The world’s leading authority on the subject, Transparency International, also regards government as the ubiquitous perpetrator.   It defines corruption as “the abuse of entrusted power for private gain”, which it addresses in 18 categories, all of which entail government.   Even the “private sector” category is mostly about government corruption.   Transparency International reports, for instance, that “a fifth of executives surveyed by EY claimed to have lost business to a competitor who paid bribes”.

Leon Louw is executive director of the Free Market Foundation and what appears above is an extract from his opinion piece Corruption flourishes in hothouse of bureaucracy which first appeared in Business Day today.


A RECENT column in City Press echoed a common refrain, when it said, “Corruption has two sides: a giver and a taker.” The Congress of South African Trade Unions (Cosatu) agrees: “There are two sides to corruption….     For every corrupt councillor or public official there is a corrupt businessman or woman.”

They are wrong.   There is really only one side to corruption: government.   The other “side” is many sides; a bewildering array of organisations, civilians and government employees in their private capacities.   Most people are on the other side of government corruption at least once.

Apologists for governments being the overwhelming common denominator blame “giver” victims instead of “taker” perpetrators.

. . . .

To their credit, Cosatu and the South African Communist Party have been among the most vociferous critics of corruption.   Despite the fact that everything they publish laments government corruption, their ideological immune system protects them from the obvious conclusion that it is due to the kind of government power they promote.

By convoluted logic, they blame “capitalism” for what the government does.   “The problem,” they say, “has always been the capitalist system” because “people … tempt and corrupt public representatives”.   Poor babies!

Cosatu and others presume that corruption involves “public representatives” because it usually does.   The reason is not rocket science, yet eludes most commentators.   The main cause of corruption is discretionary power.   If official X has the power to say “yes” to A and “no” to B, X is likely to be wealthy.   It would be a strange world were it not so.

The two sides to corruption are not so much a “giver” and a “taker” as one with government power and one without.   Freer economies are associated with less corruption simply because they have, by definition, less discretionary power.

South Africa is “founded on … the supremacy of … the rule of law”, according to our constitution.   The “rule of law” as opposed to “the rule of man” implies either the absence of discretionary power or the presence of effective checks and balances where it is considered unavoidable.

Faith in “fighting” corruption reflects misconceptions about its nature.   It can be discontinued, not “fought”, by the repeal of antimarket controls and parastatal privileges.   Despite protestations to the contrary, advocates of interventionism are unwitting advocates of corruption.   The devil could not have maximised corruption more effectively than the present tsunami of controls and bureaucratic empires.