Chapter 1
Introduction
Government's experience suggests that a change in institutional arrangements can make a difference for governmental stability and effectiveness but does not always do so. Governmental effectiveness can be measured according to several standards. One common standard is that of democratic rule. Government should be responsive to the will of the populace. Citizens should be able to hold their elected officials accountable for their actions. (Rockman & Weaver, 1993). A second common standard for assessment is that of particular policy outputs, whether one state spends more on public services than another or promotes faster economic growth (Rockman & Weaver, 1993).Several caveats should be noted about using government capabilities as a standard for government effectiveness. First, capabilities are inherently situational: they involve a relationship among government objectives, efforts, and perceived problems that are never completely comparable across individual countries (Young, 1999).
Capabilities cannot be observed and measured directly; judgments about a government's capabilities can only be imputed. A country may have a strong capability for innovating in social policy, for example, but a weak capability for innovating in agricultural or energy policy. At a minimum, these possibilities show that capabilities in any specific situation are likely to be strongly influenced by the nature of the groups supporting and opposing a government, by ideologies concerning the legitimacy of certain kinds of government action, and by a variety of other environmental factors (Young, 1999). Indeed, one should not assume without investigation that it is productive to speak of capabilities as general patterns of government action across a variety of policy areas. Second, government capabilities are not exhaustive. The capabilities are fundamental to the effectiveness of governing, however. Third, effectiveness even at a broad range of tasks is not the sole purpose of government. The notion of effectiveness employed is focused more on policy management than on the legitimacy of government institutions and leaders (Young, 1999).
Fourth, although people believe that effectiveness at these tasks should be an important consideration in judging governmental institutions, effectiveness was not the exclusive or perhaps even central objective for the framers of a country’s Constitution. Effectiveness may not necessarily be a high priority for current policymakers, either. The caveats about the notion of governmental capabilities should not, however, mute the issue of institutional design and choice; if some types of institutional arrangements do lead to systematically lower capabilities than others when dealing with similar problems then institutional reforms clearly need to be considered (Young, 1999). Changes in institutional arrangements have varying effects to a country and its government. Institutional arrangements change because of the need for governments to show that they are effective. Institutional arrangements can be changed as a response to corruption issues. This paper is a study on change in institutional arrangements for corruption control in Macau.
Problem statement
The importance of the problem section in the study cannot be overestimated. It provides the rationale or motivation for conducting the project. It explains why the project is necessary. If the researcher cannot provide a convincing statement of need, then there is no justification for proceeding. The statement of the problem is so important in researches that it should be stressed regardless of the point value assigned to it in the reviewer’s evaluation form. That is, even when the reviewer’s evaluation form allocates only a small percentage of the total allowable points to the problem section (Miner, LE & Miner, JT, 2003). There are different factors that contribute for countries such as Macau to be successful. One factor is the strategies the country use; another factor is its economic standing, a factor can be the quality of the products it sells in the international market, moreover a factor that contributes for a country to be successful can be the relation of the company with the other countries in the world, lastly a factor that contributes for a country’s success is its reputation in terms of corruption in the government. Macau and other countries need to have effective counter corruption strategies to make sure that they maintain a good image in their environment. There is an immediate need for governments to control any outset of corruption that is why this paper focuses on looking at how Macau changes its institutional arrangements to control corruption in the state. This paper will compare how Macau and other countries’ act towards the initial instances of corruption in their respective states. This paper will take a look into how changes in institutional arrangements help in the fight against corruption.
Research Questions
The paper intends to study the change in institutional arrangements for corruption control in Macau. Specifically it will answer the following questions.
Aims and objectives
The aims and objectives of the study include
Importance of the Study
The study is important to Macao and other nations since they can compare corruption and how they respond to corruption in their countries. This study can provide to the government of Macao and other nations, the ability to gauge how satisfied and motivated the public is with the government’s response towards corruption. The study can help the government of the two nations know whether their public is still motivated with the current corruption strategies they use and it will provide the government information about the level of satisfaction the citizens have. With the establishment of the goals given, this study may also be of importance to the goals that have been set. By fulfilling the aims that were stated in the objectives section, this study will be helpful for other researchers who may be focusing on the current strategies on corruption, and other researchers who believe that change in institutional arrangements is ultimately helpful to removing the culture of corruption. The data that will be gathered will be helpful for researchers in establishing related studies that will help remove the culture of corruption. The data that the study will gather can be given more focus as other studies on corruption will be done.
The notable significance of this study is the possibility that other researchers may be able to use the findings in this study for future studies that will create a huge impact in society. This study’s findings can be used for other findings that might prove to be helpful in introducing the change the world needs. The research and analysis methods that this study will use need to be credible because it will help researchers in knowing how to look for particular information and then know how to analyze them. It is through this that researchers will then be able to find out how they will be able to focus on their investigation on a particular instance and also know the possible methods that they may choose in the possible time that they may choose to conduct another study. Thus, another significance of this study is to serve as a guide for researches that focus on the analysis of a country’s venture into strategies that will help it maintain its dignity, image and global competitiveness.
Accuracy of findings
The accuracy of the findings will be validated through the combination of various techniques and accessories that will assist in determining whether the recorded and non recorded information is valid and whether such information can assist the study, the recorded information will be compared with the different literatures used in the study. This is to check whether the sources of data agree on how changes in institutional arrangements affect corruption control in Macau.
The researcher’s role
The researcher is the one that will gather the data that will be analyzed and analyzed for the study. The researcher is the one that will make sure that the data gathered will be appropriate for the study and can help the study achieve its goals. The researcher will make sure that respondents will be informed on why the data is important.
Structure of dissertation
There are different chapters for this project. Each chapter has a different focus for a specific course of action that will benefit the study. Each chapter will bring the study closer to gathering information about the goal of the study. The different chapters will contribute to the success of the study and it can be used as a starting point for further studies. The first chapter was the introduction part wherein general ideas and goals of the study were discussed. The second chapter will be the literature review part. The second chapter used various resources to gather necessary data. The data collected in the second chapter will explain through various literatures how changes in institutional arrangements affect corruption control in Macau.
The literatures presented will come from books and other sources that are deemed to be helpful in the advancement of awareness concerning the subject. The third chapter will feature the Methodology, Type of research, Research Strategy, Data Collection and Analysis, Primary Data, Secondary Data, Sampling, and data analysis. The third chapter will focus on discussing the instruments and methods used for the study to be a success. The fourth chapter will focus on the presentation of demographic data, the ideas of the respondents, and analysis of data. The fourth chapter will demonstrate how the results from the surveys link to the literature review results. The last chapter will focus on discussing the Summary of the data acquired, the conclusions on the study and Recommendations.
Chapter 2 Literature Review
Economic growth
Economic infrastructure, such as telecommunications, power, transportation, and municipal services, are necessary for economic growth, but too often governments are unable to supply the needed levels of infrastructure. Governments must open the provision of economic infrastructure to the private sector. Mobilizing finance for infrastructure, in turn, requires the development of capital markets. Privatization has a macroeconomic impact on the development of capital markets. As described in the preceding section, privatization of State owned Enterprise (SOEs) and economic infrastructure reduces deficits and inflationary pressure, which builds a stronger foundation for capital markets (McLindon, 1996). Privatization can be a means of deepening domestic capital markets. Public share sales and mass privatization help create broad and diversified share ownership, new companies listed on the stock exchange, and new investment funds. These forms of privatization stimulate the creation and scope of operation of capital market agents, including critical back office operations. The usual candidate companies for privatization are just the ones needed to add liquidity and stability to the stock market (McLindon, 1996).
