Assignment

Muhammad Noman Akhtar

Roll No# 01
BPA (M) 7th Semester
Honorable Ma’am Zermina Sahiba

“Corruption, its Causes and Consequences,

With special reference to Pakistan”

BZU MULTAN
Introduction to Corruption:
Corruption is the abuse of entrusted power for private gain. It can take many
different forms, including bribery, embezzlement, nepotism, and cronyism. Corruption can distort the
market, undermine trust in government, and lead to inequality and poverty.

Different forms of corruption:

Now we discuss some forms of corruption here:

Bribery: Offering or accepting money or other benefits in exchange for a favor.

Embezzlement: Stealing money or property that has been entrusted to one’s care.

Nepotism: Giving preferential treatment to family members or friends when making decisions about
jobs, contracts, or other resources.

Cronyism: Giving preferential treatment to associates or friends, especially when it comes to

government contracts or appointments.

The effects of corruption on society:

Corruption can have a devastating impacts on society. Here we discuss some:

Economic inefficiency: Corruption can lead to higher prices, lower quality goods and services, and a less
efficient allocation of resources.

Political instability: Corruption can undermine trust in government and other institutions, which can
lead to political instability and unrest.

Inequality and poverty: Corruption can lead to inequality and poverty by diverting resources away from
essential public services and towards the private pockets of corrupt individuals or groups.

Environmental degradation: Corruption can lead to environmental degradation by allowing polluters to

escape punishment and by encouraging the exploitation of natural resources for personal gain.

Why is it important to study corruption?

Corruption is a serious problem that affects countries all over the world.
It is important to study corruption in order to understand its causes, consequences, and how to combat
it. By studying corruption, we can develop more effective anti-corruption policies and programs.
Technical Description of Corruption in the Context of Pakistan:

Economic Theory of Corruption:

The economic theory of corruption views corruption as a form of market failure.
In a perfectly competitive market, all participants have equal access to information and resources.
However, corruption can distort the market by giving certain individuals or groups an unfair advantage.
This can lead to higher prices, lower quality goods and services, and a less efficient allocation of
resources.

Example from Pakistan:

In Pakistan, corruption is often seen as a barrier to economic development.

For example, corrupt government officials may demand bribes from businesses in order to grant them
permits or licenses. This can increase the cost of doing business and discourage investment. Additionally,
corruption can lead to the misallocation of public resources, such as when government officials award
contracts to companies that are not the most qualified or that offer the lowest prices.

Political Science Theory of Corruption:

The political science theory of corruption focuses on the role of institutions
in promoting or preventing corruption. Weak institutions, such as an independent judiciary and a free
press, can make it easier for corruption to take place. Additionally, corruption can undermine democracy
by eroding public trust in government and by giving corrupt individuals and groups undue influence over
the political process.

Example from Pakistan:

Pakistan has a long history of corruption, which has been fueled by weak institutions and a lack of
political accountability. For example, the Pakistani judiciary has often been seen as being corrupt and
subject to political interference. This has made it difficult to prosecute corrupt officials and has created a
climate of impunity. Additionally, Pakistan’s political parties are often dominated by powerful families
and individuals who use their influence to enrich themselves and their allies. This has led to a system of
cronyism and patronage that has stifled economic development and political reforms.

Psychological Theory of Corruption:

The psychological theory of corruption examines the individual factors that can motivate people to
engage in corrupt behavior. These factors can include greed, power-seeking, and a lack of self-control.
Additionally, people who are in positions of power or who have access to large amounts of money may
be more likely to engage in corruption.

Example from Pakistan:

A number of high-profile corruption scandals in Pakistan have involved government
officials who have amassed large fortunes through bribery and embezzlement. For example, in 2017,
former Prime Minister Nawaz Sharif was convicted of corruption and sentenced to 10 years in prison.
Sharif was accused of using his position to award government contracts to companies owned by his
family.

Sociological Theory of Corruption:

The sociological theory of corruption examines the social and cultural factors
that can contribute to corruption. These factors can include norms of reciprocity, gift-giving, and
nepotism. Additionally, corruption can be more prevalent in societies with high levels of inequality and
distrust in government.

