Vu Hoang Linh, Ph.D.

ECONOMICS OF Thuy Nguyen, MPP

SOCIAL ISSUES VNU University of Economics &
Business
CHAPTER 5:
ECONOMICS OF CORRUPTION
ECONOMICS OF CORRUPTION

1. The concepts of corruption

2. Effects of corruption
3. Public sector and private sector corruption
4. Policies to reduce corruption
DEFINITION OF CORRUPTION
• In dictionaries:
•Oxford: dishonest or fraudulent conduct by those in
power
•Merrian-Webster: dishonest or illegal behavior especially
by powerful people

4
DEFINITION OF CORRUPTION
•By regulations/laws
• WB: use of public office for private gain
• OECD: the abuse of a public or private office for personal
gain
• Transparency International: The abuse of entrusted power
for private gain
• Vietnam’s Anti-corruption Law: An office holder’s abuse of
his/her official capacity for personal gain
(Tham nhũng là hành vi của người có chức vụ, quyền hạn đã lợi dụng chức vụ,
quyền hạn đó vì vụ lợi - Điều 3.1)
ACTS OF CORRUPTION
The illegal actions defined by UNCAC as corruption offences include:
• Bribery in the public and private sectors (articles 15, 16 and 21)
• Embezzlement in the public and private sectors (articles 17 and 22)
• Trading in influence (article 18)
• Abuse of functions (article 19)
• Illicit enrichment (article 20)
• Money-laundering (article 23)
• Concealment (article 24) and Obstruction of justice (article 25) related
to the offences listed above
 ACTS OF CORRUPTION
1. Acts of corruption committed by office holders in state organizations include: 2. Acts of corruption committed by office
a) Embezzlement; holders in non-state organizations
include:
b) Taking bribes;
a) Embezzlement;
c) Abuse of one’s position or power for illegal appropriation of assets;
b) Taking bribes;
d) Abuse of official capacity during performance of tasks or official duties for personal
gain; c) Bribing or brokering bribery for taking
advantage of one’s influence over the
dd) Acting beyond authority in performance of one’s duties for personal gain; operation of the enterprise or
e) Abuse of official capacity to influence another person for personal gain organization, or for personal gain.

g) Impersonation for personal gain;

h) Bribing or brokering bribery for taking advantage of one’s influence over a state
organization or for personal gain;
i) Illegal use of public assets for personal gain by abuse of official capacity;
k) Harassment for personal gain;
l) Failure to perform or correctly perform one’s duties for personal gain;
m) Abuse of official capacity to screen violations of law for person gain; illegally
intervening or obstructing supervision, inspection, audit, investigation, prosecution,
adjudication or judgment enforcement for personal gain.
TYPES OF CORRUPTION
• Political corruption vs. bureaucratic corruption (grand vs. petty): Political or grand
corruption takes place at the highest levels of political authority, bureaucratic or petty
corruption, which is corruption in the public administration, at the implementation end of
politics.
• Corruption with vs. without theft: bribes paid to reduce or eliminate official fees
(customs duties, fines) vs. bribes paid in addition to official fees (speed, meet
requirements, eliminate paperwork)
• Private vs. collective corruption (individual vs. aggregated): The money or benefits
collected through corruption may be extracted for the benefit of an individual who will
share nothing or very little with his equals, or it may be extracted for the benefit of a
particular group with some coherence and unity.
• Redistributive vs. extractive corruption (from below vs. from above): Corrupt
practices will generate a flow of resources either from the society to the state
(“extractive” corruption, or corruption “from above”), or from the state to the society
(“redistributive” corruption, or corruption “from below”).

