One would think the collective widespread suffering brought about by the global pandemic would only intensify feelings of solidarity among people. Seeing people suffer on such a massive scale triggers empathy, and in the context of the current pandemic has led to innumerable acts of kindness between fellow humans. But it’s also opened up opportunities for corruption and exploitation, especially as governments take on an expanded role in managing the pandemic.
For example, in South Africa, the hardest-hit country in Africa and one of the hardest hit globally, corruption has found its way to coronavirus relief efforts. As millions of South Africans lose their jobs and go hungry, President Cyril Ramaphosa finds himself dealing with a flailing economy, fighting the pandemic, and setting up a new law enforcement unit to investigate allegations of corruption within the government. But South Africa is not alone in fighting the dual pandemic of COVID-19 and corruption.
In Brazil, “massive amounts of government emergency funds to fight the pandemic are being stolen” as thousands of healthcare workers struggle to get paid. Public officials are also demanding kickbacks for coronavirus test kits and working with contractors to inflate the price of ventilators, enabling them to embezzle public funds in the process. In the East African economic powerhouse Kenya, citizens are protesting in the streets against widespread corruption that is hampering the government’s efforts to respond to the pandemic. It seems as if the corruption pandemic is as widespread as the coronavirus pandemic—in fact a German anti-corruption agency found that a majority of the countries it surveyed experienced some form of corruption related to getting resources necessary to combat COVID-19.
Why is this the case?
Coronavirus, scarcity, and corruption
The global pandemic has severely impacted many aspects of our economies by creating widespread scarcity. At the onset of the pandemic, even toilet paper was scarce. In most emerging economies where access to economic opportunity was already scarce before the pandemic, COVID-19 only made things worse. As investors pulled out more than 100 billion dollars from these markets, and hundreds of millions of people lost jobs, government budgets were stretched thin as their tax receipts dwindled. As the virus spread, so did scarcity.
In my TED Talk, Reducing corruption takes a specific type of investment, I note that most people who engage in corruption know they shouldn’t. Public officials demanding kickbacks for test kits and those inflating contracts know they are breaking the law. But they do it anyway. They do this because of scarcity. Whenever people benefit from gaining access to something that is scarce, corruption becomes attractive—even rational. In many of these economies, economic opportunity is scarce, so corruption becomes an attractive way to gain wealth, especially in the midst of a pandemic when other means of obtaining wealth may be limited.
Corruption is less enticing (and therefore less overt) in wealthy countries, where there are more opportunities to get ahead. But the phenomenon still plays out, since people generally want more than they have. In an economic crisis like the one we’re in now, opportunities to create wealth have reduced, making corruption more attractive.
A Brookings Institute report, Addressing the other COVID crisis: Corruption, explains how this is playing out in the US. According to the report, coronavirus spending in the Trump administration has reached an “inflection point” as 27 clients of Trump-connected lobbyists have received up to $10.5 billion of that spending. In addition, multiple entities connected to Jared Kushner, the president’s associates, major donors, and other political allies have benefited enormously, including more than $230 million awarded to 100 affiliated companies. Scarcity in the United States may look different, but the result is the same: corruption becoming more attractive.
We’ve not yet explored whether there are short-term solutions for the corruption we are seeing across the world as a result of the pandemic. But one insight from our research reveals that it’s possible to mitigate future corruption by combatting scarcity with innovations that make products simple and affordable. Given that our research also points to these innovations as the key to unlocking prosperity in emerging economies, innovators have an opportunity to fight the dual pandemic with a single punch.