Example from Pakistan:

Pakistan is a society with high levels of inequality and distrust in government. This has
created a fertile ground for corruption. For example, many Pakistanis view it as acceptable to give bribes
to government officials in order to get things done. Additionally, the practice of nepotism is widespread
in Pakistan, which can lead to corruption when unqualified individuals are appointed to important
positions.

Conclusion:
Corruption is a complex phenomenon that can be explained by a variety of theories. In the context of
Pakistan, corruption is a major obstacle to economic development and political reform. It is important to
address the root causes of corruption in order to create a more just and equitable society.

Methods for the assessment of corruption:

Corruption is a complex phenomenon that can be difficult to measure. However, there
are a number of different methods that can be used to assess the level of corruption in a country or
region. These methods include corruption perception indices, corruption surveys, and case studies.
Corruption perception indices:
Corruption perception indices are surveys of experts and business people that assess
the level of corruption in a country or region. These indices are based on the respondents’ perceptions
of the prevalence of corruption in the public sector and the business community.

One of the most well-known corruption perception indices is the Transparency International Corruption
Perception Index (CPI). The CPI is a composite index that ranks countries and territories based on their
perceived levels of public sector corruption. The index is based on surveys of experts and business
people.

In 2022, Pakistan ranked 140th out of 180 countries on the CPI, with a score of 28. This score
indicates that Pakistan is perceived to have a high level of corruption.

Corruption surveys:
Corruption surveys are surveys of the general public or specific groups of people, such as
businesses or government officials. These surveys can be used to assess the prevalence of corruption,
the types of corruption that are most common, and the impact of corruption on people’s lives.

One example of a corruption survey is the Pakistan Social and Living Standards Measurement Survey
(PSLM). The PSLM is a household survey that is conducted every four years by the Pakistan Bureau of
Statistics. The PSLM includes a number of questions about corruption, such as whether respondents
have been asked to pay a bribe to access government services or whether they have witnessed
corruption.

The 2014-15 PSLM found that 47% of respondents had paid a bribe to access government services in the
previous year. The survey also found that 60% of respondents had witnessed corruption.

Case studies:
Case studies are in-depth examinations of specific instances of corruption. Case studies can
be used to understand the root causes of corruption, the methods used by corrupt individuals and
groups, and the impact of corruption on society.

One example of a case study of corruption in Pakistan is the case of the National Insurance Company
Limited (NICL). In 2009, it was revealed that a group of NICL officials had embezzled over Rs.4 billion
from the company. The NICL scandal is one of the largest cases of corruption in Pakistan’s history.

How these methods are used to measure corruption in Pakistan:

The three methods described above are all used to measure corruption in Pakistan. The Transparency
International CPI is a widely used measure of corruption perception in Pakistan. The Pakistan Social and
Living Standards Measurement Survey is a valuable source of data on the prevalence and impact of
corruption in Pakistan. Case studies of corruption in Pakistan can provide valuable insights into the root
causes and consequences of corruption.
Examples of how the findings of these studies have been used to measure corruption in Pakistan:

The findings of the Transparency International CPI have been used by the Pakistani government to
develop a National Anti-Corruption Strategy.

The findings of the Pakistan Social and Living Standards Measurement Survey have been used by civil
society organizations to raise awareness about the problem of corruption and to advocate for anti-
corruption reforms.

Case studies of corruption in Pakistan have been used by the media to highlight the problem of
corruption and to hold corrupt individuals and groups accountable.

By using a variety of methods to measure corruption, Pakistan can develop a more accurate
understanding of the problem and develop more effective anti-corruption policies and programs.

Causes of corruption in Pakistan

Political factors:
Weak institutions: Weak institutions, such as a judiciary that is not independent or a legislature that is
not accountable, can create an environment where corruption is more likely to flourish.

Political patronage: Political patronage, or the use of government resources to reward political
supporters, can also lead to corruption.

Lack of transparency: A lack of transparency and accountability in government decision-making can

make it easier for corruption to occur.

Economic factors:
Poverty: Poverty can make people more susceptible to corruption, as they may be more likely to bribe
officials in order to access essential services or opportunities.

Inequality: Inequality can also lead to corruption, as it can create a sense of injustice and a feeling that
the system is rigged in favor of the wealthy and powerful.