8
WHAT IS CORRUPTION?
What Is Corruption? (2017). Bonnie J. Palifka (14 min). This video explains some
definitions and provides examples of corruption. » Available from:
www.youtube.com/watch?v=bImyKAjQ2Io&feature=youtu.be
Question: How has corruption affected you or
someone you know?
Please write down on paper three things:
 first, the basics of what you wish to share with the class;
 second, how your real-life example of corruption affected you or your
acquaintance; and
 third, upon reflection, what is corrupt or corrupting about the example you have
described.
EFFECTS OF CORRUPTION
Undermining the Sustainable Rising illiberal populism
Development Goals
Organized crime and terrorism
Economic loss and inefficiency
Diminished state capacity
Poverty and inequality
Increasing polarization and unrest
Personal loss, intimidation and
inconvenience Climate change and damage to
biodiversity
Public and private sector dysfunctionality
Human rights violations
Failures in infrastructure
Armed conflict and atrocity crimes
Rigged economic and political systems
Public frustration and cynicism
Impunity and partial justice
EFFECTS OF CORRUPTION (1/9)
How corruption affects the Sustainable Development Goals (SDGs)
EFFECTS OF CORRUPTION (2/9)
Economic loss and inefficiency
A 2016 report from the International Monetary Fund12 (IMF) estimated the cost of bribery alone to be
between $1.5 to $2 trillion per year. This represents a total economic loss of approximately 2% of global
GDP. And yet it does not take into account the economic cost of all other forms of corruption.
Regarding fraud, money-laundering and tax evasion, for example, the thousands of leaked documents known
as the Mossack Fonseca Papers13 (commonly referred to as the Panama Papers) exposed the vast economic
implications of offshore entities for many nations and for economic inequality in general.
Finally, beyond deadweight economic loss, there is economic inefficiency to consider. When jobs (or contracts)
are given to people (or companies) who offer bribes or share a personal connection, this occurs to the
detriment of competition. The result is that more qualified candidates and firms are turned down. The more
widespread such practices are, the more inefficient the economy becomes.
Corruption in developing countries may cause underdevelopment. This can occur when international economic
and humanitarian initiatives are derailed as funds disbursed from loans and aid are embezzled or handed out
to inferior contractors who have won their bids through corrupt means (kickbacks, bribery, nepotism, etc.).
Furthermore, investment in physical capital and human capital is reduced as resources are diverted from their
most beneficial use.
EFFECTS OF CORRUPTION (3/9)
Poverty and inequality
In Nigeria, an (in)famous bribery case, involving the international oil company Shell, deprived
Nigerian people of over $1.1 billion14 as the money went to corrupt officials instead of to the
national budget (Global Witness, 2017). Meanwhile, according to the World Bank (2019),
more than 50% of the population of the oil-rich country live in extreme poverty.
This example shows that as political and economic systems are enlisted in the service of
corrupt actors, wealth is redistributed to the least needy sources. Mechanisms such as political
representation and economic efficiency are both compromised by self-dealing and secret
exchanges.
Under conditions of corruption, funding for education, health care, poverty relief, and elections
and political parties’ operating expenses can become a source of personal enrichment for
party officials, bureaucrats and contractors.
Social programs and the redistributive potential of political systems suffer accordingly. A key
result of all the instances named above is a state of unequal opportunity in which advantages
arise only for those within a corrupt network.
EFFECTS OF CORRUPTION (4/9)
Personal loss, intimidation and inconvenience
When people experience corruption, it is rarely a positive experience. A bribe must be paid
to receive medical attention, obtain a building permit, pick up a package, or enjoy phone
services.
A judge rules against a party, not based on the facts of the case, but because the opponent
paid a bribe, knows a power broker, or comes from the same racial or ethnic background.
A person is beaten, detained or subject to a higher fine because he or she refuses to pay a
bribe solicited by a police officer.
Retirement funds are lost to fraudsters or tied up in a money-laundering scheme.
While the victims of corruption suffer personal loss, intimidation and inconvenience, those who
perpetrate corrupt acts and schemes tend to experience personal gain, a sense of superiority
and greater convenience – pending enforcement of the law, that is.
EFFECTS OF CORRUPTION (5/9)
Public and private sector dysfunctionality
The cumulative effect of individual corrupt acts is dysfunctionality. Whether offered
by the public or private sectors, the quality of goods and services decrease, and the
process of obtaining them becomes more expensive, time consuming and unfair.
If bribes can successfully be offered to police, doctors, and civil servants, then those
who are most successful at extracting these funds get ahead to the detriment of more
honest colleagues and competitors who may perform better on merit.
Moreover, corporations lose the incentive to offer better services and products if they
can undermine competitors through obtaining political Favors.
State-owned enterprises and industries are structured to enrich government officials
instead of pursuing innovation and efficiencies. This can lead to the loss of intrinsic
motivation within organizations. Workers and managers are demoralized. People
begin to doubt the value of hard work and innovation.
EFFECTS OF CORRUPTION (6/9)
Failures in infrastructure
When a bridge collapsed in Genoa in August 2018, killing at least 39 people, there were
many possible causes to consider. Corruption was not the most obvious one, but subsequent
investigations have found that a Mafia-controlled construction company appears to have used
