As the United States prepared to take a long holiday over the July 4th weekend, the Department of Justice set off some fireworks of its own: the department published a new edition of the FCPA Resource Guide, a one-volume compendium of all things related to the Foreign Corrupt Practices Act (FCPA). What does the Foreign… Read More
Corruption takes place when an individual abuses their entrusted power for individual gain. When we think about corruption, we may envision illegal backroom deals between politicians or corporate officers – important decision-makers with large-scale resources at their disposal. However, much of the corruption that occurs around the world can be described as petty corruption – small acts of exploitation undertaken for personal gain by individuals with limited authority.
What is Petty Corruption?
Petty Corruption is the lowest form of corruption, typically involving low-level public servants, or managers who abuse the limited authority of their positions for personal gain. Petty corruption frequently involves the abuse of entrusted power in exchange favors or small sums of money.
Grand Corruption involves major political or executive actors whose illegal activities subvert the legal, political, and economic aims of entire countries or corporations. Incidents of grand corruption capture international headlines, but they are less common than acts of petty corruption which take place on a regular basis.
Systemic Corruption, also called endemic corruption, occurs when a public or private organization establishes rules or norms of governance that permit or encourage corruption. Systemic corruption is a characteristic of kleptocratic governments, unethical corporations, and criminal organizations.
What are Examples of Petty Corruption?
Petty corruption occurs on a small scale, involving low-level public and private officials, and the exchange of small sums of cash or favors. It includes illegal acts such as bribery, nepotism, abuse of discretion, grafting, blackmail, influence peddling, and other acts. Some examples include:
- A public sector hiring manager helps their family members get government jobs by rigging the hiring process.
- A manager uses part of his department budget to purchase services from a fake company set up by his brother.
- A customs official delays travelers for an unreasonable time period under the guise of inspecting their luggage – unless they pay a bribe.
- A corrupt police officer uncovers a gang of drug dealers, but solicits a bribe or blackmails the group instead of starting an investigation.
Petty corruption can take many different forms and varies from place to place. In some developing countries, public officials (police, customers, etc.) have been reported to refuse or delay performing their duties to the public unless they are paid bribes.
What are the Causes of Petty Corruption?
Researchers have conducted surveys to identify and understand the causes of petty corruption in the world’s societies and institutions. Some are:
- Greed – The desire to increase one’s own power and wealth can drive corrupt behaviors.
- Low Transparency – Individuals who are seldom held accountable to others have little incentive to follow the rules – they know that they won’t be caught.
- Poverty – If a manager or public servant doesn’t earn enough money, they’re more likely to justify abusing their office for personal gain.
- In-group Favoritism – An individual may be compelled to abuse their entrusted power to benefit members of their family, religion, or cultural group – instead of acting in the interests of shareholders.
- Networking – Individuals may abuse their power to do favors for others, in hopes of building a network and enhancing their future prospects.
It has been theorized that corruption will occur in an institution if the perceived gain of committing the illegal act is greater than the anticipated penalty multiplied by the likelihood of being caught. Therefore, organizations who wish to eliminate petty corruption should increase penalties for corrupt activity and implement systems for the prevention and detection of petty corruption.