14 JOURNAL OF CONTINGENCIES AND CRISIS MANAGEMENT

Corruption, Culture and

Transferability: What Can Be Learned
From Australia?
Peter Larmour*

The Asian financial crisis is often blamed on `corruption'. International banks and aid donors
now promote technical assistance and training in corruption prevention, referring to the
international best practice of Independent Commissions Against Corruption in Hong Kong or
Sydney. However, it is often also argued that what counts as corruption is culturally specific,
and that the incidence of petty corruption is related to low salaries. So lessons drawn from
corruption prevention in Australia, for example, may not be transferable to other countries with
different cultures and levels of income. This paper reflects on the experience of designing and
teaching a course on corruption prevention for officials from developing countries in the Asia-
Pacific region. It considers what counts as `corruption', identifies different approaches towards
prevention, and draws some conclusions about the transferability of Australian expertise.

Introduction Domestically, Australia's concern with corruption

* National Centre for
Development Studies, J.G.
Crawford Building, Australian
National University, Canberra
ACT 0200, Australia. E-mail:
Peter.Larmour@anu.edu.au
`Corruption' is frequently invoked as an
explanation for the Asian financial crisis that
began in 1997 (see for example, Backman, 1999).
The World Bank, the Asian Development Bank
and aid donors have become increasingly willing
to address issues of corruption and support
activities designed to prevent it. Preventive
measures include changes in procedures, such as
tenders, and new training programmes for
officials. The new international attention given
to corruption has created a demand for expertise
in corruption prevention and raised questions
about its relevance. Corruption is often said to
be linked to questions of `culture'. The
prevalence of so-called `petty' corruption would
be linked to low levels of pay. If so, it may be
difficult to draw lessons about corruption
prevention from one country to another,
particularly if they have different cultures, or
different levels of development.
This paper addresses these questions of culture
and transferability by reflecting on the
experience of designing and delivering a
university course on `Corruption and Anti-
Corruption'. The course has been running for
several years in Canberra, the Australian capital,
as part of a Masters degree for developing
country officials, mainly funded by aid donors.
Shorter versions of it have been taught in
Indonesia, Cambodia and the Philippines.
The expertise was drawn from the research and
experience of the New South Wales Independent
Commission Against Corruption (ICAC).
has been driven by scandals in the police, justice
system and prisons at state, rather than federal,
level (Grabosky and Larmour, 2000). The ICAC
was created in 1988, following revelations that
included a prison minister receiving payments to
release prisoners. It was, to some extent,
modelled on the Hong Kong ICAC. Specialist
anti-corruption agencies were set up in
Queensland and Western Australia, and the
New South Wales ICAC's jurisdiction over police
corruption was hived off to another specialist
agency after another Royal Commission into the
police. ICAC takes research seriously as a guide
to its use of limited resources (a staff of about
130 and a budget of about $A13 million).1
To what extent is ICAC's experience,
transmitted through a training course, relevant
to countries with presumably different cultures
and where salaries and incomes are much lower?
This paper addresses these issues from several
directions before it draws some conclusions
about the `transferability' of ICAC's experience.
The issues addressed in this paper are:
1. The definition of `Corruption' and the role of
`culture' (variously defined) in it.
2. The relationship between prosecution and
prevention, and the evolution of ICAC's
thinking about it. The course included people
with prosecutorial responsibilities, as well as
general managers.
3. The points of leverage for corruption
prevention on an international, national,
agency, and individual level. Many of the

Blackwell Publishers Ltd 2001, 108 Cowley Road, Oxford OX4 1JF, UK and
Volume 9 Number 1 March 2001 350 Main Street, Malden, MA 02148, USA.
CORRUPTION, CULTURE AND TRANSFERABILITY
participants in the course were from countries
adopting `national' strategies against
corruption, often with aid donor support.
4. The limits of a managerial approach to
corruption prevention and the relationship
between corruption and the New Public
Management called in the development
literature `New Corruption'. Most of the
participants in the course were public sector
managers.
5. Some gender issues in the definition and
prevention of corruption. Most of the
participants in the course were men.
What Counts as `Corruption'?
Discussions on the definition of corruption
typically distinguish `legal' from broader `public
interest' definitions, but recognise that both may
be out of step with public opinion. Dissonance
between definitions might, therefore, be stronger
where legal systems are imposed or imported
from outside (say, post-colonial states), or where
there is a weak distinction made between `public'
and `private' activity (perhaps where traditional
authority is strong). One might also expect
differences within public opinion, perhaps on the
basis of gender, class or ethnicity. In reality, it
turns out to be more complicated.
