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Category: Dr. Teck Yong Eng
By Dr Teck-Yong Eng

July 18, 2008


I highlighted previously that the state of corruption in Malaysia is now at its gravest level of concern. Corruption is one of the major causes of poverty and inequality in wealth distribution. It has dire consequences resulting from manifestations including behaving dishonestly, corrupting the administration of law and order, squandering of public funds to eliminating the independence of a judicial system. It is most worrying when corruption in Malaysia is institutionalised (see previous article) and the government and the ACA seem to turn a blind eye despite the scale and obvious act of corruption in various high-profile cases involving senior government ministers (e.g., the purchase of the Scorpene submarines, the RM4.6 billion Port Klang Free Zone scandal).


We often heard the ACA’s official line that there was no evidence to press charges or solve an alleged corruption case. One must wonder how did large sums of funds, computer records and trails of evidence disappear into thin air. Does the government think that the people and the international community were easily misled into believing the ACA’s excuses? How can our leaders live with their conscience and face the outside world? Are they not shameful of being vilified and ridiculed?


What signs do the government and ACA need that the nation is tired of this institutionalised disease of corruption? Malaysia is a lucky country with plenty of natural resources (e.g., oil and agricultural resources) but yet our economic progress in terms of standards of living and distribution of wealth seems to be deteriorating rather than improving, e.g., after more than 30 years of NEP only a small group of Malays benefited from the distribution of corporate equity shares, the Indian community unrest was related to economic marginalisation and the public support for the Coalition Against Inflation rally.


Corrupt practices are becoming more voracious as the ruling government scrambles for survival, e.g., a petrol price hike of 41 percent, the use of both police and the armed forces to intimidate and prevent peaceful public assemblies. Over the years, our country has built some world-class infrastructure (e.g., Cyberjaya, Multimedia Super Corridor, Petronas Twin Towers, major highways, IDR project, etc) - but our public services, corporate governance, economic competitiveness and education systems are sliding. These mega projects presented the best opportunities for kick-backs in the absence of competitive tenders and their negative effects could last for many generations through national debts, ineffective allocation of resources, and flight of private and human capital. This is why one of the best ways to silence government critics is to announce several mega public investments (e.g. IDR and similar regional corridor development projects).


The root of corruption has become even deeper and widespread to the extent that the independence of our judicial system is questionable. How will the ACA pursue high level prosecutions against government officers without operating in a transparent and accountable legal system? It is widely acknowledged that for anti-corruption strategy to be effective, the government must relinquish and distribute its power and monopoly control over governance to countervailing agencies. To this end, the government has recently announced plans of setting up an independent corruption prevention advisory board, a parliamentary committee and a substantial increase in the anticorruption workforce. These are supposed to turn the ACA into a totally independent commission - the Malaysian Commission on Anti-corruption (MCAC).


The ACA is at the forefront of reducing corrupt practices and it should be the strongest legitimate force against graft. Let’s examine the basic structures of the proposed MCAC. Firstly, members of the advisory board would be appointed by the King but based on the Prime Minister’s advice. This would only create an additional layer of structure delaying investigation into serious corruption cases, which are often time-critical. Apart from the fact that the board is not independent, the board also serves to provide corrupt officials time to prepare their cover stories and counter any allegations of corrupt practice. The board would also complicate the process of investigation and hence create opportunities for corruption. Research has shown that over-regulation and complexity increase the level of corruption1.


Secondly, members of the parliamentary committee have control over what corruption cases are to be tabled or heard in the parliament. This defeats the purpose of having an independent agency as well as creating additional administrative and operational tasks. Furthermore, if allegations of corruption were against government ministers, members of the parliamentary committee would be involved. At worse, this proposal would discourage people from coming forward and report corruption. Furthermore, the process would be time-consuming for the parliamentary committee to approve and represent corruption cases. Again, investigators would lose crucial time and provide the opportunity for evidence on corruption to be destroyed.


