03 December 2010

Whose Fault Is It Anyway?

By Antonette Palma-Angeles, PhD.

PUBLIC GOVERNANCE IS “the process and institutions by which authority is exercised in a country.” It includes “capacity of governments to manage resources efficiently and to formulate, implement, and enforce sound policies and regulations.” We are told that governance in the Philippines has been plagued by corruption since the time of the Spaniards, when civil servants were underpaid and given many opportunities for corruption. Interestingly, it started at approximately the same time in nearby Thailand, in the 16th century when the king’s revenue collectors did not receive any salary and were allowed to retain part of what they collected. (Corruption in Sea Asia: A Comparative Analysis of Indonesia, the Philippines and Thailand, 4).

Throughout history, as the role of governments in national development steadily expanded, opportunities for corruption proportionally increased. Corruption can be simply defined as the “abuse of public office for private gain” (Coronel and Tirol, 3). Public office includes the civil service, elective and appointive posts. Corruption involves monetary and non-monetary rewards and happens not only in the public but in the private sector as well.

Corruption studies have repeatedly highlighted the alarming economic costs of corruption in Asia (how much it is costing our governments, how it has held back our economic development and the influx of foreign investors, how it has kept our businesses small and still family-controlled and therefore globally uncompetitive, etc.). The reforms suggested and introduced have concentrated on the administrative, structural and legal weaknesses and gaps that cause corruption. Anti-corruption measures have included higher salaries for civil servants, strictly enforced punitive action, strong independent regulatory bodies, an anti-corruption agency, clear and simple processes in the delivery of services.

In short, anti-corruption efforts have focused on institutional reforms.


Since these have not created sustained reforms, anti-corruption campaigns have turned to citizens’ participation and initiatives in making the public sector accountable, a movement increasingly known as social accountability. (Social Accountability in the Public Sector, vii). Social accountability efforts involve citizens in the planning, implementation, and delivery of government projects and services. Social accountability also includes the education of citizens group on government systems and policies. But these are still focused on institutional reforms with citizens monitoring these changes.

Without doubt, these anti-corruption interventions have produced significant changes. I do not belittle their effectiveness. I completely agree for instance with observations that a large part of the problem in Thailand and the Philippines lies in too much centralization of power, poor law enforcement, and excessive expectations from regulatory bodies that are in truth so weak that they encourage not only small time cheating but organized crime-style corruption (Phongpaichit and Piriyarangsan, 98). Logically then anti-corruption efforts should focus on institutional reforms. However, despite the resources and reforms poured into this kind of anti-corruption program, corruption persists in many Southeast Asian countries.

I question therefore if administrative and institutional reforms are indeed enough to prevent corruption and if we had not been single mindedly focused on them for too long.

I do not think anti-corruption efforts will make substantial strides if we do not acknowledge that individuals are the primary bearers of ethics and are the main agents responsible for organizational reforms and institution building.

Brzezinski an international law partner at McGuire Woods LLP says, “Corruption is the scourge of economic development, is correlated to more authoritarian and despotic regimes, and divert goods and services to favor the few over the many.” The suggestion is as countries become more democratic, the more evenly distributed power is, the more transparent and honest governments become. Needless to say, this correlation has not worked as well as we had hoped in many Asian countries (The Conference Board, April 2010). While democratic reforms have been excruciatingly slow in some Asian countries, it cannot be denied that much of Asia is becoming increasingly democratic. But we are still plagued by what some critics call endemic corruption. Is this because Asian organizations remain leader-centered, patriarchal and occasionally authoritarian. But Asian leaders like Lee Kuan Yew and Mahathir insist that these are unique cultural values that do not necessarily oppose the principles of democracy. Does corruption persist because even as we insist on institutional reforms we have not paid enough attention to the leaders must be strongly committed to these reforms?

It is thus puzzling for me why given the unique governance style in our institutions and the wide spread acceptance among ethicists that individuals are the primary bearers of ethics in any organization, we are still not investing on more anti-corruption programs that focus on “fortifying” the moral fiber of our leaders and concomitantly the culture that inputs into the leaders’ moral judgment and relationship with the citizenry. I would wager that the reasons for this are the following: First, the one-size-fits all anti-corruption templates that seem to proliferate have clear metrics; the leader-focused framework lacks these. Additionally, its success takes time to show. Second, there is a misconception that ethics is merely values formation. Values formation is often seen as a preachy, pedantic soft approach that does not produce results and turns off adult learners. And third, this framework requires a resource-extensive, complicated study of the relation between culture and ethics.

In this paper, I would like to argue for leader-focused anti-corruption interventions and discuss two related reasons for unethical behavior in organizations: our lack of reflection and inability for abstract thinking (Licuanan, “A Moral Recovery Program”) and the most significant “cultural driver” of corruption, loyalty to family and clan.

