Sight beyond sight. Foreseeing corruption in the Indonesian government through behavioral analysis
| Published date | 03 May 2016 |
| Date | 03 May 2016 |
| Pages | 289-316 |
| DOI | https://doi.org/10.1108/JFC-12-2014-0063 |
| Author | Hendi Yogi Prabowo |
| Subject Matter | Accounting & Finance,Financial risk/company failure,Financial crime |
Sight beyond sight
Foreseeing corruption in the Indonesian
government through behavioral analysis
Hendi Yogi Prabowo
Centre for Forensic Accounting Studies, Islamic University of Indonesia,
Yogyakarta, Indonesia
Abstract
Purpose – The purpose of this paper, which is based on the author’s study, is to explore the potential
use of behavioral analysis in predicting corruption among public ofcials in Indonesia as part of the
corruption prevention measures.
Design/methodology/approach – This study examines major corruption cases in Indonesia in the
past three years through reports from various institutions regarding fraud-related issues to gain a
better understanding of corrupt leaders in Indonesia and how to predict their occurrence by means of
observing and analyzing visible behavioral red ags.
Findings – The author establishes that in addition to the nancial perspective, corruption can be
detected and thus prevented by means of behavioral observation and analysis. The discussions in
this paper suggest that bad leadership is a major cause of corruption in the Indonesian
Government. However, a main reason corrupt leaders are elected into ofce is because the people
failed to recognize them in the rst place and accidentally voted for them. Among the signs of bad
leadership visible enough for the people to see is the so-called “narcissism” which has four core
dimensions: authority, self-admiration, superiority and entitlement. The four core dimensions are
often visible in leader candidates in Indonesia which should have been early warning signs of bad
leadership which may lead into, among others, corruption. Furthermore, the need for excessive
compensation, exposure and power has been a common trait in many corruption offenders in
Indonesia and each can be associated with the four core dimensions of narcissism. It is because of
such a need that pressure/motivation to commit fraud among Indonesian public ofcials occurred.
Society’s awareness of the signs of narcissism will help them decide who will become their future
leaders and diminish the risk of corruption in the country.
Research limitations/implications – This study is self-funded. Therefore, due to the limited
resources available, the discussions and analysis on visible behavioral red ags of corruption in this
study are built upon secondary data from agencies such as the Corruption Eradication Commission
(KPK), the Constitutional Court (MK), the Supreme Audit Board (BPK) and the election Supervisory
Committee (Bawaslu). For future studies, primary data from the public regarding their opinions toward
the past, present and future leadership in Indonesia will offer a more accurate view into visible
behavioral red ags of corruption.
Practical implications – This paper contributes to the development of corruption prevention
strategy in Indonesia by empowering the society to monitor potentially corrupt leaders so as to prevent
them from controlling the country.
Originality/value – This paper demonstrates how the seemingly small and insignicant
behavioral clues may become effective tools to predict and prevent the occurrence of corruption in
the future.
Keywords Leadership, Corruption, Indonesia, Fraud, Narcissism, Fraud triangle
Paper type Research paper
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Corruption in
the Indonesian
government
289
Journalof Financial Crime
Vol.23 No. 2, 2016
pp.289-316
©Emerald Group Publishing Limited
1359-0790
DOI 10.1108/JFC-12-2014-0063
Fraud and corruption in Indonesia: an overview
Corruption has been a major global problem for generations. Despite the various
existing anticorruption measures, evidence suggests that more still needs to be done. A
number of studies have been conducted to measure the severity of the problem to,
among other things, see if anticorruption measures do make a difference. Based on
Transparency International’s (2013) Corruption Perception Index (CPI), which measures
the perceived levels of public sector corruption in 177 countries, corruption remains an
entrenched part of the global public sector. This is partly indicated by the fact that
around two-thirds of the surveyed countries received an index score of below 50 (out of
100) (Transparency International, 2013;Prabowo, 2014a). According to the 2013 CPI, out
of 177 countries surveyed, more than two-thirds scored less than 50 (out of 100), which
suggests that most countries in the world are still plagued by corruption (Transparency
International, 2013;Prabowo, 2014a). As for Indonesia, although it scores a little better
compared to the previous year, it remains in the bottom 30 per cent of the most corrupt
countries in the world. In the survey, Indonesia’s ranking improved slightly from 118
(2012) to 114 (2013); unfortunately, this keeps the republic among the most corrupt
countries in the world (Transparency International, 2012,2013;Prabowo, 2014a).
In Indonesia, a single case involving a public ofcial may cost the country millions of
dollars of tax payers’ money. According to a report by the Supreme Audit Board (BPK)
in 2011, for example, it was estimated that the potential losses from the misuse of public
funds in Indonesia was in excess of Rp. 103 trillion (US$10.9bn) (Prabowo, 2013b). With
its devastating effects to the economy, many believe that, without corruption, the level of
poverty in Indonesia would have been much lower than what it is today (Prabowo,
2013b).
According to an annual study by the Corruption Eradication Commission (KPK)
using the National Integrity Index (Indeks Integritas Nasional/IIN), over the past few
years, the overall IIN scores have been uctuating in the range of 5.42 to 6.84. The index
declined in 2008 to 2010 before going up again in 2011 to 2013 (Corruption Eradication
Commission, 2014a,p.14,2014b). Based on the study, in terms of corruption eradication,
there are four main areas in the Indonesian public sector that still need special attention:
the use of information technology; service user behavior; anti-corruption efforts; and
whistle-blowing mechanism (Corruption Eradication Commission, 2014a,2014b).
To eradicate corruption in Indonesia, an effective anti-corruption agency is needed.
Since their rst inception in the world of corruption eradication a few decades ago,
anticorruption institutions have grown in numbers across the world (Prabowo, 2013a).
Some, such as Singapore’s Corrupt Practices Investigation Bureau (CPIB) and Hong
Kong’s Independent Commission Against Corruption (ICAC), remain at the forefront of
the war against corruption, while others, such as Portuguese High Authority Against
Corruption, South Africa’s Directorate of Special Operations (known also as the
Scorpion) and the Italian High Commissioner Against Corruption have fallen due to,
among other things, the lack of government’s political will (Prabowo, 2013a).
The eradication of corruption also means that we must ensure that it does not regenerate
over time (Prabowo, 2013c). This suggests that there is more to corruption eradication than
just prosecuting the offenders (Prabowo, 2013c). Just as with the eradication of other crimes,
prevention should also become part of corruption eradication in Indonesia. In practice,
reducing the opportunities for corruption is the most common approach taken to minimize
the occurrence of corruption, also known as the “situational crime prevention” approach
JFC
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