Is a 50% ministerial pay increase really the best way to address corruption?

I originally wrote this article as a sample to be submitted to an editor. I decided to publish it today because there are some questions which must not be allowed to sleep for too long. If you would like a copy of the original article complete with references feel free to reach out to me either by commenting here, email or Facebook.

“I believe it is justifiable. You cannot have a situation like in the PPP where they were prepared to accept low salaries because they were thiefing money all over the place. We are not going to do that…and so we have to pay people well if you want them to perform.” Joseph Harmon, Minister of State, Stabroek News, October 7, 2015.

 

When Minister of State Joseph Harmon announced the 50% salary increase for Government ministers last year, many Guyanese expressed outrage for two reasons. They were angry because the move was perceived as a violation of the principles on which the APNU+AFC Coalition campaigned earlier that year and they believed that it expressed gross insensitivity to public servants at the lower end of the hierarchy.

On the day Harmon made the announcement, he was reported by Stabroek News and other major media outlets as saying that he believed the pay increase was justifiable because “You cannot have a situation like in the PPP where they were prepared to accept low salaries because they were thiefing money all over the place”.

Harmon’s statement alludes to the existence of a link between low pay of senior government officials and corruption. The World Bank has (since 1997) defined corruption as the abuse of public office for private gain. By “thiefing money”, as the Minister of State so eloquently alleged, the former PPP government officials were using their office or position of power for personal gain; they were engaging in corruption.

This corruption, as Harmon’s statement suggests, was due – not primarily to the lack in morality of his predecessors – but to the fact that they were willing to accept low pay. Within this context, the exorbitant salary increase appears to be a method for addressing corruption by way of prevention and for ensuring that senior government officials perform.

The most distressing thing about this statement is that it stands in stark contrast to the stance the APNU+AFC Coalition took while in opposition and on the campaign trail in 2015. These same PPP salaries, which Harmon now describes as “low” enough to be a cause for corruption were once represented in his and his peers’ rhetoric as being exceedingly high and for the “fat cats”.

In the interest of diplomacy, we can say that Harmon and the Coalition’s position on the matter has changed. However, since diplomacy has never been the best language for truth, the only thing left to say is that the campaigners of change have lied to the people.

But even in light of this most distasteful fact, Harmon is correct in presuming that an increase in pay for senior government officials is one way to tackle the corruption problem. Whether this is the best move that Guyana can make currently is another issue. Would it have made more sense to offer public servants lower down the hierarchy a salary increase in order to curb corruption?

In the absence of scientific data, some amount of introspection is necessary to support the statement which immediately follows. Petty corruption – as it exists at the lower level of the public service ladder – is now cultural. When a police man pulls over a driver, the former will most likely ask for money, the latter will willingly pass “a lil raise” and perhaps neither will fully grasp that they are engaging in an act of corruption.

Similarly, the practice by citizens who go to any government office is to hand over a “lunch money” in order to get efficient service. The rampant practice of corruption by lower to mid-level public servants has been linked by studies to wages that are too low.

Employees, Augusto Lopez-Claros writes in “Six Strategies to Fight Corruption”, may find themselves under pressure to supplement their incomes in “unofficial” ways. Lopez-Claros further refers to the popular study by Van Rijckeghem and Weder which shows there is an inverse relationship between the level of public sector wages and the incidence of corruption.

Increasing the pay of public servants across the board has been part of a national strategy that Singapore has successfully used for years. Singapore is one of the least corrupt countries in the world. One of the reasons Singapore has been so successful in fighting corruption is because it keeps the salaries of its politicians and civil servants high in order to prevent brain drain and to stamp out the economic incentive for engaging in corrupt activity.

The important point to note here is that Singapore did not just give hefty salaries to its politicians and top government officials but to public servants throughout the hierarchy. Hong Kong has since followed this example.

Will the Government of Guyana be doing the same? And if we assume that the ministerial pay increase is just the beginning, why did they decide to begin the increase at the top, was it really the best decision and when can public servants expect their salary increases?

Statements made by Minister of Finance Winston Jordan in “Don’t expect an elaborate increase” – an article published in the March 17, 2016 edition of the Kaieteur News – provides some of the answers. According to the article, Jordan warned that “the expectations for handsome increases need to be tempered” and public servants can expect only a “top-up” to their salaries.

The finance minister justified this “top-up” approach to the salary increase of low and mid-level public servants by agreeing with a recently released report by the International Monetary Fund (IMF). The IMF mission, which was recently in Guyana, suggested “moderating the growth of wages, as well as reforming public enterprises with a view to reduce their reliance on government support.” Jordan agrees.

It is clear that public servants lower down the hierarchy will not be receiving the same treatment as the Coalition ministers.

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