Admittedly, this kind of anti-corruption framework does not reward us with the quick and definitive results that would psychologically give anti-corruption efforts the boost they badly need at this point. A leader-and-culture centered anti-corruption program would require time and resources that governments, non-governmental organizations and bilateral agencies, concerned as they are with immediate results to a festering and urgent problem, might not be inclined to expend.

Nevertheless, there is no denying the need to focus on ethical leadership development and to study closely how cultural values that are distorted and misapplied in public governance contribute to the corruption of public officials. If we do not design anti-corruption programs that capacitate the leaders and are sensitive to these cultural drivers, we will produce only short-term, piecemeal solutions that bring short-term changes (in a few government agencies) which are then written up as best practice case study but are unable to bring the sweeping and long-term reforms we badly need (Alatas, xi).

A second thesis in this paper is that social accountability efforts are sustainable only if they are done by private organizations that transact business with government on a regular basis. One assumes that because the success of their organizations is premised on good public sector governance, they will invest in making government accountable. At the moment, monitoring efforts are generally dispersed among different civil society watchdog groups who are tracking different government agencies on both local and national levels. There have been successes such as those of Government Watch (G-Watch) that monitored the textbook delivery and schoolhouse construction of the Department of Education. Groups involved in these projects however cannot be expected to provide continuous vigilance because these require time and funding. Additionally, these groups do not work with these government units on a regular basis.

We have to tap the resources of two well-positioned institutions to lead a more sustained and targeted social accountability efforts: business and education. Business is best positioned to monitor government because it deals with government agencies in different areas of its operations on a regular basis. It is to its best interest that the latter is transparent, predictable and fair in service delivery. Schools and universities can contribute to ethical public governance in the long term if these focus moral education not just on preaching values but also on teaching practical judgment—the ability to do abstract and systemic thinking. These efforts must be concerted; government must take the lead. It has to have the will.

The new Philippine President, Benigno C. Aquino III has repeatedly said in his press conferences that unless we correctly diagnose the problems of our country, we cannot offer real solutions. I am not saying that we have misdiagnosed the corruption problem in focusing only on institutional reforms even in our social accountability initiatives. What I am saying is we have not listened enough to the other perspectives of this problem. We do not regularly organize multi-sectoral and multi-disciplinary discussions. Conspicuously missing are the contributions of ethicists and social and developmental psychologists.

It is my hope that the ideas in this paper will invite (??) reactions that will bring together the different sectoral and disciplinal stakeholders interested in minimizing corruption and subsequently they can launch a holistic approach to government’s social accountability.

The Individual as Bearer of Ethics

Many believe that our moral judgments are made by our conscience. In the course of my long career as an Ethics teacher to both college students and professionals, I have repeatedly probed into students’ conception of conscience and the role it plays in moral judgment. I have discovered that for many, conscience is an intuitive grasp of the good.

It is commonplace for government officials (like the beleaguered newly appointed NEDA director Paderanga in a July 2, 2010 interview with the Philippine news channel, ANC) who when caught in a swirl of allegations of wrongdoing, use as their defense, the argument that they used their conscience. In saying that, they think that no justification is needed.

Viewed this way, conscience functions like an intuition. Intuition works like the blink of an eye. It does not go through a process. It knows in a flash. If conscience is intuitive, then when someone says he used his conscience, he means by this, he knows with certainty he is correct. Conscience after all naturally knows and directs us to what is good.

For instance, when someone does a dastardly evil act, we say “makonseniya din yan”, meaning that his conscience will eventually make him feel guilty or will “get him.” Subsequently, he will acknowledge his wrongdoing. The statement also implies that if only the moral agent listened closely to its murmurings while deciding there would have been nothing to be guilty about. We are led astray because we do not listen to conscience.

For many students I have interviewed, conscience is believed to have this unfailing accuracy because of its mystical quality. It is not an ability; it is a gift. In it, a transcendent being speaks.

This conception of conscience could present difficulties. When seen as a direct access to a transcendent being’s desire on how we should decide, there is a temptation to leave moral judgment to a mere passive listening to a “voice within.” This does tell different people different things. It is understandable then why a decision is justified to another person by simply saying “I used my conscience.” In short, if the other did, we would have the same conclusion. Additionally, if it is believed to be a direct access to the transcendent’s desire, the temptation not to work on its formation and education is very strong. Is moral judgment in fact as easy as listening closely to a conscience for which evil is counter-intuitive?

If evil were indeed counter intuitive, why are some leaders involved in highly publicized ethical scandals in both business and government, seem to be unrepentant, going to the extent of rationalizing their decisions after they have been caught, publicly castigated and punished? A few are even repeat offenders. What happens to their “voice within?” Did they not listen to it or can it be downright wrong?

Conscience plays into a moral dilemma. A dilemma is so-called because it is so complex that we do not have a ready answer for it. As we take on more responsibilities and juggle more roles and commitments, they become increasingly more complex and difficult to resolve.

