In March 2019, Kassym-Jomart Tokayev replaced long-serving President Nursultan Nazarbayev to become independent Kazakhstan’s second head of state. Apparently recognizing the scope and scale of Kazakhstan’s corruption problem, President Tokayev made combatting corruption a central focus of his agenda from the get-go. And he has continued to emphasize that the fight against corruption is a top priority.
Although it’s not unusual for heads of state to deploy anticorruption rhetoric, often without action to back it up, there are indications that President Tokayev is serious. Over the past year and a half, the Kazakh government has implemented several concrete anticorruption measures—both large-scale and quotidian. Perhaps most prominently among the former category, in January 2020 Kazakhstan joined the Group of States against Corruption, a corruption-monitoring organization run by the Council of Europe. Additionally, a law enacted in December 2019 provides for the dismissal of public officials in managerial roles if their subordinates are convicted of corruption-related charges. Most recently, President Tokayev himself announced a new policy under which high-ranking officials and their family members will be barred from keeping bank accounts abroad. Among the more “everyday” measures, the government has created “anticorruption centers” where citizens can speak directly with employees of Kazakhstan’s anticorruption agency. And to prevent price-gouging during the COVID crisis, the government has required pharmacies to post QR codes that allow customers to easily check the legal prices of medicines.
It remains to be seen whether these measures will be effective in helping to address Kazakhstan’s corruption problem. One additional measure, however, appears unlikely to make much difference: a new system of “universal” property and income declarations that the Kazakh government is beginning to implement (see here, here, and here). Kazakhstan has required public officials to declare their assets and income since 1996, but the new initiative will extend this requirement to all citizens and foreign permanent residents of Kazakhstan in a phased rollout over the next several years. By 2025, all Kazakhstanis will be required to file, in addition to their standard income tax return, a declaration listing the value of their assets and liabilities, including real estate, cars, bank accounts, and jewelry. According to the government, this new system of universal asset declarations will help counteract the shadow economy, increase compliance with tax laws, and reduce corruption.
The new disclosure regime may well be justified as a matter of tax policy or as a measure to combat the shadow economy. However, evaluated purely as an anticorruption measure, the policy is misguided, for two main reasons:
- First, extending asset disclosure requirements to all citizens is not likely to help expose additional corruption. Requiring non-public-servants to declare their assets and liabilities will not reveal the “demand” side of corrupt transactions because those citizens are not in a position to demand a bribe. By definition, ordinary citizens have no public authority to abuse. And while ordinary citizens do participate in the “supply” side of corruption, the small monetary value of a bribe to, say, a corrupt police officer to overlook a traffic violation or to a school teacher for a good grade means an asset declaration is unlikely to reveal that bribe. Admittedly, there may be an anticorruption justification for extending the asset declaration requirement to officers and directors of business organizations, which Kazakhstan plans to do in 2024. After all, declarations from corporate officers and directors might aid in identifying “corporate corruption,” and these individuals are more likely to engage in the kind of grand corruption that might be revealed by an asset declaration. But the contrast between those individuals and more working-class Kazakhstanis only emphasizes that the anticorruption rationale doesn’t justify making the declaration requirement universal.
- Second, the universal declaration requirement might divert already scarce anticorruption resources from other, more effective uses, both in terms of investigation and enforcement. Regarding investigation, in a 2011 report, the OECD noted that Kazakhstan’s tax authority employed only about 260 auditors to review asset declarations from over 400,000 public officials, one of the lowest ratios among the countries surveyed. Once the universal declaration requirement is fully implemented in 2025, the annual number of declarations will stretch into the millions, swamping an already overburdened investigative staff. And even if the number of auditors is increased, any time spent reviewing an asset declaration submitted by a construction worker or taxi driver is time not spent evaluating the potentially more fruitful declaration of a public servant, diluting the effect of that increase. This reduces the likelihood of catching a corrupt actor via an audit of her or his asset declaration. Regarding enforcement, as previously discussed on this blog, positive corruption outcomes correlate with mandatory asset disclosure only when there is a “credible threat of prosecution” for filing false a declaration. This means that if scarce prosecutorial resources are spent prosecuting “mom and pop” type violations of the new asset disclosure rules, rather than violations by those most likely to engage in large-scale corruption, the new rules seem more likely to hurt Kazakhstan’s fight against corruption than help.
For these reasons, and given the undeniable privacy and civil liberties concerns implicated by compelling private citizens to disclose their assets and liabilities to state regulators, as an anticorruption measure Kazakhstan’s universal asset declaration regime doesn’t seem justified. President Tokayev seems genuinely to want to confront the corruption problem facing his country. If that’s the case, his government’s anticorruption resources are better spent elsewhere.