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The Control of Corruption in Finland



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The control of corruption in Finland
The control of corruption in Finland
Ari SALMINEN, Professor Ph.D
Olli-Pekka VIINAMÄKI, Researcher, Ph.D
Rinna IKOLA-NORRBACKA, Researcher
Faculty of Public Administration, University of Vaasa, Finland
1. Getting a grip on the control of corruption
The focus of this article is the control of corruption in Finland. Corruption is seen as a primary
threat to open and transparent governance, sustainable economic development, the democratic process,
and business practices. Corruption is a multi-faced phenomenon, linking multiple issues together such
as abuse of entrusted power for private gains, low integrity, taking bribes, maladministration, fraud,
and nepotism. The big question is how to prevent the increase of administrative corruption in a single
country? But, how to get a grip on the control of corruption in a single-case comparison, and how to
identify properly the most important implications of corruption?
1.1 Background and context
Comparative academic studies have been focused on unethical behaviour, maladministration
and mismanagement in public sector organizations. Governments all over the world and international
organizations have designed strategies to fight corruption.
There are studies which concentrate on explaining the effects of corruption (e.g. Mauro 1995;
1998; Rose-Ackerman 1999), elaborating upon the implications, forms, and types of corruption (e.g.
Caiden 2001; Levin & Satarov 2000; Stohs & Brannick 1999), and analysing anti-corruption
mechanisms and effective ways of minimizing harms and preventing corruption (e.g. Maor 2004;
OECD 2000; Clark & Jos 2000; Johnston 1999; United Nations 2004; OECD 2003a).
The proper diagnosis of the causes and logic behind corruption plays an important role in
combating it (Quah 1999; Maor 2004; Schwartz 2003). Huberts, Lasthuizen and Peeters (2006: 290)
make clear the fact that researchers will never be able to reveal all corruption to the public. They
compare corruption to an iceberg, in which only the tip can be seen and only known facts can be taken
into consideration.
One could also argue that studying the control of corruption in a small country, such as
Finland, with 5.3 million inhabitants, that consistently receives a high rating for relative freedom from
corruption makes little sense. In other words, what is the reason to study non-existing corruption?
For several years, the Transparency International has ranked Finland as the least corrupt
country in the world
. In turn, the high ratings in international surveys indicate peculiarities in the
Finnish society. Generally, the Finnish welfare model has been that it is institutional, comprehensive
and maintained with tax revenues and directed to all citizens. Public expenditures represent a large
slice of public outlay, as to roughly 49 percent of the GDP.
As shown in Table 1, the Nordic countries are highly ranked from year to year. Is everything
going well in Nordic countries and their public administrations? At least, the rankings indicates that
there must be some ‘Nordic’ factors which might explain the situation. The five Nordic states are
small, rich, and politically stable and homogenous societies. Relatively taken, they share common
values in their public administrations, such as openness and confidence in public sector institutions,
loyalty between politicians and civil servants and compassion as value of comprehensive social
The control of corruption in Finland
security. There are reasons to believe that the ‘gap’ between the state and the civic society has not
become so far a big problem. We agree with Huberts et al (2006) that the high ratings are also a
question of reputation, and we might ask further does good reputation ‘feed’ low corruption.
Rankings of Nordic countries in Corruption Perception Indices
Table 1
Finland 1 1 1 1 1 2 1 1
Denmark 2 2 2 3 3 4 2 1
Iceland 6 4 4 2 4 1 1 6
Norway 7 10 12 9 8 8 6 9
Sweden 4 6 6 6 6 6 3 4
(Source: Transparency International 2000–2007)
1.2 The focus
Control is here defined to refer mainly to mechanisms that both prevent administrative
corruption directly and indirectly and strictly and less strictly. Then, control is used formally and
informally or intentionally and unintentionally. In studying control of corruption, in principle two
basic approaches are identified. As we see it, one might either concentrate on ‘control system’ itself,
which is more or less our target, or reduce the study to how or how well corruption is ‘controlled’.
These approaches are interlinked, and they create linkages to low (or high) corruption as described in
Figure 1.
Figure 1. Studying control of corruption
We try to find potential sources of low corruption and linkages to control system and they are
more or less hypothetically described in the following chapters. The sources are described through a
single-case comparison which means that the ‘answers’, explanations come from local experience,
Control system
of corruption
Low Corruption High Corruption
The control of corruption in Finland
backgrounds and historical events. Some of the sources are more ideographic, nation-bounded and
socially constructed than the others. (Salminen & Viinamäki 2006.) Additionally, on the assumption of
low corruption follows that administrative corruption should be defined broadly. On the contrary, if
corruption is expected to be a high and overwhelming phenomenon, a study would require a specified
and narrow definition of corruption.
We follow Langseth’s (2006: 14–20) note that different types of searching for data and
methods for gathering data about corruption are needed. Our analysis deals mainly with the factors
that are associated with corruption or, to be more specific, with low corruption.
For this purpose, the data, mainly from the years 2000–2005(7), was gathered through desk
review in a single country. Pre-existing surveys, previous research, annual reports and documents, and
analyses of different institutions are used for describing the control of corruption in Finland. The data
processing is shortly described in the context of each table and statistic. As Galtung (2006: 101)
observes, it is difficult to develop indicators for phenomena like corruption, which are legally and
morally condemned. This becomes even more difficult when trying to compare gathered data across
different administrative and legal systems or across different time periods.