Confronting the complexity of dilemmas requires careful attention to the facts, people, values, etc involved and the consideration of the many possible solutions. The ability to make the right decision depends on going through a deliberation process that is not as simple as falling back on past experiences.

But one can object that we have been taught values by our parents and formally in school as early as kindergarten. Haven’t we been prepared enough for these increasingly complicated moral dilemmas?

Basic education’s usual approach to ethics teaching in the Philippines and I would imagine in many hierarchical societies has been generally pedantic. Teachers and parents repeatedly admonish us about the dos and don’ts, perhaps thinking that is enough to make us ethical.

Eventually our moral education graduates to being theoretical. We are taught the ethical theories or frameworks our university professors studied during their post-graduate studies. We memorized them and were tested on them. Unfortunately, the theories whose validity has been inferred from different contexts are mistakenly expected to be similarly valid in our contexts.

Taught this way, ethics is not intended primarily to articulate students’ ethical quandaries or help them resolve their struggles. Judging from the amount of time ethics curricula devout to ethical theories and framework, it would seem that these are the primary aim of teaching ethics. Students’ moral experiences are of secondary importance. Real life dilemmas are selectively discussed to validate these or serve as their application.

Additionally, ethics in the tertiary level is so focused on personal morality and does not discuss its relation to ethics in the professions. If professional ethics is discussed, it is often to memorize codes that are changed every so often. It is not surprising therefore that young college graduates enter their workplace unprepared to handle the many conflicting values of their personal and professional worlds.

Unfortunately, even until today, some ethics teachers are still safely cocooned in their slow changing world of ideas, and do not exert enough effort to know the dizzyingly fast changing world of the youth and the professions they will enter. While their students are redefining the meaning of privacy through electronic social networking or the meaning of intellectual piracy; and while the country is talking about how former President Gloria M. Arroyo slowly destroyed institutions; and while the world is talking about how the sub-prime market, futures and options trading precipitated a global economic financial crisis, they persist in not investing time to know what these are and their implications in the teaching of Ethics. Instead they take shelter in their alternately “globalization is evil” and “business and government are dirty” rhetoric.

Moral dilemmas involve values that occur not singly but together in competition with each other. In them, good is not always pitted against evil. Sometimes the choice is between several goods or between two evils. For instance, a young idealistic Bureau of Internal Revenue employee narrated a story of how his entire section was complicit to a corrupt practice and how he was so confused about what his response should be. He could not report to his section chief who had the best take on the “rent.” If he told on his entire unit, he would be ostracized. He could not quit his job because he had a difficult time finding one in the first place and his family badly needed his income. The young employee was confronted with the values of honesty, survival and smooth interpersonal relationships, all important to him. What is he to do?

Moral judgments require more than knowledge of the values drilled into us since childhood. We need what Greek philosophers called phronesis, a kind of knowing that has a capture of the theories but also how this are applied in experience. We do not acquire this kind of knowing by a mere transfer of knowledge from teacher to student. It requires drills in making moral decisions. It requires mentors who guide us through the actual process of making a decision. This is the way by which ethics should be taught.

Since every situation is unique in that it involves different sets of facts, competing stakeholders, different instantiations of values, we have to go through a deliberate process of evaluation every time we are confronted with a dilemma. It is not enough to be told what are important; or what one should do.

Lawrence Kohlberg, the famous Harvard moral development psychologist, says that morality is developmental. We go through stages that progress from self-centeredness to group-centeredness to common-good and universal-centeredness. We can call these stages: the Self, Group, and Universal stages. We do not jump to principled decision-making; we have to laboriously ascend through the stages.

The standards of right and wrong that govern the earlier stages of our lives are inherited from the multiple communities that we belong to. In the beginning, we mimic these communities’ sense of right and wrong when we decide. However, these influences happen behind our backs. We do not know how exactly they influence us and to what extent.

Without doubt, not all communities have the same standards. We usually discover this when we meet people from other societies. As we expand our world to include more people, we increasingly distance ourselves from these inherited values and standards. We do this to evaluate make them to make them our own or reject them when they do not subscribe to universal human values.

Not everyone graduates to the mature stages of moral development. Some remain in the self-interest stage. Some remain on the interpersonal, community-acceptance stage. Here being “nice” to loved ones and friends is confused with being ethical. But ethical maturity is more than that. It about rising to a level of living where we are concerned with the interests of the anonymous “others” who are affected by our life decisions. Being ethical is not only about being a good spouse, daughter, or friend. It is about fulfilling a role in a profession. It is about being a good citizen of country, region and even world. It is about being cognizant and fair to those I do not know personally, for whom I do not have any special affection, but who are nonetheless stakeholders in my world.

