Stamping out corruption

rte

The RTÉ Prime Time Investigates report on corruption among some councillors broadcast last night inevitably draws a reaction of how do we rid a country of corruption. A simple answer might be to stop electing probably corrupt candidates. Charles Haughey continued to get elected even though rumours that he amassed his fortune corruptly were rife. Michael Lowry continues to get elected despite the findings of the Moriarty Tribunal, and if a fellow with the nickname ‘Stroke’ later gets convicted for corruption, surely his electors knew what they were doing.

Another reaction is to think corruption is a uniquely Irish phenomenon, bred into us by dark historical forces. Of course corruption in Irish political life isn’t ‘endemic and systemc’ despite what Judge Mahon says (I suppose if you spend so many years studying one thing it’s natural to assume the phenomenon is everywhere and important).

The programme approached 15 people, and three of those behaved in ways that suggest they’re corrupt. 12 didn’t. And presumably the 15 that were approached weren’t selected randomly. RTÉ probably had a reason to suppose that they were likely targets for corrupt propositions.

On indices of corruption, for instance Transparency International or the World Bank’s Worldwide Governance Indicators, Ireland performs pretty well. Out of a possible anti-corruption score of 100 in the WGI indicators Ireland’s 2014 score was 91.5 – not quite at the level of Denmark (99.5), but far better than any of the other PIIGS we were used to comparing ourselves to. The Transparency score isn’t as impressive, but shows us in the top half of the rich world.

2014_CPIBrochure_EN

While measures based on perception aren’t ideal, they have some face validity. Few of us experience corruption in day-to-day life. We don’t have to pay bribes to get an x-ray, or pass a driving test or nearly any of the myriad daily interactions we have with the state. The Irish Revenue Commissioners is widely regarded as utterly clean.

So Mahon was wrong that corruption is systemic and endemic in all aspects of Irish public life. Too many of us know enough clean politicians to suspect that his assertion couldn’t be true. It’s a problem in the area of planning. One of the most interesting aspects of  last night’s programme was that it was focussed on just this aspect of public decision making. Why is this?

The programme makers didn’t choose planning randomly. They didn’t pretend to be a high-tech start-up. They chose planning and councillors because it’s one of the areas that political decisions can make someone exceptionally rich at the stroke of a pen (the awarding of a phone licence is another). The decision to rezone land or allow some development can make someone exceptionally rich (though changes in taxation have largely dealt with profits from rezoning). In few other areas can political decisions make people so much better off.

So the solution to the problem might be to consider how to ensure that decisions that can make people very rich are taken cleanly. This might be to minimise this number of decisions. A  reform of the planning process with a principles-based planning process might be less open to corruption as opposed to a developer-led planning process (i.e. one where the person seeking to develop land requests permission). This is because it would limit the number of decisions that can benefit identifiable people, and instead decisions would apply to a broad class of people. I’ve yet to hear of anyone accused of taking bribes from Apple for the low corporation tax rate it gets, because that tax rate applies to a class of companies, not a few individual companies each based on separate decisions.

There is some evidence for the proposition that liberalised markets are less corrupt than ones in which the state plays a large role. Liberalising the market limits the impact of political decisions. For instance why limit licencing to  a certain number of radio stations (another area perceived to be corrupt at one time)? It should also require that where major decisions are taken which can make people wealthy – such as the awarding of state contracts – clear criteria are set out in advance and the process is transparent.

We should also be alert to the fact that creating statutory agencies doesn’t necessarily fix things. They don’t work unless they have real powers and incentives to do their job properly. SIPO is a reporting agency, but it relies almost entirely on the honesty of the participants. It has few real power of investigation. This silly assumption that an agency for something once set up will fix a problem still exists. The Register of Lobbying won’t work because it’s easy to get around, but temporarily helps d0-gooders think something is being done.

Hopefully the standard calls that ‘something must be done’ will give way to a clearer analysis of what the problem is and how it can be tackled.

Eoin O’Malley, School of Law and Government, Dublin City University @AnMailleach

Advertisements

5 thoughts on “Stamping out corruption

  1. As a canny old Jesuit once observed: “It’s a wise society that knows how much evil to tolerate.”

    Corruption will never be stamped out; and anyone who thinks so and has the power to pursue such a course will only drive it deeper in to the undergrowth where it is likely to prove more baleful and entrenched. It is a constant battle to curtail the incentives for corrupt behaviour (and to increase the incentives for compliant behaviour, to channel the ingenuity and inventiveness that is often employed in more positive ways and to increase deterrence. This piece offers some useful suggestions.

    The real corruption in Ireland is the soft corruption that permits the various interconnected elites and special interest groups to capture significant economic rents at the expense of all other citizens. In terms of what the OECD calls “market outcomes” (but which are really the result of distorted or rigged markets, of market failings or of the absence of markets and competitive processes) the distribution of income in Ireland is the most unequal of all OECD members. As a result the tax and welfare system has to be worked to the limit to generate final outcomes that are just above the OECD average. This rent capture by self-selecting elites and special interest groups happens in all other advanced economies, but it appears to be more insidious, prevalent and entrenched in Ireland – probably because the country is so darned small that all the backs that need mutual scratching are in continuous close proximity, because the system of democratic governance is more dysfunctional than most and because there appears to be an almost total lack of accountability.