Many of the SOEs were created to give government control of the commanding heights of the economy. Although such SOEs invariably require restructuring after privatization, selling SOEs in the telecommunications, power, banking, petroleum, cement, and other sectors will increase market capitalization and liquidity, and add stability to the stock market. Privatizations by share sale can help to transfer the financial technology of initial public offerings (IPOs) to the fledgling local securities industry, and have a demonstration effect by encouraging private sector companies to undertake their own IPOs and secondary offers to raise equity financing. These are new vehicles to channel savings into productive investment, which is a key to economic growth. In general, the role of capital markets is to facilitate the transfer of funds from savers to long-term investors who invest in the physical capital needed to increase productive capacity and generate economic growth (McLindon, 1996).
Capital markets deal in instruments of a year or more, and include long-term debt obligations, such as corporate and government bonds, and equity instruments, such as common stock in companies. Compared to money markets, capital market instruments involve longer maturities and relatively high degrees of risk; therefore, they must provide higher rates of return for investors. Capital markets invigorate the financial system (McLindon, 1996). The faster rate of growth in emerging countries starts from a less-developed economic base, which means that they manifest a high level of demand for both consumer and industrial products and services. Their economies therefore offer the most significant opportunities for companies from the developed countries to expand their markets (Child & Faulkner, 1998).While acquisitions are generally the favored mode of expansion into developed-country markets, cooperative forms such as joint ventures tend to be the most prevalent in emerging economies. This is partly a result of host government preferences for local firms to share in the ownership of foreign funded ventures in the expectation that such participation will increase their opportunities to acquire new technology, management skills, and other expertise. It also reflects a frequently found preference among foreign investing companies, to co-opt the assistance of a local partner in navigating through an unfamiliar environment. The cultural and institutional features of the emerging economy are normally quite different from those of the foreign partner's home country and this creates additional complexity for that partner (Child & Faulkner, 1998).
The nature of partner objectives and the achievement of complementarity between them differ from those applying to most alliances between partners from developed countries. Thirdly, the differences between emerging and developed countries in culture and environment, together with the fact that in some cases the emerging economy has a colonial legacy with the sensitivities attaching to this, can give rise to special difficulties in the process of managing alliances (Child & Faulkner, 1998).Any growth in the economy means that there is an increase in the average standard of living. Different factors contribute to economic growth; each factor may make the economic growth faster or slower depending on the circumstance. Countries all over the world like Macau try all possibilities to make their economy grow but due to corruption in the private and public sector their goal of economic growth is not easily achieved. Corruption serves as one of the most difficult barriers to the economic growth and development of Macau.
Competitive economy
Even in advanced countries technological developments, where they tend to increase the degree of complementarity between different investment decisions, may have a profound effect on market structure. There exist between the firms in a modern competitive economy complex interrelationships of ownership and control, which are abstracted from in much of our more formal analysis; their justification derives, in part, from the need to co-ordinate complementarity activities. And the optimum size of the firm may be determined, not so much by the scale economies associated with any particular operation, but by the number of operations which require planned co-ordination (Richardson, 1997). Nevertheless, as we have seen, all the forces do not work in the direction of integration. The inevitable imperfection of the entrepreneur's knowledge, both about technical conditions and about the prospects of other firms, checks his willingness both to make long-term binding commitments and to throw in his lot with that of others. The counterpart of entrepreneurial reluctance to make binding commitments will be a policy of deliberately limiting the degree of integration provided for in the plan (Richardson, 1997).
Close complementarity between several investments is equivalent to a conductor of error; some degree of independence acts as insulation. The greater the extent to which the profitability or propriety of any one investment depends on others being implemented exactly according to plan, the wider will be the area over which the consequences of any particular failure will be felt. The absence of a sufficiently wide consensus about the profitability of simultaneous investment in related directions is also a check to concerted activity in both kinds of economy; in a planned system the combined investment can still proceed, provided the controlling authority issues the appropriate fiat. Whether this is a desirable outcome, however, depends of course on whether its assessment of the situation is correct (Richardson, 1997). Opinions about the best allocation of resources are weighted in a competitive economy by the wealth and the credit which those holding them can command; in a planned system, by the position of those holding them in the hierarchical structure. In a competitive economy, the command over resources exercised by any particular entrepreneur, and therefore the weight to be given to his estimates depends on the extent of his capital and of his credit (Richardson, 1997).
In the competitive economy, the ultimate tribunal is composed of particular owners of wealth who feel able to form an opinion on the matter (Richardson, 1997). To have a competitive economy means that the country can match with the kind of economy other emerging economies are having. It shows how well the country has performed and maintained its status. It shows how effective a country’s economic policies and procedures are. Macau is attempting to be a competitive economy that can conquer any attempts to destabilize its economy and prevent it from gaining economic growth. The country can attain economic competitiveness through improving its products for exports and improving the services of its stock markets.
Corruption and society
Corruption has been an issue all over the world. It has different implications for different sectors of the world. Political corruption is no more a self-regarding act than insider trading, but rather a crime with victims who may never know they are victims. Their victimization ranges from paying speed money for a minor service or bearing the costs of politicians’ refusal to adopt reforms which would reduce the scope for bribery to tolerating the negative impact of corruption on inward investment, customs duties and international aid (Jain, 2001). Public awareness of, and tolerance for, corruption has seen a sea change over the past decade as information and expectations have caused people to expect more from their leaders. While much of the focus of the current struggle to reduce corruption is on making bribes more difficult to pay and accept, corruption involves much more than bribes. Corruption, defined more comprehensively, involves inappropriate use of political power and reflects a failure of the political institutions within a society. Corruption seems to result from an imbalance between the processes of acquisition of positions of political power in a society, the rights associated with those positions of power, and the rights of citizens to control the use of that power (Jain, 2001).
Power leads to temptation for misuse of that power. When such misuse is not disciplined by the institutions that represent the rights of the citizens, corruption can follow. Existence of corruption reflects a failure of the markets economic as well as political. A successful fight against corruption, which is really one part of the challenge for effective governance of societies, would seem to require a thorough understanding of the link between the political institutions and corruption (Jain, 2001).When a segment of the society feels its interests have not been served by the political system, it will try to circumvent the accepted political processes and explore weak points within the system that will serve its interests. One of the weak points may be the existence of corrupt decision-makers. Corruption will depend upon the combination of the rents that an interest group can see itself earning through policy changes, costs it has to incur to change policies, and the enforcement-related costs, that is, the cost of penalties associated with being discovered (Abaroa, Klitgaard & Parris, 2000).
Political systems may even allow some interest groups to exert influences that will transfer the costs of policy changes to groups with less political influence. Policy changes will show up either as regulations or as government expenditure policies. Political markets that do not function well have at least two consequences related to corruption. First, unsatisfied groups, and groups with limited access to decision-makers, have an incentive to resort to corruption or other means to achieve their goals (Abaroa, Klitgaard & Parris, 2000). Second, groups that are able to exert disproportionate influence can expect to receive some benefits from their access to policy-makers. Corruption, as mentioned earlier, can be a rational response for some sectors of a society that do not believe their best interests are being served by the political system (Abaroa, Klitgaard & Parris, 2000).