ICAC's Act defines `corrupt conduct' very
widely, including action by non-officials that
might affect the `honest or impartial exercise of
official functions', breach of public trust, and
misuse of official information (Section 8.1). It
goes on to list what sort of activities might
adversely affect the carrying out of official
functions, including, for example, bribery, tax
evasion, or election fraud (Section 8. 2). It then
goes on to qualify its scope to more serious
conduct, defined as that which would constitute
a criminal offence, a disciplinary offence, or
provide grounds for dismissal (Section 9).
An agency report summarises its definition as:
. . . the dishonest or partial (that is, biased) exercise
of official functions by a public official (ICAC,
1998a: 5)
In designing the course, contributors were
alert to `cultural' arguments claiming that what
counted as corruption in one country might not
be the same in another. Politicians in the South
Pacific, for example, have defended payments in
exchange for political support as an acceptable
form of traditional gift giving (Larmour, 1997).
The participants turned out to be impatient with
such rationalisations.
Several aspects of ICAC's work turn, in
different ways, on issues of `culture', thought
of as rules and meanings that are experienced as
`given', but may differ from place to place and
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15
time to time. Australia is officially a
`multicultural' country, with low levels of
religious belief.
Research by ICAC found that meanings were
not widely or consistently shared among New
South Wales public servants. The `idiosyncratic
nature of deciding what is corrupt and what is
not' (Gorta, 1994: 67) suggests the absence,
indeterminacy or multiplicity of cultures in New
South Wales. Gorta (1994) presented a sample of
public servants with a series of situations, such as
an official using her position to get a friend a job,
and asked whether they thought the behaviour
was corrupt. While there was agreement about
the corruptness of some situations (for example,
an official accepting money from a company for a
tender, and spending it on a stereo for himself),
there was no unanimity across all of them. People,
for example, tended to agree that situations of
direct financial gain and illegality were `corrupt'.
But there was much less agreement over the effect
of mitigating circumstances and bending the rules
to achieve a reasonable outcome. For comparison,
a straw poll I took with a small group of Thai
public servants found greater unanimity and a
stronger tendency to find all the New South
Wales situations `corrupt' (chor rat bang luang
literally, `cheating the citizens and hiding from the
king'). While there was lack of consensus, it was
also hard to say that any particular group was
more likely to perceive the situations differently
from others. Different `background characteristics'
(gender, salary, level) were associated with
different perceptions of some, but not all
situations.
However, culture does, nevertheless, play
important roles in ICAC's methodology. First,
explanations of police corruption in New South
Wales refer to an unofficial culture into which
new recruits are quickly inducted, and which
punishes those who refuse to go along with
corruption. Here, the issue is the dissonance
between the official culture of the police,
represented by a new commissioner recruited
from overseas, and the persistent sub- or
counter-culture of police corruption.
Secondly, in looking for remedies, ICAC
corruption-prevention staff are increasingly
turning to `cultural' explanations. This is a lesson
Gorta (1994) draws from the crime prevention
literature.
Thirdly, ICAC has been particularly concerned
with `cultural sensitivity' in its investigation of
complaints about corruption in Aboriginal Land
Councils. These organisations were set up to
assist indigenous people to overcome the effects
of dispossession from their land and are funded
by a levy of a percentage of the state's land tax.
ICAC combined its investigations with
recommendations about corruption prevention
in future.
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16 JOURNAL OF CONTINGENCIES AND CRISIS MANAGEMENT
Australian policy towards indigenous people
has been highly paternalistic and discriminatory.
It is usually compared with policy in other
countries of European settlement, such as New
Zealand, Canada or South Africa. There are also
parallels in the relationship between majorities
and `hill' or `tribal' peoples in some parts of
South East Asia. ICAC's corruption prevention
report found:
The way in which public sector organisations
interact with Aboriginal organisations has often
been ineffective. Some past interactions have been
characterised by a lack of commitment on the part
of government officers to, and awareness of,
Aboriginal needs, priorities and sensitivities. A
particular issue has been the failure of
governments to accept that a process of
consultation should involve negotiation. The
modes of communication used by bureaucracies
are often inappropriate and unintelligible to
Aboriginal people (ICAC, 1998c: 19).
ICAC sought to make its investigation of land
councils as `culturally sensitive' as possible. Here,
culture seems to have had more to do with
processes of interaction than substantive
differences about what constituted corruption
and whether it was a problem.