    Since the reality of this rent capture is generally recognised – even if the minutia of the process of extraction may not be fully or widely understood, it is possible that this may be contributing to the fragmentation of voting intentions with indicated support for the traditional mainstream parties much lower than in the past and support for individuals and factions from the populist, but dangerous, through the deluded to the well-intentioned but ineffectual much higher.

    None of this, of course, will reduce the incidence of this soft corruption; the most that will happen is a minor reconfiguration and re-shuffling of the elites and the special interest groups.

  2. Given yet another housing crisis, particularly in Dublin, the real corruption in Irish life is the failure of the public authorities to ensure that our governmental processes are fit for managing the changes in our society in a timely and effective way.

    As an example, consider the exchange which took place during the Banking Enquiry between Joe Higgins TD and Dermot Gleeson (former AIB Chair, Attorney General) who pointed out that all the intellectual work was done on the issue of the price of building land, referring explicitly to the long-ignored 1974 Kenny Report. (extract below)

    This is a clear example of inertia on the part of the governmental system – elected and appointed.
    In this sense, Judge Mahon was correct to draw attention to a systemic institutional corruption in Irish public affairs. A recent example is the recent report of the Garda Inspectorate
    http://www.irishtimes.com/news/crime-and-law/root-and-branch-garda-reform-urged-in-report-1.2455181
    The ongoing messing with the health service shows clearly that our governmenal system is not able to deal with the complex processes needed to sustain decent living conditions for all.

    The real political challenge is how to limit the scope for such inertia in our way of governing ourselves. Putting time and energy into exposing three councillors is as much distraction as is referring to rankings in international indices that hide as much as they reveal about the realities of life in Ireland.

    “Deputy Joe Higgins
    Each year, requiring young working people to have mortgages extended from 20 years’ duration to 40 years, into their retirement, and at unsustainable levels. Now, can I ask you, in your view, is it moral or ethical, do you think, that inordinate profiteering and speculation in building land and in housing by banks, developers and bondholders should enslave a generation of young working people to that extent, with all the suffering and the horror that has ensued after for them? Do you think that is ethical or moral?

    Mr. Dermot Gleeson
    Well, I’m not in favour of immorality or slavery or suffering. So far as your question relates to the issue of the price of building land, I think that there is a serious political and social issue as to how that should be controlled, and the price of building land, and you probably know that building land becomes the object of speculation, and you probably also know that 40 years ago, this very issue was addressed after an increase of 500% in the cost of building land in Dublin between 1963 and 1971. This is a social resource, it should have some element of, in my view, State control. You can’t increase the number of building land … amount of building land around Dublin. And that issue – that very issue – was put to an expert committee in 1973 … 1971, reporting in 1973, under the chairmanship of Mr. Justice Kenny.

    Chairman
    Wrap up now Mr. Gleeson, very quickly to answer the question.

    Mr. Dermot Gleeson
    I have been asked the question and I am going to … and I’ll try and finish within 30 seconds.

    Chairman
    Okay, thank you.

    Mr. Dermot Gleeson
    Mr. Justice Kenny reported. If you look at that report, it’s lain on the shelves for 42 years. He proposed ten solutions. One … the first was nationalisation of building land.

    Deputy Joe Higgins
    Yes … and I’m—–

    Mr. Dermot Gleeson
    Eventually he proposed—–

    Chairman
    Not a new question now, Deputy Higgins.

    Mr. Dermot Gleeson
    I want to finish my … can I finish my answer? I simply say, the legal intellectual spade work in relation to the price of building land has been done. That’s all.”

    The full exchange here https://inquiries.oireachtas.ie/banking/hearings/dermot-gleeson-former-chairman-aib/

  3. In all the huffing and puffing about the programme, no one thought to question RTE. They spent a lot of time and money preparing the programme but found virtually nothing. That should have been the focus of the Prime Time discussion afterwards. Three dodgy characters out of 1,000 (?) councillors in the State is what you would expect. Indeed, I suspect it would be a lot worse in many other countries, including countries that the National Professor of Verbal Diarrhoea would complain were far superior to us (the National Professor couldn’t wait to launch himself into another tirade – he might stop to think before speaking occasionally). The programme and Prime Time afterwards represented RTE and chattering class Ireland at its worst. We do need, however, to make changes to local government. Five local authorities would be enough – Dublin city and county, South Leinster, North Leinster, including Cavan and Monaghan (pending re-unification), Munster and Connacht, including Donegal. Among other benefits, it would create more distance between elected representatives and voters. I often wonder if there are no local bus services in some counties because too many taxi-drivers live next door to councillors! That does not imply corruption but it can make it difficult for councillors to be objective. Ditto at national level. Irish political scientists don’t seem to be understand that every TD should represent no less than 50,000-60,000 voters. My thoughts on the RTE programme are set out in my blog – http://www.mcc-currentaffairs.blogspot.ie.

  4. Good Lord, having only sixteen countries in the world better than Ireland (a country with a population of just over 4 million) is supposed to be a good thing? I presume you also consider corrupt politicians continuing to ‘serve’ in the Dail is a good thing? I’d also have to presume you think it’s okay for corrupt businessmen to silence those ‘serving’ in the Dail ? It’s not me calling them corrupt by the way, check out Mahon.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s