Why Kenya’s war on corruption still remains costly pipe dream

Last Tuesday’s State House Summit, originally titled a Governance and Accountability Summit’ before morphing into an ‘Anti-Corruption and Accountability Summit’, ended up looking like an anti-corruption “blame game” and feeling like an accountability “cop out”.

There were two main parts to the summit. First, a quick round of “passing the buck” between the Ethics and Anti-Corruption Commission (EACC), Director of Public Prosecutions (DPP), Directorate of Criminal Investigations (DCI) and the police, the Attorney-General and the Judiciary, with the Auditor-General thrown in for good measure.

Second, an aggressive intervention by President Uhuru Kenyatta in which he expressed his frustration and helplessness at the lack of progress in the war on corruption.

There was other discourse, yet the trouble with these summits is nothing is published after the event. Despite a Constitution that envisaged development as a continuous conversation through public participation that works in two ways.

First, get views from the public. Second, provide feedback on how these views have been captured, or on what action has been taken in response.

But, let us get back to the anti-corruption story. When we stop all the philosophising and moralising, corruption is, at bottom, a crime.

Many have attempted to examine the economics of crime, and one of the better attempts I have come across is a clever 1990 paper written by Samuel Barker in the Journal of Criminal Law and Criminology titled ‘An Economic Analysis of Criminal Attempt’.

The long and the short of his mini-thesis of ideal sanctions — based on rational crime (such as corruption) — is reflected in the formula:
B x P0 < M x P1 (H x P0) + C

Where B is the benefit to be received from the crime and P0 is the probability of realising the benefit. M is the severity or size of sanction or punishment and P1 is the probability of the sanction being imposed.

Further, H is the magnitude of harm caused, P0 is the probability of the harm occurring and C is the cost of apprehension and incarceration — that is, the cost of running the criminal justice system. Huh?

In the ideal world, therefore, B x P0 — the criminal’s benefit — should be lower than M x P1 (the punishment, that is, the criminal’s cost) which itself must be lower than H x P0 (the social harm it causes) plus C, in other words, the social cost.

In other words, the penalty in the eyes of society must reflect, but should not exceed, society’s view of the effect of the crime.

Mull that for a moment as I cheekily “misuse” the formula to review last Tuesday’s summit.

The first part of the summit was really about H x P0 + C. Let us start with C. Essentially, what we witnessed was a “blame game” across the criminal justice system that refuses to truly reform but is quick to make requests for the three Cs it claims it needs to reform — cars, computers and capacity building (training).

But it is the H x PO that should have us worried. There is an argument by some that corruption is a “victimless crime”, a veritable case of “whose mbuzi (goat) was stolen?”

Until we visualise and quantify the social harm that corruption causes, we are chasing the wind. Until we see government interventions, even development, as proactively reducing social harm, how do we act for public good?

The second part of the summit was about the President’s claimed limitations to act. I don’t buy that. As the head of the executive arm of government, he has control over the Treasury, and the public finance management reforms that are aimed at reducing opportunities for corruption. He has control over the budgets of all elements of the criminal justice system except the Judiciary.

Further, what happened to the Office of Management and Budget he promised in his anti-corruption announcements last year?

He also has oversight over planning, which means he has access to the statistics necessary to embarrass criminal justice institutions into action. Like the EACC and DCI (police) on investigation and detection rates, the DPP on conviction rates and the Judiciary on case clearance rates.

He might soon find that institutional scores on these measures are unacceptably low, not just for corruption, but all crime. He will then understand that anti-corruption reform cannot happen outside wider criminal justice reform.

Then he also has oversight of the Public Service, which, when not obsessing with youth and gender matters, is actually responsible for performance management across the entire public sector — in the same way that the Treasury is responsible for public finance management systems across public sector.

Most significantly, the President superintends the ICT ministry, under whose current master plan Kenya is supposed to establish the integrated persons-establishments and companies-land and spatial-assets data infrastructure (beyond IPRS) that is central to the war on graft.

As I have said before, this is the infrastructure that identifies all people and establishments in Kenya. Links people to establishments.

Links people and establishments to the land and assets they own. And puts faces and names to the more than Sh100 billion in transactions that is processed by our national payments system every day.

Through these institutions, the President has levers to drive the war on corruption, in other words, to influence the (H x PO) part of the equation.

We could add to this the more than 20 measures agreed with the United States in the July 2015 joint pact on good governance and anti-corruption, which are essentially executive measures. Or the further measures outlined in his speeches in November 2015.

Social costs

On the legislative front, he also has a “tyranny of numbers” in the National Assembly. This is the place where laws, including anti-corruption laws, are passed. Whatever happened to the Private Sector Anti-Bribery Bill? If he uses this lever, he impacts the M x P1 part of the equation.

If none of this is happening, then it means the B x P0 part of the equation still rules, and cartels are winning because their benefit is far greater than the “expected cost” of sanctions (M x P1) and our own “view” of social costs ((H x P0) + C).

Or to re-state the equation B x P0 > M x P1 is simply because the likelihood of getting away with corruption is higher than the likelihood of sanction, and M x P1 bears no relation to H x P0 because we refuse to measure the corruption’s social harm, and C (our criminal justice system) is deadweight loss.

Put differently, if cartels are winning then it also means the Executive ((H x P0), the criminal justice system (C) and Parliament (M x P1) are all badly compromised.

That is one conclusion from a summit that might have done better by reporting against an action plan, rather than lament and pass the buck.

Mr Kabaara is a management consultant. Email: [email protected]