Controlling corruption
Time and again corruption has been identified above all at the borderline between the private and the public sector. Many publications convey the impression that corruption is mainly a problem of the morals of civil servants and the elimination of tempting opportunities, and this approach regularly gives room to manifold thoughts regarding the refinement of the control mechanisms for the civil servants. For safeguarding the validity of the universalistic norms the control shifts from more or less informal social control to intentionally established formal institutions. Then the corruption decreases because the costs increase, while the benefit remains the same (Lambsdorff, Schramm, & Taube 2004 At this point it becomes important to investigate how far universalistic norms can become parts of the particularistic norms, or to what extent the formal law can gain validity for the system of norms of the individuals and to what extent rules prescribing social neutrality will be accepted by the society concerned. If the socially accepted space of validity of particularistic norms changes in relation to the universalistic norms the individual risk assessment also changes (Lambsdorff, Schramm, & Taube 2004).
If the norm becomes wider the public assessment changes and the actual chance of detecting an act of corruption decreases because people don't care so much as well as the assessment of the threat and the seriousness of the sanctions. Corruption was seen as a transitory phenomenon, which was likely to decline as economic and social progress was achieved (Lambsdorff, Schramm, & Taube 2004). Corruption is a form of rule evasion, and one that is frequently engendered by the potential to evade other rules. As a form of evasion, corruption shares many of the features associated with rule circumvention including: the potential for corruption to be socially beneficial; the trade-offs associated with zero tolerance policies; the difficulty of drawing bright lines between corrupt and non-corrupt behavior; and treadmills of reform in response to corruption and their tendency to result in a complex system of rules (Leitzel, 2003). Not all corruption is aimed at the evasion of other rules; there is also corruption in the sense of misused discretion. From a legal standpoint, patronage or nepotism may not be corrupt, even if in some cultures they are ethically suspect. If the president has the right to nominate whomever he pleases for attorney general, he could nominate his brother, despite there being candidates more highly qualified on some objective grounds. In situations with a good deal of discretion, violations of the arm's length principle might be impossible to verify even for those who are engaged in the violation (Leitzel, 2003).
No nation and no government on earth are immune from the scourge of corruption. Bribery and fraud have affected every government ever established to a greater or lesser degree. This is hardly surprising since the evil of corruption is a fundamental reflection of mankind's darker side. So long as people are ruled by human beings and so long as those who are empowered to rule are subject to the very human temptations of greed and self-interest, corruption will be present. This is why it is fruitless and even counterproductive to speak of eliminating corruption (Carter et al., 2000). Such a goal is no more realistic than the elimination of all disease, and it is no more attainable than immortality. This is not to say that people should not try to prevent corruption or to expose it and to punish those responsible when their guilt can be established lawfully. People can aspire to control corruption; to reduce the incidence of bribery and fraud to a greater and greater degree so that democratic government can achieve its true purpose of serving its citizens well and so that the society so served can prosper to the greatest degree possible. This should be the goal of every government, of every society, throughout the world (Carter et al., 2000).
The level of international interest in fighting corruption has grown dramatically over the last several years. As more and more nations have embraced the model and goals of democratic self-government, the petty dictators who once held sway over the nations in the developing world are becoming an endangered species. However, many of the new leaders in emerging democracies are confronted by almost overwhelming challenges: Their nations are deeply in debt, too many of their public servants are either corrupt or incompetent and their own continued political survival is very often dependent upon the maintenance of a very fragile political balance (Carter et al., 2000). There is no absolute means to control corruption, that doesn’t mean that the people should find ways to reduce and minimize corruption in their states. The society needs to be vigilant and critical of governments, private institutions and individuals that commit corruption.
Macau Special Administrative Region
As the coastal provinces of China are caught up in one of the major social and economic transformations experienced in the late twentieth century, Macau stands at a double juncture in its 450 years old history as a Portuguese outpost. This is a reference to the political transition of the territory in 1999, from Portuguese to Chinese administration, and, to its economic insertion into a greater Chinese economic ensemble linked to China's Guangdong province, to Hong Kong and the world. With a population of less than half a million Macau enjoys an enviable per capita GDP. Yet this population has never been entirely homogeneous, a reference to the emergence of discrete Portuguese, Macanese and Chinese segments of society (Gunn, 1996). While the relative political and economic power of these communities has changed though the ages, it is notable that, according to a survey, the number of Macau residents born in China eclipses the Macau-born and, correspondingly, the number claiming Chinese nationality exceeds those with Portuguese nationality (Gunn, 1996).
It stands to reason that such political demographics have always had far-reaching consequences for political participation and governance in Macau, just as the changing demographic and nationality base of the territory will have major consequences for its future political and social evolution. In 1993 China published the Macau Basic Law, an erstwhile constitution for Macau as a Special Administrative Region (SAR) of China after 1999. While this document reflects the particularities of Portuguese culture and heritage in Macau, as with its Hong Kong counterpart, it also throws up complex legal questions as to rights and freedoms of Macau citizens (Gunn, 1996). At the stroke of midnight on 19 December 1999, Portugal's red and green flag was lowered inside a huge pavilion near Macau's outer harbor and China's red banner was hoisted to the tune of the national anthem of the People's Republic. The last Portuguese governor, Vasco Rocha Vieira, handed over his duties to Edmund Ho, a 44-year-old local banker whom a Beijing-appointed body had selected to become the first chief executive of the Macau Special Administrative Region (Lintner, 2002). Clouds and strong winds had forced the organizers of the historic ceremony to cancel the planned fireworks, but thousands of guests burst into boisterous cheers as the territory changed hands. This ended four-and-a-half centuries of Portuguese rule in Macau (Lintner, 2002).
The event went much more smoothly than the handover of Hong Kong did two-and-a-half years earlier. Macau was just too small to be able to oppose any decisions taken in Beijing. Consisting of only a narrow peninsula and two small islands, the 23 square kilometer territory is 50 times smaller than the former British colony, and has a population of no more than 430 000 people compared with Hong Kong's 6.5 million (Lintner, 2002). Macau is one of administrative regions of China. It is one of the richest cities of the world because of its wide range of hotels, resorts, stadiums, restaurants and casinos. Macau is plagued by various problems which hinder its growth and development, one problem is corruption.
Corruption in China and Macau
China is one of the oldest bureaucratic countries in the world. Chinese society for thousands of years was dominated by elite of scholarly officials and local notables. The traditional Chinese bureaucracy retained certain features common to other bureaucracies: absolute authority, hierarchical structures, and rigid operations. Its millenarian endurance only added refinements to these features generally in favor of increased centralization, more minute regulations, strict surveillance, and tight control. However, the Chinese bureaucracy in its millenarian history developed and demonstrated certain political patterns different from or even contrary to those of Western bureaucracies. Power integration was one important feature of the Chinese bureaucracy. Unlike their Western counterparts, Chinese bureaucrats were not subject to checks and balances from other government branches. Rather, the organization of the traditional Chinese government was quite simple and easy to schematize: at the top ruled the emperor surrounded by bureaucrats who were entitled administrative, legislative, and judicial powers. Power thus was highly integrated in the hands of bureaucrats (Gong, 1994).
They performed multiple functions, acting as parent officials over their children citizens. The emergence of the new patterns of corruption and the problems with anti-corruption are to some extent related to the reform context. However, it would be a mistake to blame the reform for corruption. Corruption in China is by no means confined to the reform period. The development of corruption in China in recent years should not be attributed to too much reform; rather it is a result of the incompleteness of the reform. The problem is not so much with the decentralization of power, but lies with the fact that while the central control over society is weakened, alternative checks on excessive subsystem autonomy have not been established; while economic reforms give cadres more power for policy innovation and implementation, the lack of political reform allows little chance to develop effective legal and institutional checks on them. Decentralization without democratization can only leave economic reform vulnerable to power abuse; therefore China needs a balanced reform agenda and bold economic innovations toward a market economy plus comprehensive political reform to install effective control over power holders (Gong, 1994). Corruption in China has its roots in the political process, including the way in which economic changes have been implemented. The political structure vests power in a small oligarchy of effectively unaccountable politicians, military leaders and officials. Secrecy is maintained through media control, fear and punishment (Harris, 2003).
