Tag Archives: Thailand

Fighting Corruption With Art: Successfully Raising Public Awareness

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Art is “one of the best societal mediators of difficult messages — it has always created a bridge between the comprehension and the expression of critical problems in society.” So declares the 10th International Anti-Corruption Conference’s website, which organized an art program against corruption. In keeping with that sentiment, last September the Anti-Corruption Organization of Thailand (ACT) organized a “museum of corruption,” a temporary exhibition at the Bangkok Art and Culture Centre intended to raise public awareness about the extent and costs of corruption. Thailand is not the first country to undertake such an initiative. Museums of corruption (actual museums, not just temporary exhibitions) already exist in Paraguay, Ukraine and the United States, and many other enterprises that use art as a tool for anticorruption education and action are flourishing worldwide. For instance, the Open Society Initiative for West Africa has recently launched a hip hop video against corruption in Liberia, while the Inter-American Development Bank organized a cartoon contest to promote awareness and understanding of the corruption phenomenon and its harm to development. More recently, Pakistani President Mamnoon Hussain called upon poets and intellectuals to write against corruption. Other major players in the anticorruption field that have organized artistic projects include Transparency International (see here and here) and the United Nations Development Program (UNDP). In additions to these institutionalized artistic anti-corruption projects, several countries have witnessed spontaneous public art displays – in the physical public domain, usually outside and accessible to all – to promote awareness and solidarity in fighting corruption (see for example in Afghanistan and South Africa).

Understandably, some are skeptical of these initiatives, arguing that museums and temporary exhibitions are not the right forum to communicate on corruption (this was one of the criticisms of the Thai museum of corruption). One might worry that expressing anticorruption messages through cartoons and popular music won’t lead people to take the message seriously enough. (This would also be true when the artistic initiative takes a more humorous approach, as is the case for many of the anticorruption cartoons, as well as New York’s corruption museum.) And of course, nobody thinks that art initiatives on their own are enough. Yet while artistic initiatives will not by themselves solve the issue of corruption, these initiatives are not just a fad or a gimmick or a distraction. Indeed, there’s quite a bit of research indicating that these programs can be quite effective in raising public awareness on corruption. Continue reading →

There Is No “East Asian Paradox” of Corruption and Development

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Imagine that you’re talking to a friend, and you mention that smoking shortens average life expectancy, and that smokers should therefore be encouraged to quit. Suppose your friend replies, “Well, but my uncle Fred smoked every day, and he lived into his 80s.” If your friend means this either (a) as a serious challenge to your empirical claim that smoking is bad for you, or (b) as a critique of your prescriptive argument that smokers should therefore be encouraged to quit, then you would probably find his response absurd on its face. And if your friend were to say that he has posed a serious conceptual conundrum—say he calls it the “Uncle Fred Paradox”—you would probably laugh at him. His argument might seem marginally less ridiculous if he pointed not to his Uncle Fred but to, say, France—which has relatively high smoking rates and relatively high life expectancy—but we probably still wouldn’t view this as a serious challenge to the view that smoking is bad for you, nor would we spend a lot of time wringing our hands worrying about the “France Paradox” in the smoking-health relationship.

Yet for some reason, in serious discussions about the relationship between corruption and economic development, people seem to make precisely this sort of specious argument, and the argument gets taken very seriously by people who should know better. The form the argument takes in this context goes something like this: “It may be true that high corruption seems to be correlated with lower levels of economic development on average. However, many countries in East and Southeast Asia—such as China, South Korea, Japan, Taiwan, Thailand, and Indonesia—either achieved or currently are achieving impressively rapid economic growth despite widespread corruption.” This is the so-called “East Asian Paradox” (a term coined, as far as I know, by Professor Andrew Wedeman — see also his recent book). The somewhat more sophisticated version of the argument, developed most prominently in an article by Professor Michael Rock and Heidi Bonnett, notes that although perceived corruption has a negative relationship with growth and investment in most countries (especially small developing countries), this relationship becomes positive in a subsample consisting of five large, newly-industrializing Asian countries (China, Indonesia, South Korea, Thailand, and Japan), using data drawn from the early 1980s through the mid-1990s.

