E-Governance and Anti-Corruption Efforts

Chapter 1

Introduction

Government institutions have used technology to improve the quality of their services as well as tackling corruption by reducing red tape. Theory suggests that the use of information technology for all transactions enable governments to promote transparency and accountability. E-governmenance would allowed government to provide citizens with better services, provide direct interaction between government and stakeholders and give citizens access to a wide range of information with which to hold governments to account (World Bank, 2011). Concerns raised with respect to serious issues such as public corruption and fraud have created urgent demand for countries to apply e-Governmenance in order to promote transparency and accountability in the delivery of their services to the citizens (Ionescu, 2013). However, scholars argue that good and useful egovernment is reliant on many factors, such as, technology, stakeholders, environment, and institutional culture prevalent in the country (Luna-Reyes, Gil-Garcia, & Romero, 2012). These factors will impact the way e-government is implemented in the country and it is not necessary that e-government will directly correspond with decreased corruption in the country. Indonesia is one of countries that suffer from the problem of corruption. The Corruption Perception Index (CPI) 2018 released by Transparency International ranked Indonesia at 89th spot in a list of 180 countries, which reflects on the significant rate of corruption in the country. On the other hand, the e-government development index (EGDI) 2018 released by United Nations, which measures the adoption of e-government in a country, ranks Indonesia at 107th spot in a list of 193 countries. Japan is ranked at 18th spot in 180 countries in the same Corruption Perception Index (CPI) 2018. Japan is ranked at 10th spot in a list of 193 countries in the EGDI 2018. This shows that Japan, unlike Indonesia, is benefiting from the application of e-government in reducing corruption. This also conforms the previously stated argument that the adoption of e-government is not necessarily linked to the decrease in the level of corruption in a given country and there are many factors that come into play for there to be a positive link between adoption of e-government and decrease in corruption in a country.

This dissertation is an attempt to outline the relationship between e-government and corruption. Specifically, the dissertation examines the impact of e-government on the level of corruption in countries, and how Japan has succeeded in applying e-government and keep corruption at a low level.

Literature Review

Corruption

Corruption is one of the biggest challenges facing countries at present. Countries and international organizations have taken measures to counter this phenomenon, which is believed to be one of the most important factors that negatively affect the economic and social development of many societies around the world, of which the economically weaker societies are the most affected. Former UN Secretary General Kofi Annan is on record with his statement that ‘Corruption hurts the poor disproportionately –by diverting funds intended for development, undermining a government’s ability to provide basic services, feeding inequality and injustice, and discouraging foreign investment and aid’ (Stausberg, 2006). Kofi Annan’s statement is to be seen in the perspective of impact of corruption on the society and its people because corruption, especially public corruption has the potential to gravely affect citizens’ interests as funds meant to be used for the benefit of the citizens are diverted by government officials or agencies for nefarious purposes. At this point, it will be useful to differentiate between public and private corruption as it is the former which is directly linked to e-government. Corruption has a public-private dimension. Public corruption is defined as the “abuse of public office for personal gain” (The World Bank, 1997, p. 8). The essential element of public corruption is that public office or official position is used in an unauthorised manner to make private gains. Therefore, public corruption will involve use of public office, which is not the same as private corruption. It is public corruption that is meant to be targeted through e-government. Corruption has largely been understood in a public context. Scholars as well as policy makers have been concerned with corruption in the public sense (Breit, et al., 2015). This has also led to the adoption of anti-corruption measures that are driven by the objective of targeting public corruption. This is not to say that the issue of private corruption is not significant as there is now a greater consensus about corruption in corporations and private sector (Breit, et al., 2015). Therefore, corruption is also defined from the context of the private sector (Rothstein, 2011). However, this paper is not concerned with corruption in the private context because the topic of research is e-government, which makes public corruption relevant to the topic and not private corruption, which although relevant to corruption studies in general, is not much relevant to the topic at hand. Corruption itself is not a new phenomenon. The Roman Empire for example, crumbled due to its corrupt officials in the 5th century: they lived lavish lifestyles, while the empire lacked in resources (MacMullen, 1990). In the 19th century, the American urban government overpaid in tax money for basic services in return of kickbacks demanded by corrupt officials (Glaeser and Goldin, 2007,p. 3). In China during the Qin Dynasty, officers would accept bribes from citizens because their incomes were low and they sought to make private gain from their public offices and functions (Fairbank, 1986). Even in Japan, corruption was pervasive at one time, although it has now become one of the least corrupt countries in the world. An example from its earlier period which reflects on corruption can be seen in the reign of Emperor Keitai, when a Japanese leader was involved in an infamous case of bribe from someone in the Korean Peninsula against which he was to give four regions controlled by the Japanese Court(Shiobara, 2013).

The examples discussed above indicate that corruption has existed in different societies around the world since a lond period of time. It is obvious that corruption in these earlier times, was not confined to a particular nation but was spread throughout the world. Corruption is still widespread all over the world; it exists in both developed and developing countries alike, although the level of public corruption in the developing countries is higher as compared to developed countries (Rothstein, 2011; Breit, et al., 2015). Despite the fact that the impact of corruption on developed countries is not as much as that on the later, corruption still hinders growth of countries economically and socially, which is reflected on the welfare of citizens (Elliott, 1997). Although all countries have problems with corruption, these problems vary in extent. Therefore, to what extent does corruption exist in certain countries and the nature of the problems that the countries face with regard to corruption would determine the kind of anti-corruption response in the law and policy of the country. Therefore, there is no single or homogenous strategy that can be adopted to fight corruption all over the world (Zulkarnain, 2017). For example, I-Paid-A-Bribe (IPAB) site worked and thrived in India but does not in China (Zulkarnain, 2017). It is important in this context to explore the definition of corruption. It may be stated at the outset that there is no consensus on the definition of corruption and that corruption has been defined in different ways. There are cultural and political reasons why definitions of corruption do not gain wide consensus (Rose-Ackerman, 2010). Some scholars define corruption from an economic, or social and political perspectives (Zulkarnain, 2017). Economic researchers consider corruption from the perspective of giver and taker, where bribery is defined as the predominant type of economic corruption (Andvig, Fjeldstad, Amundsen, & Soreide, 2000). Rent-seeking is also a type of economic corruption, where corrupt officials demand money to abuse their authority in policy making. This can be done through the enactment of laws that may create economic barriers that are not necessary in the first place. Rent-Seeking also involves corporations who are interested in saving their business requirements by influencing the legislature (Zulkarnain, 2017). It is here that private corruption conflates with public corruption and in this sense, private corruption also becomes an important point of discussion on public corruption. As literature discussed below indicates, for the most part, corruption has been defined from a public perspective.