Centralization of power presents insurmountable obstacles in a country so vast, complex and variable that even undertaking an accurate population census has recently proved impossible. Conversely, decentralization of administration to the provinces has led to more corruption, while organizational decentralization by the provinces extends corruption downwards, with lower-level cadres obliged to form corruption networks with their superiors. The alliances of convenience are held together by a combination of self-interest and the knowledge that anyone in the network can both bring down and be brought down by anyone else. High corruption means the risks involved in reporting it far outweigh any possible benefits (Harris, 2003). In a situation where anyone and everyone might be corrupt and in the absence of independent investigative or reporting machinery, whistle-blowing is dangerous if not impossible, as well as entirely pointless. Covering for those under investigation becomes a necessary self-protective device. Punishments for convicted officials, though severe, are erratic. Corruption is a rational act. In a culture in which corruption by institutions is perceived as a victimless crime with many beneficiaries, and corruption by individuals as a semi-legitimate perquisite, it is hard to see how it could be effectively detected or extinguished other than at the behest of political leaders (Harris, 2003).
In contrast to Hong Kong, there is considerable public maladministration in Macau. Corruption is rampant; both in the private and public sectors, and the anti-corruption organs are quite weak. Moreover, there is strong opposition to anti-corruption efforts from the business community and those elites with vested interests (Mackerras, Mcmillen & Watson, 2001). Corruption in China and its special administrative Region is no different from each other. Both have been visible in many aspects of its society. Corruption in China and Macao has historical roots and removing it will require a lot of perseverance, planning and change management.
Chapter 3
Methods and Procedures
This chapter will focus on studying how changes in institutional arrangements affect corruption control in Macau. This chapter will give a discussion of the different methods and procedures used and done in the study; this chapter will discuss the research method; this chapter will also give a description of the research method, the different techniques used in the research method will be discussed to give explanation of its purpose and application to the study.
Research methods
This study employed the qualitative research method, since this research intends to find theories that would explain the relationship of one variable with another variable through qualitative elements in research. Qualitative research designs in the social sciences stem from traditions in anthropology and sociology, where the philosophy emphasizes the phenomenological basis of a study, the elaborate description of the meaning of phenomena for the people or culture under examination. Often in a qualitative design only one subject, one case, or one unit is the focus of investigation over an extended period of time. Qualitative research is multi method in focus, involving an interpretive, naturalistic approach to its subject matter. This means that qualitative researchers study things in their natural settings, attempting to make sense of, or interpret, phenomena in terms of the meanings people bring to them. Qualitative research involves the studied use and collection of a variety of empirical material such as case study, personal experience, introspective, life story, interview, observational, historical, interactions, and visual texts on the described routine and problematic moments and meanings in individuals' lives. Observation is the most frequent data-collection method used in qualitative research. Observation has greater face validity than a second-hand account gathered either through interviewing or document study (Benz & Newman, 1998).
Observation is the technique of gathering data through direct contact with usually another human being. The researcher watches the behavior and documents the properties of the object. It is a very important method of data collection used by both qualitative and quantitative researchers. Quantitative scholars usually have an a priori highly structured plan that directs them to remain aloof and observe certain behaviors. In contrast, qualitative researchers usually observe from a phenomenological perspective; they immerse themselves in natural environments and watch a situation as a diffuse, ambiguous entity and allow themselves to be struck with certain peculiarities or interesting happenings. In many examples of qualitative research, the researcher goes into the field to observe and interview people. This raises an important concern about how the researcher is to present him or herself in the community being studied. One option is that researchers could be anonymous so no one in the situation being studied would know the researcher is there to gather data. The interpretive nature of qualitative research does indeed present a real problem to scholars who attempt to explain the process. This is why most theoreticians do not explicate the process of analysis as a set of steps. Rather, they talk about the analysis process as an organic whole that begins in the data-gathering stage and does not end until the writing is completed. The process allows for multiple iterative passes back and forth from data gathering to writing and back to data gathering (Potter, 1996).
Reliability refers to consistency in measurement. In common terms the reliability of a test is the extent to which subsequent administrations would give similar results. A test which is not reliable will give different results every time it is taken. Accepted practice uses such measures as test-retest reliability coefficients to indicate reliability. In qualitative research, reliability suggests that different qualitative researchers would come to the same conclusions given exposure to the same situations. The extent to which data relate to objective criteria will improve reliability. When the data are based on personal impressions they tend not to be reliable. However, when they relate to counts or physical measurements or the number of correct math problems, they are generally reliable (Anderson, 1998). There are two basic approaches to defining qualitative research problems, open and focused. It entails collecting a broad spectrum of data and is typically used to discover the nature of the phenomenon, often leading to hypotheses as well as conclusions. Qualitative and quantitative researchers alike define problems, select research designs, develop methodologies, collect, analyze and interpret data, and report findings. There is, however, one significant difference between the two. In qualitative research, the researcher is the principal data collection instrument; whereas in quantitative research, scientifically designed data collection tools are developed (Anderson, 1998). Qualitative research intends to find theories that would explain the relationship of one variable with another variable through qualitative elements or components in research. The qualitative research is described as multi-method in focus, involving an interpretative, naturalistic approach to its subject matter. This means that a qualitative researching procedure acts on studying things in their natural settings, attempting to make sense of situations, or interpret events in terms of the meanings people bring to them.
Research Design
The research process onion of Saunders et al (2003) will be used in the entirety of the study in order to formulate the most suitable research approaches and doable strategies for this study. The first layer raises the question of the research philosophy to adopt, the second considers the subject of research approach that flows from the research philosophy, the third examines the research strategy most applicable, the fourth layer refers to the time horizon a researcher applies to his research, and the fifth layer is the data collection methods to be used (Saunders et al., 2003). The research process onion assists the study in gathering detailed information on studying how changes in institutional arrangements affect corruption control in Macau. The research process onion will act as a guide and it will provide the step by step procedure that will make sure that the goals of the study will be met.
Ethical Issues that might be faced
Informed Consent
Worries about protecting clients' rights to privacy can similarly be understood as concerns about issues of autonomy. The right to privacy follows from the assumption that autonomous individuals have the right to make decisions about their own lives and the information relevant to it, including to whom that information is confided. Thus, for example, although students and supervisees may not have the right to confidentiality in a strict sense when they confide information to professors or supervisors, they do have a right to expect that the information will be treated with respect and kept private to the extent that it is possible (Kitchener, 2000). The use of informed consent in research, practice, and teaching is certainly no panacea for the ethical problems psychologists face. On the other hand, informing consumers or participants ahead of time about the aspects of the experience that may cause them discomfort or clarifying misconceptions could go a long way to helping psychologists avoid ethical mistakes (Kitchener, 2000).