Clearly, the more morally mature we become, the more developed our ability for abstraction. Ethical development after all is about taking responsibility for an increasingly expanding circle of stakeholders.
“Ethics involves a stance that is inherently more distanced than face-to-face relationships embodied in tolerance, respect, and other examples of personal morality. In the jargon of cognitive science, ethics involves an abstract attitude—the capacity to reflect explicitly on the ways in which one does, or does not, fulfill a certain role.” (Gardner 129-130)
Peter Stringer, quoted in Gardner’s book, says:
“The ethical point of view does…require us to go beyond a personal point of view to the standpoint of an impartial spectator. Thus looking at things ethically is a way of transcending our inward looking concerns and identifying ourselves with the most objective point of view possible—with, as Sidgwick puts it, ‘the point of view of the universe’.” (Gardner, 144)
Ethical maturity is the result of a deliberate process of formation. At the end of this process is a self-propelling moral agent who because he is capable of logical and abstract thinking can reference decisions to universal principles.

As we discussed above, this formation requires mentors and an enabling environment. A culture therefore whose ethics education is predominantly pedantic and theoretical and has pervasive culture of corruption in both private and public sectors, does not provide the environment that will produce enough leaders who will tenaciously push for ethics culture change and enough citizens who will make sure their leaders do.

In the wake of global ethics scandals and confounded by the fact that seemingly good people are making unethical judgments, prominent American business ethicists like Patricia Werhane have in the past decade been debating on the best approach to teaching ethical judgment. Werhane suggests that ethics should start with cases rather than theories, as we have traditionally done, so that what is developed is not a knowledge disconnected from the reality which it should help understand but wisdom, the capacity to make good decisions in real life situations. I strongly agree with this recommendation.

If we were to adopt this recommendation, we would of course have to enlist the commitment of schools and universities to this new approach to ethics education. This requires a lot of doing and undoing. (I will discuss this matter in the third part of this paper). It will take some time. What can we do in the short term to address the urgent challenge of developing ethical leadership in government?

Is the answer in electing and hiring only “decent” leaders? I am afraid that ethical public governance is not as simple as electing and hiring decent leaders. What do we really mean anyway when we say a person is decent? Do we mean that he has shown himself to be morally upright in his personal dealings so that he is good son, a good friend, a good classmate. Does being good in this sense prepare a person for the demands of a public office? Is personal integrity enough for us to navigate and survive what is sometimes mafia-like corruption in government offices? I believe not.

Unlike one’s personal life where personal relationships are few and on occasion deliberately chosen, public governance is about dealing with numerous publics. Many of these publics are anonymous since the leader cannot possibly be in personal contact with constituents with each of these publics. It is thus not possible for him to have empathy for all these publics. It would be extremely difficult for him to see how a bad decision can impact on their lives; damage the country; be detrimental to the common good. This is unlike bad decisions in his personal life where those affected are those with whom he has face-to-face encounters. Here he sees the effects of his evil act. He sees how it can destroy people and ruin relationships.

For instance, the same DPWH undersecretary who rigs the bidding process to extract huge rent money, may think twice about stealing money from his brother, because he “sees” the effect of such wrongdoing on his brother and his family. This seem duplicity is also observed in the behavior of his neighbor. His neighbor knows where the official’s wealth comes from but does not see anything wrong fraternizing and worse enjoying the fruits of the latter’s corruption. He shares in the official’s loot--food, car and rest house, because this man is his friend. The reality that all these come from the taxes of his neighbors who work hard to earn an honest wage and yet do not enjoy the same perks is lost on him. He does not see the injustice involved here. And that he must do something. Taxes, common good, distributive justice, etc. are too abstract for him. He does not see that in actively benefiting from the official’s loot, contributes to corruption. He only sees his self-interest and “niceness” and kindness of his friend. Ironically, this same neighbor will be enraged if a policeman or a customs examiner at the airport extorted money from him. He will condemn corruption because in this instance he saw it up close and personal.

Additionally, decent leaders may be unprepared for deeply entrenched culture of corruption that will encounter in government. In some instances, these practices have been there too long that the bureaucracy may no longer perceive these as unethical. To change this culture requires more than idealism and a well-stacked hierarchy of values.

Leaders cannot wage a quick, all out-war on a corrupt office culture in which many are deeply invested. Of course, those affected will fight tooth-and-nail to protect their interests. One merely has to recall the bitter war waged by the employees of the Bureau of Internal Revenue to the proposal in the early 2000s to “corporatize” the bureau and dissolve existing positions. Such quick and radical solutions can be na├»ve and even quixotic. Neither does one fight corruption with self-righteousness, a “I am clean and every else is corrupt approach.” What is needed is a kind of “ethical sophistication” so one can keep to one’s ideals but is pragmatic enough to know that not all can be changed at the same time; that changes have to be calibrated and graduated. Either this, or he gets thrown out and loses his chance at reform.

Do “decent” government officials amount for anything then? Absolutely. We must build on their good intentions and resolve to change government.