“weakened cement” in the building process.
It is widely known that the construction industry is a valuable source of profits and a channel
for money-laundering operations by the Mafia. Oversight and competition are both
undermined in industries and firms plagued by organized corruption.
Relatedly, a 2017 report by Mexicans Against Corruption and Impunity blames corruption for
the collapse of over 40 buildings during the September 2017 earthquake in Mexico City.
Land-use and permit laws appear to have been bypassed, ostensibly through bribery,
cronyism and influence trading, leading to the presence of fundamentally unsafe buildings
around the capital.
EFFECTS OF CORRUPTION (7/9)
Rigged economic and political systems
What is described as dysfunctional above is actually functional and profitable for
corrupt actors.
Whether falling under the label of political cronyism, crony capitalism, political party
cartels, oligarchy, plutocracy and even kleptocracy, widespread patterns of private
and public corruption construct social systems that are rigged in the private interest.
Citizens with strong ethical principles (and citizens who lack significant funds,
connections, favors to dispense, “hard power” over others such as guns or private
enforcers) lose representation, influence and power.
EFFECTS OF CORRUPTION (8/9)
Diminished state capacity
Even if citizens were to adamantly demand that the problems listed above be addressed,
corruption undermines the power of politics. For example, to the extent that bribery, trading in
influence and state capture are widespread, political systems become incapable of
addressing social problems whose resolution would threaten vested interests.
Naturally, this is never acknowledged as such from within – state incapacity may manifest in a
great many distracting and misleading ways, such as wedge issues, political party
restructuring, the emergence of scandals and overwhelming outside issues that detract from
structural problems, and so on.
Under conditions of state capture, political arbitrage can be expected to occur in a highly
strategic fashion. Issues will be played off against each other in order to frustrate systemic
reforms. Moreover, as Della Porta and Vannucci (2005) argue, corruption compromises the
ethos of public service and changes political culture so as to render meaningful, public-spirited
reforms virtually unthinkable
EFFECTS OF CORRUPTION (9/9)
Climate change and damage to biodiversity
Corruption derails anti-climate change funding and initiatives, defeats forest
conservation and sustainable forest management programs, and fuels wildlife and
fishery crimes.
These and other adverse effects of corruption on climate change and the environment
are underscored in a TI report20 from 2011 and additional TI publications.
On a broader level, the book This Changes Everything by Naomi Klein (2014) details
how state capture by monied interests has derailed legislative efforts to address
climate change in the United States.
Her analysis applies to many countries around the world, given the power of the fossil
fuels and automotive industries over governments – elected and unelected – across
the globe. The perilous impact of corruption on the fisheries sector is discussed in
detail in the publication Rotten Fish22 (UNODC, 2019), while the report Authorized
to Steal23 (CIEL, 2019) reveals how corruption enables criminal networks to illegally
harvest timber in Peru
MEASURING CORRUPTION (1/4)
Attempts to measure corruption are intended to reveal the nature and impact of
corruption and are necessary for developing anti-corruption responses.
Measurements of corruption can be used to identify trends and illustrate the scale
and scope of particular types of corruption. They can help policymakers, analysts
and scholars to develop tools to reduce corruption effectively.
There are different methods for measuring corruption and each has its own merits
and drawbacks. Furthermore, each method is designed to detect certain things and
ignore others.
MEASURING CORRUPTION (2/4)
• Direct methods of measuring corruption aim at collecting evidence-based
information on corruption through statistical and standardized procedures. They
measure actual experiences of corruption, rather than perceptions of corruption, and
can include official data (such as reported cases of corruption, conviction figures,
electoral scrutiny findings) and experience-based sample surveys (which collect
data on the experience of representative samples of a given population).
• Indirect methods of measuring corruption do not gauge the actual occurrence of
corruption but are rather based on perceived levels of corruption. They are often
used because actual occurrences of corruption are difficult to measure. Indirect
methods can be based on expert assessments (where selected experts are asked to
assess corruption trends and patterns in a given country or group of countries) or
other types of surveys that focus on perceived levels of corruption rather than on
actual levels. They are sometimes composite measurements or “surveys of surveys”
combining a variety of statistical data into a single indicator
MEASURING CORRUPTION (3/4)
• Perceptions Index (CPI) of Transparency International (TI): A global index
ranking countries based on perceived levels of corruption, as determined by expert
assessments and opinion surveys.
• Global Corruption Barometer: A survey capturing people’s experiences and views
on corruption.
• Index of Public Integrity (IPI): based on evaluating a set of six components
(judicial independence, administrative burden, trade openness, budget
transparency, e-citizenship and freedom of the press) that help to clarify the
institutional framework which empowers public integrity.
• Control of Corruption Indicator of the World Bank Governance Indicators:
captures perceptions of the extent to which public power is exercised for private
gain, including both petty and grand forms of corruption.
MEASURING CORRUPTION (4/4)
VIETNAM’S CPI SCORE AND RANKING