Whether in practice or in research attending, to the competence of the participant to give consent, the clear disclosure of necessary information, the participant's understanding of the information, the voluntariness of the decision, and the right of the person to authorize consent helps fulfill the spirit of consent. It may be necessary to experiment with different methods of providing consent depending on the group involved (Kitchener, 2000). From an ethical perspective, maintaining confidentiality is grounded in the principles of autonomy and fidelity. Respect for autonomy, or the right to self-governance, implies that individuals have the right to make decisions about those with whom they wish to share private information and those from whom they wish to withhold it (Kitchener, 2000). Without control over who has access to information about themselves, individuals could not protect private information or guard against dangerous disclosures (Kitchener, 2000).
Second, respecting the privacy of intimate human interactions and the personal secrets others share is at the core of human relationships, thus, the principle of fidelity adds further justification for keeping confidences. Third, when consumers or research participants share private information about themselves after a psychologist has extended a professional promise of confidentiality, a fiduciary relationship has been formed (Kitchener, 2000).Any person asked to participate in a certain research should be given enough information on why the research is important and how the information acquired for the research will be used. It will give the respondents the assurance that the information will be used in accordance with proper respect and within boundaries and limitations set by the society. It will also assure them that the information that they divulge will not be used against them. The research about how changes in institutional arrangements affect corruption control in Macau will ensure that proper information about the need, objectives and future implications for the research will be given to the respondents.
Issues on Confidentiality
This extends to the way in which researchers treat people involved in their study. It is tempting to slip into a mode of seeing informants as sources of data rather than as interesting human beings. Violating their person through disrespect in this way may scar them for a long time, and cause them to see future research in a cynical or negative light. In some instances, researchers may be collecting data from people who cannot take complete responsibility for their own decisions, such as children or consumers with learning difficulties. They need special protection (Daymon & Holloway, 2002) .Privacy and protection from harm is closely related ethical principles because, if a researcher betrays participants' rights of privacy, then they are failing to protect them from harm. Rights of privacy are neglected if they publish research findings which present confidential information, or if they expose confidences which can be traced back to participants (Daymon & Holloway, 2002). Confidentiality refers not only to how someone eventually use the data, such as in the writing of a research report, but also to how someone conduct oneself in interviews. .Many informants share confidential information that could jeopardize their careers or even the future of their organization (Daymon & Holloway, 2002).
It is vital that researchers honor their trust and do not release this information to other members of the organization (Daymon & Holloway, 2002). Confidentiality is an important aspect of qualitative research because it can help in making sure that participants will have the trust and confidence to indulge in research undertakings in the future. If confidentiality is violated, participants may not want to share information that can be valuable to future research. The research will not disclose personal information of the respondents; there will be a cover letter to explain the research and this will be included in the questionnaire. This will result in lesser ethical problems. It is necessary for the researchers to explain to the respondents that the information collected will be used solely for assessment. The researchers will inform the participants that the study will allow them access to the designed results.
Chapter 4 Data Presentation and Analysis
After data collection the next thing to be done is data presentation, interpretation and analysis. It is important that the research output be presented in an organized, coherent and understandable manner so that those who will read the research can propose important decisions about the results of the study. This chapter intends to discuss the information acquired from the survey and research done for the study. The information is acquired through historical survey, case study and content analysis. The information from these sources will be analyzed in this part. The main objective of the study is directed towards studying how changes in institutional arrangements affect corruption control in Macau. This part will present data that compares Macau’s instance of corruption with regions like Mainland China, Hong Kong and Taiwan. After this part summary then analysis of the results will be done as well as a concluding part of the study and recommendations for the country. This part takes a look at the results and what it implies within the study.
Hong Kong
Hong Kong remains wrapped in an enigma. Its intermediaries of capital, who include traders, financiers, and corporate managers, have made Hong Kong the pivot of decision-making about the exchange of capital within Asia and between that region and the rest of the world (Meyer, 2000). Yet, for 150 years, this tiny island and adjacent peninsula could not even lay claim to status as a city-state. When Britain declared sovereignty over Hong Kong in 1841, after taking it from China under the terms of the Treaty of Nanking that settled the Opium War, the government and merchants had to build a town. The British viewed Hong Kong as their emporium of trade in the Far East, but they did not aspire to transform it into a commercial-military power. The impetus for Hong Kong's return to China rested in the ticking clock of an obscure treaty from 1898 when Britain acquired the New Territories; the lease terminated on July 1, 1997 (Meyer, 2000).Hong Kong has survived the challenge of the 1997 Handover from British to Mainland Chinese control and the economic reversal caused by the unrelated events of the Asian financial downturn and the September 11 disaster (Hall & Tucker, 2004).
Although the latter has had more impact on the lives of everyday people, the Handover was a cause for a certain amount of nervousness about the future with concerns raised about change to civil, administrative and economic freedoms. The passing of colonialism has allowed some examination of Hong Kong cultural identity in government programs and through other venues, but much of the focus has been on maintaining its economic advantage in the region as the economy has slowed in growth (Hall & Tucker, 2004). Moreover, the tourism market appeal of Hong Kong as a brand changed after the Handover, causing some disappointment among economic forecasters and tourism authorities. A number of aggressive new marketing strategies have been adopted, which present an artificial summary of its cultural identity, race relations and attitudes to colonialism (Hall & Tucker, 2004). Hong Kong is one of the two special administrative regions belonging to China. Hong Kong over the years has developed into a leading financial theater through the economic changes it made in the region. The defense of Hong Kong’s territory and foreign affairs lies on the Central people’s government. Hong Kong is on the continuous path for improvement.
Hong Kong has created changes on some of its landmarks and physical features this contributed to the state becoming a tourist destination. Being a tourist destination means more clients for businesses in the state. It also means a better economy for the state. The tourism of Hong Kong is one of the factors for the economic growth of the state. Visitors to Hong Kong have continuously increased over the years. The rise in tourist is attributed to the introduction of the individual visit scheme wherein residents from Mainland China can go to Hong Kong not only for business purposes but for tours and recreation as well. The Hong Kong tourism board is the agency responsible for promoting and advertising Hong Kong as a tourist destination.
Hong Kong Economy
On the question of the economic situation there is greater cause for concern, and there is the distinct possibility that here the pessimists are gaining the upper hand, at least in the short term. There can be no question that Hong Kong's economy has carried hidden structural weaknesses for some time, and that these are now being exposed. Hong Kong has lost virtually its entire manufacturing base to China, and there is little doubt that this pattern will continue into the future given the mainland's comparative advantage in land and labor factor costs (Ash et al., 2000). Externally, the position of the pessimists also seems to be gaining ground. The large re-export component of the Hong Kong economy is highly vulnerable to external developments. The improvements in the standard of professionalism of Chinese producers make it less necessary to ship goods initially to Hong Kong, for quality inspection, packaging and overseas transportation, on the way to their final destination. It is reasonable to assume that the lucrative margin earned on consumer goods by Hong Kong middleman will certainly decrease over time (Ash et al., 2000).
The likely eventual agreement for direct air and sea links between the mainland and Taiwan thus bypassing Hong Kong will also have a significant negative impact on economic activity in Hong Kong. The effects of continued growth and success of Shanghai, and other mainland coastal areas, should also not be underestimated. By the time of the handover, the Hong Kong economy was very strong. Growth remained around 6 per cent per annum, and unemployment was low. The only significant problem was the property market, which had clearly been bubbling up for the previous few months. All of this suggested that the economy ought to be fairly well protected against speculation (Ash et al., 2000). Hong Kong stood out as the only open economy in the region that had not suffered devaluation. Suddenly, its own US$80 billion reserves did not look so impregnable and even though the obstacles for speculators were large, the very challenge encouraged some of them because the HK dollar would have to settle at a much lower level against the US dollar if the peg to the US dollar were broken. The profits for speculators would then be correspondingly greater and it might easily lead to a further round of devaluations in the region, with renewed opportunities for speculative profits. Given all the recent turbulence in the world and especially the region's financial markets in recent years, it is impossible to guarantee that the peg will survive forever at its current rate (Ash et al., 2000).
