Trevor Hunt

View the full bibliography here: Bibliography on Municipal Corruption

This blog provides my reflections on the publicly accessible literature on the topic of municipal corruption. It follows upon my development of a bibliography for the International Centre for Criminal Law Reform (ICCLR) in Vancouver, Canada. I identify themes that emerged in the research process, which focused on creating a bibliography that collates the literature as an assist to researchers of this often-overlooked aspect of corruption. In this blog, “municipal corruption” refers generally to criminal acts of corruption perpetrated by both elected representatives and employees at the municipal level. These can include the embezzlement of funds, accepting or soliciting bribes, procurement fraud, vote buying, or acting in a way that beaches the trust of the public.[1]

Although the bibliography focuses primarily on criminal corruption, an interesting trend in corruption prevention emerged through the research process. Though there is a necessary distinction between criminal corruption and ‘soft corruption’, including conflicts of interest and ethically inappropriate decision-making, preventive efforts often require the same strategies. As an example, integrity management systems, described by both Transparency International (TI)[2] and the United Nations (UN),[3] are intended to be provide best practices and minimum standards for policies and programs that municipalities can implement to curb corrupt behaviour. Common strategies include the need for transparency in decision-making and procurement, whistleblowing mechanisms, independent investigative bodies, effective training for municipal officials and employees, and a policy framework to facilitate efforts, including the development of ethical codes of conduct. Open data initiatives, described later in this blog, also provide anti-corruption strategies that do not rely on a criminal or non-criminal distinction.

Of the many kinds of municipal corruption, procurement fraud has inspired the greatest volume of literature. It can take the form of collusion, bribery, contract bid fixing, and the embezzlement of funds. The highest profile procurement frauds described in the literature tend to be in construction industry. In Canada, the Charbonneau Commission investigated collusion between elected municipal officials and employees in Quebec’s construction sector.[4] In Spain, the Puníca and Gurtel scandals involved government officials accepting bribes for the granting of favorable construction contracts – resulting also in the fall of the Spanish national government.[5] Though procurement fraud is an issue which all levels of government must grapple with, it appears regularly in the municipal sector, likely due to the fact that municipal governments are often the only provider of many necessary services to end users. As an example, 72% of government procurement in Italy is at the municipal level.[6]

Another, well researched area, is the risk of corruption in the decentralization of governments. Many governments, primarily in Asia and Europe, have been undertaking decentralization efforts since the 1990s, which in Europe coincides with the many structural changes that flowed from the fall of the Iron Curtain. As part of their push to decentralize, senior levels of government relinquished considerable authority to local governments, which had a greater susceptibility to local forms of corruption and were arguably less resourced to deal with the problem. This is not only an issue in countries with a democratic tradition. In the People’s Republic of China, a campaign was launched to counter ongoing embezzlement of poverty relief funds given to village and cadre governments.[7] The solution attempted to find a balance between control from Beijing and decentralized authority at the municipal level.[8] A broad takeaway is that governments undergoing structural change must be cognizant of and seek to minimize opportunities for corruption as they go forward with a decentralization, or other change process.

Organized crime was a research area that presented unique issues. The nature of the term signifies that it transcends individual actors. Where it exists (and that is in most countries), the problem requires strategies which target the organization rather than individual members. For example, in Italy the problem is so endemic that the national government has the power to dissolve a local government when it suspects that it has been infiltrated by the mafia.[9] The literature on this topic includes research conducted on the problem in Mexico and India. Mexican drug cartels finance candidates in municipal elections to gain political influence and protect their illegal interests.[10] In India, organized crime has infiltrated the construction sector by illegally appropriating land and bribing officials for building permits and licenses. Research on organized crime’s role in municipal corruption may offer insights into the vulnerabilities in municipal processes which criminal actors can leverage to their advantage.

A developing body of knowledge within the literature considers the opportunities for corruption presented by land and natural resources within a municipality. Local governments are often victim of a ‘resource curse’, which finds criminal actors using property as a vehicle for money laundering, tax evasion, and other illegal purposes.[11] For example, zoning changes can inflate the value of land. High or low property appraisals can influence lending practices, builder’s liens can be used as an enforcement mechanism for criminal debts, and a lack of transparency in property ownership can result in proceeds of crime being integrated into the legitimate financial system.[12] In this context, the role of urban planners is becoming more important than previously understood.