1.3 The plan of the article
Whether describing the control system or presenting the figures how corruption is controlled,
the next five issues tend to be the most essential. The first issue is good administration which links
control to values, codes and principles which exists in order to prevent corruptive behavior. Integrity
of civil servants is the second link between control and assumed low corruption. Thirdly we look at
legal framework concentrating to Administrative Procedure Act and the Penal Code. The fourth issue
is the investigations of Ombudsman and Chancellor which both present some statistics on forms of
corruption and ways of controlling it. The fifth issue is the audit which illustrates control in terms of a
structure of audit systems, and the performance and financial sides of combating corruption. The last
section discusses our overall attempts to comprehend control of corruption, and we try to conclude the
topics discussed and present some particulars of the Finnish system.
2. Benefits of good administration
2.1 Ethical values of the Finnish government and municipalities
It sounds reasonable that corruption increases if ethical guidelines and codes of conduct are
not established or clearly stated or if civil servants do not obey them. Good governance and good
administration are loaded with ethical values and principles, such as trust, transparency, responsibility,
accountability, responsiveness and participation. They represent the opposite to corruption, and more
particularly, opposition to misbehaviour, mismanagement, and maladministration.
In what ways do these ethical values affect the process of controlling corruption and what
impacts do the values have on public sector and governance? To claim to be able to give
straightforward answers to these kinds of questions might be inaccurate. Yet, we assume that codes
and values of good administration play an essential role in fighting corruption, and they are harnessed
to curbing corruption in various countries. At least, codes and values may represent a sketch of
prevention and set of wanted behaviour in public service, even if codes and values seldom create
direct and intentional criteria to punishing and condemnation.
Among the mentioned values, trust is and has been an essential part of responsible
government and good administration in all Scandinavian countries. Trust in public authorities is rather
The control of corruption in Finland
high and trust is seen as a cornerstone of a civic society. Public confidence in impartiality, objectivity,
and lawfulness of the government and its institutions has remained strong in Finland. But, how the
government obtains the public’s trust, is a sensitive issue. Furthermore, if people do not trust the
government, in the same time, trust and confidence to control corruption tend to be gratuitous.
Harisalo and Stenvall (2001) have studied citizens’ trust in the Finnish central government
institutions. They surveyed 2000 Finnish citizens in 2001. The research did not directly interlink trust
and administrative corruption. Still, citizens criticized professional ethics of public servants which
may decrease high level of confidence. As the list below indicates, citizens have ranked the military
force and the police as the most trusted organizations
. Here is the top ten list of their survey:
Police 75 %
Military force 64 %
Electronic media 55 %
Universities and high schools 55 %
The church 41 %
The press 39 %
The judiciary 37 %
Trade unions 34 %
Government 34 %
Parliament 32 %
More generally speaking, good governance, with codes and principles, is written down in the
Finnish Constitution. The formal instructions of good local governance are written down in the
beginning of 1990s (Hyvä kunnallinen hallintotapa 1993). The role of municipal values and codes is
essential because two-third of public service (about four-fifths of municipal employees work in health
care, education, and social services) is provided 422.000 employees in 416 municipalities.
Occasionally the Association of Finnish Local and Regional Authorities deliver circulars for the
municipalities about good local governance. For example in 2005 the circular clarified principles
about how municipal officials should deal with private sector actors and implement co-funded
Our inquiry in five of the biggest Finnish cities (one fourth of the Finnish population) revealed
that values and codes have become more relevant than they were a decade ago. Violations of codes
and values are usually handled by an internal control unit which is responsible for municipal auditing
and performance evaluations. The municipalities are able to handle violations by themselves, thus,
need for a separate, national-level ethical committee seems to be sparse.
2.2 Channels for citizens
Comparative studies have shown that when violations of good administration are evident,
political and government executives often respond by establishing anti-corruption mechanisms to
uncover such behavior. These are ethical commissions, special prosecutors, independent councils, and
investigative judges/authorities entrusted with extensive coercive powers (Maor 2004). Recent
accounts of anti-corruption policies indicate global increases in legal frameworks, rules and
regulations, and internal control in a wide range of countries (OECD 2000; Clark & Jos 2000). There
are various reporting systems and some countries have special bodies to deal with unethical situations.
Organized protection for whistleblowers is used in a few countries and there is also a confidential
integrity counselor operating in six member states. (Moilanen & Salminen 2007: 43.) In Finland, there
is no single body to investigate integrity violations or desecration of good administration. These kinds
of cases are handled by the administrative courts, ombudsman, and media.
In addition to ethical bodies, ethical violations of good governance provide extra channels for
citizens. Blowing the whistle is not the first instrument for fighting corruption. Normally it is among
the last ones. For instance, to verify the facts that led to blowing the whistle, transparent and open
The control of corruption in Finland
government is required. And for many reasons (reputation, avoiding partisan conflicts) the
complainant and the accused should be protected. Whistleblowing covers outside routine channels for
citizens, such as ombudsman, investigations, and even going to the media.
Alternatively, the maintenance of diverse forms of citizen participation, independent and self-
regulated media, a high level of education, public access to official documents, clear-cut roles of
appealing institutions, and a possibility to present appeal with professional legal help, are all ways
towards a lower level of corruption.
