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Corruption: the Source of Inequality and Exploitation

An Islamic perspective In a letter to a provincial commissioner, the Imam demanded detailed accounts and advised him to remember Allah: “I have been given to understand that you have taken possession of State-lands and that you have not only brought them under personal use but you have misappropriated State treasury also. Will you immediately send the detailed accounts (about both the items)? Remember that the reckoning of Allah is far more severe than any audit which man can carry out. ” (Letter 40)

An Islamic perspective

According to Transparency International (TI), “corruption is operationally defined as the abuse of entrusted power for private gain.” One of the problems faced by the present world is that of widespread corruption at varying levels. There have been numerous studies on corruption, and several causes and affects have been established. The problem of corruption has increased economic and social inequality and has hampered economic development. Corruption is not only limited to economic or financial matters; rather, it has permeated all spheres of life – be it legal, social , moral or other facets.

Researchers at the World Bank estimate that worldwide bribery totals at least one trillion dollars per year – just over three percent of world income in 2002. The corruption forms a vicious circle of poverty. Studies have found that high levels of corruption are associated with lower levels of investment and growth, and that corruption discourages both capital inflows and foreign direct investment (Graf Lambsdorff 2003a, Mauro 1995, Wei 2000). Corruption lowers productivity, reduces the effectiveness of industrial policies, and encourages businesses to operate in the unofficial sector in violation of tax and regulatory laws (Ades and Di Tella, 1997; Graf Lambsdorff 2003b, Kaufmann, 1997).

Graf Lambsdorff (2003a, 2003b) finds that an improvement in a country’s TI corruption score by one point increases productivity by 4% of GDP and increases net annual capital inflows by 0.5% of GDP. This means that if a country such as Tanzania could achieve the corruption score of the United Kingdom, its GDP would increase by more than 20%, and net annual per capita capital inflows would increase by 3% of GDP.

It has been found that highly corrupt countries tend to under-invest in human capital by spending less on education, they over-invest in public infrastructure relative to private investment, and they have lower environmental quality levels (Mauro1997, Tanzi and Davoodi 2002a, Esty and Porter 2002). High levels of corruption produce a more unequal distribution of income under some conditions, but the mechanism may be complex – operating through lower investments in education and lower per capita incomes (Gupta, Davoodi, and Alonso-Terme 2002, Gupta, Davoodi, and Tiongson 2000).

The World Business Environment Survey (WBES), carried out between the end of 1998 and the middle of 2000 under World Bank auspices, questioned several thousand enterprises in 80 countries (Batra, Kaufmann, and Stone 2003). The survey results show that a high frequency of corruption, financing difficulties, high taxes, and lack of government/business consultation each had significant negative impacts on firms’ sales growth over the 1997-1999 period, after correcting for other firm-specific features such as private ownership, size, age, and export activity. In countries with negative scores on all four measures, the average growth of sales of existing businesses was more than 10 percent less than in countries on the positive side on all four.

(All the above data and citations are based on the paper “The Challenge of Poor Governance and Corruption by Susan Rose-Ackerman”, Copenhagen Consensus Challenge Paper, 2004.)

The World Bank expresses its anguish on corruption as “it has identified corruption as among the greatest obstacles to economic and social development. It undermines development by distorting the rule of law and weakening the institutional foundation on which economic growth depends.

The harmful effects of corruption are especially severe on the poor, who are hardest hit by economic decline, are most reliant on the provision of public services, and are least capable of paying the extra costs associated with bribery, fraud, and the misappropriation of economic privileges.”

There are several recommendations and policy advices to curtail and control corruption but these suggested measures have failed to achieve uniformly spectacular results. Somewhere, sometimes they work – but at other places or other times they fail. The mostly suggested ways to curtail corruption include increasing political accountability, strengthening civil society participation, creating a competitive private sector, placing institutional restraints on power, and improving public sector management.

Islam, the divine religion, severely abhors all kinds of persecution and exploitation. One of the goals of the Prophets (peace be upon them) has been to eliminate all forms of persecution. The Holy Qur’an forbids Muslims about the grievous sin: “And do not swallow up your property among yourselves by false means, neither seek to gain access thereby to the authorities, so that you may swallow up a part of the property of men wrongfully while you know.” (2:188)

Imam Ali (peace be upon him), the Commander of the Faithful, took very strict steps during his reign against any officer caught in misappropriation of public funds or indulging in other types of corruption. In a letter to the Commissioner of Basra, Ziyad ibn Abih, who was found guilty of misappropriation, the Imam wrote: “I swear by Allah that if I find you misappropriating the wealth of Muslims I will punish you in such a way that you will be left poor. Besides this poverty there will be the burden of sins on your shoulders, you will be disgraced and humiliated, losing your position and prestige.” (Letter 20, Nahjul Balagha, Peak of Eloquence)

In a letter to a provincial commissioner, the Imam demanded detailed accounts and advised him to remember Allah: “I have been given to understand that you have taken possession of State-lands and that you have not only brought them under personal use but you have misappropriated State treasury also. Will you immediately send the detailed accounts (about both the items)? Remember that the reckoning of Allah is far more severe than any audit which man can carry out. ” (Letter 40)

The letter 41, he wrote to one of his cousins who was a governor that ran away with public funds: “…The sin pleased you and the loot made you happy. The thought that it was an evil deed never stopped you from the act. Did you take it for a heritage which you can take hold of and send home? Allahu Akbar! Do you not believe in the Day of Judgment? Are you not afraid of the reckoning on that Day? …I advise you to fear Allah and return the money to those whom it rightfully belongs. If you do not do this and if Allah gives me a chance to punish you then I shall act in such a way that Allah will be pleased with me. I shall give you a stroke with that sword of mine which has sent all those whom I struck with it, to Hell. I swear by the Merciful Allah that even if all the wealth which you have so wickedly looted had come into my possession in a lawful way it would not have pleased me to leave it to my heir as a heirloom.”

As is apparent in all the above quoted Islamic texts, there is a very strict punishment for corrupt officers, along with advice and teachings to remember Allah’s reckoning on the Day of Judgment.

We cannot control corruption without following the ways shown to us by the Great Lights of Islam.

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