Trends: How corruption levels

have changed in Vietnam over
the past decade.
Discussion Question: What
factors contribute to Vietnam’s
persistent challenges with
corruption?
PUBLIC SECTOR CORRUPTION
❑ Public sector: Consists of both the branches of government and the bureaucratic structures
and processes that constitute the government.
Provides the administrative services for the branches of government (executive,
legislature and judiciary) and public services, such as health, education, policing, military,
infrastructure, water and transportation.
Includes the oversight and accountability organizations that monitor and audit
the performance of these services.
Organizations that carry out commercial activities but are owned by the
government and are referred to as state-owned enterprises (SOEs) or public enterprises.
❑ Public officials: The persons who work in the public sector may be elected or appointed and are
usually called public officials. Some jurisdictions refer to non-elected public officials as civil
servants or public servants.
❑ Public sector vs. private sector corruption: public sector corruption primarily abuses
government resources whereas private sector corruption primarily abuses private or commercial
resources.
CONSEQUENCES
➢ Adds substantially to the costs of public goods and services, leads to the
misallocation of public resources, weakens policymaking and
implementation, and destroys public confidence in the government
➢Corruption in the police or judiciary can be especially detrimental to the rule of law and human rights
in a country.
➢Corruption in the defense sector and the health system can have equally devastating impacts:
corruption in the military, for example, can impede the government’s ability to protect the population
from security threats; whereas corruption in hospitals can result in health crises and unnecessary
deaths.
➢Corruption in public works and infrastructure has the obvious potential for harm to the public, and
ranges from non-existent, inappropriately located and poorly functioning public services, to services
that physically injure or kill members of the public; Corruption in infrastructure often determines
what is built where, rather than the amount spent on building or connecting the infrastructure.