The World Bank defines corruption as the abuse of public office for personal gain (The World Bank, 1997). Transparency International defines corruption as the abuse of entrusted power for private gain. Another definition for corruption is the use of public office for private interest (Bardhan, 1997). All these definitions notably focus on corruption by public officials as their is discretion as well as vested power in public offices that can lead to corrupt activities in the allocation of funds or services (Zulkarnain, 2017). Social scholars consider social corruption as a corrupt act among a group of people who happen to have the same interests. In this context, corruption takes the form of nepotism and favouritism (Zulkarnain, 2017). Developing countries do indicate corruption of this nature in their public spaces (Zulkarnain, 2017). There is research that indicates that significant number of public actions are driven by nepotism and favouritism in these countries (Zulkarnain, 2017). From the political scholar’s point of view, corruption is “a form of corruption that involves individuals’ wealth, status, and power to influence the political system to gain a political advantage” (Zulkarnain, 2017p.10). Political corruption also includes buying votes by elected officials as it happens in many countries around the world especially in developing nations (Zulkarnain, 2017). Political corruption is also seen in the actions of corrupt political leaders who might support the passage of certain laws just because it serves their interests even though these laws may be against the interest of the citizenry. Political parties may also increase the scope of corruption by discouraging transparency and freedom of opinion and speech (Brunetti & Weder, 2003; Chang & Golden, 2007; Yadav, 2011). Therefore, influential individuals and corrupt officials will resist implementing any initiative that increases the level of transparency and accountability, such as e-government, because it will expose them or prevent them from obtaining their illegal personal interests. As is clear from the discussion above, corruption can take various forms. Determining the type of corruption that is to be responded to via policy and law, is very important because the response has to match the kind of corruption that is to be targeted. The measure that is ysed to target corruption should also be implemented properly. For example, use of e-government to reduce corruption may respond effectively to public corruption or corruption by public officials, but if politicians and corrupt legislators hinder the implementation of such measures by not supporting the enactment of the necessary laws or do not providethe necessary data, or create a law or policy that is not effective, the measures will fail to achieve the desired effect.

E-government: A tool to promote transparency and accountability

E-government is a new concept which conflates information technology techniques with governance deliverables and objectives. Thus, e-government signifies the link between governance and information technology, where the latter provides the tools for the delivery of public services to the citizenry. According to the World Bank website (2005), e-government can be defined as follows: “information technologies… that have the ability to transform relations with citizens, businesses, and other arms of government… [and] can serve a variety of different ends: better delivery of government services to citizens, improved interactions with business and industry, citizen empowerment through access to information, or more efficient government management… benefits can be less corruption, increased transparency, greater convenience, revenue growth, and/or cost reductions.” The above definition of e-government indicates that information technologies can be used by the government to provide services to the citizenry and for the fulfilment of other objectives. The definition also clarifies that there can be a link between e-government and decrease in corruotion. The use of information and communication technologies (ICTs) has increased in recent years and these technologies are now considered by governments as tools to promote government transparency and to tackle corruption (Carlo Bertot, Jaegerand Grimes, 2012). The latter objective, that is, tackling corruption has received a great attention in the application of ICTs from particular countries (Carlo Bertot, Jaegerand Grimes, 2012). This is very relevant to developing countries, especially resource-rich countries, where the control over the resources has remained with the government and public officials, and where corruption is seen as an essential factor in preventing social-economic growth, leading to the situation being termed as a “resource curse” (Kolstad and Wiig, 2009; Kolstad et al., 2009; Mehlum et al., 2006; Robinson et al., 2006). Another useful definition of e-government is provided by (Almarabeh and AbuAli, 2010) who write that e-government can be defined as “use of information and communication technologies to offer for citizens and businesses the opportunity to interact and conduct business with government by using different electronic media such as telephone touch pad, fax, smart cards, self-service kiosks, e-mail/internet, and EDI” (p.30). Shim and Eom (2008) defined e-government as “a tool to reinvent the public sector by transforming internal government work processes and external relationships with citizens” (p. 299).

The above noted definitions show that e-government provides services, governance, and better communication between citizens and corporation.Pascual (2003) writes that the main purposes of e-government are to provoke a great business environment, create a better customer service and avoid face to face interaction with public officials, thus promoting governance and broadening citizen engagement. Consequently, the role of e-government in can be considered as a measure that governments can use to fight corruption. Due to this potential of e-government, international organisations encourage governments to consider the application of e-government in tackling corruption, because of the characteristics of e-government that allow greater transparency and accountability, and reduces the risk of corruption. The UNDP for example, has recommended four elements in order to fight corruption, one of which is the access to information. Access to information is an important tool to tackle opaque government actions, as this enables the citizenry to reach a wide range of information online and to perform many transactions electronically without having to meet government employees face to face. This process prevents petty corruption at the very least, as face to face interactions between the government officials and citizenry exposes the latter to the demands of the public officials to bribery in form of money in return of provision of public services. E-government can also eradicate ‘middleman’ as instead of interactions between public officials and citizenry for the provision of services, such services can be provided in an online environment. Oldenburg (1987) has shown how the ‘middleman’ is an important cause of corruption in land consolidation in the north Indian state of Uttar Pradesh. The United Nations Office on Drugs and Crime (UNODC) emphasises on access to information as a tool ranked at 19 in fighting corruption (UNODC, 2004). The UNODC also indicate the importance of the access to information in their report and emphasise on the need to promote accountability. Access to information and transparency in the last few decades did not hinder governments’ confidentiality in specific cases, and therefore confidential government business cannot be a justification for denying greater transparency in government actions. Moreover, e-government is a cost-saving tool for governments as information can be collected and passed on iin a more efficient and economical manner; therefore many governments tend to apply e-government as an anti-corruption tool (Bertot et al., 2010).

Initiaves taken by governments around the world are reflective of the different ways in which governments are trying to implement e-government in their own jurisdictions. The Asian Development Bank published some of these initiatives that has been taken by different countries (Wescott, 2003). In Pakistan, information and communication technology (ICT) systems aim to reduce interaction between tax collectors and tax payers (Andersen, 2009). The government in the Philippines has created e- procurement systems which enable fair competitive practices and minimise risk of corruption (Andersen, 2009). In the state of Andhra Pradesh in India, 214 registration offices with online registration facility for real estate registration has been implemented, making the process of registration more simple and transparent (Andersen,2009). In the Saudi Arabia, the open data portal of the country aims to promote transparency, public engagement and participation, and provides services across 17 groups such as health, industry, labour market, social services, social insurance, energy and water, to name a few. One of the primary motivations for the initiatives discussed above is to increase transparency in the services provided by the government so that the governments are able to gain the trust of their citizens trust. Therefore, transparency can be determined to be an important factor in the application of e-government. However, it is notable that transparency itself does not have a universally accepted definition, although there is some consensus that transparency is aided by the application of e-government (Rothstein, 2011). Many scholars in their attempt to study transparency have defined it in different ways. Some of these definitions are considered below.Cerrillo (2011) defined transparency as the open discourse between citizens and governments, thus placing emphasis on the transparency in the communications between the government and the citizens as well as on the transparency of government actions . Information that flows from the government to the citizens may be noted as an important element of transparency in this context. This is also noted by Cuillier and Piotrowski (2009) who write that transparency is related to the important information that the citizens need from the government and the government is under a duty to provide (). Bagdai, Molen, and Tuladhar (2012)indicate that transparency has a great function in reducing mismanagement from governments, thus linking transparency to accountability of the government (). Alt and Lassen (2006) argue that transparency may give countries economic stability, thus linking transparency with economic well-being of the country (Alt and Lassen, 2006). The definitions of transparency considered here indicate that transparency is considered important for the government’s functioning in a responsible and accountable manner. This may also be applied to the officials of the government, whose actions and decisions must be seen to be transparent. Although transparency is considered as an uphill goal to achieve, many governments tend to provide their officials with the necessary training to be able to respond to the citizens’ enquiries, which training would enable public officials to reply in line with the national law as well as maintain transparency in their interactions with the citizens (Abu-Shanab, 2013). This is in line with the concept of ‘open government’, such as seen in the United States. The United States has formulated open government withthree main dimensions: transparency, participation and collaboration (Ganapati and Reddick, 2012). E-government can help achieve these aims in the open government, as the experience of the United States demonstrates (Ganapati and Reddick, 2012).