An ICAC follow-up study asked people what
they thought was corrupt and found (1998c):
influenced decision-making processes, such as
favouring family members
biased housing allocations (people jumping
the queue)
inadequate meeting procedures (vote
stacking)
inappropriate use of resources (for example,
using vehicles for their own purposes)
theft (misuse of funds)
This survey suggests that Aboriginal people
are defining corruption in familiar ways. ICAC
found these instances of corruption also closely
corresponding to a list of the `three biggest
problems' in the council.
ICAC's experience suggests that culture is
important, but far from monolithic, unequivocal
and determining behaviour. Corruption persists
because of organisational sub-cultures, while
leaders must be encouraged to model the culture
they expect to prevail within an organisation.
Cultural sensitivity involves the processes by
which the Anti-Corruption Agency goes about
its work, as well as alertness to different
understandings of corruption.
The Link Between Prosecution and
Prevention
A large proportion of participants in the course
came from countries that had been
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systematically looted by their leaders. They
were understandably concerned with difficulties
of prosecuting leaders and recovering their
assets. Like the ICAC, they felt political pressure
to investigate and prosecute corruption.
The reasons to emphasise prevention over
prosecution are partly practical, and partly
managerial. Corruption is, almost by definition,
secret, and with no obvious or immediate
victims (victims only appear, for example, when
shoddy construction work allowed by
corruption leads to building collapses, or dams
bursting). The incidence of corruption is hard to
estimate, but only a small amount of the
corruption that happens is funnelled into
detection, prosecution and conviction.
Potentially corrupt officials presumably make
these calculations and one of the surprising
findings of ICAC investigations is how little the
sums involved are for which people risk their
careers several thousand dollars and a used car,
in one case. Similar resources devoted `upstream',
to prevention, might have greater impact on
resources devoted `downstream', on
investigation.
The developing country participants were not,
on the whole, impressed by this argument: they
mentioned a sense of justice, the huge amounts
involved and the contrast with the
impoverishment of the general population.
Professionals involved in audit investigation
and prosecution are also less likely to be
sympathetic to claims of specialists in
prevention. Here, ICAC prevention specialists
were developing an interesting argument about
the use of investigation to provoke an
organisation into longer-term prevention
strategies.
The Point of Leverage in Prevention
Strategies
While prosecution finally targets individuals,
prevention raises the question of application of a
strategy. It may be aimed at individuals, perhaps
persuading them to recalculate the risks of acting
corruptly, or encouraging them to blow the
whistle on others. `Bad apple' theories are
individualistic. But other approaches target an
agency, non-public servants, or (more broadly)
`the nation'.
Course participants were involved in the
production of national strategies (working from
the President's office in Cameroon, on the
national audit agency, BPKP, in Indonesia).
Others had a brief covering the public service
(Uganda), or agencies within it (Ombudsmen in
Philippines). Others were based in NGOs.
More broadly, should anti-corruption
strategies target the private sector as much as
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CORRUPTION, CULTURE AND TRANSFERABILITY
the public sector, or (in development situations)
the burgeoning category of NGOs? With
globalisation, can it any longer be simply
targeted at the national or (in Australia) state
level?
ICAC's mandate was the New South Wales
public sector, and its managerial and
organisational culture theories led it to treating
the agency as the point of application of a
strategy. Some participants doubted that
agency-level changes would have much purchase
on the issue until there were changes at the top
a position supported both by ICAC theories of
the role of leadership in organisational culture
and more classical theories of the causes of
corruption arising from loose living among the
elite, or `fishes that rot from the head down'
(Alatas, 1986).
For contrast, Transparency International
(whose doctrine formed part of the course
material), began with a strongly international
focus, locating a cause of corruption in
international dealings. It has now developed
national chapters which point to NGOs, the
`national integrity system', and networks of firms
in `islands of integrity' as points of application
for a corruption prevention strategy (Pope,
1996).
The development literature distinguishes
between `supply' and `demand' side approaches
to achieving good governance (OECD, 1997).
The former concentrates on training, pay and
institutional strengthening. The latter, now more
fashionable, looks to improved accountability,
mobilised clients and competition from other
agencies to spur better performance. Clearly,
both supply and demand for corruption
prevention need to be addressed. Some
participants in the course, and applicants, wanted
more emphasis on technical skills in intelligence,
investigation and prosecution. More generally,
training assumes that participants who complete
the course have a greater capacity to carry out
corruption prevention. Many were sceptical,
however, that their new skills and knowledge
would be used.