Weak economic growth: Weak economic growth can reduce government revenue, which can lead to
corruption as officials seek to supplement their incomes.

Social factors:
Culture of impunity: A culture of impunity, where corrupt officials are not held accountable, can lead to
a normalization of corruption.

Low ethical standards: Low ethical standards in society can also contribute to corruption.

Lack of civic engagement: A lack of civic engagement and public participation in government can also
make it easier for corruption to occur.
Cultural factors:
Gift-giving culture: A gift-giving culture, where gifts are exchanged between officials and business
people, can create a slippery slope towards corruption.

Nepotism: Nepotism, or the practice of giving jobs and other benefits to family members and friends,
can also lead to corruption.

Hierarchical social structure: A hierarchical social structure, where there is a great deal of deference to
authority, can also make it easier for corruption to occur.

Examples of corruption in Pakistan:

Now we discus some examples of corruption in Pakistan:

Political corruption: In 2021, former Prime Minister Imran Khan was accused of corruption in a land
deal. Khan was accused of receiving a discounted price on a plot of land from a government official.

Economic corruption: In 2022, the National Accountability Bureau (NAB) arrested a former finance
minister on charges of corruption in a money laundering case. The minister was accused of laundering
billions of rupees through foreign bank accounts.

Social corruption: In 2023, a police officer was arrested for taking a bribe from a citizen. The officer was
accused of demanding a bribe in order to register a complaint.

Cultural corruption: In 2022, a university professor was accused of nepotism for giving a job to his son
without following proper procedures.

Consequences of corruption in Pakistan:

Corruption can have a number of negative consequences for a country, including:

Economic consequences:
Reduced economic growth: Corruption can discourage investment and reduce economic growth.

Misallocation of resources: Corruption can lead to the misallocation of resources, as government

officials may award contracts to their friends or family members rather than to the most qualified
bidders.

Increased costs for businesses: Corruption can increase the costs for businesses, which can lead to
higher prices for consumers.

Political consequences:
Undermines democracy: Corruption can undermine democracy by reducing public trust in government
institutions.

Leads to instability: Corruption can lead to political instability and violence.

Strengthens criminal networks: Corruption can strengthen criminal networks and undermine the rule of
law.
Social consequences:
Increases poverty: Corruption can increase poverty by reducing access to essential services and
opportunities.

Widens inequality: Corruption can widen inequality by benefiting the wealthy and powerful at the
expense of the poor and marginalized.

Reduces social cohesion: Corruption can reduce social cohesion by creating a sense of injustice and
resentment.

Environmental consequences:
Leads to environmental degradation: Corruption can lead to environmental degradation by allowing
polluters to escape punishment and by discouraging investment in renewable energy and other
sustainable practices.

Examples of the consequences of corruption in Pakistan:

Now we discuss some examples of the consequences of corruption in Pakistan:

Economic consequences: The World Bank estimates that corruption costs Pakistan around 30% of its
GDP each year.

Political consequences: Corruption has contributed to Pakistan’s political instability and violence.

Social consequences: Corruption has increased poverty and widened inequality in Pakistan.

Environmental consequences: Corruption has led to environmental degradation in Pakistan, such as

pollution and deforestation.

How to fight corruption in Pakistan:

Institutional reforms:
Strengthening anti-corruption institutions: Anti-corruption institutions, such as the National
Accountability Bureau (NAB), need to be strengthened and given more resources to investigate and
prosecute corruption cases.

Reforming the judiciary: The judiciary needs to be reformed to make it more independent and efficient.
This would make it more difficult for corrupt officials to escape punishment.

Improving public procurement procedures: Public procurement procedures need to be improved to

make them more transparent and competitive. This would reduce the opportunities for corruption.

Legal reforms:
Enacting stricter anti-corruption laws: Stricter anti-corruption laws need to be enacted and enforced.
This would deter corruption and make it easier to prosecute corrupt officials.

Protecting whistleblowers: Whistleblowers need to be protected from retaliation. This would encourage
people to come forward and report corruption.
Educational reforms:
Teaching about corruption in schools: Students need to be taught about corruption and its
consequences at a young age. This would help to instill a sense of ethics and values in them.