Armstrong argues that as the extent to which citizens will trust their governments, depends on the extent to which they are allowed access to information with the government (Armstrong, 2011). This thesis was conformed in a study by Cuillier and Piotrowski (2009) in which a survey was conducted to explore students’ opinion about open information on the internet. ( The study found that making the information available to the public via e-government increases trust in the government and enables the e-government project to receive more financial support. In this context of building trust, Tolbert and Mossberger (2006) believe that through enabling access to the information, e-government can increase the citizens’ awareness about their government and politics matters; therefore they can participate in the development of the policy of their country. Some other scholars argue that in addition to e-government, social media use by the government also promotes transparency, and this can be achieved through further steps, such as, development of means for transparency and evaluation of the current systems (Bertot, Jaeger and Grimes, 2010). A study of some European websites found that social media and ICTs used by governments promotes transparency levels (Bonson et al., 2012). The reason for this is that ICTs make it easier for citizens to access the necessary information, and they will be also able to track the government's’ promises and procedures. This is in line with the principle of accountability which is central to transparency (Klitgaard, 1991). In this context, it may be noted that if citizens have access to information published by the government in the application of e-government processes, they can then monitor the progress of projects and the efficiency of spending on them. Thus, citizens can question their government if there is any waste of public money, failure in implementing projects or laxity in accounts of contractors. This would be in accordance with the principle of accountability (Klitgaard, 1991). A study in Korea examines the extent of efficiency of e-government in the country; it uses different variables such as the level of corruption, transparency and the abuse of power; it found that 46.2% of the respondents believed that e-government applications promote transparency, while 41.5% of the respondents thought that e-government applications significantly decreased corruption (Ahn & Bretschneider, 2011). The results of Ahn and Bretschneider (2011) conform the argument that was being made above regarding transparency and accountability and perceptions of the citizens about their government and state of corruption. In a country, where the government applies e-government practices, there is a higher proportion of citizens who believe in the accountability of their government.

There is also an important link between e-government and communication. Zulkarnain (2017) argues that ICTs can improve communication between government and stakeholders. He states that there are three types of relationships in which such communication with stakeholders can be seen: “Government-to-Citizen (G2C), Government-to-Business (G2B), and Government-to-Government (G2G)” (Zulkarnain, 2017, p.48). He indicates that the Government-to-Citizen (G2C) relationship is the main purpose behind applying e-government, therefore improving this relationship by using e-government would allow access to wide range of information (Zulkarnain, 2017). Furthermore, it is emphasised that citizens can request to obtain some public services without the need to visit the government’s offices, and by using e-government applications instead, such as, e-Tax, e-Procurement (Zulkarnain, 2017). Government-to-Business relationship also needs to be improved as the government buys goods and services from companies to maintain its day to day work; likewise private sector needs government support to maintain their work. Finally, Government-to-Government (G2G) is also undoubtedly very important as government agencies need to cooperate and collaborate with each other in providing support and information (Zulkarnain, 2017). In certain countries G2G communication may be important in the context of improving communication between local and enteral governments (Zulkarnain, 2015). Although, literature has pointed out the many advantages of adopting e-government strategy, there are also some potential disadvanatges that are pointed out in literature. E-SPIN Group mention some of these disadvantages, including inequality to access to information, the lack of accuracy of information, and possible use of the internet by the government to influence public discourse against something in its agenda (E-SPIN, 2018). The application of e-government may also have the potential to breach privacy of individuals as e-government services will require citizens to give their own data, which maybe misused, or the funds that have been approved for the development of the system may also be exploited by corrupt government officials (E-SPIN, 2018). In this section, the dissertation had discussed how governments can utilise e-government in promoting transparency and enable access to information, thus gaining citizens’ support and trust. The question is whether e-government has impact on corruption or not. In the next chapter, this dissertation will discuss the impact of e-government on decreasing corruption.

Chapter 2: The impact of e-Government on Corruption

At the outset, it will be worthwhile to note that the impact of e-government on corruption is not measurable. This is not data that can be quantified and therefore measured in that sense. However, qualitative analysis of such potential impacts can be considered and explored. In this chapter, impact of e-government on corruption is not measured in quantitative terms, but is so done in qualitative terms. Literature and research from different parts of the world, is used to explore and discuss such impact.There is a strong relationship between corruption and e-government, which has led some scholars to explain this relationship. Norris and Moon (2005) argue that the principal–agent theory can explain the relationship between e-government and corruption; as they found how considerably the information and communication technologies can change that relationship by promoting efficient control and accountability. In the principal–agent relationship, there is a contract between the principal and the agent, according to which contract, the principal delegates some of his responsibilities and authorities to the agent as he has more knowledge, experience and the necessary skills (Moe, 1984). However, the problem appears when the agents’ act against the principal interest. As Moe (1984) described in his words, “the agent has his own interests at heart, and is induced to pursue the principal’s objectives only to the extent that the incentive structure imposed in their contract renders such behavior advantageous.” (p. 756). In addition, the data of the agent’s behaviour is unsound and can be manipulated to be in his favour (Moe, 1984). Therefore, the principal needs to have oversight on the agent’s behavior and make sure that the agent has not breached the agreement (Zhao and Xu, 2015). E-Government can mitigate this issue as it provides the right tools to observe agents’ performance and citizens will be also able to communicate directly with government agencies (Bhatnagar, 2003). The e-government rools can systematise the policies and the processes and reduce discretion that conventionally vests with government agents (Bhatnagar, 2003). By making information on transactions accessible, allowing the citizens to track and spot any corrupt act; moreover, it enables the citizen to question any suspicious action, transparency can be increased (Bhatnagar, 2003). Other scholars claim that the agency problem refers to the clash between the goals of the two parties in the agreement and “constraints in principal’s ability to monitor the agent” (Ojha, Palvia, & Gupta, 2008, p.165). They argue that in the e- government application the agent who is responsible to deliver the service to the public is isolated and the communication between the principal and the citizens is through artificial intelligence (Ojha, Palvia, & Gupta, 2008). In fact, this is one of the most important advantages of e-government, since the citizen does not need to meet the public servant face-to-face therefore, avoid any bribery demanded by corrupt officials. An e-government practice can potentially assist governments to reduce corruption because of the significant influence that e-government can have in reducing government monopoly and discretionary power of the government officials as well as in promoting transparency (Klitgaard, 1991). In fact, corruption cannot be eliminated by terminating a corrupt government employee contract (Garcia & Ortega, 2010). Rather, there is a need for systematic solutions to the problem of public corruption, with e-government being one of these systematic solutions.

