Corruption is a multidimensional phenomenon with economic, political and cultural aspects. Its causes can be a combination of economic, political and cultural factors. Its impact can permeate the economic, political and cultural spheres. Brazil, India and China are countries that belong to the BRICS or the organization of emerging economies. Corruption can hamper the economic growth prospects of these economies. A comparison of corruption in Brazil, India and China provides a deeper understanding of the historical roots of this problem and the implications on the future growth prospects of these countries.
Level of Corruption across Brazil, India and China
A measure of corruption in a country’s public sector is the Corruption Perception Index. A lower rank and higher score (0 means highly corrupt and 100 mean very clean) mean less corruption. According to the Corruption Perceptions Index for 2012 until 2015, as shown in the table below, Brazil, India and China remained in the middle percentile in terms of ranking and below 50 in terms of score. Brazil now has a lower ranking and lower score. India’s ranking improved and its score slightly increased. China’s ranking improved but its score decreased.
Corruption Perception Index for Brazil, India and China, 2012-2015
(Transparency International, 2016)
Attempts at policy changes, legal reforms and prosecution of government officials linked to corruption can account for small improvements in the corruption index of these countries (Stocker, 2012). Current ranking and scores indicate a wide room for improvement, especially if these countries are targeting sustainable high growth.
Economic, Political and Cultural Causes of Corruption
Centralized control over the massive flow of revenue from economic resources create economic incentives for corruption (Eicher, 2016). Weak institutions (Eicher, 2016), lack of political will and ineffective administration (Adelman, 2016), and ineffective laws and judicial system (Sahu & Gahlut, 2014) are the political causes of corruption. Attitudes and practices that reinforce tolerance for corruption account for the cultural causes of this problem (Yan, 2016).
Brazil
Brazil is rich in natural resources, which attract domestic and foreign investors. Intense competition over access to natural resources creates the conditions for corruption and clientilism (de Mello, 2010). Brazil’s bureaucratic federal system and state ownership of key natural resource industries meant the need to expedite the processing of permits and other documents through practices that bypass the complex multi-tiered regulatory process and get approval from many public officials (Stocker, 2012). Low income also make government employees susceptible to bribes (Eicher, 2016). The culture of jeito or jeitinho, which translates into ‘to find a way’, together with a strong sense of collectivism manifest in a lax attitude towards corruption (Stocker, 2012). There is high tolerance for bending the law and asking favors from government officials and employees. Tolerance for corruption affects the exercise of political will in enforcing anti-corruption laws by investigating and prosecuting corruption cases in the country (Sahu & Gahlut, 2014; Adelman, 2016; Eicher, 2016). Inefficient and redundant bureaucratic system and lax regard for corruption are focus areas in addressing the problem of corruption.
India
Unlike Brazil, India attracts investments primarily through its industries and services sectors. Despite the difference in economic base, incentives for corruption also emerged. Corruption is the second most serious issue in doing business in the country. Corruption has deep historical roots in India. Secrecy, rule of elites, and lack of participation from citizens characterize the British colonial government. Centralized control remained after independence. Post-independence governance involved overregulation and red tape as well as government control over natural resources that created opportunities for corruption. High tolerance for corruption is due to the low income of government employees and recognition that corruption leads to efficiency for businesses. Close relationship between political parties and politicians with criminal groups also reinforce corruption. Gangs pay money to political parties and politicians in exchange for protection and favors. (Stocker, 2012) An inefficient regulatory system is a corruption-related problem commonly experienced by Brazil and India. In addition, India needs to focus on increasing transparency and accountability as well as cutting the close ties between criminal groups and political parties and politicians to address corruption.
China
China’s economic base is much broader to include natural resources, agriculture, industries, and services. Similar to Brazil and India, economic incentives for corruption also emerged. Unlike Brazil and India, authoritarian decision-making created conditions that brought about corruption (Adelman, 2016). Government monopoly over many economic sectors led to the large administrative spending and corruption (de Mello, 2010). Moreover, corruption persists due to the lack of an independent press and an independent investigative body (Adelman, 2016). Similar to Brazil, the cultural practice of guanxi or the establishment of personal relations and social networks to ease business and other transactions has made corruption inescapable (Stocker, 2012). It is acceptable to use relations and networks to gain favors. Addressing corruption requires the relaxation of monopoly, greater transparency through press freedom and independent investigations, and the identification of a line separating guanxi and corruption.
Implications of Corruption on Brazil, India and China
Persistence of corruption have a negative impact on the growth prospects of Brazil, India and China. Corruption hampers public and private investments, aggregate productivity, economic development, and the overall wellbeing of citizens (Eicher, 2016). Key elements of economic power are a first class high-tech zone and mass immigration (Adelman, 2016). Corruption is one reason that Brazil, India and China are struggling with agricultural modernization, high rates of educational attainment and skills acumen, and higher emigration than immigration. China has the potential to become a superpower in the next 20 years, but only if it addresses corruption. Brazil, India and China have laws or are currently undergoing legal reforms to meet international legal standards. Corruption leads to redundant regulations and poor enforcement, especially in Brazil and India. (Adelman, 2016) Corruption also reduces the efficiency and effectiveness of government policies, escalates the discontent of citizens, and increases transaction cost (de Mello, 2010). Corruption also negatively affects cultural values by lowering ethical standards and building tolerance for unethical practices (Yan, 2016).
Conclusion
Comparison of the Corruption Perception Index of Brazil, India and China showed that corruption levels in these countries remain high. A combination of economic, political and cultural factors explain corruption and its persistence in these countries. As part of BRICS, Brazil, India and China are aiming for sustained growth over the next decades. China may even become a superpower. Corruption creates barriers to sustained growth by reinforcing poor economic, political and cultural conditions. Context-based solutions to corruption are necessary for these countries to become strong economies in the coming decades.
References
Adelman, J. (2016, May 18). Whatever happened to the BRICs? The World Post. Retrieved from http://www.huffingtonpost.com/jonathan-adelman/whatever-happened-to-the-_7_b_7306714.html
de Mello, L. (Ed.). (2010). Growth and sustainability in Brazil, China, India, Indonesia and South Africa. Paris, France: OECD Publishing.
Eicher, S. (2016). Introduction: What corruption is and why it matters. In S. Eicher (Ed.), Corruption in international business: The challenge of cultural and legal diversity (pp. 1-14). New York, NY: Routledge.
Sahu, S. K., & Gahlot, R. (2014). Perception about corruption in public services: A case of BRICs countries. Journal of Social Science for Policy Implications, 2, 109-124. Retrieved from http://jsspi.com/journals/jsspi/Vol_2_No_2_June_2014/7.pdf
Stocker, F. T. (2012). Anti-corruption developments in the BRIC countries: A MAPI series. Arlington, VA: Manufacturers Alliance for Productivity and Innovation.
Transparency International. (2016). Corruption Perceptions Index 2015. Retrieved from http://www.transparency.org/cpi2015
Yan, Q. (2016). An institutional approach to understanding corruption in BRIC countries. In S. Eicher (Ed.), Corruption in international business: The challenge of cultural and legal diversity (pp. 143-162). New York, NY: Routledge.