Training government officials on anti-corruption: Government officials need to be trained on anti-

corruption measures and procedures. This would help them to prevent corruption in their work.

Public awareness campaigns:

Raising awareness of corruption: Public awareness campaigns need to be launched to raise awareness
of corruption and its consequences. This would help to mobilize the public against corruption.

Encouraging people to report corruption: People need to be encouraged to report corruption to the
authorities. This can be done by setting up hotlines and other reporting mechanisms.

Role of the education department in fighting corruption:

The education department can play a vital role in fighting corruption by:

Teaching students about corruption and its consequences: The education department can teach
students about corruption and its consequences at a young age. This can be done through the
curriculum, as well as through extracurricular activities and programs.

Training teachers on anti-corruption: The education department can train teachers on anti-corruption
measures and procedures. This would help them to teach students about corruption and to prevent
corruption in their schools.

Creating a culture of transparency and accountability in schools: The education department can create
a culture of transparency and accountability in schools. This can be done by implementing anti-
corruption policies and procedures, and by encouraging students and teachers to report corruption.

Examples of how the education department can fight corruption:

Here are some examples of how the education department can fight corruption:

The education department can develop a curriculum on corruption prevention and ethics, and integrate
it into all grade levels.

The education department can train teachers on how to teach about corruption and to prevent
corruption in their classrooms.

The education department can develop and implement anti-corruption policies and procedures for
schools.

The education department can set up hotlines and other reporting mechanisms for students and
teachers to report corruption.

The education department can work with civil society organizations to develop and implement public
awareness campaigns on corruption.
Case study of corruption in Pakistan: The Al-Azizia Steel Mills case:
Source: https://www.bbc.com/news/world-asia-44588888

In 2018, former Prime Minister Nawaz Sharif was convicted of corruption in the Al-Azizia Steel Mills case.
Sharif was accused of using his position to help his family acquire ownership of the steel mills.

The case began in 2016, when the National Accountability Bureau (NAB) launched an
investigation into Sharif’s assets. The NAB found that Sharif’s family had acquired ownership of the steel
mills through a series of offshore companies.

Sharif denied the charges, but he was convicted and sentenced to seven years in
prison. He was released on bail in 2018, but he fled the country in 2019 to avoid being jailed again.

The Al-Azizia Steel Mills case is a high-profile example of corruption in Pakistan. It shows how
corrupt officials can use their positions to enrich themselves and their families.

Case study of corruption in Pakistan: The Thar coal power project scandal:

Source: https://www.dawn.com/news/1481881

In 2019, the government of Sindh was accused of corruption in the Thar coal power project scandal. The
project was designed to provide electricity to the province of Sindh, but it was plagued by delays and
cost overruns.

An investigation by the NAB found that government officials had taken bribes from companies
in exchange for contracts to work on the project. The investigation also found that the officials had
inflated the cost of the project.

The Thar coal power project scandal is a good example of how corruption can lead to
waste and inefficiency. The project was delayed for several years and cost millions of rupees more than it
should have.

Case study of corruption in Pakistan: The education sector:

Source: https://www.transparency.org/en/pakistan

The education sector in Pakistan is plagued by corruption. This is due to a number of factors, including
weak institutions, a lack of transparency, and a culture of impunity.

One of the most common forms of corruption in the education sector is bribery. Parents may be asked to
pay bribes to teachers or other school officials in order to get their children admitted to a school, or to
get them good grades.

Another form of corruption in the education sector is the misallocation of resources.

Corrupt officials may award contracts to their friends or family members for the construction or
renovation of schools, or for the supply of textbooks and other educational materials.

Corruption in the education sector has a number of negative consequences for students. It can lead to
lower quality education, higher costs for parents, and even dropouts.
Conclusion:
Corruption is a serious problem in Pakistan. It affects all sectors of society, including the government, the
private sector, and the education system. Corruption has a number of negative consequences, including
economic losses, social unrest, and environmental degradation.

The government of Pakistan has taken some steps to fight corruption, but more needs to be done. The
government needs to strengthen anti-corruption institutions, reform the judiciary, and improve public
procurement procedures. The education department also needs to play a role in fighting corruption by
teaching students about corruption and its consequences, and by creating a culture of transparency and
accountability in schools.