The impact of e-government on corruption has been covered in many studies. Andersen and Rand (2006) found in their study in different countries that the adoption of good ICT plays a crucial role in the fight against corruption. Shim and Eom (2008) argue that both anti-corruption strategy and e-government would reduce the level of corruption. Kim (2014) finds that e-government is a valuable method for tacklling corruption but that the role of law definitely would be more effective in facing this phenomenon (Kim, 2014). One may note here that there is some debate on whether e-government or an anti-corruption strategy be used to tackle corruption in public spaces. For some scholars, e-government is a method that in itself can be used to counter corruption in their countries, while for others, an argument is made out that reliance on only e-government for tackling corruption is not appropriate. Corrupt political leaders also do not welcome the application of efficient e-government in their countries, because it will expose them to the public and reduce their illegal profits. In this context Bussell (2011) states that the extent of corruption in any nation can be the obstruction to implement ICTin that country, and that corrupt officials would fight to prevent its application (Bussell, 2011). Individuals may also not welcome e-governance as they may see it as an intrusion into their privacy or they may fear that their private data is susceptible to cyber crimes. Therefore, objections to e-government may be both political and social. The issue of privacy of the citizens can be an important social objection to implementing of e-government. Although technology is a great tool for both fighting corruption and promoting transparency; using technology needs human supervision to ensure that their operation has not been manipulated (Fisman & Golden, 2017, p 250). Hermana and Silfianti (2011) have indicated several factors that can be obstacles in implementing e-government especially in developing country. These obstacles are in the nature of (a) digital divide, (b) differences in language and written characters, (c) coordination and policy, and (d) technical aspects (Hermana and Silfianti, 2011). Technical aspects can be lack of infrastructure, lack of people's purchasing power for computers, lack of human resources, and costs for information technology (Hermana and Silfianti, 2011).E-government is application of anautomated system; which would refer to provisions of public services through the internet, so as to reduce the control by the official over the process; in addition, it enables the government to outsource the collecting of fees through banks (Garcia and Ortega, 2010). Although it has many advanatages, it still remains open to scepticism in the field of individual privacy because technology would still need some human supervision and it is here that a possibility of intrusion into individual privacy is made out (Fisman & Golden, 2017, p 250).In fact, there are other factors that may affect the success or failure of the implementation of e-government as a tool in fighting corruption, such as, the financial situation of the state because money can allow the government to bring modern technology as well as advanced equipment , also the government can provide official employees with the necessary training. Another important factor is the type of corruption which is prevalent in the state; corruption may be petty or grand. Petty corruption is undertaken usually by lower level officials when they ask for a small amount of money in return for providing basic services for instance a driving license or a commercial permit. In petty corruption the application of e-government allows the users to overcome this issue because they would not need to meet the public employee therefore, thus the opportunity to commit corruption would dramatically decreased. Therefore, the impact of e-government on corruption in developing countries is greater than in developed countries because petty corruption is dominant in the former. Researchers have indicated that all types of petty corruption can be tackled by promoting transparency obtained by adopting e-government (Pathak et al., 2008). However, petty corruption usually exists as a result of unfair distribution of the government sources that may be because of either a weak supervision by senior officials or because they gain personal interest from corruption.

An example of how petty corruption has been tackled through an e-government practice can be found in India, where the government developed a system that enables citizens to secure birth certificates and to execute the pension process without having to meet the officials face to face (Garcia and Ortega, 2010). The application of e-government was welcomed by the citizens who believed that in comparison with the provision of services through the government office, the system is extremely effective in terms of saving time, money and effort ( Kumar & Best, 2006). Another example introduced by the Indian government is Bhoomi (meaning land) project, which aims to provide land records in an online space in Karnataka; the system helped the farmers to avoid paying bribe to corrupt civil servants, and though the system took 8 years to be developed and computerized, Karnataka’s Department of Revenue has now computerized 20 million records covering 6.7 million farmers in the state (Chawla & Bhatnagar 2004).. In the earlier format, the farmers had to get a copy of RTC from the accountant( RTC is a record of rights, tenancy, and crops);because the process would take so long, the farmers had to pay bribes to the accountants involved (Chawla & Bhatnagar 2004). In Pakistan, the tax procedures have been developed with ICT in mind, as the Pakistani government has introduced a new ICT system aimed to reduce the interaction between tax payers and collectors (Andersen, Thomas 2009). Also, as a part of the Philippines anti-corruption strategy, the Department of Budget and Management has adopted e-procurement system, allowing the suppliers to provide their bidding online (Andersen &Thomas 2009). Oyamada (2005) has noted that the creation of e-procurement in the Philippines in 2004 has increased the efficiency of government procurement as a result it has helped the government to reduce the costs by 30%. However, in some developing countries, the e-government services cannot be said to be evenly distributed because not all citizens are offered the self-services model. A vast majority of people in such countries are underprivileged and cannot enjoy many services that are provided via e-government such as the ability to obtain a statement about certain thing like the status of the driving license application or a request of water service connection (Ojha, Palvia, & Gupta, 2008). This is so because many people may still not have access to computers or ICT and may not have the proficiency on these systems to be comfortable enough to do procure the services available via e-government. Nevertheless, e-government where is it available enables the citizen to assess the agent’s performance (Ojha, Palvia, & Gupta, 2008).

