De-normalizing corruption in the Indonesian public sector through behavioral re-engineering
| Date | 02 October 2017 |
| Pages | 552-573 |
| Published date | 02 October 2017 |
| DOI | https://doi.org/10.1108/JFC-10-2015-0057 |
| Author | Hendi Yogi Prabowo,Kathie Cooper,Jaka Sriyana,Muhammad Syamsudin |
| Subject Matter | Accounting & Finance,Financial risk/company failure,Financial crime |
De-normalizing corruption in the
Indonesian public sector through
behavioral re-engineering
Hendi Yogi Prabowo
Department of Accounting, Faculty of Economics, Islamic University of Indonesia,
Sleman, Indonesia
Kathie Cooper
School of Accounting, Economics and Finance, University of Wollongong,
Wollongong, Australia
Jaka Sriyana
Department of Economics, Faculty of Economics, Islamic University of Indonesia,
Sleman, Indonesia, and
Muhammad Syamsudin
Faculty of Law, Islamic University of Indonesia, Sleman, Indonesia
Abstract
Purpose –Based on the authors’study, the purpose of this paper is to ascertain the best approach to
mitigate corruptionin the Indonesian public sector. To do so, the paper uses three behavioral perspectives:the
SchemataTheory, the Corruption Normalization Theory and the Moral DevelopmentTheory.
Design/methodology/approach –This paper is part of the authors’study to examine corruption
patterns in Indonesiain the past 10 years through examination of reports from various institutionsas well as
other relevant documents addresses corruption-related issues to explore various options for mitigating
corruption through behavioral re-engineering. For the purpose of gaining various perspectives on anti-
corruption measures, this study also uses expert interviews and focus group discussions with relevant
expertsin Indonesia and Australiaon various corruption-relatedissues.
Findings –The authors establish that despite the fall of the New Order regime nearly two decades ago,
corruptionremains entrenched within the post-SuhartoGovernments. The normalized corruptionin Indonesia
is a legacy of the NewOrder regime that shaped societal, organizationaland individual schemata in Indonesia.
The patrimonial styleof leadership in particular within the regional governmentsresulted in increasing rent-
seeking activities within the decentralized system. The leadership style is also believed to have been
supporting the normalization of corruption within the public sector since the New Order era. The three-
decade-old systematic normalization of corruption in the Indonesian public sector can only be changed by
means of long and systematicde-normalization initiatives. To designthe best intervention measures, decision
makers must first identifymultiple factors that constitute the three normalization pillars:institutionalization,
rationalization and normalization. Measures such as periodical reviews of operational procedures,
appointment of leaders with sound morality, anti-corruption education programs, administering “cultural
shocks”,just to name a few, can be part of multifaceted strategies to bring down the normalizationpillars.
The authors would like to acknowledge the support provided by the Department of Education and
Training Australia through the 2015 Endeavour Research Fellowship Award and the Directorate
General of Higher Education of Indonesia through the 2015 National Strategic Grant for the funding
of this study.
JFC
24,4
552
Journalof Financial Crime
Vol.24 No. 4, 2017
pp. 552-573
© Emerald Publishing Limited
1359-0790
DOI 10.1108/JFC-10-2015-0057
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/1359-0790.htm
Research limitations/implications –The discussionon the options for de-normalization of corruption
in Indonesia is focused on corruption within the Indonesian public institutions by interviewing anti-fraud
professionals and scholars. A better formulation of strategic approaches can be developed by means of
interviewswith incarcerated corruption offendersfrom the Indonesian public institutions.
Practical implications –This paper contributesto the development of corruption eradicationstrategy by
suggesting options for de-normalizing corruption in the Indonesian public sector so that resources can be
allocatedmore effectively and efficiently to mitigate the problem.
Originality/value –This paper highlights the importance of behavior-oriented approaches in mitigating
corruptionin the Indonesian public sector.
Keywords Leadership, Normalization, Indonesia, Corruption, Moral, Schemata
Paper type Research paper
Introduction
Corruption, generally defined as the abuse of public power for private benefits, has been a
major problem in the world causing low economic growth, distorted investment and low
quality of public services (Dreheret al., 2009). Billions of dollars have been lost to corruption
around the world. Worldwide experience has shown that corruption affects not only the
perpetrators but also their environments and even their countries. More than a few high-
profile politicians,world leaders, businessmen and even governments have fallenbecause of
accusations of corruption. Conflicts arising from corruption-related issues have even
claimed the lives of many innocent people. Regardlessof the difficulty in quantification, no
one denies that the political, economic and social development costs of corruption are
becoming increasingly evident (Organisation for Economic Co-operation and Development,
2014, p. 1). Corruption in the world comes in various shapes and sizes. Common forms
include bribery, embezzlement,nepotism, state capture, just to name a few (Organisation for
Economic Co-operation and Development, 2014, p. 1). Due to the fact that the perpetrators
are generally intelligent individuals, corruption rarely occurs on its own.A number of other
offences such as bid rigging, fraud and money laundering often act as supporters for
corruption (Organisationfor Economic Co-operation and Development,2014,p.1).
Efforts have been made by various international institutions to reduce the risk of
corruption in the world. For example, the OECD’s Convention on Combating Bribery of
Foreign Public Officials in International Business Transactions (signed in 1997) aims at
encouraging member countriesto sanction bribery in international business transactionsby
companies within their jurisdictions (Organisation for Economic Co-operation and
Development, 2011). The convention essentially provides standards in particular for
criminalizing the acts of bribery in international business transactions to foreign public
officials. Similarly, the United Nations Convention against Corruption (UNCAC) (signed in
2003) serves as a comprehensive anti-corruption convention covering a wide-range of
corruption offences such as bribery (domestic and foreign), embezzlement, trading in
influence and money laundering(United Nations Office on Drugs and Crime, 2004).
Studies have shown that corruption, especially in the public sector, has been part of
many developing countries.In terms of the flow of illicit funds, for example, according to the
World Bank, the bribery payments in developing and transition countries each year is
estimated to be around US$20bn to US$40bn(World Bank, 2007, p. 1). The illicit funds from
corrupt activities are diverted from the original purpose of providing public health and
education services, prosperity and development, to the multiple private accounts of the
people entrusted with management of public resources. According to an estimate from the
World Bank (2007, p. 1), every year, the globalproceeds from criminal activities, corruption
and tax evasion in developing and transition countries are estimated at around US$1tn to
De-normalizing
corruption
553
To continue reading
Request your trial