Nothing has undermined our democracies and free market economies all over the globe as much as corruption. This is especially true of the corruption of public officials who are invested with the public’s trust. When they who preach integrity and transparency are found in breach of their own hypocritical declarations, the whole fabric of societies risks unravelling.
Cynics would claim that the spate of corporate and public sector scandals within the most advanced global economies of the OECD has destroyed confidence. They claim that we will never bring corruption under effective control. I disagree, although I concede that it will never disappear.
Let us assess what has been achieved in controlling corruption and reinforcing integrity in government and busi- ness in our many countries over the past decade ”” and there have been some remarkable achievements.
Indeed, this is an occasion to take some lessons as to what collaborative and strategic efforts we might need to make over the next decades in the fight for good gover- nance, public and private, in our societies.
But before looking at those lessons, one thing we can take as given is that combating corruption is an ongoing and most likely a neverending task because of human greed.
Corruption is best seen as a disease, with multiple causative factors, including poverty, poor political and business leadership, institutional weakness, and personal greed: it has no upside ”” no justification and no benefit. Left untreat- ed, we know that corruption undermines the integrity of governments and busi- ness enterprises alike, by
negating the rule of law and dem- ocratic institutions;
compromising the functioning of markets and economies;
distorting the allocation of public and private resources;
damaging the environment;
robbing citizens of their rights;
making the public administration unreliable; and
destroying investor confidence in whole countries.
Historically the gravity of corruption and the impacts enumerated were little understood, and I think we can take considerable encourage- ment for the future from what has already been achieved, in a relatively short time.
For example, a decade ago:
successful prosecutions for corruption offences were rare, especially where lead- ing political or business figures were involved;
bribery of public officials by business interests was widespread; and
corruption and bribery were generally accepted as inevitable and incurable: busi- ness bribes were even tax deductible expenses in many countries (until just recently!) and the ”œdemand side” of the bribery equation ”” elected offi- cials and the public service ”” were often seen as an intractable difficulty, especially where there were relatively low public serv- ice salaries, patronage-based public employment, and a lack of transparency in government decision-making.
But a decade ago, the cost of corruption began to be an issue because there was focus on the issues enumerated. Competitive bribery was seen as displacing competitive goods and serv- ices. The result?
The OECD, as well as the World Bank and other international agen- cies, began to identify corruption as an economic issue, as well as a moral and political one. The World Bank in particular began to devise ways of assessing the real costs of corruption, especially where those costs impact- ed directly on ordinary citizens.
A new NGO calling itself Trans- parency International was starting to focus the attention of governments on the problem of corruption in gen- eral, and bribery in particular. Anti- corruption agencies were being established in a number of countries, based on ”œthe Hong Kong model” of the Independent Commission against Corruption, which was proving that such an institutional approach could be effective. Civil society organisa- tions in many countries ”” notably in Europe ”” began to speak out against political corruption and lack of accountability by governments, and these groups rapidly developed politi- cally significant influence.
The OECD has played and contin- ues to play a key role in this change. The ”œOECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions,” adopted by OECD member countries and five non- members in November 1997, is but one example.
In the public governance area, OECD member countries contributed to major work on Ethics in the Public Service, and Trust in Government. (I will return to the role of public ser- vants to which I attach particular importance).
In the business sector, the spate of corporate scandals has resulted in the OECD being asked to revise its world benchmark Principles of Corporate Governance, requir- ing much more accountability and transparency on the part of directors, managers and others who are entrusted with the management of shareholders’ capital. The revisions which have been reviewed with busi- ness, labour and civil society representatives are now com- plete and should be endorsed by OECD ministers in this month of May.
The fact that the OECD’s Global Roundtables series on these issues, held in cooperation with the World Bank in Russia, South America, south-eastern Europe and Asia attract widespread support, bears witness to the fact that corruption and lack of integrity in government and the business world are no longer accepted as inevitable. More and more people are prepared to be engaged in programs of action which a decade ago seemed futile.
In brief, we can rightly be encour- aged by what has been achieved in the past decade. In particular, we have seen unprecedented levels of effort to come to grips with corruption ”” by national and local governments, the business sector, international agencies and civil society.