As awareness increases among citizens, it becomes easier to make complaints. Somehow it
seems like citizens have more courage to contact the appellate authority and to question the decisions
authorities have made. This can also be seen in a wider context where citizens are not the subjects of
administration but sovereign citizens who can influence things which concern them. Additionally,
there is, of course, a leap between controlling corruption and for example complaints made by citizens.
Only a limited number of complaints lead to a criminal or organizational investigation. Still, citizen
control system may create a forewarning mechanism for public service to follow the rules.
3. Integrity of civil servants
The above discussion on good administration produced certain ethical framework for public
sector. It clarified the principles to which control can be proportioned. Alongside with this more or
less general and indirect framework of codes, a cornerstone for the control system of corruption is
integrity of civil service. Integrity in office is an essential part in curbing corruption. We assume here
that if civil servants as individuals 1) do not follow the requirements of the office, 2) lose the capacity
to distinguish self from office, 3) feel lack of respect, 4) are unpaid, and 5) the management does not
support integrity, then low corruption is heavily threatened in public organizations (cf. Dobel 1999).
Part of the roots of low corruption is grounded in a Finnish administrative culture which is
based on the Russian and Scandinavian traditions. The legalistic tradition and lawyers and legal
professions have dominated the public service and the Finnish political system. This legalistic tradition
has influenced legal infrastructures fighting maladministration and mismanagement (Tiihonen 2003:
107; Konttinen 1991: 220–227; Salminen & Temmes 1994; Torke 1989: 41.) Scandinavian tradition,
with the emergence of the welfare state, emphasized the extensive state, including commonly shared
values such as compassion and uniformity.
The current size of public sector is relatively big in Finland, and therefore, to control public
integrity is a consequential task. The GNP share of public expenditure is more than 40 per cent; the
amount of public servants in state government is more than 120 000 and in municipalities 422 000. A
career as a civil servant is open for all citizens in Finland. Formally taken, civil servants are well
educated. Through education everyone has an opportunity to have a civil service career. Still, public
sector organizations are able to decide detailed recruitment principles and pay their own salaries
Only the collective agreements for civil servants set the limits.
3.1 Formal and informal regulation
The Finnish Constitution requires civil service and any exercise of public powers to be based
on the law. For example, in the Constitution it is regulated that ministers have to announce their own
liabilities which might harm their status in the council of the state. Corresponding regulations are
given for the top civil servants and executives in the State Civil Service Act.
The Finnish legal norms of administrative corruption have remained unchanged for several
decades. The legalistic tradition imposes that civil servants have the obligation to provide public
argumentation for decisions, a correctional system, and accurate criminal investigation methods.
Civil service is strictly regulated in terms of disqualifications and conflict of interest which
characterize direct control in performing public tasks. To prevent corruption and maladministration
public sector officials’ secondary occupations are strictly defined. Public sector office holders are
The control of corruption in Finland
obligated to inform superiors about every connection concerning secondary occupations. Public
servants should state their interests before their appointment to office. There are strict regulations of
disqualifications especially related to civil servant work. This regulation aims to avert, in advance,
nepotism, cronyism or patronage, all of which are kinds of corruption. As stated above, all of these
norms and the whole idea of good governance are historic in the Finnish judicial culture. (Tiihonen
2003: 100–101.)
The old pillar of the Finnish civil service is the referendary or reporting system where the
reporting official (civil servant) researches the matter under advisement, presents alternative proposals
and suggests a final proposal to the decision makers. The long-established system has been seen to
serve the prevention of abuse and corruptive behavior. (Tiihonen 2003: 109–110.) We might imagine
that the potential corrupter has to do double work to realize the wanted plans: the corrupter has to
convince both the decision maker and the refendary. More evident is that the obligation to provide
public argumentation for decisions increases transparency and public trust in governance, and prevents
partial and partisan decision-making.
Peer-pressure and peer-comparison affect the level of corruption and integrity in civil service
(Holmes 1993: 165). In such a small civil servant community as Finland, this means that the threat of a
ruined reputation usually leads to resignation from office. Public shame is present in the Finnish civil
service. When someone is caught red-handed for giving or taking bribes the social disgrace is
substantial. He/she is remembered only for wrongdoing and all the good achievements made before
are swiped away. The gates to better jobs are closed. Additionally, because corruption cases are
uncommon, they receive a lot of attention in media and court decisions might be hard-edged.
3.2 Value-led management
Loyalty in the Finnish civil service is vested in so-called objective loyalty towards formal
position and hierarchy. Loyalty is divided into subjective or personalized forms of loyalty, especially
political loyalty, whereas objective loyalty remains despite changes in government or top civil
servants. Most civil servants hold their position after parliamentary or local elections and changes in
the top management in government agencies. Loyalty is emphasized in the formal and independent
position of civil service and hierarchical statuses.
A value-led management has been introduced in government during this decade. The results of
two Finnish surveys give evidence from this case. The values guiding daily work in the Finnish
ministries and agencies (180 central government units) have been measured in 1999 (n=647) and 2007
(n=642). The empirical data was collected by postal survey (Ministry of Finance 2000; Ministry of
Finance 2007: 39–40, 56).
Both surveys show that the most appreciated values are trustworthiness, expertise, openness
and independence. Compared the previous survey, especially efficiency and effectiveness are values
that are decreased their importance.