How do we empower them? This is where civil society groups could help. Social accountability efforts should focus on supporting the efforts of decent leaders determined to counter the tide. Civil society groups should create discussion venues with government. I suggest the creation of discussion groups for leaders similar to the leadership sanctuaries created by the Ateneo’s School of Government in the mid 2000s. These sanctuaries however should be more than spiritual and psychological wells of strength. Neither should they be griping sessions.

They should be “ethics circles” formally structured to discuss actual ethical issues encountered in daily governance. These discussions are not primarily intended to provide solutions for work place ethics dilemmas. Instead the discussions themselves are what capacitate leaders in moral reasoning. Ethicists say that the rational discourse with well-informed and objective partners raises the level of moral maturity. (reference here) These circles should be created within government offices which share the same issues and experiences so that the discussions. They should be carried out in the context of regular administrative meetings. But they should start with a vanguard group whose members will eventually lead their own small circles. (This program is similar to PLDT’s early morning donut and coffee sessions organized upon the establishment of its Corporate Governance office nearly four years ago).

Ethics circles should also be organized by civil society groups that are at the interstices of the public and private spheres. These groups understand the workings and challenges of both the private and public sectors. These could include schools of government, think tanks, business groups, even professional guilds. They are in a position to act as convenors, which can bring together pertinent government offices and the private groups that do business with them to discuss contentious issues. These “ethics circles” give both parties the opportunity to routinely listen to different perspectives. It also has the side advantage of concretizing for public sector leaders the anonymous publics and interests they serve.

Cultural Drivers of Corruption

In his controversial 1987 essay in The Atlantic Monthly James Fallows coined the phrase, “damaged culture” to explain the Philippines’ continued underdevelopment, corruption and poverty. He argues that the fundamental source of all our problems is culture. By that he means we have an inherent, pervasive cultural flaw: lack of nationalism. He admits that the phrase paints culture as a kind of “large-scale genetics channeling whole societies toward progress or stagnation” which of course is not the way culture works. By pointing out that at every turn in our history Filipinos en masse have persistently exhibited this lack of nationalism, he is suggesting it is in fact genetic to us. Fallows says that ironically we can thrive individually but only when we are out of this culture, when we are abroad. He seems to be saying that if we stay in these islands, we are doomed to be a damaged culture. As he anticipated, this thesis has since his article’s publication been hotly contested in the Philippines.

While I agree, that we are indeed plagued by a lack of nationalism, I disagree that a culture is inherently flawed so that its future cannot be expected to be much different from its past. Every culture is constantly evolving. That we have not always displayed a strong love of country does not mean that will never change; or that ours is a damaged culture. Cultures can morally progress as evidenced by the way they correct inequities in their laws and cultural practices (e.g. apartheid, women not owning property, etc.) in response to historical contingencies and the internal and external public’s clamor for change. Of course, some cultures take longer to change than others.

The important elements that propel change, the ability of a people for self-analysis and formal leaders with the political will to push for reforms, are not found in equal measure in different cultures. We are one of those cultures that unfortunately are lacking in both.

While I don’t agree with Fallows’ harsh assessment of our culture and his pessimistic reading of our future, I believe that corruption in government—like a highly-resistant disease—infects our country because of “cultural drivers.” These are cultural values that are important in our personal relations but when brought to public governance, wreck havoc on the laws and structures of public institutions. This is how I contextualize the phrase “cultural drivers.”

The most noteworthy of these drivers is loyalty to family and a small circle of friends. Collectivism is often written as an Asian trait (Frost, 2008:82). In the Philippines, the circle of loyalty is much narrower, compared to say in China. Family extends beyond the core family to include grandparents, aunts, cousins, children of cousins, etc. Our relations to these groups are integral to our self-definition. Unlike the Western self, which is highly individuated, ours is established only in the context of our relations. We establish our identity by tracing our family’s roots and achievements. This connectedness is also the reason why we are not as mobile as our Western counterparts. We prefer to stay physically rooted in the places where we grew up because this is where we get our sense of security. For those who need to work abroad, they usually go to where family members and friends have gone ahead.

Family is often the priority in many of important decisions we make especially since the steadfastness of the commitment of family members protects us from uncertainties of life In a country like the Philippines where government is unable to provide basic needs and social security, the family takes over as provider of many of those needs. The more the government fails to provide these needs, the more familial we become.

Harmonious relationships are understandably very important in these small circles. The focus is responsiveness to the individuality of members and the care for their persons. In this ethics of care, bonding, loyalty, forgiveness and reconciliation are important values.

When this loyalty to family and tribe is carried over to public governance however, it wrecks havoc on an institution that is built on the principles of rights, fairness and justice.  Leaders bred in this culture are easily tempted to choose the interests of family and clan over the abstract common good that the government is mandated to protect.

