causality would be readily determined: obsession with corruption in high office leading to political instability/change leading to the continued denial of services the people need from their provincial governments.

Preposterous, you say? Perhaps. But the point of the conjecture outlined is to highlight the desperate lack of nuanced thinking about corruption. We may not like it, and may not even realise it, but we live in a very complex world where an instant ‘good’ can lead to more ‘bad’ over the longer term.

Put another way, would you care as much about purging the corrupt from office if that means you can’t get the basic services you believe the state is supposed to provide you?

So are we supposed to do nothing about corruption? Of course not. But what we need is for the anti-corruption watchdog to be snapping at the heels of the corrupt, not sinking its teeth in the jugular of the state. And what we also need is an institutional mechanism for dealing with corruption, not emotional attacks against the corrupt.

Heard of the PPRA? That’s the Public Procurement Regulatory Authority. The only time I have seen it mentioned in the context of fighting corruption is in the excellent editorial columns of the Business Recorder. What can a muscular, independent PPRA do to fight corruption?

The answer doesn’t matter — at least as long as we are happier hunting the villains rather than trying to fix the system.


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