With regard to the Hong Kong economy, there is a clear commitment from Beijing in the Basic Law to maintain after 1997 the capitalist economic and trade systems practiced in Hong Kong, and to retain Hong Kong's free port status and free trade policy, which includes the free movement of goods and capital. Further, the Hong Kong Special Administrative Region (HKSAR) government will be committed to safeguard the free operation of financial business and the free flow of capital within, into and out of Hong Kong. Hong Kong will be allowed to raise its own taxes and control revenue. The Hong Kong dollar will continue to circulate and remain freely convertible to the US dollar and other hard currencies. Within this framework, decisions on economic, trade, monetary and fiscal policies are to be taken by the HKSAR without any necessity for these policies to be adjusted in line with those in operation in the rest of mainland China (Ash et al., 2000).Since the return of Hong Kong to mainland China, the issue of Taiwan has received increased attention on both sides of the Taiwan Strait. With Hong Kong being an SAR of mainland China, Hong Kong-Taiwan relations naturally constitute a special component of cross-Strait relations. Hong Kong's Chief Executive Tung Chee-hwa has expressed a strong desire to improve cross-Strait relations and is willing to facilitate mainland China Taiwan exchanges through Hong Kong (Ash et al., 2000).
It is expected that the interaction of the mainland, Taiwan, and Hong Kong will create better understanding, promote mutual benefits, and reduce misconceptions, thus reducing the scope for conflict. Hong Kong's return to mainland China in July 1997 can be seen as an opportunity for both Taiwan and China to develop their ways of interacting, with Hong Kong as intermediary. Pending establishment of the three direct links across the Strait, or the final unification of Taiwan and mainland China, it may be expected that Hong Kong's role will continue well into the future (Ash et al., 2000). Hong Kong’s economy is one of most improved in the world. It survived different threats and problems to its economy. It was able to withstand the different changes and challenges that its government has undergone.
Corruption in Hong Kong
In Hong Kong, though the vibrant democracy movement of the 1980s has intensified public awareness and support for democracy, the massive public backing for speeding up democracy after the Tiananmen Square incident proved to be short-lived. For most of the time, Hong Kong people have conferred a medium to high level of legitimacy to the non-democratic political system of Hong Kong, because of its continuous capacity to deliver economic prosperity, political stability, and civil liberties. While civil liberties, stability, prosperity, and rule of law have been enormously cherished by Hong Kong people, their prolonged presence under its former non-democratic system have fostered a popular belief that democratic institutions are only enhancing, rather than necessary, for their continued enjoyment of those values (Sing, 2004). Owing to the limited extent of the experience of democracy of the people of Hong Kong commitment to democratic institutions has been far from overwhelming and intensive. Such lukewarm support for democratic reform is in sharp contrast to those in former communist states in the early 1990s (Sing, 2004).
The rapid democratic transition of many former authoritarian and communist states in Europe and Latin America have been prompted by prolonged economic ineffectiveness, state-sanctioned brutality, large-scale corruption, and ideological bankruptcy. Those collective experiences have attracted relatively more solid public support for the democratic institutions than that of Hong Kong Chinese. In terms of corruption, Hong Kong performed better than Taiwan and South Korea immediately before the democratic transitions in the late 1980s and afterwards, based upon the cross-national corruption perceptions index. The consistently smaller degrees of perceived corruption in Hong Kong compared to Taiwan and South Korea before and after 1997 would have also lessened public support to change the quasi-bureaucratic authoritarian system in Hong Kong that since the 1960s has managed to deliver superior economic performance (Sing, 2004). The relatively free and uncorrupt nature of Hong Kong society, coupled with its freedoms and stability, sustained economic growth most of the time during the last few decades and conferred a moderate level of legitimacy on Hong Kong’s undemocratic political institutions. Authoritarian regimes that have enjoyed high economic growth rates but been devoid of check-and-balance instruments were often tainted by corruption and abuse of power. The ensuing fall in their legitimacy, together with values and structural changes arising from their socio-economic growth, finally sparked off their transitions towards democracy (Sing, 2004).
The rare prolonged enjoyment of the revered rule-of-law and corruption-free governments in both Hong Kong and Singapore, were largely due to the colonial heritage of Britain. The overwhelming difficulty of finding cases sharing conditions similar to Hong Kong and Singapore, largely explains the impossibility of finding any other high-income places which invalidate modernization theory on the same grounds. Hence, in countries like China that have been plagued by rampant corruption, inefficient bureaucrats, growing ethnic and regional tensions, a non-institutionalized legal system, and the prolonged deprivation of human rights, even sustained economic development may fail to confer the sorely needed long-term legitimacy for its political system, and keep the political pressure for democratization off indefinitely (Sing, 2004). Hong Kong is doing well in terms of reducing corruption. In lieu of this a survey was used to know how corruption affects people in Hong Kong. The first figure presents a survey done to see what the people think is the most important problem that the HKSAR Government should tackle in 2001. This was taken from The Public Opinion Program Express.
Dec. 94
Dec. 95
Dec. 96
Dec. 97
Dec. 98
Dec. 99
Dec. 00
Dec. 01
Housing
11.8
7.3
21
25.9
7.6
4.9
5.5
1.3
Welfare
9.6
5.4
6.9
7
5.5
4.5
5.3
1.9
Education
1.6
0.4
2
3.1
1.6
2.7
4.9
2.4
Medical/Health
0.7
0.2
0.7
1.3
1
2.5
0.9
0.6
Environment
1.2
N. A.
N. A.
0.2
0.6
2
2.2
0.4
Law and order
6.1
1.2
6.2
0.9
0.2
2.5
1.7
0.5
Corruption
0.7
0.2
1.3
0.2
0.2
0
0.1
0.2
Traffic
6.3
2.4
0.6
0.4
0
0.2
0.1
0.1
Community facilities
0.9
0.8
0.7
N. A.
0
1.1
0.1
0.7
Economics related
12.8
50.8
19.3
37.6
67.9
62.1
56
70.1
Inflation
3.3
1.5
1.4
0.4
0.4
0.3
0.3
0.0
Constitutional development
24
4.6
12.3
0.9
1.2
1.9
3.1
3.1
Others
6.5
16.7
7.3
11.4
11.6
3.7
9.6
8.9
Don’t know/hard to say
14.4
8.5
20.1
10.8
2.4
11.5
10.2
9.9
The survey shows that corruption was not a concern for Hong Kong residents. This is due to the proper use of strategies towards corruption. It also shows that the Independent Commission against Corruption (ICAC) who is the lead agency against corruption is doing its job well.
Taiwan
Taiwan’s most intractable problems are political and stem from differing views of the island's national identity. The roots of these matters lie deep in Taiwan’s past. For one thing, Taiwan’s political status has never been unassailable. China has been governed in several ways: by Chinese exercising dominion over the entire empire, by Chinese exercising power in regions that competed for control of the whole empire, and by foreigners who wrested control of China from Chinese but who were ultimately routed and replaced by Chinese rulers (Wachman, 1994). This has not been the case on Taiwan. Taiwan has not always been considered part of China, has often been governed by non-Chinese, and until the early 1990s had never been ruled exclusively by people who consider Taiwan their home. Taiwan was first inhabited by Chinese immigrants in the seventeenth century but was then under the control of the Dutch until 1662, when the island was taken by a colorful figure known as Koxinga, the son of a Chinese pirate and a Japanese woman. The island was ruled as a separate kingdom until 1683, when it was conquered by forces of the Ch'ing, the Manchu dynasty that had taken control of China in 1644. Taiwan was then formally under the control of the Manchus, who were themselves alien rulers of China (Wachman, 1994).