Additionally, the 2007 survey reveals that civil servants face
certain corruption related issues. Civil servants stated that they relative regularly or occasionally met
unethical behaviour in their daily work such as:
lack of publicity and improper announcements (71%)
use of difficult official language (60%)
delaying issues (53%)
putting self-interest before public interest (49%)
making decision without appropriate preparation and referandy (47%)
Despite the fact that civil servants in ministries face the corruption related issues, it is
emphasized in the survey that forms of grand corruption like taking bribes or gaining financial benefit
for the office are still very rare.
4. Key anti-corruption acts
The control of corruption in Finland
The status of anti-corruption codes and regulations, as well as, the control system, is to be
interpreted by legal administrative tradition of a single country. With the other Nordic countries,
Finland belongs to the countries (tradition of Roman law system and unitary state), which have
differentiated systems of public law (administrative law) and civil law (criminal law). Administrative
law regulates aspects of civil service. The law of corruption of public services has been generally
accorded a special section inside the criminal law.
4.1 The Finnish Administrative Procedure Act
Administrative matters are regulated by the Administrative Procedure Act which entered into
force from the beginning of 2004. The basic legislative idea for the Act was to unite administrative
principles, good administration, including public services in one law. The scope of application is
rather wide from state and municipal authorities to public enterprises. Additionally, State Civil
Servants Act (1994) enriches these principles.
More than fighting corruption directly, the main idea of the Act is to promote good behaviour
in public organizations, to improve the relations between citizens and administration and to prevent
maladministration in administrative practices.
Despite the general administrative purposes, the Act aims to minimize the harms of corruption
in the following manners. Legal principles in the Act emphasize that an authority shall treat the
customers of the administration on an equal basis and exercise its competence only for purposes that
are acceptable under the law. The actions of the authority shall be impartial and proportionate to their
objectives. They shall protect legitimate expectations as based on the legal system. Principles
emphasize the appropriateness of service which includes appropriate services, organization of
services, and that the authority can perform its tasks productively. The principle of advice means that
authorities should provide the necessary advice free of charge, and within their competence, for taking
care of administrative matters, as well as responding to the questions and queries about their service.
Finally, good administration requires the use of proper, clear and comprehensible language.
Civil servants are under the control of the administrative discipline system. The Finnish
system is in line with the EU member states. Disciplinary measures range from written warnings to the
termination of employment while legal sanctions include the punitive measures listed in the penal
4.2 The Penal Code
In Finland, civil servants are subject to criminal law and they are in a special position in terms
of the Finnish Penal Code. Concerning only civil servants, there is a group of acts which belong to
maladministration or mismanagement and are separately criminalized as malfeasance, offence in
office and have severe punishments, such as dismissal or admonition. (Koskinen 2001: 137–138.)
The Penal Code of Finland contains a chapter concerning offences in office. Below are
wrongdoings listed in the Penal Code, and they are 1) acceptance of a bribe and aggravated acceptance
of a bribe, 2) bribery violation, 3) acceptance of a bribe as a Member of Parliament, 4) breach and
negligent breach of official secrecy, 5) abuse of public office and aggravated abuse of public office,
and 6) violation of official duty and negligent violation of official duty. How does the legislation
Some statistical evidence is given in Table 2. The statistical data was gathered from The
National Research Institute of Legal Policy. On the basis of bribery violations, economical sides of
bribery, and acceptance of bribery the empirical data was grouped in the different cells. In Table 2 the
real cases of wrongdoings are measured according to the three categories: accused of the particular
crime, sentenced of the crime or no cases existed.
The control of corruption in Finland
Although some of the cases are totally missing from year to year, it seems that the total
amount of cases is increasing. The years 1997 and 2005 are for some reason exceptional, especially in
terms of bribery investigations. The yearly growth does not mean the real growth, because the cases
are long-lasting and they are concluded in trials in occasional years. This picture might be the tip of
the iceberg. For instance, Kaufmann (2004) argues that where the “rules of the game” have been
captured well, frequently ignored manifestations of so-called “legal corruption” may be more
prevalent than illegal forms, such as outright bribery, which are the usual focus of attention.
There are no guarantees that extensive legislation would decrease corruption. A high degree of
observed corruption may, as such, reflect a high standard of ethics and a rigid application of rules
rather than high degree of real misbehavior (van Hulten 2007).
Persons accused of bribery and sentenced in Finland in 1996–2005
Table 2
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
a/s a/s a/s a/s a/s a/s a/s a/s a/s a/s
Bribery 6/3 8/4 2/2 1/1 4/1 1/1 1/1 3/3 21/17
Aggravated bribery 1/1 1/0 3/3
Bribery in business 1/0 3/0 1/1 1/0
Acceptance of a bribe
in business 1/1 1/1
Acceptance of a bribe
3/2 7/5 1/2 1/0 1/1
Aggravated accep-
tance of a bribe 2/2 1/0 1/1
Bribery violation 3/0 1/1 1/0 4/2 3/3 1/1 2/2
Total 16/8 20/11 6/3 4/4 9/3 4/4 2/1 1/1 5/5 26/21
Notes: a = accused of the particular crime; s = sentenced of the crime; – = no cases
(Source: National Research Institute of Legal Policy)
5. Investigations of Ombudsman and Chancellor
The Ombudsman institution is a world-wide arrangement. It protects citizens against arbitrary
authority and keeps the guard of the law on behalf of citizens (Rowat 1965). In the Finnish system
Ombudsman and Chancellor are highly respected and represent long-standing institutions. Their role is
different from administrative courts where public servants are accused and sentenced.
