Designing for Differences

In some cases, the most effective way of creating support for anti-corruption is to distinguish between different types of organizations operating in a sector. For example, categorising them according to differing incentives and objectives (e.g. large vs. small firms, high-capability vs. low-capability skills training organizations).

Powerful organizations in a sector may be violating rules but for different reasons. Understanding these differences allows the design of policies to enable most of these organizations to behave productively in their own interest and support rule enforcement.

For instance, adherence to building regulations has been weak in the Bangladeshi garments industry, resulting in occasional disasters. Investigations show that all firms are violating building regulations and petty corruption is widespread. However, firms have very different reasons for engaging in corruption.

Most high-capability firms want, and have the capacity to comply but find that building regulations are too complex for the limited number of inspectors to certify in time. They engage in corruption because they are required to produce documents for exporting. But several less capitalized firms become corrupt because they cannot meet the requirements. Yet they employ large numbers of people and closing them down suddenly would create problems for local politicians.

This context creates complex drivers of corruption. An anti-corruption strategy must recognize these factors to build sufficient horizontal support for effective enforcement. For example, it could combine regulatory simplification with improvements in regulatory capacity and exit or upgrading strategies for firms unable to comply.

Image credit: Nayeem Kalam - Workers at dusk, Chittagong