Opinion: as well as actually not being corrupt, Irish officials and leaders owe it to us that they do not do anything that might appear dirty
I spend most of my workdays thinking about corruption. Thankfully, most of my work entails studying other countries, as Ireland is a relatively clean country by most metrics. For example, the World Bank’s recently released measurements places us in the 91st percentile in terms of control of corruption. This places us somewhere between the UK and the US who are in the 95th and 89th percentiles respectively. We should be very grateful for this as theory and evidence tells us that corruption is economic poison in terms of the business environment, growth and the well-being of individuals.
The recent controversy that has led to the resignation of Denis Naughten has obliged me to think about matters closer to home. While it would be totally wrong to assume anything untoward happened, the case of a minister resigning under a cloud is cause for concern in at least two respects, both of which boil down to the perception of corruption. Such perceptions can change how people outside of our country view the situation here and, perhaps more insidiously, change the decisions made by Irish business people and public servants.
The Irish economic model is reliant on investment from abroad. Multinational corporations account for significant shares of employment and the tax take. Evidence shows that these firms shy away from countries that are perceived to be corrupt, as they anticipate all of the hidden costs that go along with a corrupt regime. Corrupt countries have more red tape, and a greater risk that profits and capital will be eroded by bribery or outright theft. The experts whose views shape the metrics of corruption perceptions may change their view of Ireland in light of headlines like the Naughten case, which would have the knock on effect of scaring off some investment.
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From RTÉ Radio One's Drivetime, Fergal Keane and Richard Curran discuss the government's announcement of measures to enhance Ireland's corporate, economic and regulatory framework
In terms of our capacity to attract the best bidders for vital infrastructure contracts, companies may elect to not tender for projects because they expect that some competitors for the contract have an insurmountable advantage that is not based on cost or quality. Furthermore, many countries have strong laws and enforcement targeted at foreign bribery. For example, an expectation that corruption part and parcel of large scale public projects in Ireland could see some American companies drop out rather than risk prosecution under the Foreign Corrupt Practices Act.
Countries that are more corrupt tend to have worse outcomes in terms of infrastructural quality and this extends to regions within a country. For example, there is evidence that shows that Italian regions that are relatively more corrupt end up with less productive public investment and this in turn leads to slower regional growth. While part of this can be due to distortions in planning and maintenance decisions, some of this poor quality could arise because the best companies drop out of the tendering process.
Another way in which Ireland could be hurt by scandals such as this is through a change in people’s perception of the "tone at the top". Numerous studies have demonstrated the perceived behaviour of those at the top of a hierarchy can change the behaviour of those further down the food chain. People also rationalise misbehaviour by appeals to the notion that "this is just how things are done."
We should keep in mind that it is easier to move from a good to a bad norm than the other way around.
Executives may find it easier square the idea that they are bribe payers with their morality if the paying of bribes is seen as a normal part of doing business. Likewise, some public servants may find it easier on their conscience to accept bribes if they think others, particularly their superiors, are also on the take. Scandals that generate the perception of corruption at the top of Irish political and business life could therefore change the moral calculus faced by business people and officials in the public sector.
Some of my own recent work has even demonstrated that people will ignore an anti-corruption policy that makes it more likely that they will be caught and punished if they think the person setting the rule is corrupt. The fact that corruption can generate changes in behaviour such as this "legitimacy effect" speaks to further paths through which a suspicion of impropriety in, say a tendering process, could corrode the less tangible defences we have against corruption. A change in the norm regarding corruption and honesty could spell disaster for the Irish economy. We should also keep in mind that it is easier to move from a good to a bad norm than the other way around.
All of this speaks to a vital need for those at the top of Irish political life, and the civil servants who support them, to take transparency and perceptions seriously. As well as actually being clean, our officials and leaders owe it to us that they do not do anything that might look dirty.
The views expressed here are those of the author and do not represent or reflect the views of RTÉ