Thirdly, the appointment of the head of MCAC by the King on the Prime Minister’s advice would break the cardinal rule of independent countervailing actions against the government’s monopoly over decision-making. This provides an indirect leverage of control for the government over the MCAC activities – by recommending the appointment of its leader. The institutionalised nature of corruption means that the selected head of the MCAC would be expected to conform to the norms. Such high profile appointment should be based on merit scrutinised by independent organisations and/or civil societies.


Fourthly, the MCAC and the Attorney-General (AG) do not enjoy total independence when they have to report to the Prime Minister. This makes it impossible for the MCAC and the AG to prosecute ministers in the Prime Minister’s department/office. An appropriate structure would be a tightly audited system with checks and balances through a distributed control of power. The basic principle of anti-corruption strategy is to reduce asymmetric information in the proposed reporting structure, and raise accountability and transparency by a checks and balances system.


Fifthly, current laws on comprehensive protection for whistleblowers are ambiguous or the agency could certainly do a better job in communicating clearly the measures of protection provided for whistleblowers or even reward whistleblowers for coming forward to report corruption. For example, a committed government in fighting corruption could strengthen the incentive to inform on corrupt acts by a proven penalty system based on ‘prisoners dilemma,’ which encourages one or other party to break the deal, as corruption involves two or more people making a deal.


Finally, the Prime Minister had announced that the number of officers in the anti-corruption force would be increased substantially. As noted above, complexity creates a propitious environment for corruption. While increasing the number of workforce may help strengthen the agency, the need to implement measurable anti-corruption strategies, tougher bribery laws and strengthen our judicial system – still sit on the fence. The voters deserve an explanation. Also, the increase in the workforce suggests that the focus is on investigating escalating corrupt practices rather than introducing preventive measures.

 

On the whole, the restructured MCAC would provide further opportunities for corruption and fail the crucial test of independence. Recall that a corrupt institution tends to stay corrupt unless the leader of the institution begins in earnest to dismantle the concentration of power in the government, and subject ministers, senior officials, and government departments to both ex ante and ex posts checks on the use and allocation of public funds and resources. The ACA is administratively and structurally crippled or implicated by the institution in terms of its ability to conduct full and objective investigation into allegations of corruption at the highest levels of the government. The ACA’s past success records in prosecuting and punishing influential people at the top of the system would affirm this.


The crucial question is how this burden of institutions on the ACA be disentangled. This does not mean that the ACA should have a monopoly power; instead, the agency must be accountable and transparent, which can be achieved through distribution of power, and a checks and balances system. Realistically, to expect the Prime Minister of the country and its party components to eradicate corruption in the system is not an option. What about our country’s courts and legal systems? With the tarnished reputation of the judicial system and repeated failures to act and solve high profile corruption cases through the courts, it is evident that courts are also not autonomous and it remains impossible to solve corruption in a particularism context.


So, where do we turn to and what lessons can we draw from countries that had successfully fought corruption? It is important to recognise that anti-corruption instruments that work in one country would not necessarily apply to every country. Because corruption is highly politicised and institutionalised in Malaysia, histories suggest that clean governance cannot prevail in governments laden with corrupt institutions. It cannot be over-emphasized that anti-corruption legislation must be supported and upheld by an independent judiciary. For instance, legal mechanisms of anti-corruption would not work effectively without dismantling the essentials of particularism2. The prospect is daunting as honest citizens are fighting against an institutionally corrupt system or those who are on top. Let the truth be known that through perseverance and collective efforts in the fight against corruption our country, children and future generations would live in a better society. Research evidence has shown that per capita real income, business integrity and public sector integrity are positively interrelated3. A clean government leads to economic efficiency and in turn enhances national competitiveness.