A topic of lesser interest in the literature but important just the same is the relationship between cultural and customary gifting and bribery. The literature references gift-giving as a common practice when interacting with government officials in many countries, particularly in Asia. However, there is a paucity of literature and official governmental guidance on these practices, and the juncture at which they become criminal. The state government of New South Wales, Australia has, however, noted that the problem should be considered by local governments, and that immigrants interacting with officials should not be allowed to offer gifts, even if such practices are customary in their home country.[13]

Studies have described the use of technology to enable new forms of corruption prevention, with open data initiatives being the most prevalent. Open data is any publicly available information or data sets that allow a private citizen to obtain details or statistics relating to a government service. Open data appears to be a particularly effective anti-corruption measure in the procurement context. It relies on principles of transparency to create de facto accountability mechanisms when transactions and interactions are occurring in the public eye. In South Korea, the city of Seoul implemented a system called OPEN as a centralized platform for procurement and service delivery to citizens which has now been applied at the national level.[14] Similarly, the Ukrainian government has adopted a globally recognized system called ProZorro to fully digitize its procurement process.[15] Bogota, Colombia, has worked with higher levels of government to apply open data principles to the procurement of municipally run school meal programs.[16] The foregoing initiatives not only reduce corruption, but also reduce the cost of government services, by preventing money from being illegally funneled out of transactions.[17]

Other uses of technology described in the literature are even more innovative. In India, a whistleblowing service called “I Paid a Bribe” (IPAB) allows both citizens and politicians to report incidents of being offered a bribe.[18] The IPAB service also publishes data on the types and frequency of reports, which can be sub-divided by level of government. In a similar vein, the state government of Queensland, Australia, has created a publicly accessible data dashboard that analyzes the prevalence and nature of corruption allegations within the state.[19] In an effort of improve corruption detection, a recent Brazilian study explores machine learning as an alternative to the existing randomized selection process for municipal government audits.[20] Each of these examples is a creative application of technology to historically challenging issues.

It is ICCLR’s hope that both practitioners and professionals will find value in the bibliography as a research tool designed to assist in tackling municipal corruption. With technology now bolstering research capacity and providing academics, independent researchers, and governmental institutions with the ability to share knowledge and best practices, there are unprecedented opportunities to make real progress in the fight against municipal corruption.

References

[1] Definitions of Corruption – Research Brief no. 48 (Ottawa, Public Safety Canada, Last Modified 2018)

[2] Nuno Ferreira da Cruz & Michel Gary, “Local Governance Integrity: Principles and Standards” (2015) online: Transparency International

[3] Milena Minkova, “Guide To Corruption-Free Local Government” (2018) online: United Nations Development Program

[4] Commission d’enquête sur l’octroi et la gestion des contrats publics dans l’industrie de la construction, vols 1-4 (Québec: Commission of Inquiry on the Awarding and Management of Public Contracts in the Construction Industry, 2015)

[5] Virginia Lopez Rubio, “Corruption in Spain – A Brief Analysis of High-Profile Cases and Spanish Authorities’ Efforts” (2020) online: Kroll

[6] Francesco Decarolis et al., “Rules, Discretion, and Corruption in Procurement: Evidence from Italian Government Contracting” (2020) online: SSRN

[7] The People’s Republic of China, News Release, “Premier stresses strict supervision of new funds” (1 June 2020) online: The State Council

[8] Ting Gong, “Corruption and local governance: the double identity of Chinese local governments in market reform” (2006) 19:1 The Pacific Review 85

[9] Gianmarco Daniele & Benny Geys, “Organized Crime, Institutions and Political Quality: Empirical Evidence from Italian Municipalities” (2015) 125:586 The Economic Journal F233

[10] Jerjes Aguirre Ochoa & Hugo Amador Herrera Torres, “Local democracy, crime and violence in Mexico: The case of Apatzingán, Michoacán” (2016) 11:22 Política Criminal 656

[11] Dieter Zinnbauer, “Urban land: a new type of resource curse?” in Aled Williams & Philippe Le Billon, eds, Corruption, Natural Resources and Development (Cheltenham, UK: Edward Elgar, 2017)

[12] Francesco Chiodelli & Stefano Moroni, “Corruption in land-use issues: a crucial challenge for planning theory and practice” (2015) 86:4 The Town Planning Review 437

[13]Communicating Anti-Corruption Messages in Community Languages: Guidelines for New South Wales Local Councils”(2010) online: NSW Independent Commission Against Corruption

[14] Seongcheol Kim, Hyun Jeong Kim & Heejin Lee, “An institutional analysis of an e-government system for anti-corruption: The case of OPEN” (2009) 26:1 Government Information Quarterly 42

[15] Sophie Brown, “Overhauling Ukraine’s corrupt contracting sector” (28 Nov 2016) online: Medium

[16] Sophie Brown & George Neumann, “How open contracting helped fix Colombia’s biggest school meal program” (9 April 2018) online: Medium

[17] Chiodelli, supra note 12

[18]Bribe Trends – Municipal Services” online: I Paid a Bribe

[19]Corruption allegations data dashboard” online: Crime and Corruption Commission of Queensland

[20] Elliott Ash, Sergio Galletta & Tommaso Giommoni, “A Machine Learning Approach to Analyze and Support Anti-Corruption Policy” (2020) online: SSRN

Photo by Juliana Kozoski on Unsplash.

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