Their scepticism reflects a more general
difficulty with overseas training that simply
produces students who will, almost by definition,
be out of step with the organisational culture to
which they return. It suggests that a better or
additional approach should be:
in country training of cohorts, who will,
subsequently, work together in the same
agency (this has been done for finance
training in Indonesia)
selection of participants from different sectors,
who will then develop cross sectoral links
when they return (as parts of a `national
integrity system')
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The Limits of Managerial Approaches
The underlying `story' of the course was of
ICAC's own learning. Through the 1990s, it had
moved from an emphasis on prosecution to
prevention and, then, from managerial to a more
ethical approach. It emphasised the role of
leaders in determining the organisational culture,
which, in turn, determined whether or not
people behaved corruptly, and whether incidents
were dealt with. This learning took place
through ICAC's dealings with the State Rail
Authority (ICAC, 1998a). ICAC carried out
investigations into this authority in the early-
1990s and it found corruption `ingrained, serious,
and widespread'. But the limited corruption
prevention programs the SRA installed soon
faltered. The ICAC found:
. . . it appeared incapable of dealing in any effective
manner with the widespread corruption that was
evident within its ranks. The prevailing culture
tolerated corruption and this was exacerbated by
fundamental systemic flaws. Management and
control arrangements were not effective and were
themselves prone to corruption (ICAC, 1998a: 4).
ICAC turned its attention to leadership and
the ethical climate that leaders set in the
organisations they were responsible for.
Restructuring provided an opportunity to secure
commitment from the top. The SRA was to be
divided into four new corporations and the
Minister insisted that the new CEOs take
responsibility for eliminating corruption. The
ICAC used its powers to hold public hearings to
ask the new CEOs to make
. . . public presentations and submissions on the
steps they had taken to reduce opportunities for
corrupt behaviour (ICAC, 1998a: 5).
ICAC's experience with prosecution and
corruption prevention planning without top-
level support had led it to an approach based on
ethics and leadership. Gorta's review of the
research suggested that
. . . the tendency to behave ethically in the
workplace may be related more to aspects of the
organisation than to attributes of the individual
(Gorta, 1998: 10).
In turn, managers were particularly important in
establishing, by example, an ethical culture in the
organisation.
The New Public Management (NPM) shares
many of its assumptions with Economics.
Corruption may have an effect on the
substantive economy, by deterring or distorting
investment, getting prices wrong and so on. The
New South Wales Premier has referred to the
existence of ICAC in boosting New South Wales
as a good location for foreign investment. It may
also be understood in terms of the formal
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18 JOURNAL OF CONTINGENCIES AND CRISIS MANAGEMENT
economic sense of choices among scarcity, in
which officials decide whether or not to act
corruptly. Low pay, for example, may increase
incentives to act corruptly. So may the low
probability of detection. This economic method
not only helps understand official motivation,
but also is productive of remedial ideas (change
incentives, reduce discretion and so on). This is
well-expressed in Klitgaard's (1988) famous
formula:
Monopoly Discretion Accountability
Corruption
The economic understandings of corruption
typically lead to arguments for liberalisation.
Reduction in government activity will reduce
opportunities for corruption almost by
definition. Allowing prices to reflect scarcity
will reduce the rents those officials may skim off
(and also provide better signals about the
demand for public services), and so on. To that
extent, arguments for political and economic
liberalisation and arguments against corruption,
seem happily consistent. In Indonesia, for
example, a smaller public sector, and more use
of market mechanisms, should reduce
opportunities for both grand and petty
corruption.
The ICAC's work with the State Rail
Authority (SRA) in Australia shows one way in
which competition policy provides an
opportunity to secure high-level commitment
to corruption prevention. The monolithic SRA
was resistant to reform. The ICAC used its
existing powers to hold the managers of the
successor corporations accountable.
However, NPM may also depend on the prior
existence of a bank of integrity, which it does
not replace.
NPM assumes a culture of public service honesty
is given. Its recipes to some degree remove
devices instituted to ensure honesty and neutrality
in the public service in the past (fixed salaries,
rules of procedure, permanence of tenure,
restraints on the power of line managers, clear
lines of division between public and private
sectors) (Hood 1991: 16).
In the absence of these pre-existing values, de-
regulation may simply provide more and
different opportunities for corruption in, for
example, deciding who gets contracts, and who
gets made redundant. Liberalisation in some
countries, particularly Russia and China, has led
to a `New Corruption' in which rapacious new
elites relieved of the restraints of the past, link up
with criminals (Harris-White, 1996).
State-directed development projects often had
an ethical basis (nationalist, socialist, religious, or
in Indonesia the state doctrine tolerant of
Volume 9 Number 1 March 2001
religious difference) which provided some
restraint of official behaviour. Liberalism does
not make such strong ethical claims, yet ICAC,
and others, increasingly talk `ethics'.
Gender Issues
There are gender implications to many of the
concepts deployed to understand corruption.
