FIGHTING CORRUPTION IN KENYA. Mathematics & Economics Essay

FIGHTING CORRUPTION IN KENYA
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FIGHTING CORRUPTION IN KENYA
INTRODUCTION
Corruption is a common problem yet very complex to understand due to its multidimensional nature. Even scholars studying the phenomenon find its definition to be a source of disagreement (Dixit 2018, p. 15). Common variant in most definitions of corruption is the “utilization of public office and resources for selfish gain.” Although it’s challenging to define it, activities that constitute the vice and their effects are widely known. Examples of events that are considered to be corrupt are embezzlement, white-collar crime, bribery, power abuse, money-laundering, identity theft, fraud, and conflict of interest, among many others. Corruption typically undermines the law of the land, impedes economic development, and causes many people to lose their rightful share of the national cake (Otusanya et al. 2017 p. 106). While the vice and its effects are experienced in virtually every part of the world, developing countries tend to suffer more; thus, many studies have investigated the subject (Otusanya et al. 2017 p. 107). In this paper, I will asses theory and empirical evidence on the subject, as well as economic models and wider evidence regarding corruption, with a focus on the fight against the phenomenon in Kenya, a developing country found in East Africa.
THEORETICAL BACKGROUND
As already noted, developing countries tend to be more corrupt than more prosperous countries. The situation persists despite reform measures being put in place to fight the vice (Eigen et al. 2008). It follows that some countries, even among the developing ones, tend to have better outcomes in their fight against corruption while others struggle (Asongu 2012 p. 4-5). The differential success in the fight against corruption is down to the status of the determinants of corruption which include discretionary power concerning regulations, economic rents that benefit people in control, and inadequate or marginal punishment to perpetrators (Jain 2001 p. 77-85). Accordingly, the three determinants of corruption are the basis for postulations under the four theories of the phenomenon: 1) Upright and misguided governments put up rigid systems, fraudulent bureaucrats shape the law to suit them, then corruption shrinks red tape and obstructs just allocation of resources; 2) Upright and smart governments develop systems that are designed to be rigid, dishonest bureaucrats shape the law to suit them, then corruption lessens the significance of bureaucracy and compromises justice in resource allocation; 3) Unscrupulous and smart governments enact lax regulations that allow bureaucrats to operate as they wish, no red tape is needed thus corruption does not take place but justice in resource allocation suffers severely; and 4) Upright and smart governments come up with laws that tempt bureaucrats to engage in corruption, then the bureaucrats establish red tape that enables them to practice corruption while bending rules to protect them from legal consequences (Asongu 2012 p. 5).
Approaches to analyzing corruption may also consider the determinants of individual decisions to take part in bribery generally in the economic, social, or political settings. In contrast, others may focus specifically on influences in organizations when considering motivating and de-motivating factors at a personal level (Bracking 2007 p. 9). In the public choice realm, the ‘capture’ theory of regulation developed by Stigler (1971 p. 394) has been highly influential in the determination of corruption. The theory explains that firms will tend to manipulate their regulators or ‘capture’ them so that they gain from regulations within the power of the regulators. Furthermore, the Keynesian interventionist theory posits that regulation through government intervention can protect public welfare amidst market failures (Bracking 2007 p. 9). However, it has also been argued that regulated societies can experience the so-called ‘tollbooth’ of corruption that illegally benefits unscrupulous rent-seeking bureaucrats (Djankov et al. 2002 p. 2-3).
THE SITUATION IN KENYA
Based on the latest Corruption Perception Index (CPI), as reported by Transparency International (2019), Kenya had 28 points out of 100 and ranked 137th out of 180 nations that took part in the survey. Correspondingly, the score of 28 was below the global and Sub-Saharan mean of 43 and 32, respectively (Transparency International 2019). It should be noted that corruption continues to thrive in the country despite efforts by the Kenyan government to implement several measures to deal with it. Various legislations, institutional initiatives, and strategies have been developed over the years in the country to deal with the vice, yet little success has been achieved. As posited by Hope (2013 p. 298), Kenya has failed in the fight against corruption because of bad governance and management shortcomings in economic issues in the country since her independence in 1963.
Empirical studies to explain the corruption phenomenon in various parts of the world are useful in understanding the situation in Kenya. To begin with, Mauro (1995) studied corruption and growth using a cross-section of countries; based on data sourced from indices of the Economist Intelligence Unit (EIU), Business International, and institutional efficiency. Using a corruption index, he established that corruption was negatively and significantly associated with investment rate using Ordinary Least Squares (OLS), Two-Stage Least Squares (2SLS), and an ethno-fractionalization (ELF) index as the instrument variable. Consequently, Mauro showed that low red tape and high red tape countries w...