The Finnish institutions of the Parliamentary Ombudsman and the Office of the Chancellor of
Justice represent legal regulation and supervision of legality. In other words, these institutions present
legal control efforts in terms of corruption and integrity in civil service.
To appeal, citizens can either institute action with the Parliamentary Ombudsman or the
Chancellor of Justice. The overall aim of these institutions is to safeguard the rights of citizens. 60
persons are working in the office of Ombudsman and 40 in Chancellor’s office. But what kind of role
do they play in curbing corruption?
The formal duties (role to supervise) of the Ombudsman and the Chancellor of Justice are in
many respects parallel with each other. The difference is that the Chancellor of Justice inspects the
complaints concerning the actions of advocates and public legal aid councils. The chancellor has the
duty to supervise the legality of government actions. The Chancellor is present in the sessions of the
Council of State and he revises the cabinet documents before the weekly sessions.
The Ombudsman’s duty is to ensure that public authorities and officials observe the law,
constitutional and human rights, and that civil servants fulfill their duties according to good
The control of corruption in Finland
administration. The Ombudsman investigates the performance of authorities and officilas on the basis
of citizens’ announcements. In the Ombudsman’s investigations the names of complainants are not
usually published which increases probability of denunciation. The amount of cases concerning
legality has increased even 47 percents from 2003 to 2006.
Both institutions investigate corruption related cases, but what is the precise content of
control? Typical cases from 2000 to 2005 referred to control of corruption handled by the Ombudsman
are listed in Table 3. In a similar way, investigations of the Chancellor are presented in Table 4. The
data of corruption related cases in the tables was collected, regrouped and counted together from
annual reports of Ombudsman and Chancellor.
Investigations of Ombudsman: Corruption related cases in 2000–2005
Table 3
2000 2001 2002 2003 2004 2005
Delayed issues 19 27 4 22 24 33
Insulting principle of
equality 15 15 6 10 16 12
Negligence 7 8 2 15 8 22
Improper justifi-
cations of
decisions 12 14 7 6 4 10
Lack of publicity 7 10 10 8 7 7
Lack of hearing of the
parties involved 7 15 4 6 3 8
Discrimination 8 7 7 9 4 7
Undelivered public
notices 6 5 4 3 10 4
Insufficient advice 5 7 2 4 5 6
Partiality 4 13 1 2 1 4
(Source: Annual Reports of Ombudsman Office 2000–2005)
In terms of corruption investigations, we found 10 types of cases in the Ombudsman
institution and 9 in the Chancellor’s. Both institutions handle equal cases, such as delayed issues, lack
of hearing of the parties involved and lack of publicity. Rethinking the relevance of these figures, that
sort of issues belong to the category of maladministration rather than of strict corruption.
There are also differences between the institutions. Violation of principle of equality,
negligence and partiality belong to Ombudsman’s typical cases. Compared to Ombudsman,
Chancellor is responsible for the cases of disqualification, misuse of public power and
untrustworthiness of public actions which are near to the ethics of civil servants.
Investigations of Chancellor: Corruption related cases in 2000–2005
Table 4
2000 2001 2002 2003 2004 2005
Delayed issues 5 23 16 9 13 7
Disqualification 9 3 7 5 5 5
Lack of hearing of the
parties involved 2 1 3 5 7 2
Insufficient advice 4 1 2 1 2 5
The control of corruption in Finland
Misuse of public office 7 - 1 2 3 -
Lack of publicity 5 - - 3 1 3
Improper justifi-cations
of decisions 1 - 3 3 1 -
Untrustworthiness of
public actions - - - 7 - -
Discrimination - - 3 2 - 1
(Source: Annual Reports of Chancellor Office 2000–2005)
Putting the information in the tables another way, both tables above confirm Finland’s image
as a low corrupted country. For a country with some 550 thousand public sector employees, the above
presented numbers seems comparatively insignificant. When building the picture of Finnish low
corruption and control mechanisms, these numbers only provide circumstantial evidence regarding
occurrence and incidence.
6. Financial and performance audit
Above, codes, integrity and, legal settings of controlling corruption are discussed.
Comparative experiences show that well-established tasks of financial and performance controlling
institutions and transparent controlling mechanisms might reduce potential corruption. One might even
argue that corruption increases if administrative control and audit mechanisms are missing or
controlling is not extensive. (Maor 2004; Caiden 2001).
Administrative control is decentralized in Finnish state administration and curbing corruption
is handled by several institutions. A distinctive feature is that combating corruption is only a part of an
institution’s duties. The government has not established any special anti-corruption agency, institution,
or commission.
Internal audit holds a significant role in preventing corruption because of its semi-autonomous
standing and its functions as overseer of internal control mechanisms. In general, an internal audit may
have greater access and higher potential for broad coverage of operation than any other controlling
institution, but it is dependent on political and management intervention (Schwartz 2003).
How is the financial side of controlling corruption organized in Finland? All Finnish
ministries and government agencies have a unit for internal control. However, these units are in the
first place concerned with financial audits. Corruption related issues may be revealed in terms of
performance audit and on the basis of denunciation. If internal units find misuse or any other
references to corruption, they always pass the case to the police authorities. We dare to say, internal as
well as police investigations are speeded up with external pressure: corruption cases are interesting
topics for the media.