Consequently, it is not surprising why leaders play favorites and act as patrons in the selection and hiring of people who work with them. Our Western-trained politicians are no exception. Even if they are admirers of the West’s ideals of meritocracy and fairness, they are similarly guilty of patronage. For instance, they criticize former President Arroyo for appointing former household staff and close friends to high public offices, but they find nothing wrong in appointing their own immediate relatives as their support staff with salaries still drawn from public funds. The usual justification is that they would rather hire relatives, former classmates, etc. who they trust over complete strangers. Despite public attestations of upholding the meritocracy ideal for selecting and appointing public officials, patronage and nepotism are still so pervasive that some are not even conflicted about these anymore.

Leaders are not the only ones guilty of framing relations with familial categories. Citizens expect political leaders and the bureaucracy to similarly give them the special attention and favor normally given to family members. Thus a town mayor is like a father, who distributes the largesse of his office to his children when they need them. The ethics of care for relationships and individuals is expected to override the principles of fairness and justice. Public officials are expected to respond to citizens based on their particular needs.

This attitude spills out to our relationship to the law. We expect exemptions at every turn.

It is said that Filipinos do not like the “blindness” of the law. The law does not consider their personal circumstance.

Among the members of the bureaucracy and ordinary government employees, relations are similarly familial. Employees call each other “Ate” or “Kuya” (traditional titles of respect Filipinos give to an older sibling), bosses by subordinates to stand godfathers for all sort of Christian rituals to establish a special relation with them. While this fosters a pleasant working environment, it breeds favoritism, which is the implicit expectation in a familial office dynamic. Thus the fair and objective implementation of office rules, objective performance evaluation, promotion, distribution of benefits, honest feedback, etc are jeopardized.

Needless to say leader-focused anti corruption programs should acknowledge and address the effect of this cultural value before designing any kind of intervention. This tendency to treat any social grouping as family, and the “personal” framing of all most relationships cannot be changed overnight by a simple memo, from a new unit head instructing her subordinate not to use these familial address, as one department chair of a top Philippine university did. Predictably, her people reacted and ganged up on her. This kind of radical solution cannot achieve its purpose because in rejecting outright a cultural practice, it is saying to people that family-like relations in the workplace are wrong. What is necessary are carefully planned intervening steps that gradually bring people away from this familial orientation and exception making without making them feel that these in themselves are wrong.

Similarly, civil society groups monitoring government should seriously do “values scanning” among themselves. I seriously doubt if they are exempt from this cultural mind frame. I seriously doubt too if many Filipinos are genuinely convinced that in public sector governance, fairness and justice should override the ethics of care. Without a deep commitment to the ethics of rights and justice, social accountability efforts will be inconsistent and episodic. Like the ethics development programs for leaders, ethics development for civil society groups will produce long term results but may not bring immediate results.

Will Business and Universities Please Step Up to the Plate

The sector that is currently in the best position to push for immediate changes is business. Business deals with government regularly: from application for business permits, to the importation and exportation of products and services, to the payment of taxes, to labor arbitration, stock exchange monitoring, etc. It would appear that it is to business’ best interests government procedures are transparent and its operations efficient. They need government to be predictable so that they can anticipate budgets and profits.

The reality is, business is not doing enough to call government to accountability. A friend who is a business consultant for many small and medium enterprises (SMEs) says that business in general has not pushed hard enough for reforms in government because it is still dominated by small and medium enterprises which because of their size feel vulnerable to pressures from corrupt government employees. Small business owners especially those in food, manufacturing and services have to confront the many challenges of starting businesses, such as intense competition from big players in the Philippines and other Asian countries. The pressure then to keep costs as low as possible to be competitive is very strong. Thus many when approached by corrupt local government licensing officials, or customs and tax examiners who under-assess import, export duties and businesses tax in change for substantive bribes, choose their self-interest over their civic duty.

Businesses claim that even if they wished to pay their correct taxes, revenue officials harass them anyway. Inevitably, they succumb to the pressure and pay the extorted amounts. But this is only part of the story. Business is not always the victim.

Studies show that major fraud cases in customs for instance are committed not by SMEs but by large companies that falsify documents with the collusion of customs examiners.  The Philippines is rife with rumors and insinuation in the media that prominent business people, cronies of past presidents and senators and congressmen are the biggest evaders of customs duties because they are the biggest smugglers in the country.

Corruption serves business interests. Businesses would rather bribe internal revenue officials, than submit themselves to an honest audit of their financial statements. They save billions and gain an undue advantage over competitors. In Thailand, a survey among businessmen showed that the “value-added tax was the easiest and most frequent point of evasion” (Chat-uthai and McLean, 337). It is common knowledge that some businesses keep as many as two financial records in order to defraud government. Businessmen in the construction business either actively bribe city hall or collude with the Department of Public Works and Highways to win contracts and/or to have substandard projects approved.

Publicly, businesses through their CEOs and professional associations, e.g., management, finance, purchasing officers associations, etc. call for reforms in the government agencies they transact with because corruption they say makes doing business expensive. They claim that it also makes simple business processes excruciatingly unstructured, slow, and most importantly unpredictable. With local businesses expending so much energy and resources on simple processes like these, they say that they cannot dream of becoming globally competitive public companies that have to subscribe to the strict requirements of transparency and accountability of foreign bourses.

