Myanmar Should Adopt Formal User Fees To Displace Petty Bribery

Corruption is part everyday life in Myanmar. While the wealthy can use bribery to get around the law, for the vast majority of Burmese citizens, bribery is necessary to get things done even when the law is on your side. The term “tea money” exists in common parlance to describe the small bribes necessary to obtain even the most basic of services—bribes that are so ubiquitous that many people don’t think they count as corruption. The imposition of unofficial, discretionary and discriminatory “fees” means that formally public services are in practice “privatized.”

One explanation for the persistence of this petty corruption is that both the national government and the regional governments lack the revenue necessary to provide the public services that, under Myanmar’s Constitution, the government is supposed to provide. According to the Asia Foundation, “Decades of deliberate neglect of Myanmar’s tax-administration system have left the country with one of the lowest tax takes in the world [….] Myanmar’s tax revenues in 2016–17 were only 6–7% of GDP. This compares to 10–20% of GDP for countries at similar levels of income.” The country does earn significant revenue from natural resources, but these rents have gone into the pockets of military elites; other revenue sources are severely limited. When the demand for government services and benefits outstrips the supply, people become willing to pay extra for the promised public goods. The idea that these extra fees are acceptable is exacerbated by the fact that Myanmar’s lower-ranking public servants earn very low official salaries. But allocating public services on the basis of bribe payments is not fair, equitable, transparent, or efficient.

In an ideal world, Myanmar would reform its tax system, collect adequate revenue, pay its public servants decent salaries, and be able to provide all of the goods and services to which its citizens are legally entitled. But while we can all hope Myanmar works toward that goal, nothing like that is going to happen anytime soon.

A more practical short-term solution is to raise the official administrative fees—or “user fees”—for public services.

In fact, there are already user fees in place for some municipal services in Myanmar, including building and land fees, as well as street lighting fees, garbage collection fees, and water collection fees in places where these services are provided. These fees provide for much of the revenue for the state-controlled municipal offices. Similar user fees could be applied for nationally-provided public services like health and education, but with proper mechanisms to ensure access to everyone through fee exemptions for certain marginalized groups and the very poor. In short, the proposal is to formalize some of the currently unregulated payments for government services, through the imposition of pre-identified and pre-determined “user fees,” coupled with special provisions to ensure access for the very poorest. This approach would have two principal benefits:

  • First, replacing bribes with official user fees will also allow for better regulation of money currently collected as bribes and with increase transparency of revenue collected.
  • Second, user fees would help the state address its revenue shortfalls, and the additional revenue could be used for providing better public services.

Of course, user fees can be exploited and pocketed for personal gain. In the case of Malawi, which introduced user fees for various services provided by the local government, there have been numerous instances of misappropriation, diversion, overcharging, and unauthorized collection. However, this doesn’t mean that user fees inevitably lead to corruption. Rather, it means that appropriate controls are essential. One solution is to use technology to systematize receipts of user fees through electronic cash registers. In fact, a government in Kenya successfully raised its annual collections by 400% through their utilization of electronic cash registers, which Professor Taryn Vian claims “helped improve internal accountability” and “helped to detect corruption by facilitating the comparison of reported revenue with expected revenue.” While this is no guarantee of universal success, it shows great potential to mitigate the risks associated with user fees. With the right safeguards in place, systematized user fees for select services could be a key measure to reduce the petty corruption so prevalent in public service delivery in Myanmar.

5 thoughts on “Myanmar Should Adopt Formal User Fees To Displace Petty Bribery

  1. This is a great ideal. We have fees throughout the US. The National Parks are but one example. But for things the government must allow such as voting, there probably should not be fees. The suggestion is a simplistic fix that might just legalize what is being done. The Kenyon method of direct deposits might help but what would be better is if the leadership took a harsh stance against bribery and put some folks in jail or fire those doing this. But at what level do you stop. A tough place to live if you are poor.

  2. Heesu, thanks for this fascinating post. The first benefit you mention in your post is “replacing bribes with official user fees,” but, as I’m sure you’ll agree, the relationship between fees and bribes isn’t so simple. My read of your proposal is that user fees will be paid to the state, as opposed to bribes which are paid to an individual official. So, if the central government imposes a fee scheme without simultaneously raising salaries for low-ranking officials (as you suggest above), then the user fees won’t replace bribes, they’ll just be tacked on top of them. I bring this up merely to point out that I think, in order to be effective at reducing petty corruption and not gouge ordinary citizens, a user fee scheme would have to be rolled out carefully and in sync with a parallel set of pay raises for public employees (and likely enforcement of bribery laws, a firm message from central leadership that corruption will no longer be tolerated, etc.). I don’t think user fees alone will get the job done.

  3. Hi Jason and ST, thanks for the comments. Yes, the user fees will have to be implemented in tadem with other anti-corruption measures. (Already, the government has, at least superficially, implemented many structural and legal measures to tackle corruption such as the establishment of the Anti-Corruption Commission in 2014. The government has made several public statements, vowing to tackle corruption–in 2016 by State Counsellor Daw Aung San Suu Kyi and last March by President U Win Myint.) However, given the persisting culture of bribery as part of everyday life in a low revenue environment, eradicating corruption at all levels have proven to be extremely difficult. Hence, I am proposing this as a stop-gap measure. It wouldn’t “legalize bribery,” because fees, with proper oversight, should be determined and implemented through a fair and transparent mechanism (and citizens should be informed of the legally mandated amount, so education on the new policy would be key). It should also allow for regulation over transactions that previously were underhanded. Officials will no longer have the legitimacy to demand bribes as they wish. Pay raises for public employees should ideally also come in tandem, but again, would only be feasible once enough revenue was made. In the long run, other sources of government revenue will have to be developed, so that the government has the capacity to deliver basic services that should be universally accessible without a fee.

  4. Thank you for your interesting post, Heesu! I wanted to spend a little bit of time on the educational campaign that you mention in your post and comment. In particular, you say that part of the success of the user fees depends on the public being made aware of them so that they can reject any efforts by corrupt actors to demand more money from them. You also note earlier in your post that petty corruption has become so ubiquitous in Myanmar that many people do not consider these transactions to be corrupt. I would be curious to hear your thoughts on what an education campaign to tackle these engrained views might look like. It seems to me like the campaign would need to impart two messages. First, the transactions that the public is engaging in are corrupt; therefore people asking for these “payments” are corrupt actors. Second, the user fees that the public is being asked to pay now to the state will take the place of these payments and are not corrupt. I could see this being challenging and taking a lot of time, but it seems incredibly important to the continued fight against corruption in Myanmar.

  5. Thank you Heesu. This is a really interesting post. I fully agree with Jason’s comment, as I also think that effective prevention of petty bribery by public servants requires – first and foremost – salary raises combined with improved anticorruption enforcement. As Jason mentioned, new official user fees might end up being additional fees to the “tea money” bribes that people anyway pay nowadays. In addition, while I do not categorically oppose imposition of user fees, it is important to note that reliance on user fees to generate revenue may create perverse incentives which in turn may lead to problematic practices adopted by authorities that wish to raise their revenue. Therefore, devising new user fees should be done very carefully, in a way that limits the ability of authorities to charge them in an abusive fashion. For an excellent discussion on some of the problems created by reliance on user fees for generating revenue, please refer to this fascinating guide authored by Harvard Law School’s Criminal Justice Policy Program (CJPP): http://cjpp.law.harvard.edu/assets/Confronting-Crim-Justice-Debt-Guide-to-Policy-Reform-FINAL.pdf. Although this guide discusses the issue of fees in the context of criminal justice debt, I think that you may find it highly relevant to your post.

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