The analysis of corruption in public administrationa quantitative method

• Author: Tudorel Andrei; Bogdan Oancea; Florin Dananau
• Pages: 435-448

Tudorel Andrei. Professor, Ph.D., Department of Statistics and Econometrics, Academy of Economic Studies, Bucharest (e-mail: andreitudorel@yahoo.com).

Bogdan Oancea. Professor, Ph.D., Faculty of Economics, “Nicolae Titulescu” University, Bucharest (e-mail: bogdanoancea@univnt.ro).

Florin Dananau. Ph.D. candidate, Department of Statistics and Econometrics, Academy of Economic Studies, Bucharest (e-mail: floryndc@yahoo.com).

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1. Introduction

This paper aims to examine, starting from the Romanian case, the degree of which decentralization process and improvement of local governance contributes to the reduction of the corruption on short and medium term. Through the methodology used here the paper is in line with the international trend that aims to analyze the impact of corruption on economical and social processes at the local level. Furthermore, in the last time, the research on corruption issues are related, mainly on the measurement of the corruption level and on its impact on the growing rate of the GDP (Mauro [1995], Abed and Davoodi), Krueger [1974]), on impact that generates over some of national economical sectors (Tanzi [1998], Shang-Jin Wei [2001]), or on the decentralization processes (Shah [2006]). In Romania, studies were undertaken in order to identify corruption mechanisms at local level or to measure its impact over development of some of national economical sectors (Profiroiu, Andrei [2005], Andrei [2002]). At local level, decentralization process and corruption could generate significant negative impacts in economical and social segments.

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Like in every country that undertakes a transitional process, corruption affected in a large scale the economic performance in Romania. According to Transparency International – Romania, corruption had a high level in the period after the revolution from 1989. The indicator value from that period was in the 2.5 and 3.2 interval.

In 2005 from 159 countries¹ where corruption indicator was calculated, 117 countries scored less than 5, these being the poorest countries in the world. In this hierarchy, Romania scored 3.0, progressing from preceding years when registered 2,8 respectively 2.9. Amongst countries that recently joined European Union, Slovenia and Estonia scored above 5. Hungary scored 5.0, Lithuania 4.8, Czech Republic and Slovakia 4.3. Bulgaria, our eternal comparison term, has a superior score than Romania. A lower score than Romania was registered by Russia, Macedonia, Serbia and Montenegro, Albania, Moldavia, Ukraine and Georgia.

According to European Commission, “in decentralization and local administration domain the warnings from last year Country Report are still actual; the competences transfer to local authorities did not take place in concordance with the resources transfer.”²

2. Corruption causes

For all countries undertaking transitional process, corruption was one of the phenomena that have negative effects in developing free market. Amongst factors that contributed directly to developing and generating corruption phenomenon can be named: lack of the organizational culture, change resistance from administration apparatus, its dependence on the political changes. An important part of the mayors testified existence of corruption at local public administration level. Therefore, the obtained results from analyzing answers from the question “Do you consider corruption a real problem of Romanian public administration?” are presented in the following table:

Table 1

Answer choice	Results (%)
Yes	66,0
No	30,4
No answer	3,6
Total	100,0

A significant part of the mayors considers corruption as being one of the major problems of Romanian public administration. In considering causes of this phenomenon there were taken into account six elements: legal framework (a), civil servants pay system (b), civil servants morality (c), pressure from business sector (d) and politic (e) and citizen behavior (f). For these variables there were defined a scale with five items: 1-do not influence (the corruption from system), 2-influence in a low degree, 3-influence in a moderate degree, 4-influence is important, 5-influence is high. The obtained results from analyzing the answers are presented in the following table:

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Table 2

Variable	Mean	Std. Deviation
a	3,69	1,150
b	4,62	0,617
c	3,33	1,126
d	3,31	1,150
e	3,37	1,371
f	2,99	1,085

These results are proving the following: 1. Legal framework – still permits in a large degree the apparition and maintaining corruption at public administration level. This aspect recommends expediting the revision of the actual legislation (Law 215/1998, 213/, 326/, OUG 45/2003, etc.) that governs local public administration activities. Moreover, these legislative changes are in line with European Union integration process requirements and World Bank PAL program requirements related to the local public administration; 2. The payment system represents determinant factor in apparition and maintaining corruption in the system, according to respondents’ opinion. The mean of this variable is from far the highest (4,62), while the standard deviation is the smallest (0,617), proving a strong convergence of the respondents. This fact is more than obvious while the salaries level is not in concordance with the sector responsibilities and the changes in leading positions at the local public administration level are significant related to the changes of political spectrum. Equally important, this aspect is generated by the lack of sustainable strategy on payment system and developing a unitary payment system; 3. Morality of the civil servants – represents an aspect that has an important role in generating the corruption, according to mayor’s opinion. The explanations of this situation can be explained by the following: reduced development of a organizational culture and existence of a behavior that is non conform with the actual society requirements, that is registered at the level of the large scale of employees from the public administration; the payment system from the local and public administration sector; 4. Pressure from the business sector – has an important role in generating corruption. For an economy in transition the business’ interest in doing business with the local public administration institutions is immense due to the advantages that are offered: prices that can be advantageous negotiated, permissible contracts, guaranteed market; 5. Pressure from the political system – it is also a determinant factor. Therefore, about 50% from respondents appreciated that the political influence is high and very high in generating corruption. Explanations can be offered by a severe instability of civil service, especially on command positions, on electoral cycles and by operating of political clientele, especially in distributions of the financial resources on local level; 6. Citizens behavior – has a moderate influence comparing with other factors, therefore could be considered rather an effect than a cause for corruption.

3. Corruption and local governance

In analyzing the relationship between local governance, decentralization process and corruption should be considered that a transparent and coherent decentralization process determines corruption decrease and an improvement of public funds use. A World Bank series of studies demonstrates this fact (Olowu [1993], Fiszbein [1997]). Nevertheless, an incorrect decentralization process (conceived and implemented) is a factor that will lead most of the time increasing the corruption level from a country that undertakes a transitional process. In this situation the central weight shifts from central to local level. For reduction corruption level inPage 438 the decentralization process a series of components should be introduced for generating transparency in decisional process and...