One encounters more-or-less sophisticated versions of the “East Asian Paradox” argument all the time when talking about the adverse impact of corruption on development. When someone says something like, “Corruption is a major threat to economic development,” someone almost invariably responds with something like, “But what about China? It has achieved impressive economic growth despite widespread corruption.” As far as I’m concerned, this is equivalent to saying, “But what about my Uncle Fred, the lifelong smoker who lived into his 80s?” But in case this is not completely obvious, let me explain why I think the “East Asian Paradox” argument, at least in its usual crude form, is mostly bogus. Continue reading →

Guest Post: Fighting Corporate Corruption in Thailand, Part Two — Private Initiatives

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Karin Zarifi, an independent consultant to the Securities and Exchange Commission Thailand, contributes the following post (the second in a two-part series on combating corporate corruption among Thai public companies):

In my last post, I discussed how the Thai Securities and Exchange Commission (SEC) was undertaking innovative measures, in conjunction with private sector initiatives, to fight corruption and encourage good corporate governance in Thai public companies. One of the SEC’s most important partners in its efforts is the Stock Exchange of Thailand (SET), on which approximately 600 companies are listed. The SET and the SEC have been promoting their own and each other’s initiatives, as well as those of private sector organizations like the Thai Institute of Directors (IOD) and the Thaipat Institute, in ways that are encouraging, and seem to be helping Thailand to become a corporate sustainability leader among Association of Southeast Asian Nations (ASEAN) member countries.

The role of the SET in fighting corruption cannot be overlooked. Stock exchanges are uniquely positioned to use their listing and disclosure requirements to encourage sustainable practices, including anticorruption, by listed companies and allow consideration by investors. The role of stock exchanges in wealthy countries — most notably the New York Stock Exchange — in imposing ethics and disclosure requirements on listed companies is already well-known. The SET’s recent initiatives demonstrate that stock exchanges in developing countries can also play this role. Although a stock exchange’s anticorruption initiatives cannot substitute for appropriate action by government regulators, they are a vital complement to government efforts to prohibit bribery and corruption. Continue reading →

Guest Post: Fighting Corporate Corruption in Thailand, Part One — Securities Regulation

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Karin Zarifi, an independent consultant to the Securities and Exchange Commission Thailand, contributes the following post (the first in a two-part series on combating corporate corruption among Thai public companies):

In Thailand, despite increased focus on anticorruption, corporate governance and Corporate Social Responsibility (CSR) improvements in the private sector (see, e.g., here and here), the Thai business community does not seem convinced that anticorruption is in its interest, at least short-term. Only last April, companies listed on the Stock Exchange of Thailand (SET) were telling the Thai Securities and Exchange Commission (SEC) that they were unwilling to stay away from paying “tea money” (that is, bribes), for fear of losing out to competitors. Yet the last nine months have seen considerable progress on this front.

Some of the progress has been driven by private sector initiatives, including initiatives spearheaded by the SET. I will discuss these in my next post. But much of the progress has been driven by the Thai SEC. As Jeena Kim pointed out in a recent post on this blog (in the context of South Korea) securities regulators are well-positioned — and often better-positioned than public prosecutors — to take effective action against corporate corruption. But whereas Ms. Kim highlighted the Korean securities regulator’s ability to enforce South Korea’s foreign anti-bribery laws, the Thai example illustrates how securities regulators can encourage the development of a culture of compliance, good corporate governance, and corporate social responsibility more generally, using tools beyond simply enforcing the securities laws. Continue reading →

Are the Thai Anticorruption Agency’s Charges against the PM Politically Rash or Politically Shrewd?

