Managing Conflict of Interest - Organisation for Economic Co ...
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34 Managing Conflict of Interestand the rule of law lacks full credibility. And there was a history ofquite severe corruption before the 1970s.All of these conditions would appear to be inimical to cleangovernment. Why then has Singapore done so well? There appearto be several factors:•••••Excellent leadership on the whole range of governanceissues from former Prime Minister Lee Kuan Yew and hissuccessors;Tough anti-corruption legislation and vigorous enforcement;Excellent salaries for civil servants and for ministers;Strong performance-related management within the civilservice;Ethical values emphasizing personal integrity, duty to thecommunity, and the rule of law.These values have not come about automatically; they wereencouraged or instilled by Lee Kuan Yew and his associates in preferenceto some traditional Chinese attitudes that give more emphasisto the family and social networks and show less respect for thelaw. It is a very small country and therefore it has been relatively easyfor political leaders to change the values and practices of the wholesociety compared with a much larger country like Indonesia.While Singapore’s record in addressing conflict of interestand avoiding corruption is enviable, conventional analysis wouldsuggest that, without the more “normal” checks and balancesobserved in Europe and elsewhere, there must be a risk that its performancemight deteriorate. Much depends on the continuation ofan “ altruistic” political leadership.ConclusionsIn all seven countries reviewed in this paper, political leadersand officials have encountered, or allowed themselves to encounter,conflicts of interest. Where these have not been held in check,there has been abuse of power for personal or party gain. The followingare some tentative lessons from this analysis:• Societies have different ideas and different degrees of toleranceconcerning conflict of interest, depending on the levelADB/OECD Anti-Corruption Initiative for Asia and the Pacific

Defining Conflict of Interest 35of development, the political and economic system, andperhaps different ethical and cultural values.• Assuming control of conflicts of interest and reducing corruptionis a complex process and may take years to achieve. It isharder for countries when they are very poor. Informal normsand practices inherited from the past, and resistance fromthose who have been the beneficiaries of previous corruptpractices, make reform all the more difficult. Political elites,as well as the wider public, have to see the need for reform.• Unnecessary regulations and “red tape” should be eliminated.However, contrary to the standard neoliberal view,economic liberalization does not automatically result in lesscorruption and initially may increase it. Although administrativediscretion is reduced, there are still plenty of areaswhere politicians and officials retain discretion and thereforeretain opportunities for rent seeking; and liberalization oftenproduces a “get rich quick” culture, which makes briberymore acceptable.• Contrary to the neoliberal view, democratization will notautomatically reduce corruption. In the early stages ofdemocratization, electoral competition may increase corruption,especially in resource-rich countries, as well as inpoor countries, where there is intense competition for limitedpublic resources. High priority needs to be given todeveloping well-functioning checks and balances.• There is no magic or unique mix of solutions that will beappropriate or applicable everywhere.• The three most important ingredients are likely to beef fective political leadership that drives institutional reformand changes people’s attitudes, a strong legal frameworkand enforcement of the law, and a flourishing, independentpress.• Other helpful ingredients are likely to be a professional, wellmanaged,and adequately paid civil service; clear rules onthe duties and obligations of elected politicians and officialsand systems in place to ensure compliance; and democraticaccountability at both national and local levels.• All democratic countries need to consider carefully how tobetter regulate the funding of political parties and spendingon election campaigns.ADB/OECD Anti-Corruption Initiative for Asia and the Pacific

34 <strong>Managing</strong> <strong><strong>Co</strong>nflict</strong> <strong>of</strong> <strong>Interest</strong>and the rule <strong>of</strong> law lacks full credibility. And there was a history <strong>of</strong>quite severe corruption be<strong>for</strong>e the 1970s.All <strong>of</strong> these conditions would appear to be inimical to cleangovernment. Why then has Singapore done so well? There appearto be several factors:•••••Excellent leadership on the whole range <strong>of</strong> governanceissues from <strong>for</strong>mer Prime Minister Lee Kuan Yew and hissuccessors;Tough anti-corruption legislation and vigorous en<strong>for</strong>cement;Excellent salaries <strong>for</strong> civil servants and <strong>for</strong> ministers;Strong per<strong>for</strong>mance-related management within the civilservice;Ethical values emphasizing personal integrity, duty to thecommunity, and the rule <strong>of</strong> law.These values have not come about automatically; they wereencouraged or instilled by Lee Kuan Yew and his associates in preferenceto some traditional Chinese attitudes that give more emphasisto the family and social networks and show less respect <strong>for</strong> thelaw. It is a very small country and there<strong>for</strong>e it has been relatively easy<strong>for</strong> political leaders to change the values and practices <strong>of</strong> the wholesociety compared with a much larger country like Indonesia.While Singapore’s record in addressing conflict <strong>of</strong> interestand avoiding corruption is enviable, conventional analysis wouldsuggest that, without the more “normal” checks and balancesobserved in Europe and elsewhere, there must be a risk that its per<strong>for</strong>mancemight deteriorate. Much depends on the continuation <strong>of</strong>an “ altruistic” political leadership.<strong>Co</strong>nclusionsIn all seven countries reviewed in this paper, political leadersand <strong>of</strong>ficials have encountered, or allowed themselves to encounter,conflicts <strong>of</strong> interest. Where these have not been held in check,there has been abuse <strong>of</strong> power <strong>for</strong> personal or party gain. The followingare some tentative lessons from this analysis:• Societies have different ideas and different degrees <strong>of</strong> toleranceconcerning conflict <strong>of</strong> interest, depending on the levelADB/OECD Anti-<strong>Co</strong>rruption Initiative <strong>for</strong> Asia and the Pacific

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