Historically, a strong political opposition and civil society tend to promote the greatest stride forward in fighting graft. But the people must be aware that populist parties who jump on the slogan of anti-corruption have also in the past ended up to be as corrupt as their predecessors. What the people need is not rhetoric and constant bickering of personal issues from the government and opposition. The opposition must show leadership by pursuing justice and laying down the law to demonstrate to the people that they are accountable alternative governments. The good news is that the fight against corruption has parallels with greater modernization and democratisation process. Also, the lower the level of corruption, the more economically developed a country4.


Historically, in a society where corruption is the norm, small and incremental efforts would not work. Economists would attest to this as a locally stable equilibrium: small efforts to reduce corruption will be overcome by the incentives, which return the society to its initial pattern of behaviour5. After each failed attempt, it will appear that no strategy is effective and people will resort and conform to the norm. Is this how you feel in Malaysia? In order to dislodge the society from the local equilibrium of high corruption, history has shown there is a need for a massive coordinated effort that may at times look like civil war. As the history of democracy shows, civil wars are sometimes needed to advance the cause of accountable government.


Critically, when is the most appropriate timing in the fight against corruption? The obvious answer is not when we are content with our standards of living, law and order, public services and governments. The results of the recent general election will indicate that the majority of people have had enough of the ways national resources and public funds are being squandered and inappropriately allocated for personal gains. In fact, the recent price hikes in almost all basic commodities coupled with worsening crime rates, questionable credibility of some members of the government, and high inflationary pressures signal the best timing for turning against the forces of corruption. What are these forces and how do we deal with them? What anti-corruption strategy would be considered as a massive coordinated effort? I would welcome your thoughts while I take a breather and return to these questions in my next article.


1 Gatti, R. (1999) Corruption and trade tariffs, or a case for uniform tariffs, mimeo, Development Research Group, World Bank.

2 Bertram, I.S. (ed.) (2005) Fighting corruption in developing countries: strategies and analysis. Bloomfield, Conn: Kumarian Press.

3 See e.g.: Kang, C-K. & Lee, J-H. (2003) A new paradigm on strategy against corruption: an objective management by scientific evaluation. Journal of Korean Economic Development 9, Summer, 59-84. Lee, J-H. (2005) Business integrity, public sector integrity, income, and national competitiveness: a cross-country level analysis. Seoul Journal of Economics. Summer.

4 See e.g.: Huntington, S.P. (1968) Political order in changing societies. New Haven: Yale University Press. Choi, W-J. (2004) E-government and corruption: a cross-country survey. paper presented at the 4th international seminar on anti-corruption strategies in public and private sectors. Seoul Institute for Transparency, June.

5 Klitgaard, R. (1988) Controlling corruption. Berkeley: University of California Press.

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Category: Dr. Teck Yong Eng

As discussed in my last article, corruption is economically costly and detrimental to economic growth. I also noted that corruption is present almost everywhere. But it is important to distinguish this universal persistence of corruption is due to human nature and not because corruption cannot be eliminated or at least reduced. This distinction alludes to the institutional context of a corrupt government and/or society. In other words, a corrupt society is governed by forces that tend to keep it corrupt. For example, few successes resulted from ongoing programmes of anti-corruption[1].

Recall that corruption is highly politicised. It is on this basis that most anticorruption initiatives failed because they are of non-political nature. This argument can be explained by institutional norms of a country where institutions can include the government, professional associations, public opinion and the media. Institutional norms can penetrate the social context and become so intractable and taken for granted we are not always conscious of conforming to them[2].

Norms are what people regard as normal behaviour and they resonate with us through conformance, understanding and accepting them as our way of life, e.g., we are used to remarks ‘tidak apa’ (whatever goes) and ‘biasa’ (as usual). Our social norms are established in the context of our environment through leaders in the country, the media, laws (e.g., ISA, fines, penalties), the government, and cultural customs and traditions. Examples abound about how the government imposes censorship of the press and media, and even to the extent of barring the media from the parliament – in an effort of restricting freedom of information and modelling conformity through draconian measures. Thus, institutional norms can be become a mode of social organisation permeating our conscious and subconscious levels.