Furthermore, using Information technology will reduce the number of employees providing services that can be accessed electronically, which in turn will contribute to the lessening of the need to monitor all transactions (Shim & Eom, 2009). In addition, a study conducted by Mistry and Jalal (2012) found that in every 1% increase in the E-government Development Index (EGDI), corruption would reduce by 1.17%.Countries can develop the e-government system and use it as a tool to fight corruption effectively (Kim et al., 2009). Moreover, if corruption is considered as an arrangement then e-government will be the right tool to prevent that arrangement. Macrae (1982) states that corruption is an ‘arrangement’ that involves "an excellence between two parties (the ‘demander’ and the ‘supplier’) which (i) has an influence on the allocation of resources either immediately or in the future; and (ii) involves the use or abuse of public or collective responsibility for private ends (Macrae. 1982,p 678).’ It is important to draw attention to the fact that e-government can help create a culture that is free of corruption especially in developing countries where it is normal for an individual to pay for basic services such as obtaining a driver's license or opening a trade register (Iqbal & Seo ,2008). Moreover, in bureaucracy where the treatment given by the government officials may vary from person to person depending on his or her social status, e-government guarantees that everyone is treated equally as nepotism is very limited (Iqbal and Seo ,2008). E-government with its applications may help enforce laws, reduce abuse of power and promote integrity and transparency as well as increase citizens’ trust in their government. However, e-government solutions cannot be effective in reducing corruption unless they are accompanied with clear policy and procedure reforms (Bhatnagar, 2003). In addition, corrupt officials are likely to refuse the idea of developing e-government in a sense they think that would reduce their illicit income. Nevertheless, e-government can be exploited by corrupt officials to gain illegal income where it is adapted in a way that serves their personal interests (Iqbal & Seo ,2008). E-government also can ensure peoples’ participation in the government policies and procedures. UNCAC stated in Article 31(1): “Each State Party shall take appropriate measures, within its means and in accordance with fundamental principles of its domestic law, to promote the active participation of individuals and groups outside the public sector, such as civil society, non-governmental organizations and community-based organizations, in the prevention of and the fight against corruption and to raise public awareness regarding the existence, causes and gravity of and the threat posed by corruption.” Bolivar, Perez, and Hernandez (2007) argue that ― “technologies can improve government responsiveness and empower individual citizens. By making government’s financial information available, the public could continuously assess a government agency through everyday interaction” (p. 142). For example, the Mongolian government adopted a strategy that allowed citizens to participate and talk to the government by applying online participation (Baasanjav, 2008). The United States also adopted similar application called e-disclosure (McNeal & Hale, 2010). There is also another benefit to the e-government practice as it is based on the dissemination of vast information; violators cannot conceal their illegal actions and therefore the cost for them will be very high, as they will be exposed, therefore, the incentive of individuals to engage in corruption will potentially decrease (Fliorini, 1999).

In this chapter, the dissertation had discussed how e-government has a positive impact on decreasing corruption, and how the invention and development of some ICTs applications have helped countries in reducing the levels of corruption. The next chapter analyses the case studies of Japan and Indonesia in their implementation of e-government and whether this implementation has helped these countries in reducing corruption.

Chapter 3: Case study of Japan and Indonesia

In this chapter, the dissertation discusses the ways in which e-government has been introduced in Japan and Indonesia and how e-government in these countries can be linked to lowering corruption levels in these countries. This chapter discusses the case study of Japan followed by Indonesia. As this chapter will show there are marked differences between the Japanese and the Indonesian experiences in e-government, which may be related to the socio-economic differences between the two nations. The impacts of e-government on levels of corruption will also be different for nations as we will see in the case studies discussed in this chapter.

Case study: Japan

As per the Transparency International, Japan is one of the least corrupt countries in the world. Japan scored 73 points out of 100 on the 2018 Corruption Perceptions Index reported by Transparency International. Corruption Index in Japan averaged 71.48 Points from 1995 until 2018, reaching an all-time high of 80 Points in 2011 and a record low of 58 Points in 1998 (Transparency International). However, this does not mean that the country is free of corruption. Transparency International indices use corruption perceptions related to petty corruption and not grand corruption. As petty corruption is minimal in Japan, the Transparency International report says that it has low corruption perception; this is not necessarily the true state of corruption levels in Japan. Rothacher (2003) notes the nature of corruption in Japanese context saying that while ‘‘there is virtually no petty corruption’’ there is, however, grand corruption because ‘‘corruption is a structural component of Japan’s power structure’’ and ‘‘is endemic in a system run by an oligarchy operating in a gift culture.’’ (p. 106). Therefore, what may be surmised in the case of Japan is that while there is no petty corruption in Japan, there is grand corruption, and the existence of grand corruption in Japan is linked to the social conditions of the Japanese society. These social conditions can be traced back in time to an earlier period, which set the tone for grand corruption in the Japanese society. Thus, while there is little petty corruption in Japanese public offices, corruption at high levels is a part of the Japanese experience. The evidence of corruption in Japanese society is seen as far back as in the nineteenth century, when the Samurai expressed regret for the spread of corruption and the power of money (Teeuwen & Nakai, 2014). This is the time when the Samurai had become very powerful and corruption practiced by some powerful members of the society had become common in Japan (Teeuwen & Nakai, 2014). Corruption took the form of bribery in the Japanese society over a period of time and although bribery was criminalised in 1889 according to the Electoral Code, it was widespread in the state and appeared in the elections of 1890 where votes were bought by giving gifts (Quah, 2011). This part of Japanese history in the late 19th century is indicative of the presence of corruption in the Japanese society at the time.

Over time corruption in Japan has become linked inextricably to the economic and business dealings in Japanese society. In 1934, many state officials had been accused of intervening to end a deal to buy shares of Teijin, a textile company in below markets’ price in exchange for bribes (Warf, Warf & Bakker, 2019). In 20th century many corruption scandals have been uncovered and continue to this day, with the majority of the corruption scandals related to business and financial dealings (Carlson & Reed, 2018). However, the aftermath of the scandals has rarely seen strict action against corrupt public officials, which is indicative of the nature of corruption in Japan and its link to important power structures in Japanese political and financial institutions. In 1954, a massive corruption case emerged when a ship building company bribed legislators to get low rates of interest; in this case 71 politicians were accused but only one was sent to prison (Warf, Warf & Bakker, 2019). Mitchell (1996) asserts that “all major shipping companies” paid bribes (p. 111). In addition, tax money is always manipulated using innovative accounting methods; this has become normal and acceptable to politicians, local governments and police, who, despite their corruption, are re-elected for a new round (Nyblade & Reed, 2008). All these examples of corruption in the Japanese society points to a peculiar form of corruption which is related to economic and financial corruption. Such corruption sees a close interlink between public officials and private players, predominantly major corporate houses. The fact that little action is taken against such people shows that corruption is closely linked to power structures in Japan, and that while there is little petty corruption in Japan, there is presence of grand corruption which is harder to reveal and harder to take action against. This also has implications for e-government and its impact on corruption because e-government is useful in mitigating petty corruption, while it has little role to play in mitigating grand corruption.

The ramifications of the Japanese government not taking much action against grand corruption is that there may be a trust deficit in the public. There are many examples in Japan where allegations and investigations into grand corruption has rarely yielded results that saw legal action taken against these people. Choi (2007) argues that the government by allowing administrative corruption undermines public trust and reduced market incentive. In 1974 after a scandal in which Prime Minister Kakuei Tanaka was involved, he left the office when he was found to have received a bribe from Lockheed aerospace company in order to finish the deal with All Nippon Airways to buy their aircrafts; 470 persons were investigated in this case and despite evidence, nobody has been formally indicted or prosecuted in the case (Warf, Warf & Bakker, 2019). Another example of lack of legal action despite allegations and investigations into grand corruption can be seen in the 1989 case of Recruit Cosmos. Because of implication of a legislator to take shares for Recruit Cosmos in return of providing some political interests, Prime Minister Noboru Takeshita was asked to resign; again only two members were charged among 40 politicians who were involved in the scandal (Warf, Warf & Bakker, 2019). These cases show that there is existence of grand corruption in Japan and the regime has been unable or unwilling to punish the corrupt. This also has implications for understanding the link between grand corruption and e-government. This is so because e-government’s specific features of reducing face to face interactions between public officials and citizenry and online transactions for public services deliverables are particularly suited to reducing petty corruption. More examples given below shall demonstrate how corruption in Japanese society is structured to be grand and especially linked to financial and business deals. One of the areas where Japan has seen significant corruption is in the area of construction. The Japanese construction sector has a history of corruption, especially bribery in return for awards of contracts (Woodall, 1996). In 1991, the Secretary-General of the Liberal Democrats, Abe Fumio, was arrested and sentenced to 2 years in prison in the Kiwa case, because he accepted a bribe from a construction company (Warf, Warf & Bakker, 2019). Japan is one of the countries which is the most susceptible to the occurrence of earthquakes; however, architectural designs that always reduce the risks are ignored and instead sub-par designs are passed, and bribery used to get such designs passed (Warf, Warf & Bakker, 2019).

