Corruption and Good Governance

Corruption and Good Governance
Lecture delivered by
Asif Ali
Former Comptroller and Auditor General (C&AG)

of Bangladesh (Constitutional Post)
Venue : Financial Management Academy (FIMA)
Date : 08/08/2016, Monday.
Definition of Corruption:
 The word corruption comes from the Latin verb ‘Corruptus’

(to break); it means “broken object”. Conceptually, corruption
is a form of behavior that departs from ethics, morality,
tradition, law and civic virtue.
 The World Bank and Transparency International treat

corruption as the use of one’s public position for illegitimate
private gains. Abuse of power and personal gain, however,
can occur in both the public and private domains, often
through collusion by individuals from both sectors.
Contd.
Corrupt practice implies any direct or indirect offer or

commitment of bribe, job, valuables, service, financial benefit
to or from any procuring entity in order to influence any
activity, decision or procedure in the procurement or any
contractual process.
Robert Klitgard Formula of Corruption: Corruption =
Monopoly + Discretion – Accountability – Ethical Conduct
Misuse of power, bribery, misappropriation, fraud, extortion
of money, embezzlement, favoritism, nepotism, theft of state
assets are various types of corruption. Everywhere in the
world there is a corruption but the depth and impact of
corruption various form country to country.
Constitutional obligation:
• Article 20 (2) of the constitution of the People’s
Republic of Bangladesh.
• “The state shall endeavour to create conditions in

which, as a general of principle, persons shall be able
to enjoy unearned incomes, and in which human
labor in every form, intellectual and physical, shall
become a fuller expression of creative endeavour and
of the human personality.”
Many faces of corruption:
 Taking bribe by government
official/employees/elected or nominated public
representative while discharging their duties;
 Accumulating wealth illegally by any government
official/employe/elected or nominated public
representative or even by any other person by own or
anonymously;
 Embezzling or damaging public money/assets;
 Conducting business/commerce by government
officials/employees without permission from the
proper authority.
contd.
Trying to save any convicted criminal intentionally from

punishment by government officials/employees ;
Money laundering (illegal financial transactions,
transformations, hiding and helping to do such work)
Allegation of embezzlement of money/assets by the
employees in private sector; and
Fraud, forgery, deception, improprieties, loss, wastage
theft, etc.
[ACC (`y`K) Bangladesh Annual Report 2014, Chapter 2 (2.1.1)]

Causes of Corruption in Public Sector in Bangladesh
• Identified by World Bank (WB)

• The Nature of the regulatory environment.
• The lack of transparency in government.
• The influence of powerful business interests.
• Low salaries for public servants.
• Weaknesses in the legal framework.
• The self-sustaining cycle of corruption.
Identified by Asian Development Bank (ADB)
• Weaknesses in public financial management.
• Low salaries and lack of incentives structures in the civil
service.
• Overly complex and burdensome regulatory rules and
procedures.
• Weak public procurement systems.
• Lack of judicial independence.
• The traditional practices of closed-door policy
development.
• Legal drafting and public decision making.
• The tendency to classify all government business as secret.
Identified by Transparency International Bangladesh (TIB)
 Poor socio-economic conditions.

 Poor service condition of the public sector including
low incentive package, poor opportunity for career
advancement.
 Extensive discretionary power on the part of public
officials with limited accountability gives rise to
corruption.
contd.
 Multiplicity of laws, rules, etc. and weak enforcement
of these laws often encourages corruption.
 Key watchdog agencies’ lack adequate, well trained and
skilled staff to undertake their responsibility in an
appropriate manner.
 Existence of patron-client relationship reinforces
corrupt practices in public dealing.
 Absence of effective commitment to moral values at
the top; and
 Lack of political will.
Corruption in the public sector in Bangladesh:-
Year Most Corrupt Very Corrupt Moderately Corrupt Low Corrupt Sector
Sector Sector Sector
2005 Education, Land, Political Disaster Management Energy & Mineral, Industry, Law &
Police, Health Party, Forest & & Relief, Water Justice, Housing & Public Works, Social
and Private Environment, Resource, Home Welfare, Civil Aviation & Tourism,
sector Finance, Affairs, Post & Election Commission, Information, Youth
Communication Telecommunication, & Sports, Jute Cultural Affairs, Religion,
and Power. Agriculture, Tax, Food, Textile, Establishment, Foreign Affairs
NGO, Fisheries & and Women & Children Affairs.
Livestock and
Shipping.
2004 Police, Environment & Home Affairs, Civil Aviation & Tourism, Fisheries &
Education, Forest, Private Agriculture, Land, Livestock, Industries, Social Welfare,
Health, Local Sector, Disaster Power, NGO, Post & Housing & Public Works, Law & Justice,
Government & Management & Telecommunication, Energy & Mineral Resources, Information,
Rural Relief and finance. Tax, Water Resources, Women & Children Affairs, Prime
Development Political Parties and Minister’s Office, Parliament Secretariat,
and Food. Establishment, Religious Affairs,
Communication. Shipping, Youth & Sports, Foreign Affairs
and Jute.
TIB Database Report 2044 and 2015

