Eradicating Corruption: You Can’t Just Pin Your Hopes on Democracy

Eradicating Corruption: You Can’t Just Pin Your Hopes on Democracy

Eradicating Corruption: You Can’t Just Pin Your Hopes on Democracy

Elisabeth Kramer

There is a compelling theoretical relationship between democratization and anti-corruption efforts. On the one hand, anti-corruption concerns can be a powerful rallying cry for those who feel disenfranchised from their government, channeling citizen dissatisfaction in ways that can be harnessed to drive democratic change. On the other hand, in an ideal world, the democratization process would make it easier to hold decision-makers to account and for citizens to oversee public spending. But in order for this to happen, reformers must embed mechanisms to prevent new forms and avenues for corruption. In reality, this is difficult to achieve – especially so in post-authoritarian states, where much of this detail and consideration can be lost during the transition and rush towards a new form of government.

The relationship between democratization and anti-corruption progress is not straightforward, given the complexities of governing and governance. But it is also easy to be seduced by the idea of a lineal relationship: more democracy leads to less corruption. In this blog, I argue against the conflation of democracy and clean government, underscoring that the relationship between democratization and anti-corruption efforts must be understood within localized contexts. We know a relationship exists between democratization and anti-corruption efforts, but just how this relationship plays out depends very much on a country’s broader political environment. Indeed, there are times when reforms explicitly linked to democratization actually foster, rather than combat, corruption.

When we interrogate the relationship between democratization and corruption, context is crucial both in understanding how corruption is fostered and in developing ways to eradicate it. To better expand on this, I draw upon examples from Indonesia—a state that, after 20 years of democratic reform (Reformasi), still struggles to contain corruption.

20 years of Reformasi

In 2018, Indonesia celebrated 20 years since Reformasi, the catch-all term used for the period following the resignation of former military dictator President Suharto. The term ‘Reformasi’ was intended to capture the new spirit of democratization after over thirty years of authoritarianism. Suharto’s family and their ‘cronies’ were perceived to be at the heart of vast webs of corruption that engulfed much of the economic and military elite. The post-Suharto era was supposed to herald a new democratic turn that would address the many failing of the previous government, including their penchant for Corruption, Collusion and Nepotism, commonly referred to in Indonesia by the acronym KKN.

Whether actual levels of corruption have increased or decreased since then is impossible to say. Regardless, citizens are certainly more vocal about the issue. According to polling between 2009 and 2011, 8 in 10 Indonesians believed that corruption is widespread. A 2016 survey found that Indonesians think corruption is getting worse, despite the election of a “clean” president, Joko Widodo, who is generally perceived as a friend to the anti-corruption movement. In 2018, Indonesia’s Corruption Perception Index ranking fell to 96, down from 90 in 2017.

It has not been all doom and gloom. Advocacy efforts by anti-corruption organizations led to the establishment of the independent Corruption Eradication Commission (the Komisi Pemberantasan Korupsi, KPK), triggering investigations and the arrests of some very prominent individuals, including the former Speaker of the House of Indonesia’s national parliament, Setya Novanto and former Chief of the Indonesian Constitutional Court, Akil Mochtar. But beyond the arrest of certain individuals and the efforts of anti-corruption activists, efforts to combat corruption face an uphill battle because of systemic factors that act to foster corruption. However, the fact that the KPK has been so successful makes the current levels of corruption even more counter intuitive.

Democratic Institutions that Make Corruption Worse

One of the most problematic democratization policies in Indonesia has been that of decentralization. As an integral aspect of Indonesia’s political transition, the policy sought to reduce demands for separatism while also offering better opportunities for accountability to local constituents. Regardless of whether decentralization laws were passed with a genuine intent to move Indonesia towards a more stable, institutionalized democratic system, their consequences and the failure to account for the particular post-authoritarian landscape have had major implications for anti-corruption efforts.

Since independence in 1945, Indonesia operated as a centralized state. While the provincial structure saw the country divided into smaller administrative regions, almost all the decision-making power was concentrated in the capital, Jakarta. Critiques of the centralized state included that it made corruption easier as decisions were made by a handful of people, all appointed by and loyal to the President.

Decentralization laws were passed in 1999 with corresponding policies in 2001, through which local governments were given more authority over budgets and localized decision-making. Theoretically, these measures presented new opportunities for citizen oversight, accountability and improved service delivery (Ahmad and Mansoor 2002). However, the laws were not accompanied by complementary transparency mechanisms.

In practice, these laws have fostered new, sub-national patronage structures run by local elites, who are generally not subject to close oversight until it is too late (Choi, 2009). There are numerous examples of corruption cases linked to office-holders who rose up through these post-decentralization structures. The first landmark case involved the prosecution of Aceh Governor Abdullah Puteh, who was sentenced to a ten-year jail term in April 2005 for misappropriating funds through the procurement of a helicopter (McGibbon, 2006). A dozen years later, former Banten Governor, Ratu Atut Chosiyah, was sentenced to eight years in prison and a Rp. 250 million fine for misappropriating Rp. 79.7 billion (USD 6 million) from the province’s health budget. In 2016 alone, Indonesian Corruption Watch documented 292 registered district level corruption cases, leading to a loss of Rp. 478 billion (over USD 35.5 million) and 62 village-level cases comprising a loss of Rp.18 billion (over USD 1.3 million). Given that the KPK does not have regional offices, it is highly likely that this problem is underreported.

Despite several investigations and arrests, it is undeniable that decentralization has cultivated new, more localized, structures of corruption across Indonesia. Consequently, it has also been harder to contain. A relevant analogy here is that of putting out fires: instead of contending with one, enormous fire anti-corruption forces are now contending with thousands of smaller fires.

The Importance of Context

The Indonesian case raises questions about the relationship between democracy and corruption. There is a general consensus that, for all its flaws, Indonesia is more democratic now than 20 years ago. At the same time, corruption remains as much an issue now as it was under the Suharto’s authoritarian government. How can we explain this, given the notion that more democracy inherently leads to less corruption?

There was widespread support for decentralization in the post-Suharto era, including from anti-corruption activists. However, in the rush to implement these new policies, little consideration went into developing transparency and accountability mechanisms to oversee the execution of the policy. The main body responsible for investigating corruption, the KPK, lacks the resources to scrutinize all the financial decisions made by local politicians. While the KPK’s success is impressive, there is so much more that could be done.

The Indonesia case shows we cannot assume pro-democracy measures will automatically lead to a decrease in corruption.  As academics interested in both understanding the theoretical relationship between these two processes and also wanting to contribute to policy debates and anti-corruption efforts, a focus on localized contexts reminds us just how important it is to understand the finer details of the relationship between democratization and anti-corruption before beginning to consider possible solutions. After all, the detail is where the devil resides.

Acknowledgements: The author is grateful for and would like to acknowledge discussions and feedback on these ideas from Prof Michele Ford, Prof Simon Butt and Dr Thushara Dibley.

Dr Elisabeth Kramer is Deputy Director at the Sydney Southeast Asia Centre (SSEAC) at the University of Sydney.