But how would norms relate to corruption and why our institutions are important in fighting corruption? To answer these questions, we could ask ourselves whether some corrupt practices in Malaysia are considered acceptable. Have you bribed someone without feeling any guilt? Haven’t we heard of many corrupt practices to the extent that we view them as part of our politics and/or cultural norms?

It is possible to view corruption as norms of governance in a country’s institutional context. This bodes for the fundamental of corruption that it exists through a monopoly control over certain public resources with restrained countervailing actions. It is small wonder that most anticorruption strategies initiated by the government fail to work when replicated from one country to another, and when the diagnosis fails to account for the real cause of corruption within the system. In spite of growing investments in combating corruption, there is little evidence from the World Bank’s anti-corruption programmes that demonstrated and measured successes1.

Technically, if corruption is the exception to the norm, it is known as universalism. But where corruption is the norm it is particularism[3]. This categorisation would clearly operate on a continuum of the extent of corruption in a particular country. While corruption can be found almost everywhere, corruption in a universalism society amount to individual corrupt practices (as opposed to residing in the institution). Particularism treats corruption as a mode of social organisation as illustrated in the earlier examples.

Are we living in a society and country in which corruption is normal? Are certain groups of people or the government monopolizing the powers of domination and sources of income? I assume most would agree that corruption is pervasive in Malaysia and thus if a corrupt act is detected, it is less likely to be reported to the authorities or to the press. There is no incentive to report corruption especially when the enforcement agencies tend to pursue whistleblowers, delay investigation and complicate prosecution. Not to mention, any allegation against powerful groups would be non-conforming to the norm and thereby threatening to the people.

As corruption becomes institutionalised, the fight against corruption would implicate the whole network of government offices and related institutions. This partly explains why it is impossible to bring charges and convict authorities involved in siphoning and mishandling of the state and public funds, e.g., the RM4.6 billion Port Klang Free Zone (PKFZ) scandal. Despite such an enormous sum of funds involved in the cost of the PKFZ, the Transport Ministry and the Anti-Corruption Agency is still unable to openly investigate and resolve this glaring embezzlement of the public funds. Not surprisingly, corruption on a large scale remains unabated when the very predators of corruption control the government and in some cases the anticorruption instruments themselves. The political forces in the institution would perpetuate corruption and prevent anti-corruption strategies from effective functioning.

Thus, one could argue that the state of corruption in Malaysia is at the gravest level of concern. If corrupt practices are regarded as norms and allowed to continue, corruption would not only affect us but also future generations in terms of economic development and standards of living. The telltale sign of how the negative effects of continued corrupt practices in the institution are beginning to emerge and affect ordinary citizens. For example, the recent petrol price hike of 41 percent is closely linked to the management of our national petroleum company, Petronas. Nepotism, bribery and patronage are under threat in the face of growing revelation from the opposition as well as increasing economic uncertainties. As a result, the bureaucracy of corrupt practices becomes desperate and brutal by inflicting the costs of inefficient resource allocation to the public.

If one needs more convincing arguments that corruption in Malaysia is indeed institutionalised, let’s look at some established indicators3 of particularism by answering the following questions.

  • What is the likelihood of a private contractor winning a bid for public works if the owner is not related to anybody in the government distributing the funds?
  • How many such companies have managed to win tenders in past years?
  • Who owns the national TV networks? Who are behind the national publishers and newspapers? What positions do their wives, sons, in-laws, relatives and friends hold? Are they, by chance, councillors, senators, ministers or members of the parliament? Are the same names always present when projects or resources are divided?

I believe that any ordinary folk can ask around to find the above answers and understand if corruption is the norm or the exception in our country. It is no mystery that few would dare to question and attack the roots of corruption embedded in the institution as a mode of social organisation. We constantly see headlines of the ACA pursuing private corruption cases involving individuals rather than the government and its constituencies.