While there are examples of grand corruption in Japan, it is believed that there is no petty corruption in Japan. Corruption in Japan can go to the very highest echelons of power, as is depicted in the recent allegations against the prime minister. In 2017, Prime Minister Shinzo Abe was accused of buying discounts for the Moritomo Gakuen group, which paid lower than market price (Wakatsuki & Berlinger 2017). Quah (2011) has explained the absence of petty corruption in Japan is due to the high salary given to the public officials, however low in comparison it may be with that in private sector. He referred to the situation in Japan as “unique as petty corruption is a fact of life, but grand corruption is a way of life” (Quah, 2011, p.38). It has been recognised that corruption undermines the development of a country. Therefore, governments have decided to tackle this issue by adopting anti-corruption measures. For example, in Japan there are many anti-corruption laws such as the Penal Code of 1907 in Chapter 25 (crime of corruption). In addition, there are many other laws that aim to prevent bribery offences like the Horse Racing Law, the Cycle Racing Law, the Bankruptcy Law, and the Corporate Reorganization Law. For example, if the horse trainer was found to have received bribe for the race, then according to the Horse Racing Law he will be sent to the prison for three years (Tachi, 2001, pp. 7–8). There are several laws that regulate public procurements and biddings such as the Bidding Correction Law of 2000 which regulate the relationship between the stakeholders (Quah, 2011). Although, the government has put in efforts to tackle corruption; the country still does not have an ACA to implement the anti-corruption strategy. However, the Special Investigation Departments (SIDs) of the Public Prosecutor’s Offices in Tokyo, Osaka and Nagoya are responsible for the investigation into most corruption cases. Cases involving bribery, breach of trust, tax evasion, securities exchange violations and the non-compliance with laws governing the prohibition of private monopolies and the maintenance of free trade, are all investigated into by the Special Investigation Departments (Quah, 2011, pp. 64-65). It may be said that the police and the public prosecutor are sharing the responsibility in enforcing the law (OECD, 2000, p. 210). In fact, the police investigate 90% of cases, while the public prosecutor is responsible for the cases that are referred to them by police (Quah, 2011).

In addition to the above measures, the Board of Audit (BOA) is responsible to check the accounts of the companies and government; the BOA has to inform the PPO in case there is a need for further investigation but that rarely happens (Smith, 2008, p. 19). In practice the BOA does not take action against organised crime corruption if found, however, it would take action in bribery events in the individual cases (O’uchi et al., 2006, p. 17). Also, there is the Supreme Audit Institution (SAI) which is the highest authority in the country for evaluating the accountability of government institution; it has also roles for tackling corruption (Zulkarnain, 2017). Researchers have indicated that although, SAI does not have responsibility to prevent corruption, their work is to scrutinise financial transactions with high accuracy and through reports from reliable sources, which enable them to the detect fraud and corruption (Stapenhurst & Titsworth, 2002). This section has shown that contrary to the popular perception of Japan as a low corruption society, there is indeed much corruption in Japan. However, the nature of the corruption in Japan is different from its Asian counterparts like Indonesia, where corruption is prevalent in the public sector and many of the public sector deliverables are available to the citizenry only if they bribe the public officials. This puts Japan at a different footing vis a vis countries like Indonesia as Japanese corruption is predominantly grand in nature while Indonesian corruption as the later sections in this chapter will show, is petty in nature. This has implications for e-government programmes in Japan and Indonesia. Japanese e-government will be aimed at providing public sector services and deliverables to citizenry in a more efficient and hassle-free manner. In Indonesia, the aims and objectives of e-government will include reduction of petty corruption by minimising face to face interactions between public officials and the citizenry.

E-government in Japan

Like many countries, Japan has adopted many initiatives related to the use of information systems in order to strengthen the relationship between government institutions and society and to improve services and ensure economic and social growth. In 2000, Japan developed its strategy e-japan, and enacted a law on information technology to reach an advanced stage in technology and communications. According to the law the Prime Minister is assigned to be responsible for the strategic implementation that focused on the development of the country's IT infrastructure. In addition, the government has passed several laws related to e-government such as the law that encourage electronic signature, another law facilitates the electronic voting process, and there is also law that protect personal data of users from abuse (Nilsson, 2013). All these laws would help and promote the participation of citizens in the e-government programmes as well as enhance transparency and integrity and increase the level of confidence of individuals in their government. In order to implement the strategy a number of goals were set to be achieved by 2005; the main goals are the establishment of high-speed Internet infrastructure, the development of strong policies to simplify e-commerce and human resources development (Eifert & Püschel, 2004). As a part of the plan, 40 million houses were to be provided with high speed internet at low rate by 2005. To achieve the goals, the government has adopted several polices, one of which is the allocation of a specialised body to respond to the problems and complaints of users and processing them quickly and effectively (Eifert &Püschel, 2004). The government also planned to develop e-commerce regulation in order to protect consumers’ rights by 2002, and increase the number of transactions by 2003. With regard to human resource development, the strategy agreed that 3,000 experts would be available by 2003 to work in Japan, and to facilitate the use of Internet in schools and public sites, and also to support the experts, trainers and researchers of information technology (Eifert & Püschel, 2004). In 2003, the IT Promotion Headquarters, which were located in the Prime Minister’s Office in 1994, decided to move on to e-Japan Strategy II (Japan Strategy, 2003). As the first strategy was to build strong infrastructure for the communications network and the Internet, the following strategy focuses on using this technology to create new opportunities and industry in seven important areas, which are, “medical services, food, lifestyle improvements, financing for small and medium-sized firms, intelligent work, employment/working, and administrative services” (Eifert & Püschel, 2004, p.156).