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In my last post, I discussed the recent charges brought by Thailand’s National Anti-Corruption Committee (NACC) against the current Prime Minister, Yingluck Shinawatra, for failing to prevent corruption in the Thai government’s controversial (and recently discontinued) rice purchasing program. There are a few respects in which this case raises important questions not just for Thailand, but for anticorruption enforcement more generally. One, which I discussed last time, is the fact that the NACC has charged the Prime Minister not with engaging in corruption, but with (criminally) failing to prevent corruption. Another concerns how the NACC is managing – or failing to manage – the delicate and difficult politics of bringing charges against a sitting Prime Minister in the midst of ongoing political turmoil, in which the Prime Minister and her party remain very popular with much of the nation — and would almost certainly would have won the election that opposition protesters effectively blocked. My educated guess is that if you were to ask members of the NACC how the political situation affected their decision-making, they would say that it had no effect at all – they simply followed the evidence where it took them, without fear or favor. This is what anticorruption enforcement officials always say, at least publicly. I suspect they may actually believe it, and perhaps it’s (sometimes) true. But anticorruption enforcers operating in politically difficult environments often do, and often should, think carefully and strategically about the constraints and opportunities those environments create – Gabriel Kuris’s studies of the Indonesian KPK (here and here) provide nice evidence of that.

So, was the NACC’s decision to bring these charges against the Prime Minister at this moment a politically rash decision, or a politically shrewd one? It’s easier to make the case for “rash”, but at the risk of revealing my ignorance of Thai politics (or my ignorance more generally), I’m going to make a tentative case for “shrewd”. Continue reading →

Bright Line Rules: A Way to Reduce Politicized Enforcement?

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Yesterday Matthew discussed the wisdom of the Thai anticorruption agency’s recommendation that Thai Prime Minister Yingluck Shinawatra be charged with failing to prevent corruption.  The case would be brought under Article 157 of the Thai Criminal Code, a broadly worded law providing that a public official commits a crime if someone is injured as a result of the official’s failure to exercise his or her duties.

Statutes with such a broad sweep are a standard response to corruption in many countries, enacted out of a fear that a clever criminal can find a way around tightly drawn provisions of law.  Indeed, countries as diverse as Tanzania, South Korea, Indonesia, and Vietnam have all enacted broadly drawn laws that criminalize the “abuse of public office for private gain.”  However, such laws vest enormous discretion in the hands of law enforcement.  A critical–and often overlooked issue–is whether law enforcers should enjoy such discretion. Continue reading →

When Should Government Officials Be Criminally Liable for Failure to Prevent Corruption? Reflections on Thailand, and Beyond

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Three weeks ago, Thailand’s National Anti-Corruption Commission (NACC) recommended charging the sitting Prime Minister, Yingluck Shinawatra, with violating Section 157 of the Thai Criminal Code, one of Thailand’s key anticorruption laws. The corruption allegations concerned malfeasance in the Thai government’s controversial rice-purchasing program. There is much to be said about the NACC’s action and the underlying allegations, as well as how this will play out in the roiling cauldron of contemporary Thai politics. But perhaps the most striking thing about the charges, with the greatest potential significance outside of Thailand, is that the NACC did not allege that Prime Minister Yingluck herself committed any corrupt act, or even that she oversaw or directed or approved of any corrupt act. Rather, the NACC’s criminal complaint alleges that Prime Minister Yingluck knew about the alleged corruption in the rice-buying program and failed to stop it. This is possible because Section 157 applies to any official who “wrongfully exercises or does not exercise any of his functions to the injury of any person” (emphasis added). The NACC seems to read the prohibition on wrongful failure to exercise official functions quite broadly, so that it extends not only to an official who corruptly fails to take action (such as a health inspector or customs officer who looks the other way in exchange for a bribe), but also to an official who fails to take action to prevent corruption in the programs that official supervises.

That theory of criminal liability, applied in this context, is bold, and perhaps unprecedented. Of course, in private organizations, many legal systems may impose civil liability on corporate officers and directors who knew (or should have known) about corrupt activities by the corporation and failed to take appropriate remedial measures. But I can’t think of another instance in which an anticorruption enforcement agency has brought criminal charges against a senior government official (let alone a sitting head of government) for that official’s failure to stop corruption in a government program.

So what should we think about this? Is the expansive theory of liability under Section 157—as interpreted by the NACC—something that other countries should emulate? The short answer is that I’m not sure, but I have a few preliminary thoughts.

Continue reading →