➢Public sector corruption may be episodic or systemic and its effects can
range from isolated to far-ranging in nature. Systemic corruption in the
public sector erodes public trust in government institutions, damages policy
integrity, and distorts public sector outcomes.
CAUSES OF PUBLIC SECTOR CORRUPTION (1/3)
Country size: Research shows that countries that are geographically large and have a low
population density can be more prone to corruption because of the increased difficulties in
monitoring public officials in dispersed locations (Goel and Nelson, 2010).
Country age: Newly independent countries, or those that have recently transitioned from
authoritarian regimes to democracies, may face more corruption owing to, for example,
underdeveloped governance systems or rent-seeking opportunities created by the privatization of
State assets. In the context of corruption, rent-seeking means increasing one’s share of existing
wealth using public resources without creating new wealth for the State.
Resource curse: The public sector monopoly over the distribution and allocation of natural
resources rights allows economic opportunities to be exploited for corrupt purposes. The website
of the Natural Resource Governance Institute, stresses that “given their highly concentrated and
highly profitable nature, the oil, gas and mining industries can generate the kind of political and
private incentives that favor rent-seeking and institutional (or state) capture”.
Political instability: Political stability is associated with low corruption levels, whereas the
probability of corruption is higher in politically unstable environments. Lack of stability in transitions
to a newly elected government is particularly associated with public sector corruption.
CAUSES OF PUBLIC SECTOR CORRUPTION (2/3)
Wages: Low wages and the resulting poverty in the public sector are also believed to contribute
to corruption in some countries
Lack of rule of law: Lawlessness or poor rule of law is an important government-level
contributor to corruption. The probability of corruption occurring might increase where the legal
system is unable to provide sanctions for officials that engage in corruption. In addition,
corruption risks are higher in countries with less secure property rights, as corrupt means are
used to ensure the security of these rights, where the legal system is unable to do so.
Failure of governance: Poor governance can arise from low quality public sector management,
a lack of accountability, poor relations between the government and citizens, a weak legal
framework, a lack transparency regarding public sector processes, and poor dissemination of
information. A lack of competence and capacity due to inadequate training also contributes to
failure of governance.
Nature of bureaucracy: Government bureaucracy and government intervention in the economy
promote corruption. The existence of regulations and authorizations gives a kind of monopoly
power to the officials who must authorize or inspect the activity.
CAUSES OF PUBLIC SECTOR CORRUPTION (3/3)
Social capital: Social capital refers to the “links, shared values and understandings in
society that enable individuals and groups to trust each other and so work together” (OECD,
2007c, p. 102). Regions with higher social capital are more likely to face lower levels of
corruption, although it is not clear whether social capital leads to less corruption or whether
low corruption leads to greater social capital.
Conflicts of interest: Conflict of interest has been defined by the Organisation for Economic
Cooperation and Development (OECD, 2003) as “a conflict between the public duty and
private interest of public officials, in which public officials have private-capacity interests
which could improperly influence the performance of their official duties and
responsibilities”. An example of a conflict of interest includes the “revolving door” situation,
in which public officials obtain lucrative posts in the private sector once they leave the
public service, with the expectation that they will use their public sector contacts to benefit
the private company. The types of “private interests” that could lead to a conflict of interest
include objective things like a directorship in a company, but can also include subjective
ideological, political and personal interests that may improperly influence public duties.
THEORIES THAT EXPLAIN CORRUPTION (1/2)
Principal–agent theory: The principal–agent model assumes that agents (public officials)
serve to protect the interests of the principal (whether the public, parliament, or supervisors).
However, in reality, the interests of the agents often diverge from the interests of the principal,
and while the former can prescribe the pay-off rules in the principal–agent relationship, there
is informational asymmetry to the advantage of the agent, which could be used by him or her
for personal benefit. In this context, an agency problem occurs where the agents choose to
engage in a corrupt transaction, in furtherance of their own interests and to the detriment of
the interests of the principal.
Collective action theory: The collective action theory goes beyond traditional principal–agent
relationships and emphasizes the importance of factors such as trust and how individuals
perceive the behaviour of others. Systemic corruption as a collective problem, because people
rationalize their own behaviour based on the perceptions of what others will do in the same
situation. When corruption becomes a social norm, everyone starts seeing it simply as the way
to get things done. People are aware of the negative consequences of widespread corruption,
but they engage in corrupt actions as they believe that it doesn’t make sense to be the only
honest person in a corrupt system. An institutional or organizational culture of corruption
leads to the normalization of corrupt practices at a societal as well as individual level, and to
impunity for violating or ignoring formal anti-corruption rules.
THEORIES THAT EXPLAIN CORRUPTION (2/2)
Institutional theory: Uses country and government institutional characteristics, such as pre-existing rule
of law, well-defined anti-corruption norms, and independent anti-corruption institutions with
enforcement powers, to explain corruption in the public sector. In relation to understanding corruption,
institutional theory brings in the social context and provides a taxonomy for understanding how
corruption might become entrenched in organizations, in institutions and in society, despite the
existence of an anti-corruption framework. Institutional theory considers that corruption is influenced by
the character, design and transparency of the political system and its institutions.
Game theory: This theory borrows from economic literature and seeks to provide rationales for corrupt
decisions by public officials, suggesting that corruption is part of a rational calculus and an integral and
often deeply rooted method by which people take decisions. This is illustrated, for example, in the area of
public procurement, where participants in corruption include private sector actors that are unsure of the
actions of others. The fear of being outdone by competitors acting illegally or unethically thus motivates
otherwise ethical companies to engage in procurement corruption. It should also be noted that various