At the top of the system, the Finnish parliament controls and audits government finances
alongside its legislative role. From among the Members of Parliament, five auditors of public accounts
are selected. The formal duty of these auditors is to supervise the legality and appropriateness of the
nation’s public-sector finances. The auditors deal with inspection and monitoring actions. They
observe how the budget is followed, monitor state subsidies and loans given from budget grants and
foundations outside the budget, and monitor guarantees given by the state. They supervise the
admittance of quittances, concessions and postponements of taxes, payments and other state debts.
In their annual reports to the Parliament over the past five years, the auditors handle
maladministration related cases and issues, such as potential problems of shadow economics and
misuses of external financing in public organizations.
The National Audit Office performs financial and performance audits as an independent body
with 145 employees. In terms of financial control, the office ensures compliance with the state budget
and the provision of correct and adequate annual accounts by the state and agencies. In 2006, 115
The control of corruption in Finland
financial audits were conducted. Performance audits consist of producing information on the
effectiveness of administration and compliance with regulations and the principles of good
administration. Performance Audit serves the information needs of the Parliament, administration, and
citizens, through evaluation. Some 30 performance audits are carried out per year. Only 1–2 audits
cause further investigations. Yet, most of the audits consist of recommendations of better performance
and conducts.
The formal audit is not the whole picture. The next data was collected from the annual reports
of National Audit Office. Individuals and organizations can submit complaints to the Office
concerning the state's financial management, public economy, and suspecting abuse or misuse of
government funds. The citizen complaints accumulate for some reason in a few branches of
administration, such as agriculture and forestry, education and transport and communication. The
number of complaints is:
43 in 2001
53 in 2002
31 in 2003
43 in 2004
45 in 2005
37 in 2006.
The audit functions presented here give a clear and extensive picture on control, but says little
about the actual prevalence of misconduct. We have to agree with Huberts et al (2006: 278) that there
might be a ‘dark number’ of misconduct and certain uncontrolled corruption which can be expected to
remain unknown. Another issue is that more we pay attention to corrupt violations, the more
corruption might appear, while that might not be the actual case.
7. Corruption: is it controllable?
Administrative corruption has been the subject of considerable scholarly study and research.
This article deals mainly with the control system of corruption in Finland. More than anything else, the
article debates the potential linkages of control system and low corruption relevant for Finnish public
administration in the 2000s.
How do we see the findings of this presentation? In our empirical analysis, perhaps the
linkages remain more contributing than explicit causal factors. The major explanations on the linkages
are below. For further analysis, some of the Finnish control particulars and characteristics are taking
into consideration. The linkages are characterized by using different labels such as ‘promoting’,
‘preventing’ or ‘watchdogging’. The main observations are condensed in Table 5.
Potential linkages and control of corruption: A summary
Table 5
Linkages Control particulars Control characteristics
Benefits of good
Integrity of civil servants
The key anti-corruption
Investigations of
Confidence in public institutions; citizen
channels for whistleblowing
Legalism and loyalty to the office; ‘danger’ of
public shame
Behaving ethically and extensive sanctions of
corruption undertakings
‘Preventing’/ ‘Promoting’
The control of corruption in Finland
Ombudsman and
Financial and performance
Maintaining just and clean administrative culture
Decentralized monitoring; tight financial audits
It can be speculated that an increase in corruption is avoided by adopting these mechanisms.
Some of the arguments present implications on what the threats of low corruption are in general.
Rather than drawing absolute answers on corruption (or whether corruption is successfully controlled
in practice), this qualitative analysis describes the core elements of the control system of corruption. It
is hard to know how these sources of low corruption in society are interrelated, and therefore for the
future, a more specific research agenda is needed.
By describing the control system, as we mainly did here, one can’t argue in a valid way how
well corruption is controlled and how efficient the control system really is. Still, three additional
conclusions can be drawn from the previous discussion.
First, we are convinced that the first two elements – more than others – make Finland a
special case. At its best, administrative corruption is controlled by the public’s confidence in societal
institutions, good administration, and self-control of civil servants. Citizen influence and public
confidence belong to the flexible, less strict way of fighting corruption, while self-control of civil
servants is based both on heavy regulation and the tradition of administrative culture. As
comparativists we see that this sort of the Finnish experience, with ethical habits and procedures, can
be transferred to experiences of neighboring countries.
Secondly, together the decentralized legislative framework, tight financial monitoring, and
professional peer-control seem to facilitate functioning control environment. The absence of anti-
corruption practices (investigatory bodies, independent commissions, etc.) indicates a low level of
corruption in the Finnish case. In many countries, they are usually put in place either response to a
public outcry or to media and political pressures (Maor 2004; OECD 2000). On the other hand, this
illuminates the low profile of handling petit corruption in the Finnish case. Praises of financial control
might become problematic in combating corruption because it usually underestimates the controlling
of political decision making and providing public services.
Thirdly, the legalistic tradition is in the frontlines in combating administrative corruption. The
past ten years have been a spring time for ethical guidelines and codes of conduct at all levels of the
Finnish government. The large municipal sector is still lacking comprehensive codes. The Finnish
state tradition has been renewed, and public administration culture is no longer valid for judging
actions and representing ethical procedures. The government has become market-driven and extensive
privatizations have been made
. Maintaining low administrative corruption, the public sector should
offer proper and competitive work for future professionals and experts. Ethical training for public
servants is highly important in the future. By 2015, two thirds of government personnel will change,
for example, due to the ageing of the workforce and retirements. Therefore, the maintenance and
transfer of present knowledge and procedures, and investments in anti-corruptive behaviour will
become increasingly important. The renewed body of civil servants needs ethical training to clarify the
common values and to understand the importance of being an ethical civil servant. Rather training than
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Finland has been ranked second in the World Economic Forum reports at 2006 and 2005.