Without doubt, rampant corruption in government happens because of the collusion of businesses and private individuals. As they say, it takes two to tango (Chat-uthai and McLean, 319). In a culture entrenched in corruption, the private sector is not entirely blameless. Either it offers little resistance to extortion or it might even instigate it to further its interests. Corruption is accepted as a fact of life (Frost, 226). The usual excuse: “We do it because everyone else is doing it anyway.”

Corruption does not only happen in business’ transaction with government. When a group of businessmen took over a Philippine public utility company, they discovered that suppliers had the same family name as the CEO and majority stockholder. This is a common business practice. Raw materials for instance for a fast food chain are supplied a board director in a clear conflict of interest. This is not so objectionable if the fast food company is entirely family-owned, if it has no stockholders whose interests are jeopardized by the favoritism in the choice of suppliers. Unfortunately even companies with publicly traded stocks are guilty of this practice.
 
Corruption happens in business.


The good news however is that as individuals, economies and countries become increasingly interconnected, local businesses in developing countries cannot afford to be insular and indifferent to the business competition and economic trends going outside. A small number of local business groups in the Philippines has regional aspirations. To expand their business they need capitalization that cannot come from banks and other local financial institutions. They then enlist in regional and international bourses to either raise much needed capital or simply to increase their local stock values. These bourses rate company stocks not only on the basis of profitability but also based on good corporate governance, the most important values of which are accountability and transparency. Thus, even if the motivation is still self-interest, many big local businesses are now instituting internal good corporate governance regulations and establishing corporate governance offices. At least it is a start.

With this development, this small group of big businesses pressures the bureaucracy to minimize corruption because anomalous transactions with government brings down their corporate governance rating. But while they may be able to pressure the bureaucracy to operate more ethically, they are powerless when extortion is instigated by some of the highest elected officials of the country. These officials exert enormous influence in the granting of big contracts that are of course important to the big players. Here, much leaves to be done. And here, is where leadership development in government is important.

Another positive development is that increasingly, multinational companies because of pressures from their own governments and stockholders have to follow the same standard operating procedures in any country they operate. Thus they in turn put pressure on host governments to provide a business environment that is transparent and predictable. Because of the size of these companies and the importance they play in a country’s economy, they are able to put pressure on government to institute reforms that are comparable with those in the multinational’s mother country.

A disturbing trend however is in the wake of the global financial crisis, some of the big players in Philippines have shifted from food and consumer goods manufacturing to mining, road construction and the leasing of public utilities. The justification for this is that even if these projects involve initially big capitalization, these are not vulnerable to global market forces because the stakeholders for these businesses are mostly internal to a country. The businesses will be insulated from future global financial upheavals.

This trend reverses whatever positive effects global standards exert on businesses that are aspiring for global presence. Nonetheless, business has in fact made small steps in pushing accountability in government. It can do more.

We should push groups in an industry to buck the practices of finding connections with high ranking government officials to gain favor and of pushing bribery to higher levels to get ahead. Instead, we must encourage them to establish industry-based business groups that will use their numbers to pressure government to level the playing field.

For instance, multi-national pharmaceutical and healthcare businesses have formed a group called PHAP, Pharmaceutical and Healthcare Association of the Philippines. They have a code that is implemented by a board. Every member makes sure other members follow the code. They in other words police each other and report any violation to an Ethics Committee. PHAP has been alternately painted as a group of greedy multinationals out to overcharge the Filipino consumer or as a strong opponent to the 2009 Cheap Medicines Law. But the truth is, (and health practitioners will attest to this) problems in code implementation notwithstanding, big local pharmaceutical groups that are not part of PHAP are engaged in more rampant ethical practices than PHAP members. Through PHAP, individual pharmaceutical companies are also able to push relevant government agencies to address some pressing issues in the industry.

If we have more of this industry-based business groups organized to rationalize the industry’s relation with government, we would see government reforms instituted more quickly over large sectors of society.

It is not enough for business to organize groups that will public criticize government and support the candidacy of officials perceived to be honest. If business really wants to walk its talk, it must patiently define areas in its dealings with government that urgently needs change, suggest to government on how these can be reformed and use its collective clout to make sure government implements its changes.

For this to happen, we need as we do in the public sector, ethical business people.

The Role of Universities

I have already discussed above the pedantic and theoretical approach to ethics education in many of our universities and how this is raising young people who have difficulties in thinking for themselves, much less making the right decisions when faced with moral dilemmas.

Ethics curricula do not pay attention to developing moral reasoning as much as it does to ethical theories. In being authoritarian and pedantic, teachers do not train students’ minds and hearts to look beyond interpersonal relationships and interests. Our problem is not just ethics education. In 1987, Patricia Licuanan, current Chair of the Commission on Higher Education, already noted that problem is the educational system itself. The system teaches students passivity and conformity, and that the curriculum is not contextualized to Philippine reality, with textbooks still coming from abroad.

