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Technology: the Asymmetric Anti-Corruption Weapon?

 

April 15, 2013

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.

Asymmetric ICT-enabled Corruption Warfare

2 Twitter conversations about technology, corruption & transparency result in a blog post

Storified by · Mon, Apr 15 2013 15:17:37

Technology may drive #OpenData 2 fight #corruption, but the #corrupt also use hi tech. http://onforb.es/12TZgwt #NewYorkDaniel Kaufmann
@kaufpost yes, but I recall someone saying that the goal was to make #corruption more expensive…FreeBalance
@freebalance Point is: #ICT #IT tools help #transparency & anti-#corruption, but also the #corrupt. Who adopts tech tools faster mattersDaniel Kaufmann
@kaufpost in ICT race, lead enjoyed by corrupt diminishes quickly. Becomes asymmetric in favour of oversight.FreeBalance
@freebalance Oversight crucial & should win in principle. Not automatic. Corrupt r clever & rich. & transparency w/ impunity big issue.Daniel Kaufmann
@kaufpost will expand on blog post. In meantime: ICT enabled #anticorruption scenario linked to framework I developed http://freebalance.com/blog/?p=3902FreeBalance
Governance Scenario: GRP impact for Anti-Corruption in Procurement " Sustainable Public Financial ManagementFreeBalance has developed a framework to show where Government Resource Planning (GRP) software can help improve governance outcomes for governments in developing countries. This Governance Framework includes an overview of the governance question and a description of the methodology.
Coincidentally, the following conversation about the power of technology enabled transparency occurred.
We salute @freebalance for helping #timor civil society track moneys of Timorese people.Transparency Timor
@TransparencyTL thank you. It’s been interesting watching use by civil society.FreeBalance
The result: my thinking on the asymmetrical nature of technology in the hands of citizens and civil society:
Sustainable Public Financial Management " Blog Archive " Technology: the Asymmetric Anti-Corruption Weapon?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.
Technology enabled #anticorruption? No technology enables #corruption http://freebalance.com/blog/?p=4039FreeBalance
Technology & #anticorruption: paper trial & paper money adds to costs for the corrupt http://freebalance.com/blog/?p=4039FreeBalance
Electronic transactions such as EFT increases #corruption costs for the corrupt http://freebalance.com/blog/?p=4039FreeBalance
#socialmedia & #mobile gives #anticorruption economies of scaleFreeBalance

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Doug Hadden

Doug Hadden

Executive Vice President, Innovation at FreeBalance
Doug is responsible for identifying new global markets, new technologies and trends, and new and enhanced internal processes. Doug leads a cross-functional international team that is responsible for developing product prototypes and innovative go-to-market strategies.

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