Corruption

Corruption may be the largest social issue in the world. This is because it creates, or stifles progress on so many other issues. Corruption prevents proper administration of government services, especially in the poorest countries, creating widespread dysfunction and preventing the poor from accessing services. There is corruption in the public, private, and nonprofit sectors. It is difficult to measure the scale of corruption. $1 trillion USD annually is a common low-end figure. The IMF has estimated it at $2 trillion annually. World Economic Forum puts it at $2.6 trillion.

Public sector corruption occurs at all levels, from the prime minister to a municipal government employee. At the highest levels of government, it may occur in the form of overpaying for an infrastructure project and receiving a kickback. At lower levels, it may be in the form of withholding utilities unless a bribe is paid. Using employer bank accounts to pay for personal expenses and outright theft are also common forms of corruption in all sectors.

Private sector corruption and fraud also occurs at every level. A large company may use shell corporations to avoid paying taxes. Someone may sell property that she doesn’t actually own using fake documents. Many acts of corruption involve both public and private sectors, such as a company paying a public official a bribe to ignore their legal violations. Any act of fraud a person or group commits against another is corruption, from knowingly selling a faulty product to not adequately providing a service that was paid for.

Corruption is endemic in the nonprofit sector the world over, although it is the worst in developing countries. Many charities in poor countries, including affiliates of international NGOs, are pure scams. The government of India has estimated that 99% of registered charities in India are complete scams, existing only to make money for their employees and trustees. These types of scam nonprofits create fake PR materials to make themselves look like real charities, and may perform a small amount of genuine services to make it seem like they are real charities and facilitate fundraising. In less severe cases of nonprofit corruption, charities will carry out their mission to a degree while pampering their staff and board of directors by paying for luxury personal expenses with the charity’s money. Another form of nonprofit corruption occurs when the staff don’t show up to work or don’t work when they are at their workplace, wasting donors’ money.

Anti-corruption protest in Chitral, Pakistan

Nonprofit corruption is not limited to secular organizations. Approximately 6% of church funds worldwide are stolen. Church embezzlement is estimated to be $45 billion/year (2015). By 2025, church fraud is expected to reach $60 billion/year. CEAS therefore recommends that church-goers demand their church open up their books to the public and their congregation.

Corruption has always been around in civilization, and is even discussed in the Bible. It is not going to be eradicated anytime soon, but given its extreme scale and negative impact on the society, any progress in this space is expected to be very impactful. Corruption is very resilient and most efforts at mitigation have had disappointing results. For instance, public or nonprofit government watchdogs usually have little impact on corruption. This is due to a number of reasons, such as watchdogs being unable to uncover information, unable to take action when corruption is discovered, or being corrupt themselves. Possibly, the main reason that watchdogs, including public law enforcement, have not decreased corruption meaningfully is that they can only try to prosecute corruption after the fact. They cannot prevent corruption, and neither are they an effective deterrent.

Putting in place structural controls can prevent corruption, but even here, people find innovative ways to commit fraud. There are instances of anti-corruption measures being successful, but overall, this is a very tough field for progress. Promising areas for progress do exist, however. The citizen-government partnerships implemented by Integrity Action have seen dramatic improvements in the delivery of public services, especially infrastructure projects. At this point, these measures are not widely used, so scaling up could have a an extremely high impact considering the scale of corruption in poor countries.

The Bible contains hundreds of references to corruption. Most of them refer to the importance of rising above the low morals of society. There are also many passages advising to avoid engaging in fraud. Jesus took action into his own hands against moneychangers scamming people in the temple. Fighting fraud and corruption are scripturally sanctioned.

Effective corruption prevention is effective altruism which also promotes morals, whether it be through integrity education or by creating controls that limit the opportunity for fraud. What could be a more Christian activity?

Transparency International India and Integrity Action are CEAS Recommended Charities. Countries with high levels of corruption need volunteers for Community Integrity Building, one of the most high impact anti-corruption strategies. If you live in a country with a lot of corruption and there is no CIB, contact Integrity Action for assistance in starting one. Residents of high income countries can advocate their government for more Community Integrity Building and other effective anti-corruption measures in aid recipient countries. The academic field of corruption and fraud prevention is underdeveloped with important aspects of corruption prevention absent in the literature, presenting high impact opportunities.