Since assuming my post at the OECD in 1996, I have visited the gov- ernments of many member and non- member countries. I have been struck by the varying quality of the public services. With countries emerging from military rule or centralized communist dictatorships this is understandable. But more established democracies also face challenges of quality. Canada has been well served in that regard for so many years that we take the public service for grant- ed. We should not.
Government can be thought of as having the same elements as computer technology. There is hard- ware, meaning the institutions such as legislatures, courts, administrative tribunals, regulatory agencies and so on. They are manned by as wide a range of skills as one could imagine: judges, lawyers, scientists, econo- mists, and so on. These individuals are the operating systems responsible for the mechanics of making the hardware perform in the best interest and in response to the software. What is the software? Politicians, aided by their policy advisors. They must feed the policies or programs into the operating systems. Good governance requires that all these elements function well. To tackle the immense array of complex chal- lenges of our time, the citizenry in each of our countries must have con- fidence that the hardware, operating systems and software are honest, transparent and to a large degree ”œinclusive,” meaning that people know their views on difficult issues have been heard and reflected upon, if not accepted.
In governance as in everything, theoretical models and attractive organigrams by themselves accom- plish nothing. I have always believed that when we put the right brains to work on the right jobs, we will succeed.
To do this we need in each coun- try the necessary hardware, operating systems and software. How do we attract the educated, skilled, honest people to government who will be the operating systems and, where necessary, design and construct the hardware? Surely the answer is that public service must become a career of first choice. The best and the brightest should be drawn to govern- ment. This is true of every country. But how?
I do not have all the answers, but several thoughts come to mind.
Remuneration, recognition and public respect to begin with. Public service will never compete with the private sector on the basis of pay alone. However, good career manage- ment, stimulating public policy chal- lenges, combined with reasonable pay and public respect and recognition can make a difference.
The private sector can also help by signalling that a public service background is highly regarded by pri- vate sector headhunters, as it so clear- ly is in many of the OECD countries. This implies a migration of some pub- lic service expertise to
the private sector. Is this bad? I think not. It makes a public service career for high achievers very attractive. We have lessons to learn from each other in this regard. Some countries appear to have managed reciprocal transfers of people between the public sector and the private with significant benefits for both.
In Canada, there are many examples of public servants who have success- fully transitioned to become business leaders. L. R. ”œRed” Wilson, a onetime trade official, became CEO of BCE Inc., the country’s largest corporation, and is today non-executive chair of Nortel Networks and CAE. Paul Tellier, former clerk of the Privy Council, went on to become president of CN, presiding over its successful transformation from a crown corporation to a publicly trad- ed company in the private sector, and has been recruited to lead a turn- around at Bombardier. Former ambas- sador to the United States Derek Burney went on to become president of CAE. There are abundant examples of public service as a platform to the private sector.
There may be other incentives as well. But, from my perspective, the key issue is getting our best young people into government, to be the operating systems which provide con- tinuity and confidence in the man- agement of the public trust even during turbulent political periods, which are not unknown to most democracies.
Political systems should also be examined from time to time to provide confidence in the integrity of those seeking and holding public office. Again our political systems will always vary greatly, but there are certain principles which should find their place in all democracies, such as transparency in political financing, in appointments, disclosures by lobbyists and so on. Such measures help to replace widespread public cynicism with public confidence.
If I may turn to a sports analogy: the great coaches are those able to make one correction to the swing of a golfer or perhaps to the footwork or stroke of a tennis player which in turn corrects other defects.
In governance, what is that one correction? It is the quality of public servants. Attract the best and the brightest armed with integrity and political judgment to the public service, give them responsibilities in areas of their competence, and we will see a positive exploitation of each nation’s comparative advantage with concomi- tant global benefits. This is not theoretical musing. I see it happening regularly within the OECD.
There may always be some dis- honest people in public service, either at the political or bureaucrat- ic level. Corruption must always be contained, rooted out and punished. The future of democracy and free- dom is not assured, especially if undermined by corruption. We can- not say it is someone else’s problem ”” it is everywhere. Only vigilance, strong public ethics in an effective public service, and the rigorous application of the rule of law will relegate public corruption to the dust bin of history. It will take time.