All these plans, procedures and policies adopted by Japan have contributed to the development of the concept of e-government and its importance to the Japanese, which increased their contribution and built a mutual communication with the public institutions, which led to increased level of transparency in the country. For example, the government has established the country website platform for e-government, which contains many services that can be obtained online like police legal counsel and communication services; school education and learning information; employment and the national insurance system; health issues; income tax issues; driver’s license and payment of road and automobile tax; marriage and business certificates; and information about travelling and nationwide transportation (Nilsson, 2013). This platform also aims to disclose information provided by central government offices, which includes information on statistics, press releases, legislation and annual reports (Eifert & Püschel, 2004). The Japanese government has also introduced electronic tax filing systems. The system has been adopted by governments all over the world because the system has the potential to avoid mistakes, which can happen by taxpayers as well as is a perfect method to stop tax evasion by data matching (Berdykhanova, Dehghantanha & Hariraj, 2010). In addition, it helps streamline procedures for taxpayers and it saves both cost and time as well as eliminates face to face interaction between individuals and government offices, which are generally considered to facilitate conditions for corruption by the public officials. The government in Japan also has realised the importance of the system. Therefore, in 2000, the Ministry of Finance announced its plan to allow taxpayers to submit annual tax returns online by 2003, the plan also included 1,233 items that will be available online such as paying national taxes and customs (Eifert &Püschel, 2004, p.166). The continuous development of e-government in Japan has touched on all aspects of the state; even in the case of the Supreme Audit Institution; SAI has introduced tools for collecting financial data, with the main goal of improving the level, productivity and speed of its procedures. SAI also has developed the audit information system to improve the audit work, the system named as "Certification of the Final Account Computer System" CEFIAN (Zulkarnain, 2017, p.89). Through the developed system, SAI according to the Board of Audit ACT receives electorally a monthly financial report by all auditors of government institutions; once the reports are received the auditors compare the data included in the reports with the bank data maintained by the Japanese banks. Governmental Accounting Affairs Data Communication Management System (ADAMS), which is responsible for expenditure and input accounts for all government agencies, uses CEFIAN which ensures that the provided data matches with the real data (Zulkarnain, 2017). These measures are taken to ensure that there is oversight and audit. One may recall that the nature of corruption in Japan being grand in nature and linked to business and financial dealings, these measures are necessary to ensure that there is minimisation of corruption. This is also linked to Principal-Agent theory because the principal will be able to maintain oversight on the agent and ensure that the agent is not involved in corrupt practices.

The country also in the pursuit of justice, competition and integrity has adopted the e-bidding system as bidding systems that are opaque can lead to adoption of corrupt practices by the authorities. The system implemented in the City of Yokosuka in Kanagawa Prefecture introduced in 1999, allowed contractors to submit their bids on government projects online, as well as the knowledge of the winning bid and the price offered. The e-bidding system has contributed to the increase in the number of offers and the creation of a competitive spirit (Eifert & Püschel, 2004). The City of Yokosuka has developed the system in order to prevent bidding forgery, according to the new system any new project with its conditions announce publicly via the internet, therefore contractors who match the requirement can participate and submit their offers without the need to attend personally, the transparency in public tender procedures led to a sense of trust and fairness for contractors and encouraged them not to falsify tenders (Eifert, Püschel, 2004). Some scholars argue that the number of bidding has increased from 8.2 bidders under discretionary power to 13.7 bidders under transparency (Balsevich et all, 2011). As a small number of bidders for a public contract are associated with potential corruption (Transparency International, 2014). In fact, the e-bidding system is a good example of the principal-agent theory (C=M+D-A) as the principal has the tool to monitor the agent through public disclosure of information, and can also punish the agent if the later engages in any corrupt behaviour. Moreover, the agent does not have much space to abuse his power as the bidding online submission lessens the opportunity of meeting the agent face to face thus decreasing the risk of asking for bribery. In the Japanese case, this was important because there were many corruption scandals that broke out in the construction sector. The e-bidding process is meant to create a greater oversight in the process, and decrease discretion so as to avoid or minimise corrupt practices in the bidding and procurement processes in the construction industry.

Case study: Indonesia

Indonesia is one of the largest countries in the world and it I has been ranked as one of the most corrupt countries for a long time. Indonesia scored 33 points out of 100 on the 2018 Corruption Perceptions Index reported by Transparency International. Corruption Index in Indonesia, reached an all-time high of 38 Points in 2018 and a record low of 17 Points in 1999 (Transparency International). There are many reasons why Indonesia is a notorious country in terms of spread of corruption, including the result of colonisation of the military dictatorship, as well as oil revenues, and rent culture even in getting a government job (Warf, Warf & Bakker, 2019). Due to this level of corruption, government has taken specific law and policy oriented anti-corruption measures. The Eradication of the Criminal Act of Corruption Law 1999 and the Amendment Law 2001 define corruption as the receiving of gifts or promises by civil servants to influence them wrongdoing with respect to their legal obligations or duties under the law (Buttle, Graham Davies, & Meliala, 2016). Clearly, the definition of corruption takes into account public corruption. This is not surprising since there are grave levels of public corruption in Indonesia as reflected in the report by the Transparency International. This also puts Indonesia at a different footing from Japan where corruption is mostly situated at the power circles both in the government and the business sectors. In terms of principal-agent theory, this would mean that there is a greater need for the principal to create an oversight on its agents in public sector as compared to Japan where petty corruption is minimum. Research by corruption scholars in Indonesia, reveals to what extent corruption has become endemic in the country. An important research in this area was conducted by Buttle, Graham Davies and Meliala (2016), who collected data through interviews conducted with the police officers in the Indonesian police (Polri) between years 2010 and 2013. The research found that the corruption of police officers is motivated by economic or financial factors, which include low salaries paid to police officers, and pressure from families to provide a better standard of life (Buttle, Graham Davies, & Meliala, 2016). Accordingly, police officers in Indonesia may take bribes and gifts in return for dereliction of duties to the advantage of the bribe giver (Buttle, Graham Davies, & Meliala, 2016). The concept of Slippery Slope has been used to explain why even the honest police officers are not forthcoming about those who are corrupt and why there are not many honest police officers in Indonesia (Buttle, Graham Davies, & Meliala, 2016). Slippery Slope refers corruption that happens gradually with police officers starting at junior ranking Polri where low-level corruption is common and then getting more opportunities for corruption as they move up the promotional ladder (Buttle, Graham Davies, & Meliala, 2016).