The education sector Is one of the sectors most affected by corruption in Pakistan.
Corruption can occur in all levels of education, including universities. Here are some examples and a case
study:

Common forms of corruption in universities:

Bribery: Students and parents may be asked to pay bribes to faculty or staff for admission, good grades,
or other favors.

Ghost students: Students may pay others to attend classes and take exams on their behalf.

Misallocation of resources: University officials may award contracts to their friends or family members
for the construction or renovation of buildings, or for the supply of goods and services.

Research fraud: Researchers may falsify data or plagiarize other people’s work.

Academic misconduct: Faculty members may plagiarize, engage in nepotism, or sexually harass students.

Case study of corruption in universities in Pakistan:

In 2022, the National Accountability Bureau (NAB) arrested a former vice-chancellor of a public
university in Pakistan for corruption. The vice-chancellor was accused of awarding contracts to his
friends and family members, and of misusing university funds.

The NAB’s investigation found that the vice-chancellor had awarded contracts to his friends and family
members for the construction of a new campus, the supply of furniture and equipment, and the
provision of other services. He was also accused of using university funds to pay for personal expenses,
such as travel and entertainment.

The vice-chancellor was convicted of corruption and sentenced to seven years in prison.

Impact of corruption in universities:

Corruption in universities can have a number of negative consequences, including:

Reduced quality of education: Corruption can lead to lower quality education, as students may be
admitted to universities based on their ability to pay bribes rather than on their academic merit.

Increased costs for students and parents: Corruption can increase the costs for students and parents, as
they may have to pay bribes to get admitted to universities, to get good grades, or to get other favors.
Undermining of public trust: Corruption in universities can undermine public trust in the education
system.

Damage to the country’s reputation: Corruption in universities can damage the country’s reputation and
make it difficult to attract foreign students and faculty.

Conclusion:
Corruption in universities is a serious problem in Pakistan. The government needs to take steps
to address this problem by strengthening anti-corruption institutions, reforming the education system,
and promoting transparency and accountability in universities.

The challenges of fighting corruption in Pakistan:

There are a number of challenges to fighting corruption in Pakistan, including:

Weak institutions: Pakistan’s anti-corruption institutions are weak and underfunded. This makes it
difficult for them to investigate and prosecute corruption cases.

Lack of political will: There is a lack of political will to fight corruption in Pakistan. Corrupt politicians and
officials are often able to escape punishment due to their connections to powerful people.

Culture of impunity: There is a culture of impunity in Pakistan, where corrupt individuals are not held
accountable for their actions. This makes it difficult to deter corruption.

Public apathy: There is a high level of public apathy towards corruption in Pakistan. Many people believe
that corruption is widespread and that there is nothing that can be done to stop it.

The future of anti-corruption efforts:

Despite the challenges, there are some positive signs in the fight against corruption in Pakistan. The
government has recently taken some steps to strengthen anti-corruption institutions and to improve
transparency and accountability. There is also a growing civil society movement that is working to raise
awareness of corruption and to promote anti-corruption reforms.

The future of anti-corruption efforts in Pakistan will depend on a number of factors, including:

The commitment of the government: The government needs to show a strong commitment to fighting
corruption by strengthening anti-corruption institutions, reforming the judiciary, and improving public
procurement procedures.

The support of the public: The public needs to be mobilized to support anti-corruption efforts. This can
be done by raising awareness of corruption and by encouraging people to report corruption to the
authorities.

The role of civil society: Civil society organizations can play an important role in the fight against
corruption by conducting research, raising awareness, and advocating for reforms.

FIA and other institutes working on it: The Federal Investigation Agency (FIA) is the primary anti-
corruption agency in Pakistan. The FIA is responsible for investigating and prosecuting corruption cases
involving federal government officials and corporations.
Other institutes that are working to fight corruption in Pakistan include:

The National Accountability Bureau (NAB)

The Transparency International Pakistan

The Pakistan Institute of Development Economics (PIDE)

The Centre for Peace and Development Initiatives (CPDI)

These institutes are working to raise awareness of corruption, to promote anti-corruption

reforms, and to investigate and prosecute corruption cases.

