Methodological and Technological issues in Technology Transfer

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4.8.3 Governance and corruption

Literature on good governance emphasises transparency, political stability, public audits, participation, accountability and fairness, the rule of law, and the absence of corruption (Indian Journal of Public Administration, 1998; Johnston, 1998; Khan, 1998; Theobald, 1999). Many of these aspects of good governance are discussed elsewhere in the chapter, particularly in the sections on human and institutional capacities and social infrastructure and participation. One of the most controversial elements of good governance, the absence of corruption, is discussed here. Although principles of good governance have been adopted in most democratic governments and corruption tends to be either limited to isolated incidents or to a few institutions, many developing countries have not adopted such principles or put them into practice.

Until the 1980s the literature on corruption tended to take a relativist tone and was functionalist in approach. Since then there has been a tendency to take a more critical approach to corruption which includes embezzlement and bribery. Corruption has been defined as "behaviour which deviates from the formal duties of a public role because of private regarding (personal, close family, private clique) pecuniary or status gains; or violates rules against the exercise of certain types of private regarding influence" (Nye, 1967, p. 444), or more recently as "the abuse of public roles or resources for private benefit" (Johnston, 1998, p. 89). Corruption can be incidental, institutional or systemic. Incidental corruption can be dealt with and controlled through existing legal mechanisms in most countries. However, institutional and systemic corruption is far more difficult to deal with. Khan (1998) argues that corruption occurs when capitalist accumulation in its early phases creates new classes of privileged property holders whose justifiable claim in relation to other potential contenders may be limited and this leads to political side payments. However, not all these payments deter economic growth. Hence, Khan (1998) argues that the economic problem is not corruption per se but the political structures which generate growth-retarding corruption. He argues that only to the extent that systemic corruption hinders development (and in this context - technology cooperation), should it be addressed as a priority.

Such corruption can be seen not only in the developing countries but also in the developed countries. Since 1977, when the Foreign Corrupt Practices Act was adopted in the USA, the US is trying to end tax deductibility in relation to bribes to foreign nationals in order to persuade them to buy certain technologies. European and Japanese companies, however, continued to bribe. When the US started to threaten sanctions on countries that condone bribery, the OECD Council on Bribery in International Business Transactions stated in 1994 that each member country should examine its own laws, and in 1998 the members signed an agreement to make bribery a punishable offence. However, this may still lead to bribery taking a more innovative form. On the basis of empirical research, Lambsdorff (1998) argues that Swedish exports to corrupt import countries are lower than those of Belgium, France, Italy, and the Netherlands.

Corruption in the developing countries tends to take the form of systemic and institutional corruption. Johnston (1998) argues that when there is systemic corruption, a long-term social solution is needed, and this calls for empowerment of the people via education and enhanced participation. This fits in very well with the analysis that increased participation of the local stakeholders in a technology transfer deal will increase the likelihood of successful technology transfer (see section 4.4). Galtung (1998) argues that the international dimension of such corruption can be partially tackled by social movements and environmental NGOs. For example, Transparency International, an international NGO with about 80 national chapters has introduced an Integrity Pact.

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