situational and psychological factors could play a role in fostering unethical behaviour, sometimes
despite an individual’s best intentions to act ethically.
PRIVATE SECTOR CORRUPTION
Public officials are entrusted with power to serve the public interest
Whereas,
Employees in the private sector are entrusted with power to serve legitimate
company interests.
In both contexts,
corruption occurs when individuals or organizations promote interests that differ
from the interests they were entrusted to serve.
Identifying what interest should be served, and who or what is being served instead, can
help us distinguish between public sector corruption and private sector corruption.
FORMS AND MANIFESTATIONS OF PRIVATE
SECTOR CORRUPTION (1/2)
• Commercial bribery and kickbacks: These involve employees of one company giving
payments, undue advantage or expensive gifts to employees of another company to secure an
advantage. Examples include paying procurement staff to sway their decision in favour of the
paying company, giving an expensive gift to a bank manager to secure a loan, and various
forms of kickbacks.
• Extortion and solicitation: This occurs when an employee of a company requests a payment,
undue advantage, expensive gifts, or sexual favours in return for conducting specific business-
related tasks or making particular decisions.
• Gifts and hospitality: Excessive gifts and hospitality are given to employees to influence
business decisions or tasks. This kind of gift might be travel, luxury items or tickets to sporting
events.
• Fees and commissions: Agents and intermediaries are paid fees and commissions beyond
what is considered the industry standard, for the purpose of altering business decisions or
tasks. Characterizing a payment as a fee or commission might be a way of disguising the
payment of a bribe.
FORMS AND MANIFESTATIONS OF PRIVATE SECTOR
CORRUPTION (2/2)
• Collusion: This occurs when, for instance, a labour union employee and a member of the company’s
management team exchange favours that result in employees’ interests not being accurately
represented.
• Trading of information: This happens when a business employee offers or receives a bribe in
exchange for confidential information, where the bribe could take a number of different forms.
When confidential information is the basis for trading in a company’s stock, bonds or other securities,
this constitutes an offence called “insider trading”.
• Trading in influence: Sometimes referred to as influence peddling, this activity occurs when a
business employee gives payments, undue advantage or expensive gifts to a public official,
expecting to receive an undue advantage from the public authority in return. An example is when
businesspeople make political donations with the intent of influencing political decisions, policies or
laws.
• Embezzlement: This happens when employees misappropriate anything of value that was entrusted
to them because of their position.
• Favouritism, nepotism, cronyism, clientelism: These forms of corruption occur when a person or
group of persons are given unfair preferential treatment at the expense of others.
CONSEQUENCES
• Unfair competition: The company offering the bribe gains an unfair advantage over its
competitors, whose products and services will not even be considered. While some
companies pay bribes to gain advantages, others may be unwilling or unable to do so. Thus,
corruption undermines competition because companies that refuse to pay bribes are likely
excluded from the market.
• Inflated costs: The lack of competition caused by corruption can result in higher prices and
poorer quality of goods and services, ultimately harming the consumers. For example, a
company already paying bribes to sell its products may consider it unnecessary to invest in
innovations, new technologies, training of personnel and other activities that could improve
its productivity and quality of services or products.
• Societal impact: Business corruption can have devastating impacts on the environment and
sustainable development.
CAUSES OF PRIVATE SECTOR CORRUPTION
▪ Sector- or industry-related causes: In general, contract-dependent sectors are more
vulnerable to corruption; they also have a lower quality of management and lower levels of
performance. On a global level, the industries most plagued by corruption are oil and gas,
construction and development, and infrastructure
▪ Economic causes: Intense competition leads companies to engage in corruption to maximize
operational efficiency, safeguard development and conquer new markets
▪ Individual causes and rationalizations: According to behavioural science, some people will
cheat to gain an advantage if they are able to rationalize their behaviour and still feel good
about themselves. Three common rationalizations and their relevance to the private sector are
“Everyone else is doing it”, “It’s not my responsibility” and “The end justifies the means”.
▪ Corporate culture: a culture normalizes corruption through three processes:
▪ Institutionalization: the embedding of corrupt practices in company structures and processes;
▪ Rationalization: self-serving ideologies that justify corrupt practices; and
▪ Socialization: new employees being socialized into systems and norms that tolerate or permit corruption. Peer
pressure can socialize employees into corrupt practices. In the context of private sector corruption, peer
pressure refers to actions undertaken by way of an executive or management order
CORRUPTION AND INFLATION
PREVENTING CORRUPTION
• Public sector: •Private sector
• Codes of conduct • From legal to behavioural approaches
• Systems of rewards and incentives • Effective anti-corruption ethics and compliance
• Accessibility programmes
• Human resource management • Risk management approaches to fighting
corruption in the private sector
• Citizen and stakeholder participation
• Open government, e-government • Business partner’s due digilence
• Managing conflicts interest
• Compliance- friendly environment
• Collective action and PPP against
corruption
• Monitoring and oversight
• Accountability and scrutiny
PREVENTING CORRUPTION
• The “stick” method:
• Legal system: methods of investigation, penalties for
corruption
• Anti-corruption Agency
• Publicize information of violation
• Future welfare cuts
• The “carrot” method
• Improve working conditions for civil servants
• Reward individuals with achievements in fighting corruption
• Hotline
PREVENTING CORRUPTION
• Administrative and technical methods:
• Job rotation (against vested interests)
• Strengthen auditing
• Design standards in operations
• Publicity and transparency of state activities
• Use of information technology
• Other methods
• Education (moral education – long term)
• Anti-corruption campaigns (short term)
• Strong measures: layoffs, restructuring
CASE STUDY: ANTI-CORRUPTION FRAMEWORK IN
SINGAPORE
•Overview: Singapore is often cited as a success story in combating corruption,
transforming from a corruption-prone society in the 1960s to one of the least
corrupt countries today.
•Key Measures:
• Establishment of the Corrupt Practices Investigation Bureau (CPIB) in 1952.
• Prevent Corruption Act (PCA) enacted in 1960
• Strict enforcement of anti-corruption laws, with severe penalties for offenders.
• High public sector salaries to reduce the temptation of corruption.

