Ending corruption doesn’t require a “social contract” to “change the culture”. Government has the sole responsibility to end and prevent corruption.
In the comments on my recent column about Dimension Data, a certain Prometheus Revisited makes an excellent point. The adage that “it takes two to tango”, they argue, is a red herring.
“It is government’s job to create a zero tolerance environment,” they write. “The ANC government has created, and continues to support a culture of impunity.”
It’s been a while since I’ve written about this, so it bears repeating.
A view popular with ANC cadres, Cosatu bigwigs, SA Communist Party comrades, and the left-wing media: the notion that the private sector is also corrupt so singling out the government is unfair, is sorely misguided.
Last week’s column on the fraudulent sale of The Campus (which, incidentally, would have been a crime with or without their having undermined BEE legislation, since it violated section 75 of the Companies Act) made the point that private sector corruption differs materially from public sector corruption.
In the private sector, the victims are usually limited to investors who willingly took a risk, and have recourse in law. By contrast, public sector corruption affects every citizen, although each incident costs those millions of individuals only a very small amount each, which means it is rare that anyone has the means or motive to challenge government corruption.
Culpability versus responsibility
What Prometheus Revisited adds to this argument is that when a government official or politician and a private company or individual engage in a corrupt transaction – be it bribery, fraudulent invoicing or tender irregularities – it may be true that both parties are legally culpable, but only one had the responsibility of preventing corruption in the first place.
A company has a fiduciary duty to its investors. A government has a fiduciary duty to its taxpayers. (And by “taxpayers”, I mean everyone, because everyone pays at least VAT and fuel levies.)
It is the government’s duty to safeguard the public fiscus from being drained by private interests, just as it is my own duty to guard my banking password, lest strangers dip into my vast fortune.
Arguing that the thieves are responsible is trite. They are guilty, perhaps, but prosecuting them is to close the stable door after the horse has bolted (and requires a minimally competent NPA, which South Africa clearly lacks).
Creating corruption
Prometheus Revisited also makes the point that a corruptible government creates corruption, by corrupting companies that otherwise would not be corrupt.
When government officials are corruptible, it becomes a competitive necessity for companies and private individuals to take advantage of that corruptibility. If they don’t, their rivals will, so honesty is not the best policy for directors acting in the best interests of their shareholders.
Corruptibility in government ends up forcing companies to exploit those weaknesses more creatively than their competitors are able to do, because being honest only serves to cede business to rivals.
In this way, the mere fact that government is corruptible causes corruption to infect more and more of the private sector.
Morality versus self-interest
It makes little sense to complain about the morality of it all. If everyone was perfectly moral, we would need no laws at all. We need laws because we cannot depend upon people’s morality.
We can only depend upon their self-interest, which is why free markets remain the best way to allocate scarce resources among infinitely many wants and needs.
As Adam Smith wrote: “It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages.”
If government officials and politicians are corruptible, they will be corrupted. If not by one set of greedy opportunists, then by another. Furthermore, the more power (and budget) a government has, the more there is to be corrupted.
Shouting at the opportunists who take advantage of this corruptibility is pointless. The only way to prevent corruption is to make government less corruptible.
This requires several things.
Crime and punishment
For a start, corruption among civil servants and politicians must be punished, severely. Not only criminally, but anyone who gains a reputation for shady dealings should simply not be considered employable in government. Nepotism, self-dealing, inflating invoices, and fronting should be scandals that destroy careers.
Officials caught accepting bribes, or colluding with private interests to defraud the fiscus, should find it difficult to land jobs as cashiers or petrol pump attendants.
Institutions and procedures
Second, there should be robust anti-corruption institutions. This includes the sort of judges that wrote the ruling against the Didata executives last week, as well as a truly independent investigation unit that cannot be suborned by the very same politicians or civil servants that they’re mandated to oversee.
It requires systematic measures to avoid conflicts of interest. The entire Didata case revolves around a conflict of interests. So does most cronyism and corruption.
Government business must be transparent, and should require diligence. It should be much harder to do business with government than it is to do business with private sector customers. Companies shouldn’t be able to hide behind trade secrets to thwart public scrutiny of their pricing and product quality.
There should be third party oversight of government spending by a body of auditors that can randomly investigate any contract or tender to assure propriety and value for money.
Attack surface
Third, and perhaps most importantly, government should never be allowed to grow beyond the point where these measures begin to fail. The bigger a government gets and the more it spends, the more power and money there is to corrupt.
In software development, applications must be secure against any and all comers. Developers can’t sit back and say, well, those villains shouldn’t attack my software, so they’re to blame. They have to design software to be secure in the first place.
In that industry, programmers talk of an “attack surface”. The more code there is, and the more complex it gets, the bigger the attack surface becomes. The bigger the attack surface, the less secure the software, and the more must be spent to secure an application by responding to bugs, hacks and security breaches.
Likewise, the bigger a government’s attack surface becomes, the more corruption we should expect. And since corruptibility creates corruption, the only solution is to minimise a government’s attack surface by minimising government itself.
The buck stops here
All of this requires no action on the part of the private sector. It’s pointless to point fingers at the Guptas, or Steinhoff executives, or consulting firms, or Schabir Shaik. (Remember him? Fifteen years ago, he was paroled because he was on death’s door. How’s his golf handicap these days?)
All these remedies for corruption lie squarely within the responsibility of government. Only government can punish corrupt officials frequently enough that the risk of being caught acts as a deterrence. Only government policy can establish the institutions and procedures that prevent conflicts of interest and other causes of corruption. And only government can reduce its own attack surface.
As Prometheus Revisited said, that it takes two to tango is a red herring: “If government and law enforcement allow an environment in which corruption thrives to take hold, the corrupt will migrate to that environment.”
This isn’t a public-private partnership thing. It isn’t about a “social contract” among “social partners”. It isn’t a “whole of society” fight against a “culture of corruption”.
One hundred percent of the responsibility for preventing corruption lies with the government, and ultimately, the buck stops at the desk of the President.
[Image: BuckStopsHere.webp CAPTION: The buck stops here. Composite image created by the author from public domain photographs.]
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