From the Private Sector Development Blog comes a fascinating look at the role corruption plays in Tajik society.
Government salaries in Tajikistan are well below the subsistence level and a public official, although formally employed, realistically cannot cope with the cost of living. For example: food for one person for one month is estimated to be 50 TJS (~15 USD), while on average, a public official’s salary is 85 TJS (~25 USD). In this situation of “underemployment,” government employees (from doctors to teachers) often hold a second job outside the public sector or resort to unofficial payments to supplement government wages.
He goes on to discuss how difficult it is for SMEs (small and medium sized enterprises, like family businesses) to track and comply with a very heavy regulatory system. The result?
In such a context, corruption becomes endemic, while, at the same time, turning out to be the preferred choice for the private sector! Indeed, why spend money to comply with fire safety rules when it is simpler and cheaper to pay to get around them? The result: compliance is but a dream.
While corruption is the preferred choice for the private sector, that doesn’t mean it is the efficient choice. Rent-seeking always introduces destabilizing uncertainty, leading to an effective cap on business growth. Since bribes are usually paid according to business size, there reaches a certain size at which the bribes required to go grow further bring back such small returns they lose all utility—thus limiting the ultimate extent to which economic development can take place.
A more human reason corruption screws things up: food safety. Paying off the food inspector leads to people getting sick, and when the healthcare system is similarly reliant on bribes to operate, only the wealthy can get treatment. The result? A crippled workforce, which further limits development. So, while corruption might be the preferred option in poor countries like Tajikistan (just as it often is in rich countries like the U.S., if you consider Enron or Halliburton), it is a net drain on society.
See Also: Corruption’s anchor on global GDP, along with a harrowing report of how each sector is hit.
This post was written by...
Joshua Foust – author of 1801 posts on Registan.net.
Joshua Foust is a Fellow at the American Security Project and the author of Afghanistan Journal: Selections from Registan.net. His research focuses primarily on Central and South Asia. Joshua is a correspondent for The Atlantic and a columnist for PBS Need to Know. Joshua appears regularly on the BBC World News, Aljazeera, and international public radio. Joshua is also a regular contributor to Foreign Policy’s AfPak Channel, and his writing has appeared in the New York Times, Reuters, and the Christian Science Monitor. Follow him on twitter: @joshuafoust
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The cause and effect is backwards. Low salaries are not the cause of corruption, and corruption is not sand in the gears of the system. Corruption is the system, and low salaries are a symptom.
Government officials buy their posts, and then expect to earn a return. Salary is incidental. I’ve even heard rumors that traffic cops don’t collect their salaries, as they’d rather be out on the streets earning.
Mobsters don’t get salaries, nor do shareholders. They buy into a system, and then get their compensation. And the same is true for govt. officials.
If more taxes, traffic fines, etc. were collected for the government, if the economy grew more rapidly, if there were fewer, more efficient govt. officials, salaries would be higher. But that’s not possible, unless the logic of the system is reversed so that corruption is the virus and not the host.