According to the National Youth Barometer from the year 2006, the 15–29 year old Finnish
respondents (n=1900) stated most trust in the police (91%), judiciary (88%), and military force (81%).
Political institutions and politicians are ranked not so well which indicates a criticism of daily politics.
Van Rijckeghem and Weder (1997) argue that low wages in the civil service causes corruption or at
least, low salaries increase the probability of corruption. It is assumed that if public sector salaries
correlate with the private sector and civil servants incomes are fair, there is no strong pressure for
corruption. In Finland the wage level is, on average, high for both women and men, and thus, a
comparable salary level might correlate to a low level of corruption. A difference between the private
and public sectors exists, but salaries in the state administration and in municipalities are comparable
with private sector salary levels. Men’s salaries are on an average higher than women’s but women’s
salaries are moderate. The annual change in women’s index of wage and salary earnings has been
larger than men’s in the last few years. There are signs that the gap between the rich and the poor is
becoming bigger.
At the same time modern control and integrity codes are introduced, old-fashioned noble principles
are still present in the civil service. One description of this is given by the Finnish Ministry for Foreign
Affairs (2005: 15–16). According to the report of the ministry, humbleness is seen to be a good quality
of a public servant. Civil servants ought not to boast about their powers and positions. They should be
prudent and be familiarized with the affairs of the common people. Civil servants are assumed to be
decent citizens themselves, which means having a stable and healthy lifestyle, Christian values and
Only a few cases have become problematic. Among the worst is when three top executives of the
Finnish Maritime Administration were a few years ago sentenced to dismissal from their duties,
conditional imprisonment and to return the illegally received financial benefits to the state.
... In narrowing down the emphasis on corruption in Nigeria, attention focuses on the diffuse nature of corruption in all spheres of public service and governance in the country. Salminen, Olli-Pekka & Rinna, (2007), posited that there is no doubt that corruption is a multifaced phenomenon, linking multiple issues together, such as abuse of entrusted power for private gains; low integrity; taking bribes; maladministration, fraud, and nepotism. Olu-Adeyemi, (2004), corroborated the foregoing assertion and stated that in Nigeria, an understanding of what constitutes corruption transcends officialdom and discussing corruption broadly as a perversion or a change from good to bad will not be inappropriate. ...
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Transparency is one of the cardinal principles driving democracy. The major emphasis of democratic governance, therefore, is popular sovereignty through public participation in governance process, in decision-making and fidelity of officeholders. In Nigeria, there is glaring perversion of democratic governance and transparency. Opaque and widespread corruption looms large in the system. The phenomena present contradiction of best practices in a democratic system. It poses challenge to academic dialogue and generates serious debates that do not proffer any common ground for resolving the impasse. It also creates both theoretical and practical haze in scholarly dilemma over the fate they present to Nigeria. This study interrogates the correlation of corruption and democratic governance in Nigeria; it explores how they are trite problems plaguing good governance in Nigeria and further evaluates their general implications for development. It adopts post-colonial state theory as explanatory framework, content analysis for discussion of the contextual issues, and documentary method for the data collected. The findings show that lack of transparency breeds corruption. It retards institutional capacity and stalls infrastructural development in Nigeria. It recommends serious transformation of the political system to deepen the values of good governance provided by democracy, to entrench the culture of fidelity in public trust and invoke precepts of sound value orientation, to eradicate corruption in the system. Key Words: Corruption, Democratic Governance, Incompatible Marriage, National Development
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The CPI has been cited in thousands of newspaper articles. It is cited almost on a daily basis. In some contexts, as illustrated above, it can be credited with influencing a country's political trajectory. The CPI was a watershed in the mid-1990s. It contributed towards the formation of a global movement and widespread consensus against corruption. The CPI was a formidable instrument in raising awareness about the international scope and shared burden of corruption and driving corruption onto the front pages of newspapers throughout the developing world. The CPI levelled the playing field by comparing, for the first time, disparate and distinct countries on the same scale. The international shaming that ensued, encouraged a race to the top, i.e. to lower levels of corruption. The race was on the international stage for some (e.g. a senior advisor to South Korea's prime minister sharing his stated goal for Korea to be among the top-15 countries within 5 years 1); frequently the race was regional (e.g. between Hong Kong and Singapore; between Kenya and Uganda; Hungary and the Czech Republic, etc.); and for some selected countries at the bottom of the league table (e.g. Bangladesh, Nigeria and Paraguay) it has spurred a determination to shed the label of being 'one of the world's most corrupt countries.' With the advent of the UN Anti-Corruption Convention in 2003, international efforts to curb corruption entered the phase of implementation and enforcement. International efforts moved on from the short-term goals of setting international standards and general awareness raising. The value of the CPI as an awareness raising tool is not called into question. 2 This new international context, however, has called for a reassessment of the functions and limitations of the CPI. The failings of the CPI can be grouped under seven headings. They are referred to hereunder as the CPI's seven failings: * Fredrik Galtung, Tiri (the governance-access-learning network), 42 Madrid Road, London SW13 9PG, United Kingdom ( For their very useful comments on an earlier draft of this chapter, I am grateful to Jens-Chr.-sung and especially to Ornit Shani. For their comments on sections of the chapter I am grateful to Ross Hommel and to Amartya Sen. For several months of stimulating exchanges on macro corruption indicators I am grateful to Daniel Kaufmann and Aart Kraay -and to Johann Lambsdorff, who made this all happen. The views expressed in the chapter and the errors left in it, are entirely my own.
