Corruption in customs: Time for a new approach

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Fighting corruption in customs remains a challenge for many countries.
Fighting corruption in customs remains a challenge for many countries.

Customs are often perceived as one of the most corrupt institutions in developing countries. Though difficult and complex, fighting corruption in customs is possible but requires an approach that is less centered on transposition of norms and practices from developed countries.  

In the World Bank’s recently published Global Report on Anti-Corruption, we argue that addressing the root causes of corruption goes beyond legal reforms, code of ethics or IT system upgrades. Currently, there is no lack of prescriptions, norms, or standards to address corruption in customs. For instance, the Kyoto Convention advocates standardization and simplification of customs procedures, codes of ethics and conduct, and measures focusing on wage incentives and staff rotation. Although these types of initiatives are important, the results have often been disappointing in developing economy contexts. 

It is important to establish a robust legal framework and measures such as simplification of processes and import policies or automation but they must be supplemented with other comprehensive approaches that address the root causes of corruption. 

The obstacle of social norms
Corruption is often deeply embedded in the social norms and expectations of political and social life. Such norms provide the unwritten rules of behavior. In countries riddled with corruption, laws often fail to regulate conduct, so the prevailing social norms guide many interactions by dictating the rules of the game. Thus, there may also be social sanctions for violating these norms.

Rwanda and Georgia had been confronted with pervasive corruption in customs for years. With new leadership in the 2000s in both countries, a comprehensive approach to tackle corruption in customs was launched with some drastic measures. In both countries, a combination of measures addressing the broader social roots of corruption and technical measures were implemented. The experiences from Georgia and Rwanda are, of course, context specific and refer to particular events in the two countries’ history. Still, some lessons of broader relevance can be identified.

In Georgia, the tax code was simplified, including the elimination of many tax loopholes and a reduction in the number of taxes and import tariffs. One-stop windows were introduced for customs clearing procedures. In Rwanda, reforms led to significant improvements in collection efforts and auditing procedures. The reforms in these countries were part of larger and radical public sector reforms, with a clear message from the political leadership that corruption will not be tolerated. 

Discredited public agencies were dismantled and replaced with new ones. The reform packages involved a drastic reshaping of the bureaucracies with simplification of administrative procedures. Opportunities and the space to engage in corrupt practices were then dramatically reduced. The new rules were strictly enforced based on effective monitoring mechanisms and little or no tolerance of deviations. 

Local ownership, leadership and data analytics 
Local ownership is essential for the sustainability of anti-corruption reforms in customs, and it is important to offer political backing to reformers. At early stage of reforms, it is important to have measures that lead to an increase in customs revenue as it helps to establish credibility and trust in the reform process for high-level officials. 

However, sustainable change demands effort, commitment and leadership over time from heads of customs.

Finally, the emergence of data analytics tools and individual performance-based indicators, such as average processing time between inspectors in the same port, can help detect corrupt inspectors based on their practices. 

Though corruption in customs remains a problem for many countries, strong political will, local buy in and improved awareness can help them get on the right path. 

 

Editor's Note: This blog is part of a series that helps unpack our new global report, Enhancing Government Effectiveness and Transparency: The Fight Against Corruption.

Authors

Odd-Helge Fjeldstad

Economist focusing on taxation, fiscal corruption and capital flight

Gael Raballand

Lead Public Sector Specialist, World Bank

Join the Conversation

Dr. Zuhair Alkayed
October 22, 2020

I don’t think it’s worthwhile to write in this section as you show it or at least give a kind of feedback to the writer. I don’t see any logical reason for hiding the comments and keep it private. Thus I regret to respond anymore.

Anas Lamin
October 22, 2020

Also in some cases the government is looking forward to fighting corruption but the lack of technological advances and weak juridical system is a huge issue in developing countries. Like my home country Libya.

Susan Kinyeki
October 22, 2020

This analysis is on point. Indeed, Customs officers worldover are among the richest lot in public service. However, what surprises me is the fact that "some put a price tug on everything", including life.

James Lenaghan
October 22, 2020

This is a welcome report, which goes beyond the usual platitudes. However, the unwelcome and in my view an acknowledged problem is that invariably corruption usually emanates from the top. Customs and other revenue agencies are usually a conduit by which individuals and political parties enrich themselves. The President or party appoints the Finance Minister, the Finance Minister appoints the Head of Customs, the Head of Customs appoints the next echelon and so on and so on until you get to the officer on the frontline. This results in a chain of patronage which funnels cash all the way back to the top. Has anyone given a thought as to how many governing parties in developing countries fund their election campaigns?

Surinder Kumar Parmar
November 12, 2021

If we want to remove corruption then we all have to come together for the betterment of one another. We have to change our inner thoughts which is very difficult.
If we have lust for anything then it is impossible to stop. If we can control our mind, we can control anything.
So it's a combined effort.; seems so difficult.
Thanks