However, it would be unfair to argue that the current government is responsible for the roots of corruption in institutions. Recall that corruption is self-perpetuating and the forces within the institution would strengthen corrupt practices. In other words, the legitimacy of party members and components in the ruling party may hinge on a pledge of loyalty and acceptance of corrupt practices within the whole system. If it becomes known that corruption is the norm, new members admitted to the government would inherit this reputation and be expected to be corrupt. A simple opinion poll survey would establish whether there are widespread perceptions of government corruption despite reshuffling of cabinet members and changing of one premier to another. The current government has this privilege of being part of the corrupt forces and therefore our leaders are responsible for dismantling the institutionalised roots of corruption. Any leader in the government that is able to uproot corruption from the norm to universalism would be remembered for his/her legacy in Malaysia – which will represent a major victory for electoral democracies as well as a turning point to become a developed nation.

We therefore need to examine our anti-corruption agency and strategy. Is our Anti-Corruption Agency (ACA) effective? Or more crucially: is the government truly convicted in fighting corruption especially with the recent pledge of turning the ACA into a full-fledged Malaysian Commission on Anti-Corruption (MCAC)? I shall defer this discussion and examine the governance structure of ACA in my next article. Meantime, we all can help reduce corruption by consciously build expectations for the young generation that honesty would also perpetuate and generate incentives for their future.


[1] World Bank (2000) Anticorruption in Transition: A Contribution to the Policy Debate. Washington: World Bank

[2] See: Meyer J.W. & Rowan, B. (1977) Institutional organisation: formal structure as myth and ceremony. American Journal of Sociology, 83, 340-363

[3] See e.g.,: Bertram I.S. (ed.) (2005) Fighting Corruption in Developing Countries: Strategies and Analysis. Bloomfield, Conn: Kumarian Press. Weber, M. (1969) Economy and Society III. New York: Bedminster.

 

Dr Teck Yong Eng is a senior lecturer at King's College, University of London., His work covers economic development and strategy issues and has appeared in business management and strategy journals. He will be writing a regular column specially for the Centre for Policy Initiatives.

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Category: Kim Quek

spr-voting-2When a political party breaches election laws, why can’t leaders, officials and agents that have participated in the offence be charged and convicted in court? We have sufficient laws to ensure that not only individuals but the entire political party can be punished, depending on the nature and severity of the offences.

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Category: Dr. Teck Yong Eng
June 17, 2008

In recent months, corruption has been a topical issue especially after Malaysia’s 12th general election. On realisation that the opposition party would expose graft and misdeeds the government has reacted by putting anti-corruption on the centre stage of governance. For example, there have been plans to reform the ACA and the country’s judicial system. The timing is not a coincidence but an acknowledgement by the government that corruption is crippling the economy and generating wide dissent amongst the general public and mistrust of government. In this article, I would like to pose some questions and see how corruption affects our economy - in the hope that this would provoke thoughts and lead to actions that help to advance our society.

Corruption has been defined as an illegal payment to a public agent to obtain a benefit that may or may not be deserved, or the abuse of public offices for private gains[1]. Is this common practice in the way people go about their daily lives in Malaysia ? Would the act of bribing someone to facilitate a transaction be considered bribery? For example, is it serious bribing an officer when you need something to be processed quickly? If you randomly asked people on the street about the level of corruption in this country, there is a high probability that most would be able to share with you sordid stories of corruption in this country. Judging from the recent newspapers headlines our society is not short of examples related to misappropriation of public funds and serious graft. So, it is fair to begin the discussion the issue of corruption on the presumption that corruption is indeed widespread in Malaysia .If corruption is systemic in our culture, does it mean corruption is condoned? Some experts have argued that corruption lubricates the squeaky wheels of rigid administration[2]. The use of bribes may reduce the waiting costs associated with queuing and therefore enhance the efficiency in public administration[3]. Public agencies and administrators would equate bribes as necessary in favour of the most worthy bidder. This could overcome bureaucracy of an over-centralized system circumventing inefficient processes through the use of bribe as a price mechanism. In this case, bribes serve as an incentive promulgating an individual’s actions outside the norm. For example, a government official is bribed to short-circuit decision which may result in some savings. Viewed as "grease money," corruption may appear acceptable for reducing inefficiency in bureaucratic administrations and rewarding flexibility in performing favours outside normal practices.

