2.2. Corruption, what is it and how do we define it?
2.2.2. Acts and types of corruption
Corruption manifests itself empirically in many different ways. Since the systematized concept is very broad and open, this is only natural. In many cases, corruption is often written and spoken of in very concrete ways, such as bribes required to gain access to certain services, or the nepotism involved in the hiring process in an institution, or the collusion between elite decision-makers and leaders in the private sector. The concept of corruption catches all these specific acts, because they all fit into the misuse of a public office for private gain, which we can see if we back trace the conceptualization ladder of Adcock and Collier.
Tina Søreide argues that corruption can take many forms. However, it usually has some resemblance towards extortion or collusion. The problem with most previous literature on
12 The World Bank, United Nations, OECD, European Union, Transparency International.
20 corruption, she argues, is the notion that corruption is a single dimensional phenomenon. When there are clearly many different forms of corruption, the results you get can depend on which act of corruption you chose to look at (Søreide 2014, 5). Based on previous literature one can summarize the following acts of corruption:13
Table 3, Acts of corruption
Act of corruption Description
Bribery The act of intentionally forcing someone to pay
something extra, or being paid something extra for a service or product. This something can take the form of gifts, loans, rewards or other
advantages. Bribes can be seen as both extortive and collusive.
Embezzlement To use ones position to steal, misdirect or misappropriate funds or assets that one is entrusted with the control of.
Fraud To intentionally deceive someone so as to get an
illegitimate advantage, either economically, political or otherwise.
Collusion To have two parties come to an illegitimate
agreement to achieve personal benefits by use of public office or power, also including improper influence on the actions of one of the parties (such as top level decision-makers).
Patronage, clientelism and nepotism To use ones position to gain systematic advantages by allocating resources to others or giving official positions to friends or relatives to further one’s own position or benefits.
(Søreide 2014, 2)
While corruption can manifest in many different ways or acts, I argue in this thesis that one can categorize corruption by type, which encompasses the different acts of corruption. Corruption can happen at the civil servant or institutional level, such as the bureaucracy, referred to as
13 This table is not exhaustive, but a summary of the most common acts of corruption. Note that it is not always clear if an act is corrupt in terms of the definitions of corruption, or simply criminal.
21 bureaucratic corruption. These are the types of situations where one can bribe to speed up a process, or gain the upper hand in a procurement process, or where it is necessary to bribe to get access to the service the bureaucracy provides. This type of corruption tends to be relatively systematic and predictable. To add to the scope of literature, this type of corruption is also very similar to what Karklins called low-level administrative corruption and self-serving asset stripping by officials (Karklins 2002, 24). Corruption can also happen amongst the elites, the elected officials or at the leadership of the political institutions, referred to as political corruption. This type of corruption happens in different settings. This could be the collusion between corporations and politicians, which not only corrupts a process in the system, but also creates a corrupt system in itself. Often, the potential gains are higher and so is the risk and uncertainty (Ackerman 1999, 27; Amundsen 1999, 3; Dahlstrom 2011, 5). Relative to the degree to which political corruption occurs, the third type of corruption suggested by Karklins is synonymous here as well (Karklins 2002, 27), which is state capture. State capture (a term used by many scholars) usually happens through political corruption, and warps the entire purpose of the state.
The two different types of corruption (political and bureaucratic) argued for in this thesis could have different causes, happen in different places, and most likely have different causal mechanisms (Goswami and Haider 2014, 242; Jakobsen 2012, 97). It is therefore not unnatural or illogical to assume that their effects are different as well, even though they are both part of the concept corruption. It is logical to assume that an investor would react differently to a country with a history of unpredictable and powerful political leaders, prone to bribery and collusion, than to a country that is known for systematic bribes in the bureaucracy. Political corruption potentially changes the entire system, while bureaucratic corruption, at most, bends the rules within the given system. This might be a factor for the theoretical dispute between the grease and sand logic in the matter of corruption and FDI.14 For the purpose of this thesis then, I differentiate between two internal types of corruption, political corruption and bureaucratic corruption.15
One important issue to comment on here is that even though I argue for two different types of corruption, these two types of corruption often go hand in hand. If a country has corrupt political
14 The grease and sand theories of corruptions effect on FDI is explained in section 3.1.
15 These types are by no means exhaustive, but they fit the data available for this thesis, and the theoretical framework I employ for corruption. Other types of corruption that have been researched are for example absolute and relative types of corruption and arbitrary and pervasive types of corruption, types by degree of corruption in the public sector (Cuervo-Cazurra 2008; Habib and Zurawicki 2002; Karklins 2002)).