Although the Manchus adopted Chinese manners, values, and administrative systems, they were foreigners. Even if one accepts that Ch'ing emperors had inherited the right to rule China, official representatives of the court in Peking who were stationed on Taiwan apparently exercised very little influence outside the cities where they lived. The nationalism of the Taiwanese was their effort to cope with the competition they felt toward the Mainlander elite on Taiwan and their reaction to the same kind of reality, which until recently they have had no other means to influence. Namely, the place they consider home was controlled by Mainlanders in the Nationalist Party (Kuomintang, or KMT) party who was unsympathetic toward and did little to preserve the Taiwanese nation (Wachman, 1994). The government many Taiwanese hope to establish would be chosen by the majority of Taiwan’s residents and would, quite likely, declare itself to be an independent state. It would constitute a Taiwanese nation-state, a political association that has never been permitted to exist before. Matters of identity rest largely on sentiment and one cannot quantify such sentiments. They are dynamic, not static. Sentiments change. These sentiments are worth examining even though they cannot be validated because so many other actions, decisions, and attitudes are dependent on these basic identities (Wachman, 1994).
Taiwan is an island in East Asia. Taiwan is also commonly used to refer to the territories governed by the Republic of China (ROC) and to ROC itself. The island groups of Taiwan and Penghu are officially administered as Taiwan Province of the ROC. However, in practice, almost all government power is exercised at the national and local levels. The island consists of steep mountains covered by tropical and subtropical vegetation.
Economy of Taiwan
The Taiwan colonial economy was mainly based on the monoculture pattern and multi structure. In other words, such a pattern can be regarded as the basic condition for Taiwan managing its colonial economy and increasing its trade surplus to Japan. Monoculture means to set up a mono-production system and provide the mono-exported-commodity for meeting the needs of the Japanese imperialists. Initially, Taiwan mainly produced sugar-related products. The production series was from the culture of sugarcane to the sugar refinery, which was for exporting sugar to Japan. Starting from 1905 this process lasted about 17 or 18 years until 1922(Chow, 2002a). In 1920 only sugar occupied 65.8 percent of total exports to Japan that accounted for 83.7 percent of total exports from Taiwan. Then from about 1922 to 1938, Taiwan started to produce Japonica rice (improved by the Japanese) for exporting to Japan. In that period, more than half of the cultivated land was used to plant Japonica rice. Finally, since 1939 Japanese imperialists regarded Taiwan as the base for southern-expansion and moved its military industry, oil processing, shipbuilding, and machinery into Taiwan for taking advantage of Taiwan’s human and natural resources (Chow, 2002a).
Taiwan's rapid economic development and its relatively equitable income distribution have been widely acclaimed. Scholars debate the extent to which this success should be attributed to government intervention in the market or to the workings of a un trammeled free enterprise system. Much of Taiwan's economic success must be attributed to the intelligence and industriousness of its people: workers, farmers and businessmen. Nevertheless, government bureaucrats, mostly from mainland China in the early years, provided the vision, planning and execution of policies that made possible rapid economic growth. Well-timed provision of infrastructure, removal of obstacles to progress and creation of incentives all served to stimulate the process. Taiwan's export-oriented trade policy has made it today the 14th largest trading nation in the world and the seventh largest trading partner of the United States. It has close to $100 billion in foreign exchange reserves. Investments in mainland China by Taiwan's experienced manufacturers and exporters have helped the Mainland China to increase rapidly its production and exports (Shambaugh, 1998).
Taiwan has a dynamic capitalist economy with gradually decreasing guidance of investment and foreign trade by the government. In keeping with this trend, most large government-owned banks and industrial firms have been privatized. Exports in Taiwan have grown even faster and since the Second World War. The success of the state’s exports has provided the primary impetus for industrialization. The rates of Inflation and unemployment in Taiwan are low. Taiwan service sector contributes greatly to the economy of the region. Taiwan formerly focused on the agriculture industry but after some time the focus fell on developing new and profitable technologies. Traditional labor-intensive industries are steadily being moved off-shore and replaced with more capital- and technology-intensive industries.
Corruption in Taiwan
The potential causes of political instability include crime, corruption, and some critical social problems. Crime has increased markedly in recent years, along with the public's awareness of it. Corruption has resurfaced in recent years as a major concern of the populace. Because corruption is viewed as damaging to democratization and is related in the public's mind to crime, it is viewed as a more serious problem compared to other countries. There are other social problems in Taiwan, but neither they nor crime nor corruption are of such magnitude as to cause the serious instability that might tempt Beijing to intervene militarily (Copper, 1999).Alliances between local governments and foreign capital have strengthened the bargaining power of local governments against the national government, creating a basis for local governments to take initiatives in town planning and land development. Among the projects undertaken by overseas Chinese in collaboration with local Chinese officials in China, land development has been the most important sector next to manufacturing, and it is growing rapidly; such investment has been one of the major directions of diversification for overseas Chinese firms in East Asia, with many Taiwanese, Hong Kong, and Singaporean developers seeing property projects in China as one of the most promising directions for their business expansion (Hsing, 1998).
On the other hand, as most key planning issues are decided at the local level, land development represents opportunities for local planners to respond to local situations more directly and to shift urban planning standards away from universal norms set by the central government (Hsing, 1998). However, the potential for greater local initiatives in town planning is not always supported by either a competent and clean bureaucracy or an open system. Persistent bureaucratic monopoly over land has created severe problems of corruption that the central government has failed to control (Hsing, 1998). Closely connected with traditional political culture is also the issue of corruption. It should be quickly asserted that corruption is by no means confined to democracies or to Asia. It is universal. However, in most Asian societies, the difference between the legitimate exchange of favors or obligations and the illegitimate bribery of office holders is extensively blurred, given the personalistic system operative (Chow, 2002b). Even the public determination of what constitutes impermissible behavior and what is a natural aspect of the relationship between officials and those with whom they interact is often in doubt. In recent times, however, corruption has frequently been a major issue in election campaigns in Asian democracies, including the March 2000 election in Taiwan (Chow, 2002b).
Political corruption, in particular the growing penetration of politics by organized crime, became an issue in the 1990s as well. This came to be called black and gold politics (Chow, 2002b).Under the KMT authoritarian regime, corruption and crime had remained fairly limited at what might be termed first world rather than third world levels. Democratization unfortunately unleashed burgeoning corruption. The declining powers of the police state made illegal activities, including political corruption, much safer. The key stimulus, though, probably came from several unfortunate side effects that democratization itself had on the political processes. First, politics and campaigning became extremely expensive, forcing politicians to become dependent upon contributions from well-heeled business people. Second, the growing power of legislatures gave small groups of politicians the power to bestow favors, such as government contracts (Chow, 2002b).