I add that it is also a system that does not teach students the different virtues of the different spheres of their lives. Lee Kuan Yew commented in his book on Singapore that our country cannot move ahead and kick out corruption because ours is a “soft and forgiving culture.” I agree that we are. Our politicians and academics interviewed on television, constantly use reconciliation as a strategy for solving our problem of fractious political culture. There is nothing fundamentally wrong with being a forgiving people.

But we have already said that the rules that govern our public lives are not the same as those that make our personal relationships thrive.

Are we teaching our students to distinguish between the demands of their private and professional lives? Are we teaching them that the personalistic and familial mind frames do not work in all areas of life? Are with equal measure teaching the importance of rights, fairness, justice on one hand and charity and kindness on the other? Are we teaching students to pursue the interest of the anonymous others in the practice of their professions? Or are we subliminally saying to them that justice is secondary and happens only at the interstices of our lives, like when college studies live briefly with the poor or when companies build houses for squatter communities as part of their corporate social responsibility?

While a few top-ranked universities especially through their professional schools have moved from a theory-based to an experience-based approach to ethics, these efforts are still too few and isolated to make any real difference in the formation of a new breed of leaders.

What is needed is a concerted effort among groups of universities specially those organized along religious lines, like the Catholic Education Association of Philippines, to spend time and resources to humbly accept that an educational system that does not teach independent thinking is a cultural driver to corruption. At the moment, the notion that corruption happens because the young idealistic people from our universities are “swallowed” by the system is still very prevalent. Our schools cannot be exonerated from this problem. As I showed above, corruption happens in business and other private sectors. Our schools cannot say there are not culpable for this culture of corruption as much as business and government are.

Licuanan and Leticia Shahani’s call for educational reform in the late 1980s has gone largely unheeded. I reiterate it 20 years hence. As our corruption problems continue to intensify, despite changes in leaders and some institutional reforms, our schools should finally take some of the blame and play their part as change agents.

They are an important player in a holistic approach to social accountability.

As a nation, we should cease pinning our hopes for widespread and drastic reforms on a “heroic” superman of a president —a strong, incorruptible leader. Calling government to transparency and accountability should be the work of large well-positioned institutions like business and education and not just small marginal groups. This is our real hope for change.



REFERENCES

Alatas, S.H. 1999. Corruption and the Destiny of Asia. Malaysia: Simon and Schuster (Asia) Pte Ltd.

Bulatao, J.C. 1998. Phenomena and Their Interpretations: Landmark Essays 1957-1989. Quezon City: Ateneo de Manila University Press, second printing.

Connors, M.K. 2007. Democracy and National Identity in Thailand.  Copenhagen: Nordic Institute of Asian Studies.

Coronel, S.S. & Kalaw-Tirol, L., eds. 2002. Investigating Corruption: A Do-It-Yourself Guide. Pasig City: Philippine Center for Investigative Journalism.

Fallows, J. November 1987. “A Damaged Culture: A New Philippines?” The Atlantic Monthly.

Frost, E. 2008. Asia’s New Regionalism.  Singapore: National Unversity of Singapore.

Garder, H. 2008. 5 Minds for the Future.  Boston: Harvard Business Press.

Kidd, J. & Richter, F.J., eds. 2003. Fighting Corruption in Asia: Causes, Effectsand Remedies. Singapore: World Scientific Publishing Co. Pte. Ltd.

Licuanan, P.  27 April 1998. A Moral Recovery Program: Building a People-Building Nation. Study submitted to Senator Leticia Ramos-Shahani.  Senate of the Philippines, Manila.

Matthews, B. & Nagata, J., eds. 1986. Religion, Values and Development in SoutheastAsia.  Singapore: Institute of Southeast Asian Studies.

Phongpaichit, P. & Piriyarangsan, S. 1996. Corruption and Democracy inThailand. Chiang Mai: Silkworm Books.

Shahani, L.R. 2003. Empowering the Filipino: Empowering the Nation, A Values Handbook of the Moral Recovery Program. Metro Manila: Vibal Publishing House, Inc.

The Fight Against Corruption: Government and Business Step Up to the Plate. The Conference Board, 16 April 2010. Retrieved from http://www.conference-board.org/press/pressdetail.cfm?pressid=3894


The author is Director of the Jose B. Fernandez Ethics Center, Ateneo Professional Schools, Rockwell Center, Makati City, the Philippines.

PHOTO COURTESY OF SEARCA/RANIEL CASTANEDA

2 comments:

  1. Do we really have to point fingers? I mean, really? Time and again we've talked about how corrupt politicians are, how ancient the government is, and how incapable a lot of Filipino people are. We should stand up and work for the betterment of the country instead of complain.

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  2. I agree with you jonwilson. It will bring us no benefits if we continue pointing fingers. It would be better to give our share instead.

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