However, would the advantages of fulfilling efficiency through bribes or favours for short-term benefits be sustainable? In the absence of bribes, public officers accustomed to them are likely to find little motivation to administer services and serve the public. Corruption is therefore intricately linked to people’s expectations of corrupt practices.

It is possible to identify at least two immediate economic implications when corruption is seen as grease money that lubricates a rigid system. First, corrupt practices promote an inefficient provision of public services, as there would be no incentive to improve and maintain consistent services without bidders of scarce resources. This affects the standards of service and quality that serve as the foundations of successful economies. Second, corruption results in misallocation of resources in that concentration of efforts would be driven by bribes and limited resources would not be distributed for the benefit of a society. Corruption is also linked to cronyism and nepotism where only a small number of individuals benefit from the public resources and not every individual in a society has an equal chance to participate. Thus, the argument that corruption could improve efficiency is far from convincing.

Is there research evidence to suggest that corruption has negative implications for the economy? Is it applicable to the context of our country? Various studies have shown that corruption mirrors a country’s economic progress and development. In other words, less developed and developing economies are generally more corrupt than their well-developed Western counterparts. But this does not imply that there is no corruption in developed economies. Corruption is more pervasive in developing economies because the government has a monopoly over certain resources that are needed by the private citizen[4] and there are economic and institutional differences whch affect the availability of countervailing actions on the part of the person being extorted by government officials[5]. One recent example in tackling this problem is the government's proposed action for the ACA to be restructured and more independent.

Corruption has also been noted as an extortionary tax that distorts objective selection of investment projects and causes misallocation of talents. For example, the lack of transparency in awarding government tenders offers opportunities for corruption. Also, through corruption bribe takers would restrict the flow of information in order to limit the number of rivals and to reduce further the risk of detection. This not only reduces optimal allocation of resources but also stunts the innovation sector by restricting the number of participants, resulting in particularly encouraging outflow of talented and skilled workforce. For example, many Malaysian professionals work abroad particularly in Singapore, and the government had implemented various schemes in luring them home, unsuccessfuly. Another example is the secrecy of the criteria the government applied in awarding PSD scholarships. Such practices have long-term negative implications for human capital development and competitiveness of the country. This increases unproductive factors with the exclusion of efficient participants in the system. For example, the ability to pay bribes or privilege of political friends or kinship prevented honest and capable citizens from participation in the economic development.

A significant economic driver in any economy is innovation, that is value creation, entrepreneurism and knowledge-based industries. By and large, this depends on the pace of human capital development, innovation and technological application. These factors are influenced by efficient allocation of the talent pool. But in an environment where corruption is ripe, talent flows out of the innovation sector. In turn, this affects growth rates in societies, and innovators would be hardest hit as they must obtain government-supplied goods such as licences and permits to start, whereas established producers do not[6]. One example was the apparent fiasco and politics shrouded in the Approved Permit application and approval pertaining to foreign cars being imported into Malaysia. Various academic studies using a cross-country sample have shown that the degree of corruption is positively associated with a lower growth rate[7]. Corruption retards investment and growth as much as other political economy variables, e.g., political freedom, civil liberties and political violence.