Third, Taiwan began a huge program of infrastructure expansion in the early 1990s, which created lucrative opportunities for those with political connections. Fourth, when Lee Teng-Hui and his young Turks challenged the KMT old guard, they turned to the support of rich businesspeople and local patronage-oriented political factions as a counterweight to the bureaucratic power wielded by their conservative rivals in the party and the government. Finally, Taiwan’s dynamic economy produced substantial resources to grease the wheels of political corruption in general. More specifically related to the political sphere, the Kuomintang ran a wide variety of businesses, and many of them shared in the bonanza of rapid economic development, giving the party large amounts of Taiwan’s version of political soft money (Chow, 2002b). Corruption has been one of the issues of the past and current Taiwanese government. Their problems with corruption were worsened by their change of political system. The country belongs to the top ten corrupt countries in the whole of Asia. The country is continuously trying to devise means to combat corruption in all of its branches.
Surveys/studies on corruption
Links between corruption and centralized or decentralized forms of government are a popular aspect of studies on corruption. There are, however, no clear results, partly because authors measure corruption in different ways. An example is the estimation of bribes taken on public contracts. Clearly the choice of the measurement may lead to different conclusions about the impact of a centralized or a decentralized system (Ahmad & Tanzi, 2002). For example, if someone measures the extent of corruption by the number of tainted contracts, a decentralized government will fare worse because there are more persons dealing with money and contracts. Corruption may impact directly on the poor in many ways. It may impact on the allocation of public resources. For example, it can worsen income distribution by diverting resources from social sectors and infrastructure maintenance to defense and war expenditures. It can also impact geographically on inter-jurisdictional distribution, by diverting resources away from needy areas. On a day-to-day basis, corruption can take a heavy toll on the poor by denying or making more expensive access to basic services, such as health or primary education. . The key issue is to ascertain where the poor have better prospects against corrupt practices (Ahmad & Tanzi, 2002). There are different surveys done to study corruption. Each study uses various methodologies to rank corrupt countries. Each study makes use of different basis for a country to be corrupt. This causes the difficulty to fully determine which countries are corrupt and which are not. One study/survey on corruption is the corruption perception index. The next figure is the CPI ranking for 2007
Rank of
Country
Country/ Territory
CPI Score in 2007
1.
New Zealand
9.4
2.
Denmark
9.4
3.
Finland
9.4
4.
Singapore
9.3
5.
Sweden
9.3
6.
Iceland
9.2
7.
Netherlands
9.0
8.
Switzerland
9.0
9.
Norway
8.7
10.
Canada
8.7
11.
Australia
8.6
12.
Luxembourg
8.4
13.
United Kingdom
8.4
14.
Hong Kong
8.3
15.
Austria
8.1
16.
Germany
7.8
17.
Japan
7.5
18.
Ireland
7.5
19.
France
7.3
20.
USA
7.2
21.
Belgium
7.1
22.
Chile
7.0
23.
Barbados
6.9
24.
Saint Lucia
6.8
25.
Uruguay
6.7
26.
Spain
6.7
27.
Slovenia
6.6
28.
Estonia
6.5
29.
Portugal
6.5
30.
Israel
6.1
31.
Saint Vincent and the Grenadines
6.1
32.
Qatar
6.0
33.
Malta
5.8
34.
Macau
5.7
35.
Taiwan
5.7
36.
United Arab Emirates
5.7
37.
Dominica
5.6
38.
Botswana
5.4
39.
Hungary
5.3
40.
Cyprus
5.3
41.
Czech Republic
5.2
42.
Italy
5.2
43.
Malaysia
5.1
44.
South Korea
5.1
45.
South Africa
5.1
46.
Costa Rica
5.0
47.
Bhutan
5.0
48.
Bahrain
5.0
49.
Slovakia
4.9
50.
Cape Verde
4.9
51.
Latvia
4.8
52.
Lithuania
4.8
53.
Oman
4.7
54.
Jordan
4.7
55.
Mauritius
4.7
56.
Greece
4.6
57.
Namibia
4.5
58.
Seychelles
4.5
59.
Samoa
4.5
60.
Kuwait
4.3
61.
Cuba
4.2
62.
Poland
4.2
63.
Tunisia
4.2
64.
Bulgaria
4.1
65.
Croatia
4.1
66.
Turkey
4.1
67.
El Salvador
4.0
68.
Colombia
3.8
69.
Ghana
3.7
70.
Romania
3.7
71.
Senegal
3.6
72.
Morocco
3.5
73.
China
3.5
74.
Suriname
3.5
75.
India
3.5
76.
Mexico
3.5
77.
Peru
3.5
78.
Brazil
3.5
79.
Serbia
3.4
80.
Georgia
3.4
81.
Grenada
3.4
82.
Trinidad and Tobago
3.4
83.
Saudi Arabia
3.4
84.
Bosnia and Herzegovina
3.3
85.
Montenegro
3.3
86.
Maldives
3.3
87.
Jamaica
3.3
88.
Kiribati
3.3
89.
Gabon
3.3
90.
Swaziland
3.3
91.
Thailand
3.3
92.
Lesotho
3.3
93.
FYR Macedonia
3.3
94.
Madagascar
3.2
95.
Sri Lanka
3.2
96.
Panama
3.2
97.
Tanzania
3.2
98.
Vanuatu
3.1
99.
Dominican Republic
3.0
100.
Armenia
3.0
From: http://www.transparency.org
A country or territory’s CPI Score indicates the degree of corruption as perceived by business people and country analysts. The range is from 0 to 10, 10 being highly clean. This shows that among Hong Kong, Macau, Taiwan and Mainland China, HKSAR is the least corrupt. It is ranked 14th on the CPI ranking. Macau and Taiwan share a close ranking in the CPI study. This shows that Macau and Taiwan have almost the same level of corruption and their solutions towards corruption are not effective. With a CPI score of 5.7, Taiwan and Macau is seen as regions having a break even point towards corruption. Mainland China is on the 73rd place in the study. It shows that when compared to Macau and Taiwan, China is perceived to have more instances of corruption; this is not good for the country’s reputation and image. China’s CPI score of 3.5 shows that the country has above average instances of corruption.
Chapter 5
Conclusions and Recommendations
This chapter is dedicated to giving conclusions that can be derived from the gathered data. Recommendations for actions as well as further studies are also included in this chapter
Conclusion
Based from the CPI study and the literature, Macau is considered to be corrupt. Compared to China, Macau has lower instances of corruption. When compared to Hong Kong, Macau is considered to be corrupt. This means that changes in institutional arrangements have not affected corruption control in Macau. The change in institutional arrangements did not do anything to control corruption in Macau. The changes in institutional arrangements did not create means to change the practices towards corruption thus corruption was still prevalent in Macau’s society. The strategies used by the region are not enough to combat corruption, changing the institutional arrangements will not help unless the region will make use of drastic strategies to curb corruption.
Recommendations
The findings of the study as well as the suggestions of the respondents helped in preparing the following recommendations:
1. Since this is a pilot study further study should be done to dig deeper into the issues and determine how the changes in institutional arrangements can help reduce corruption in Macau.
2. The effects of changes in institutional arrangements should be studied to see how it alters corruption practices.
3. The government should take a look at the concrete and effective means to reduce corruption.
4. People in Macao and other countries should be vigilant and prepared for the temptation of corruption.
5. Corruption continues to improve and its capacities continue to widen, Macau and other countries should devise fool proof plans to curb corruption. Macau and other countries should have alternative plans that can be used once the effect of corruption is felt.
6. Future research should be done on other systems that can be useful to Macau and other countries and governments of those countries; these systems should reduce instances of local and international instances of corruption.
7. Future research should be done so that transactions/procedure within and amongst countries can be changed so that people will not be tempted to engage in corruption.
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