Impact of Corruption in Bangladesh:-
 ‘As a result of corruption, private mansions are being built
instead of bridges; swimming pools are dug instead of
irrigation systems; funds destined to run hospitals and buy
medicines find their way into the pockets of corrupt officials;
economic growth is held hack; and public trust in government
is undermined.’
 OECD/ABD `Curbing Corruption in Public Procurement in Asia

and the Pacific’
 Institutions engaged in checking Corruption:-
• ACC (`y`K)
• C&AG
• PAC : Public Accounts Committee Jatiya Sangsad
(Parliament)
• Media
• People at large.
Definition:-
Governance
The term “governance” means “the process of

decision-making and the process by which
decisions are implemented.
Governance can be seen as the exercise of

economic, political and administrative authority to
manage a country's affairs at all levels.
Good Governance
According to the UN, Good Governance has eight characteristics
Good governance is a form of governance that embodies eight specific

characteristics, and can be seen as an ideal of governance.
It comprises the mechanisms, processes and institutions through which citizens
and groups articulate their interests, exercise their legal rights,
meet their obligations and mediate their differences.

Role of Good Governance:-
Enhanced reporting on Public Finance, stronger
accountability
Transparent Government action, Parliamentary
Scrutiny, Media perception
Improved public service delivery
Greater Economy, Efficiency, Effectiveness, Fairness
and Integrity
Fight against Fraud and Corruption
Partners in Good Governance:-
 Executive – Ministries/Divisions, Departments,

Public Sector, Local bodies etc.
 Legislature – JS (Parliament) – PAC, Ministerial
Standing Committees etc.
 Judiciary – SC, Tribunals etc.
Extended Partners in Good Governance:-
• OCAG
• ACC (`y`K)
• Media
• Civil Society
• People at large.
Role of Audit - OCAG:-
 Analyzing and reporting on the Government

spending and performance.
 Assist Public Accounts Committee in the discussion
on Audit Reports.
 Help to Establish a Sound Financial Management
in the Public Sector.
 Support the Management in Performance
Development.
• Role of ACC (`y`K):-
• Combating corruption through punitive actions.

• Pre-empting corruption though system renew.
• Preventing corruption through education and
advocacy.
Role of PAC:-
• Discusses Audit Reports/Accounts Reports

• Settlement of Audit findings.
• Recommendations.
Challenges in Implementing Good Governance:-
 Institutional Challenge.
 Technical Challenge.
 Political Challenge.
 Ethical Challenge.
Contrasting Good Governance with Corruption:
Conclusion:

Corruption and Good Governance

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Corruption and Good Governance

Former Comptroller and Auditor General (C&AG)

 The word corruption comes from the Latin verb ‘Corruptus’

 The World Bank and Transparency International treat

Corrupt practice implies any direct or indirect offer or

• “The state shall endeavour to create conditions in

Trying to save any convicted criminal intentionally from

[ACC (`y`K) Bangladesh Annual Report 2014, Chapter 2 (2.1.1)]

• Identified by World Bank (WB)

 Poor socio-economic conditions.

TIB Database Report 2044 and 2015

 OECD/ABD `Curbing Corruption in Public Procurement in Asia

The term “governance” means “the process of

Governance can be seen as the exercise of

Good governance is a form of governance that embodies eight specific

meet their obligations and mediate their differences.

 Executive – Ministries/Divisions, Departments,

 Analyzing and reporting on the Government

• Combating corruption through punitive actions.

• Discusses Audit Reports/Accounts Reports

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