At this point, one would intuitively argue that corruption also affects income inequality. The route to success or win scarce resources such as government tenders and projects is more about spending more time with bureaucrats in developing personal favours by paying more bribes rather than by improving performance and added business value. Corruption creates income inequalities through imperfect capital markets and inefficient resource allocation. Corrupt officials and those who participate in corruption are likely to protect and hide their illegal activities, and further restrict participation to those who could pay more. This results in a vicious cycle of graft and cronyism in that benefits of wealth creation and distribution for the poor would be few and far between. This is especially prevalent when government spending is not equally distributed as well as constrained by the developing context of an economy. For example, our local newspapers are replete with stories about misappropriation or missing government funds. The inconclusive research evidence on the effect of corruption on income inequality is mainly due to differentials in government spending across countries and continents. It is clear from previous studies that corruption tends to preserve or even widen inequalities in the distribution of income.

In terms of foreign direct investment (FDI), corruption does not seem to deter in absolute terms though modelling FDI is complex and intervened by numerous quantitative and qualitative variables. Although the impact of corruption is not clearly discernible in FDI, there is consensus that corruption heightens uncertainty and raises costs. Corruption in the host and home country has negative impacts on FDI[8]. The difference in the level of corruption between the host and home country affects investors’ decision on the choice of location because they are likely to choose familiar environments. For instance, countries perceived as relatively low on a corruption index (by Transparency International) would be more unlikely to invest in countries highly rated on corruption. A country’s inability to fight graft signals the presence of inefficiency in the system, which could deter FDI or promote the use of bribes to gain preferential access to scarce resources. Foreign investors exposed to corruption would logically be able to handle them abroad or could use corrupt practices to gain competitive advantage. This begs the question on whether corruption creates significant barriers for foreign investors in Malaysia or the country’s FDI is characterised by countries with low ‘distance’ on a corruption index. Most importantly, it is widely noted that a corrupt economy does not provide open and equal market access to all competitors.

In the information age and the Internet era, it is becoming more difficult to hide corrupt practices. Headlines on reforms for the sake of public relations without real substance and actions are all misleading. Even if it is possible to control freedom of information and politicise corrupt economic interests, the outcomes of corruption are highly visible to the people. For example, how a country’s scarce resources had been squandered for misinformed and/or ill-designed government projects are often topics of daily discussion. There were many projects invested by the government without careful consideration of the public needs and opinions, and associated opportunity costs. Corrupt interests also are visible in political suppression, blockade of freedom of expression and censored or biased reporting of the national news media. Undoubtedly, corruption is present almost everywhere but it is not a force to be treated lightly, as corrupt officials are highly politicised for their personal self-interest. This means that no measure of anti-corruption and/or its associated reforms would be adequate without strong and effective leadership. Before I examine this in my next article, we shall pause for thought and ponder whether the economic development of Malaysia could be attributed to corruption, and how corruption reduces and stifles economic growth.

[1] Rose-Ackerman, S. (1978) Corruption: A Study in Political Economy. Academic Press, New York

[2] Leff, N. (1964) Economic development through bureaucratic corruption. American Behavioural Scientist, 8, 6-14.

[3] Lui, F.T. (1985) An equilibrium queuing model of bribery. Journal of Political Economy, 93, 760-781.

[4] Alam, M.S. (1995) A theory of limits on corruption and some applications. Kyklos, 48, 419-435.

[5] Husted, B.W. (1999) Wealth, culture and corruption. Journal of International Business Studies, 30(2), 339-360.

[6] Murphy, K., Shleifer, A. & Vishney, R. (1993) Why is rent-seeking so costly to growth? American Economic Review, May, 409-414.

[7] See e.g., Murphy, K. Shleifer & Vishney, R. (1991) The allocation of talent: implication for growth. Quarterly Journal of Economics, 105, 503-530. Knack, S. & Keefer, P. (1995) Institutions and economic performance: cross-country tests using alternative institutional measures. Economics and Politics, 3, 207-227.[8] Habib, M. & Zurawicki, L. (2002) Corruption and foreign direct investment. Journal of International Business Studies, 33(2), 291-307.

 

Dr Teck Yong Eng is a senior lecturer at King's College, University of London., His work covers economic development and strategy issues and has appeared in business management and strategy journals. He will be writing a regular column specially for the Centre for Policy Initiatives.

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