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This article addresses the implications of political executives losing control over corruption investigations of senior officeholders following the creation of anticorruption mechanisms (e.g., commissions, special prosecutors, independent counsels, investigating judges). When investigations hit close to home, the ensuing political fallout makes political executives eager to look for ways to derail such investigations, especially when investigators proceed with an uncharted mandate. Against this background, two hypotheses are investigated: (i) the striking outcome of this process is a concerted move by targeted political executives to undermine the credibility of anticorruption mechanisms and, when deemed necessary, to terminate their operation, and (ii) the extent to which the prosecutors are successful depends on both institutions and media accessibility: the more centralized and fused political power is, and the less media accessible the government is, the harder it will be to carry out an investigation. These hypotheses are strongly supported by a comparative analysis of five anticorruption mechanisms in the United States, the Soviet Union, Italy, and Australia (Queensland and New South Wales.)
Theoretical framework towards a definition and taxonomy of corruption examples of corruption patterns of corruption and its reporting in the USSR and PRC reasons for corruption the functions and dysfunctions of corruption and its reporting the authorities' reactions to corruptions.
High levels of corruption limit investment and growth and lead to ineffective government. Developing countries and those making a transition from socialism are particularly at risk, but corruption is a worldwide phenomenon. Corruption creates inefficiencies and inequities, but reforms are possible to reduce the material benefits from payoffs. Corruption is not just an economic problem, however; it is also intertwined with politics. Reform may require changes in both constitutional structure and the underlying relationship of the market and the state. No single "blueprint" is possible, but the primary goal should be to reduce the gains from paying and receiving bribes, not simply to remove "bad apples."
In light of significant conceptual and methodological difficulties that face comparative corruption research, we propose to treat comparative anti-corruption policy as worthy of study in its own right. By using measures of enforcement activity as evidence of anti-corruption, rather than flawed proxy measures of corruption, we endeavor to surmount some of obstacles to comparing radically different political systems. We compare anti-corruption activity in the US and the USSR and elaborate three theoretical perspectives-emphasizing political, institutional, and symbolic factors--and show how each might improve our understanding of anti-corruption policy in the two nations. By applying these three frameworks to the Russian republic, we assess anti-corruption policy in an unsettled, emerging political system and suggest that the dynamics that underlie Russia's anti-corruption policy will more closely resemble US policy than was the case in the USSR.
Economists know quite a bit about the causes and consequences of corruption. An important body of knowledge was acquired through theoretical research done in the 1970s. A key principle is that corruption can occur where rents exist - typically, as a result of government regulation - and public officials have discretion in allocating them. Since the ultimate source of rent-seeking behavior is the availability of rents, corruption is likely to occur where restrictions and government intervention lead to the presence of such excessive profits. From economic theory, one would expect corruption to reduce economic growth by lowering incentives to invest (for both domestic and foreign entrepreneurs). Empirical evidence based on cross-country comparisons does indeed suggest that corruption has large, adverse effects on private investment and economic growth. While there is a well-established body of theoretical knowledge, as well as some tentative results on the causes and consequences of corruption, several more questions need to be answered to enable governments to design effective policies aimed at curbing corruption.
We analyse Irish managers' perceptions about the degree of wrongness of ten types of unethical conduct. In-person interviews with 348 managing directors of Irish-owned businesses who report their perceptions of the degree of wrongness of ten business ethics problems (the dependent variables) yield the data for our study. Predictors of managers' ratings include the existence of a business code of ethics, perceived frequency of occurrence of the given acts, company size and sector, union membership, Irish business ownership and independence (the independent variables). Results indicate that approximately 75% of those sampled are independent Irish owned businesses but few (only 22% of this sample) have a formal business code. Regression analyses reveal that small firms with a code of ethics predict higher wrongness ratings for managers in regard to the practices of unfair pricing and delayed payments (unethical behavior involving firms) but managers also consider such acts the least wrong overall. Wrongness ratings on the eight remaining unethical acts are explained by the manufacturing sector. However, manufacturing firms in Ireland also have a high percentage of unionised workers indicating that unions influence managerial thinking about social and employee ethics (e.g., discrimination, insider trading). The traditional adversarial Industrial Relations model is useful in noting that unions are important in setting ethical standards for indigenous Irish-owned businesses. Given this reality, management in small, manufacturing firms should work with unions to create a more formal ethics code in order to guard against corruption and to remain competitive in the international marketplace. Those without strong unions might articulate their own organisational values.
This paper describes the institutions and social norms that have accommodated corruption in the Russian Federation in the post-transition years. We show how corruption is sustained by ill-defined boundaries between political and private business activity, and how the role of the state facilitates rather than hinders corruption. The paper draws upon a longer document prepared by the authors, the IDEM Report on Corruption on Russia [IDEM Foundation, 1998. Russia versus Corruption: Who Will Win?, Council of Foreign and Defense Policy, Moscow. (in Russian)].