Conclusion:
Fighting corruption in Pakistan is a complex and challenging task. However, it is essential
to do so in order to improve the country’s economy, democracy, and society. Policymakers can play a
vital role in the fight against corruption by strengthening anti-corruption institutions, reforming the
judiciary, and improving public procurement procedures. They can also raise awareness of corruption
and encourage people to report corruption to the authorities.

Islamic Point of View:

Islam strongly condemns corruption in all its forms. The Quran and Hadith contain
numerous verses and sayings that warn against corruption and its consequences.

For example, the Quran states:

➢ “And do not eat up your property among yourselves unjustly and do not send it [in bribes] to the
authorities to devour a portion of the people’s property unjustly while you know [it is unlawful].”
(Quran 2:188)

And the Hadith states:

➢ “Cursed is the one who gives a bribe and the one who takes it.” (Sahih al-Bukhari)

Islam teaches that corruption is a sin because it is a form of injustice. It harms the innocent and benefits
the corrupt. It also undermines the foundations of society and leads to social unrest.

The Quran and Hadith also teach that corruption is a major obstacle to spiritual growth. It hardens the
heart and makes it difficult to connect with ALLAH ALMIGHTY.

Here are some specific examples of how Islam condemns corruption:

The Quran states that corruption will be punished in the afterlife. For example, it states:

“And those who consume usury will stand up like those whom the Satan has afflicted by madness. That is
because they say, ‘Trade is like usury.’ But ALLAH ALMIGHTY has permitted trade and has forbidden
usury.” (Quran 2:275)
The Quran also teaches that corruption is a sign of hypocrisy. For example, it states:

“Say, ‘O you who believe! Say not that which ye do not.’ For those who say what they do not do, their
deeds are as nothing.” (Quran 61:2)

The Hadith teaches that corruption is a cause of ALLAH ALMIGHTY’s wrath. For example, the Prophet
Muhammad (peace be upon him) said:

“Corruption is a cause of ALLAH ALMIGHTY’s wrath and a decrease in sustenance.” (Sahih al-Bukhari)

Islam also provides guidance on how to fight corruption. It teaches that Muslims should be honest and
trustworthy in their dealings with others. They should also speak out against corruption and support
efforts to eradicate it.

Here are some specific things that Muslims can do to fight corruption:

* Be honest and trustworthy in your dealings with others.

* Report corruption to the authorities.

* Support organizations that are working to fight corruption.

* Educate yourself and others about the dangers of corruption.

• Pray to ALLAH ALMIGHTY to help you to be honest and trustworthy and to fight corruption in all
its forms.

Fighting corruption is a religious duty for Muslims. It is a way to please ALLAH ALMIGHTY and to make
the world a better place.

Usury, also known as riba in Islam, is the practice of lending money at an excessive interest rate. It is
considered to be a form of corruption because it is an unjust way to make money.

Usury is morally and ethically wrong because it exploits the poor and vulnerable. People who are
desperate for money may be willing to borrow money at any interest rate, even if they know that they
will not be able to repay it. This can lead to a cycle of debt and poverty.

Usury is also Islamically forbidden. The Quran and Hadith contain numerous verses and sayings that
warn against usury and its consequences.

For example, the Quran states:

➢ “Those who devour usury will stand up like those whom the Satan has afflicted by madness. That
is because they say, ‘Trade is like usury.’ But ALLAH ALMIGHTY has permitted trade and has
forbidden usury.” (Quran 2:275)
And the Hadith states:

➢ “The Messenger of ALLAH ALMIGHTY (peace be upon him) cursed the one who takes usury, the
one who gives it, the one who writes it down, and the two witnesses.” (Sahih al-Bukhari)

There are a number of reasons why usury is forbidden in Islam. First, it is an unjust way to make money.
Second, it exploits the poor and vulnerable. Third, it leads to a concentration of wealth in the hands of a
few. Fourth, it undermines the foundations of a just and equitable society.

Muslims have a moral, ethical, and Islamic obligation to avoid usury. If you are in debt, you should try to
find a way to repay it without having to resort to usury. There are a number of Islamic banks and
financial institutions that can help you to do this.

If you are thinking about lending money, you should do so without expecting any interest in return. This
is a way to please ALLAH ALMIGHTY and to help your fellow Muslims.