If they both reflect a kind of innovation, how do we distinguish 'corruption' from 'entrepreneurship' -- and encourage only the latter?
In my day job covering contemporary Africa's political economy, two distinct narratives have consistently high prominence -- and I wonder about the link between them.
One is the hugely debilitating effect of various forms of corruption -- manipulating public goods and processes for private ends. The other is the much-praised capacity of individuals and groups to make ends meet (or even multiply) despite poor or problematic public services and systems; one constantly encounters anecdotes about how this is a continent filled with highly innovative and enterprising people whose irrepressible spirit of commerce and exchange holds great promise whatever the state does or fails to do.(*)
How can we see these as part of the same issue, not as unrelated parallel stories?
Is it possible to find -- in admiring the ingenuity involved in some corrupt or illicit practices -- some silver lining about the scope for more efficient, effective or legitimate relations between those in public office and private firms or individuals? (**) Can the same spirit-of-enterprise that sometimes manifests as corruption be harnessed to increase not constrict public choice? Can the particularised trust that enables corrupt relationships be seen as the same raw material from which one can envisage a richer reservoir of generalised trust in which greater and wider prosperity is possible for more people?
Most literature focusses on how corruption stifles innovation because, for instance, it undermines trust in how a partial state might treat the fruits of any enterprise (see for example Mauro 1995; Mbaku 2007; Anokhin and Schulze 2009; cf. Mironov 2005). But what if at least some of the same creative thinking that goes into corrupt practices is from the same pool or resource of spirit-of-enterprise that might be capable of finding useful good short-cuts or leapfrogs that make government more efficient and responsive and better able to serve the wider public interest? (***)
Thus how do we foster 'good' creativity and innovation by private entities and individuals not just in commerce or social services but also in designing or influencing the provision of public goods such as security, public financial integrity or the rule of law?
You will see that I have no idea! This post involves fumbling about in the hope of stumbling upon the beginnings of a theory that manifests principled pragmatism and looks for ways to see how transactions and relationships that appear illicit and damaging may have lessons in terms of regulating the interface of private interests and public authorisation, which is where corruption occurs. If I find it I will also find a neater name than 'Governance-by-outcome-not-process'. It is in procedures that opportunities for corruption lie; those who seek to short-cut such procedures (for nefarious or even just frustrated reasons) may be telling us something about designing institutions and regulations to minimise opportunities for rent-seeking by officials.
There are familiar balances involved in idealising forms of regulation and governance: for example, one wants public servants to be responsive and pragmatic (accessible and clean), but not too responsive and malleable (accessible but corrupt). Moreover, of course, not all the regulation that matters or works comes from the state. We talk about fostering 'bottom-up' initiatives, but are also typically sceptical about those that come from non-state sources.
But I don't mean this -- rather I mean being prepared to accept (a) that some corruption fosters growth or distribution, or indicates that formal licit approval is too hard for some sectors of the public (ie, corruption could represent a reaction to bad policy, a sign that governance is not working or is requiring anti-social short-cut actions which could instead be investigated and the innovative approaches directed towards pro-social outcomes); (b) some corruption nodes indicate bureaucratic bottlenecks that simply should be relaxed or removed (rather than 'strengthened' by anti-corruption measures) and (c) corruption sometimes indicates that individual actors have found a more efficient route than policymakers prescribe, which may have virtuous implications (see for example Leff 1964; Bailey 1966).
This is all rather undercooked, but represents an attempt to think about how to design systems of governance and development-promotion that instead of requiring innovation in terms of ways to get around regulations, designs regulations that stimulate 'good' short-cuts and leapfrogs that help point officials towards making government both responsive and responsible. I stand ready to be accused of rank naivety...
Jo
* = Often, of course, it is less romantic things at work, and what is cast as 'enterprising' is instead just about survival or subsistence; that is, adversity and necessity -- not just curiosity or the promise of commercial gain -- are a major source of inventiveness.
** = The other point to note is that much of the most damaging corruption (in Africa and around the world) is not particularly innovative: often it is just a blunt and blatant act of taking (or withholding, for example of tax obligations) that does not require strong entrepreneurial skills to find ways around barriers, it only requires weak systems of oversight and accountability. Moreover, from the perspective of those marginalised from their proceeds or benefits, formalised systems of governance may be seen simply as private enrichment systems dressed up as public order. It depends on one's view of the legitimacy of the state and its processes in any one setting.
*** = A somewhat related question is the opportunity cost of anti-corruption and accountability systems -- some (eg Anechiarico and Jacobs 1996) argue, in effect, that effort should rather be directed to supporting 'good' creativity in governance rather than trying to stamp out 'bad' creativity...
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