April 15, 2013Doug Hadden
Doug Hadden, VP Products
In this age of botnets, corporations parsing through personal data and government web blocking, we sometimes miss the asymmetric use of technology to prevent and expose corruption. Many observers fear that technology is a new frontier for corrupt practices. It was interesting this weekend to have two separate twitter discussions on the subject. (Daniel Kauffmann of the Brookings Institution and Revenue Watch on the question of ICT-enabled corruption and Transparency TL on the advantages of procurement transparency for civil society to expose government corruption.)
No anticorruption strategy is foolproof. But we need to understand the interplay between technologies and corruption.
- No technology = no trail. Informal corruption involving favours is hard to track.
- The technology of paper-based systems can provide a “paper trail”. Eliminating the paper trail or manipulating the paper trail has costs.
- The technology of cash adds costs to corruption. Although cash is fungible, cash movement or “money laundering” has risks for the corrupt. Large sums of cash money is not a sign of innocence.
- The electronic movement of money through financial systems and electronic funds transfer leaves an audit trail. These systems also have built-in segregation of duties and other controls. Costs by the corrupt to manipulate or obscure the electronic trail are high.
- Vulnerabilities in transactional systems can enable corruption. But, these vulnerabilities are often closed where the corrupt must expend more resources to achieve the same reward. As anyone in technology knows, the major vulnerability is physical not technical – the person leaving their password on a post-it note or poor data centre physical security.
- Social media and mobile technology enables reporting on the outcomes of corruption. Clever use of technology by the corrupt can be easily exposed: the bridge not built, the public servant living a life of splendour, the leaking of Swiss bank accounts.
Corruption has poor economies of scale relative to anti-corruption in the hands of citizens and civil society. It only takes one picture, one video, one leak – perhaps even one tweet to expose corruption. Risk of exposure increases thanks to technology.
There is a corruption calculus. The corrupt understand that more technology means higher chance of exposure. They also understand that more technology tends to help increase prosperity. Turn off the internet can reduce the income of the corrupt. It’s only in very resource-rich countries where the anti-corruption technology-enablement can be suppressed without material impact to the corrupt. That’s why initiatives such as Revenue Watch are so critical in the asymmetric fight against corruption.
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