Topic Guide: Corruption in Service Delivery

At the policy-making level, undue influence by individuals, firms or interest groups may lead to administrative bribery, political corruption and state capture. Public policy decisions can be bought to suit the interests of powerful elites, with private actors trying to influence the formulation of laws and regulations in ways that benefit them. On another level, local politicians may be tempted to “buy” votes by pushing for construction work in their local communities, for example. Such forms of “grand corruption”[1] by political and business elites often involve the development of corrupt networks of senior officials, politicians, and domestic or foreign businesses. These networks may use illegal payments and bribes to gain contracts and purchase of political power, but can also build “networks of influence” through legal means (donations to political parties, use of lobbyists, and so on).[2]

There are examples of such practices with a direct impact on service delivery at the global and national levels. For example, the influence of the pharmaceutical companies on political processes has been made visible recently at the global level, when the multi-national GSK managed to convince the World Health Organization (WHO) to declare swine flu as a pandemic and to recommend the use of Tamiflu as the best form of prevention.[3]

The privatisation of many government functions in many countries – especially in post-communist European countries – through outsourcing of government contracts and services provide many incentives and opportunities for corruption and state capture. Long-term concessions for the provision of water, health or educational services often constitute unique opportunities to win a stream of government-backed revenue, for decades in some cases. Contractors can bribe, collude and form cartels to win valuable long-term contracts and concessions, while politicians can use government contracts to develop patronage networks, secure or reward political support.

At the local level, greater contracting-out, decentralisation, user fees and public-private partnerships (PPPs) can create fertile ground for corruption and increase discretion in spending without accountability. In Malawi, for example, the generalisation of such approaches led to contracts awarded to senior officers and their relatives and friends and “user fees” treated as personal income.[4]

Corruption and rent-seeking may also affect the allocation of resources and the general level of funding available for public services, diverting public resources towards more lucrative sectors, ultimately undermining the quality and quantity of services available to the public.