•Outcome: Singapore consistently ranks among the least corrupt countries in the
world, with a CPI score of 85 in 2023.
SINGAPORE’S CPI RANKING
Year CPI Score Rank
1965 35 60
1980 60 30
2000 85 10
2023 85 5
CORRUPTION ISSUES IN VIETNAM
•Current State:
• Vietnam has made strides in addressing corruption, particularly in the public sector and
state-owned enterprises.
• In 6 months in 2024: 308 party organizations, 11,005 party members, and 47 officials
under the central management were disciplined
• Key Issues: Bribery, nepotism, and embezzlement are still prevalent in many areas of
government and business.

•Government Initiative:
• The Vietnamese government has introduced anti-corruption law and a Central Steering
Committee on Anti-Corruption was established under the Politburo - marking a major
turning point in the fight against "internal invaders".
• Challenges: Enforcement remains weak, fear of making mistake, doing nothing.
CASE STUDY: ANTI-CORRUPTION CAMPAIGNS IN
VIETNAM
•Context: Vietnam’s ongoing anti-corruption campaign, known as the "burning
furnace“, referring to the government’s handling of corruption and law
violations by some officials and public servants, and later expanded to other
groups, including businessmen.

•Impact: Increased public confidence in the government’s commitment to fighting

corruption.
•Outcome: Several high-profile convictions, but questions remain about the long-
term sustainability of these efforts.
CASE STUDY: ANTI-CORRUPTION CAMPAIGNS IN
VIETNAM
Number of High-
Year Key Figures Involved
Profile Convictions
2016 5 Provincial leaders
2018 10 SOE executives
2022 12 Party officials

Discussion Question: How can Vietnam ensure that its anti-

corruption campaigns are effective?
 VIETNAM’S CPI RANKING

https://www.transparency.org/en/countries/vietnam
 REAL-WORLD DATA SOURCES
•Transparency International: https://www.transparency.org/
•World Bank Governance Indicators: https://info.worldbank.org/governance/wgi/
•OECD Anti-Bribery Convention: http://www.oecd.org/corruption/anti-bribery/
•Asian Development Bank Reports: https://www.adb.org/publications/series/adb-briefs
•https://grace.unodc.org/grace/en/academia/module-series-on-anti-corruption.html
SUMMARY OF KEY POINTS
Recap of Major Themes:
• Concepts of Corruption: Understanding different forms of corruption and how they
manifest globally, with a focus on Vietnam.
• Impacts of Corruption: How corruption affects economy, SDGs, public and private
sectors, inequality, political stability, and so on.
• Causes of Corruption: Cultural and political factors that contribute to the persistence
of corruption.
• Anti-Corruption Policies: Global and national efforts to reduce corruption, with a
focus on Vietnam.
https://www.youtube.com/watch?v=2NG-w-l4fqI&t=15s
THANK YOU

VU HOANG LINH THUY NGUYEN

VHLINH76@GMAI.COM THUYNTX@VNU.EDU.VN

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