Public interest definitions of corruption turn on a
distinction between public and private that
feminist writers argue has, in the West,
consigned women to the private sphere
(Pateman, 1988). Will women become corres-
pondingly prone to corruption as they re-occupy
the public sphere? Are women being brought in
to `clear up the mess' left by corrupt men, as
when women have become state premiers in
Australia after men have been discredited by
scandal? A familiar justification for corruption is
that it was not done for personal gain rather `I
did it for my family'. Nepotism has not excluded
daughters, in Indonesian President Suharto's
case.
While Gorta's survey found that men and
women thought differently about some
situations of corruption, there was no pattern
across all of them.
While more females than males described seven of
the twelve scenarios as corrupt, there was no
difference for four scenarios and a reverse trend
for one (Gorta, 1994: 44).
The police sub-culture sounds distinctively
masculine, revolving around concepts such as
`mateship'. Its exclusivity limits its scope and
survival as more women join the police. Equally,
a more active policy of recruiting and promoting
women may be a good way of dissolving such
subcultures. In that case, they might be given
greater priority in overseas training.
Conclusions
ICAC is already working internationally,
through the Australian aid programme,
providing Technical Assistance to the
Ombudsman Commission in Papua New Guinea,
and providing internships to Thai public
servants, as well as teaching in the Canberra
course. It can claim to be international best
practice in some of its work, such as corruption
prevention. How transferable are its ideas and
methods?
Issues of transferability go back to the
transplanting of colonial institutions and the
recent Asian values debate. They have become
sharper with processes of globalisation;
humanitarian intervention; competition to
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CORRUPTION, CULTURE AND TRANSFERABILITY
emulate best practice; and the construction of
league tables that compare countries, like
Transparency International's controversial
Corruption Perception Index.
Few contexts are unique and state structures
are, themselves, the result of borrowing,
emulation and imposition. Lesson drawing from
other countries has played an important role in
development, for example, in the
industrialisation of Japan (Westeney, 1987). Rose
(1993) sought to identify the conditions under
which lesson drawing in public policy was
successful. Rose (1993) found that programmes
(defined as the cause-and-effect mechanisms by
which government actions are expected to
produce a specific policy outcome) were more
`fungible' (that is, transferable between contexts)
the fewer unique elements they contained;
the more they could be carried out by
different kinds of agency;
the more that similar resources were available;
the simpler their `cause-effect structure';
the smaller the changes they sought to bring
about;
the more they were interdependent with
programs in other jurisdictions; and
the more the program's values were
consistent with policymakers' values (Rose,
1993: 118142).
Rose (1993) noted that the first three
conditions were generally met in advanced
industrial countries, but the last three were more
variable, and dependent on the character of the
programme and context.
Several of Rose's (1993) conditions are
unsurprising: keep it simple and incremental.
But two suggest interesting conclusions for
corruption prevention. Transfer can be inhibited,
or hijacked if only one local agency (the police,
or audit department) is deemed capable of
carrying out the policy. And a good pathway
for transfer might lie with customs, foreign
affairs or telecommunications agencies, which are
interdependent with jurisdictions abroad. The
final, `values' condition is a reminder that
corruption prevention cannot simply be treated
as a technique.
The course included a discussion of Rose's
(1993) ideas about the transferability of
institutions. Participants were concerned about
uncritical borrowing of perceived best practice,
and that focus on a single institution might
divert attention from the `national integrity
system' of police, public service commissions,
and the media in which anti corruption activity
took place. As it turned out, participants wanted
more detail on ICAC itself, but were also mindful
of the differences. They most often cited the
different scale of the problem in their own
countries, and the radically different resources
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available. Lessons were drawn for ICAC, too,
particularly about the way its lack of budgetary
autonomy might reduce is independence.
An ICAC may not be a bad model. It has
successfully survived transfer to Australia from
Hong Kong. Doig (1995: 161) considers the
question of transferability to developing
countries and concludes that some kind of new,
relatively independent central agency
may offer the opportunity, with donor support, to
provide an immediate building block for good
government where other administrative reforms
may be more problematical.
Participants in the course were interested, but
sceptical, of the priority ICAC gave to
prevention and its more recent adoption of an
ethics based approach. They wanted more on
prosecution (and, in the Indonesian case, on the
recovery of corruptly acquired assets). Course
participants were keen to take home copies of
the ICAC's mid-1990s Manual on Corruption
Prevention (ICAC, undated), even though the
ICAC itself had stopped using it. So people
drawing lessons need to be alert to the life cycle
of the organisation they are borrowing from:
whether it still regards its earlier doctrines as
valid and what it, itself, has learned.
Note
1 See <www.icac.nsw.gov.au>.
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