Bad governance: The mother of corruption all over the world

LAHORE: Bad governance is the root cause of all ills in Pakistan. Absence of government writ is the worst kind of governance. One glaring example of this is that Federal Board of Revenue, despite having undeniable evidence of tax evasion by the over two million individuals, just doesn't take action against them.

It is bad governance when you have to pay extortion for carrying out any economic activity besides paying normal government taxes. It is bad governance when influential persons flout the law by moving around without fear with gangs of their private gun-toting thugs. Bad governance is the breeding ground for corruption.

According to a report by The Globalist, corruption damages a country's development, what is not at all sufficiently understood is that, in practice, it is highly regressive and inequitable. The report says that this is simply because corruption ultimately is the most vicious to the poor and may occur in various ways. When people have to pay bribes for every free government service then one must understand that this corruption became possible only because of bad governance.

The report argues that corruption is the misuse of public assets in a way that creates an unleveled playing field and that makes people feel injustice has been done.

Perhaps this is why the average citizen in our country, in fact all of us, feel so bad about corruption, the report says and adds, corruption may be manifested in various forms, such as theft, fraud, bribery, extortion, and request for kickbacks, nepotism and patronage.

Most countries around the world and in this region faced these problems and resolved them by improving governance, by ensuring rule of law and by taking advantage of available technology. In good governance the rules are strictly followed. If the tax officials ignore the documented tax evaders they do so by going around the rules. In the better-governed societies, officials violating the laws are accountable. In our country they are immune to accountability.

If rules are truly obeyed there would be no chocked sewers, no ghost schools. The standard of teaching would be at par with the best and the government hospitals would provide better treatment than the private clinics. The erring officials are not accountable because they break or twist the rules for the movers and shakers sitting deep in the power corridors.

The globalist report forecasts that in the long run, widespread corruption often creates much larger negative effects that can hinder the dynamic efficiency of an economy.

It also highlighted that the cost of doing business would increase if one had to part with some money to get each bureaucratic step cleared without delay. The existence of corruption clearly indicates that something has gone awry. And it is indeed symptomatic of weak governance — and, more importantly, weak institutions, the report asserts.

The report ties good governance to strong public institutions and efficient management of public resources, and public goods and services to address the needs of society.

Just like the bureaucrats the ruling elite has got waiver from accountability. They can delay the appointment of important posts including the heads of the regulatory institutions. In many cases the chief regulator is asked to operate till further orders. This impacts the independence of the institution. In doing so they in fact break the rules

It is often argued that bribes help in lowering the cost of doing business, in clearing the market, in providing incentive bonuses, and in distributing monopoly rents from a single agent to other officials who collude in sharing a bribe. What they forget is that the same tasks are performed in other economies without paying any bribe just because it is not possible for government officials to deviate from the rules. Moreover, delay in taking decision is also considered as violation of rules.

Corruption and bad governance also breeds poverty. When public service delivery is weak due to corruption, the poor tend to be heavily disadvantaged as they may lack resources to obtain private services (in private clinics or schools, for example). Systemic corruption that has diverted resources, corrupted values — and led to rent-seeking activities in place of productive ones.

Poor households are likely to be excluded from public services which require grease payments since the burden of corruption (that is, the cost of a bribe as a share of income) for the poor is likely to be disproportionately large compared to that of wealthier households. In this sense, bribery acts as a form of regressive taxation.