The example of the research by Buttle, Graham Davies and Meliala (2016) is related to police corruption, but it may be a good indicator of how corruption is organised and systemised in Indonesian public offices. This endemic nature of corruption has not changed much despite change in governments. In the Sukarno era, corruption existed enormously in the country, especially in the judiciary; also, during the Suharto regime institutional corruption spread as patronages were used to remunerate the supporters of the government (Warf, Warf & Bakker, 2019). These examples show that corruption in Indonesia is systemised and is a part of the governance as well. At times, this has had a shocking impact on the Indonesian economy, as in 1998, when the Asian economic crisis shocked Indonesia's economy and exposed Suharto corruption, leading to his step down from the rule of the country (Warf, Warf & Bakker, 2019). Indonesia is considered an important country in exporting petroleum. However, the oil exports' money is used to be divided among the elites; thus, the state became one of the countries that have the so-called ‘resource curse’ (King, 2000). The government owned an oil company that had bad reputation in term of tax evasion as well as excessively spending on projects; it is believed that Suharto gained a lot of support from the company as the outcome of the investigation conducted in 2003 revealed that Suharto received about $1.7 billion from the company (Warf, Warf & Bakker, 2019). This complicates the principal-agent theory application in Indonesia as the principal itself is involved in corrupt practices. However, in recent times, government has tried to set up practices that will allow more oversight on the agent so that there is a minimisation of corruption in the public sector; but the effectiveness of these measures is moot. An example is the Corruption Eradication Commission was established in 2003. It has investigated and sent to prison many of politicians and officials in Indonesia (Schütte, 2012). However, it did not target the senior officials who could protect themselves and hide their corruption, that why it is believed that the commission has a little success (Warf, Warf & Bakker, 2019). It seems that the government has failed to fight corruption, since most prosecutions ended without conviction, and in the end state money goes to the corrupt officials, and yet in 2018 the former spokesman of the parliament was convicted of stealing a vast sum of $170 million that money had been allocated to the national identity card program. This also shows that Indonesia has both petty and grand corruption.

All forms of corruption have existed in Indonesia such as fraud and bribery; it is spreading across the country. The Economist indicated that “Indonesians of all stripes gripe about sticky-fingered officials” (2015). For example, a report said that more than half of Indonesians gave bribes to a judge in the judiciary; protests also always happen because of the corruption that dominates the country (Warf, Warf & Bakker, 2019). Corruption has undermined the judiciary, environmental protection law and promoted illegal logging (Smith et al. 2003). It is also impeded the economic growth (Collins, 2007). Therefore, corruption in Indonesia is different from Japan. In Japan, there is grand corruption and a similar lack of legal action against corrupt officials as in Indonesia. However, Indonesia also has a very high level of petty corruption, which is particularly impactful for citizenry which is expected to pay bribes for accessing public services and deliverables. Therefore, there is a mix of measures that are required to counter corruption in Indonesia. The anti-corruption measures in Indonesia has gone through different stages. In 1965, Major General Soeharto formed the National Security Agency (Kopkamtib), which was entrusted with the role of combating corruption (Thoolen, 1987, p. 67). Kopkamtib was introduced in the first place to take action against Tax Violations such as bribe and forced discount, by visiting government offices and firing any corrupt officials (Quah, 2011, p.38). The dark side of Kopkamtib is that its target does not include the senior officials who are involved in serious or grand corruption rather focussing on petty corruption by lower ranking officials (Quah, 1982a, p. 171). For example, for two decades no action was taken by president Soeharto to prevent corruption among his own family and ministers until he left the government in 1998 (Quah, 2011). When one of ministers was under investigation in a case of corruption, the case was under the control of the president himself and was not heard by any court; after a few days the president made his decision to not dismiss the minister but subject him to a period of ‘introspection’ (McLeod, 2000, pp. 150–151). This reflects on the hypocrisy with which corruption has officially been dealt with in Indonesia and how different yardsticks are applied to cases involving petty corruption and grand corruption. The principal-agent nexus in corruption is also exposed in these examples from Indonesia as the principal and the agent both seem to be involved in corruption. This would mean that any oversight by the principal will also be superficial and may not take into account corrupt practices by high ranking officials as well. Since the Soeharto regime is known to be corrupt amongst the Indonesians, any regime that comes later will have the primary goal of fighting corruption in response to the people's demand (Hamilton-Hart, 2001, p. 66). Therefore, President B. J. Habibie’s main aim was to fight corruption in all its forms (Assegaf et al, 2002). For example, he enacted many laws one of which is the Anti-Corruption Law (Law No. 31 of Year 1999); according to that law the penalty of corruption can be 20 years imprisonment or one billion Rupiahs in fine (Quah, 2011, p.381). However, the reforms that the president had made have not help in preventing corruption in the country. Quah (2011) indicates that the failure of Habibie’s reforms was for two reasons first, there was no political will to prosecute corrupt people; and second, all institutions established by Habibie to combat corruption failed in their mission (Assegaf et al, 2002 cited in Quah, 2011). In 2003, the Indonesian government established the Indonesian Corruption Eradication Commission (Komisi Pemberantasan Korupsi [KPK]) (KPK, 2009). The KPK consists of investigators and prosecutors (KPK, 2009). According to the law the KPK is responsible for supervision and coordination with other institutions in terms of tackling corruption, investigating and prosecuting in the corruption cases, preventing corruption by taking the necessary measures such as checking wealth reports, etc., and making recommendations on the institutions of the state in order to prevent corruption (Davidsen et al., 2006, p. 48). The KPK is divided into five divisions, the Office of the Deputy for Prevention, the Office of the Deputy for Repression, the Office of the Deputy for Information and Data, the Office of the Deputy for Internal Monitoring and Public Complaints, the Secretariat General (KPK, 2009, pp. 5–6). KPK’s employees have increased from 305 in 2005 to 652 in 2009; also, the budget witnessed huge increment from US$11 million in 2004 to US$51.3 million in 2009 (Quah, 2011).

E-government in Indonesia

Geographical conditions of Indonesia in terms of its size and population are a major challenge for the government with regard to the delivery of ICTs to all regions, cities and villages. It is another respect in which Indonesia is so different from Japan because Japan does not face challenges in the nature of geography and population for e-government application. With regard to the challenges faced by Indonesia, Hermana and Silfianti (2011) described the situation in their words:

“Wide-spread geographic conditions become a great challenge for the government and people of Indonesia in the era of globalization and information, especially how to connect the scattered parts of Indonesia Area with big population through information and communication technology- which is a type of technology that drives globalization” (p. 156).

The vision of Indonesia in terms of ICT development and use, is to become an advanced country in using information technology. Harijadi (2004) indicates that the ICT vision of Indonesia is to bring about a modern information society, which is prosperous and highly competitive, and is supported by the ICT in a strong way. One of the main goals in implementing e-government in Indonesia is to promote transparency and accountability. This is needed because the nature of corruption in Indonesia is such that there is high incidence of corruption in the public sector where people are required to pay bribes for getting their work done. Increase in transparency through the application of e-government services will go a long way in ensuring minimisation of corruption in the Indonesian society. The Presidential Instruction No. 6 / 2001 regarding ITC stated that the government should utilise technology to encourage governance (Hermana and Silfianti, 2011). It is also argued that one of the advantages of the e-government development will be that it will lead to increase in transparency and accountability of public functions (Hermana and Silfianti, 2011). The Indonesian government has taken many actions in order to implement the ICT vision in the country. For example, Presidential Instruction No. 6/2001 (April 2001) a five –year action plan, Presidential Decree No. 9/2003 about the coordinating the team (TKTI), Instruction No. 3/2003 about national policy on e - government Development, and the enactment of the “Electronic Information and Transactions Law” (Harijadi, 2004). TKTI is responsible to carry out part of the plan to support the e-government development for example, the reform in human resource, legal and policy system framework, the IT infrastructure, provide support to the applications of e-government and suggest action plan for e-government stakeholder (Hermana and Silfianti, 2011). These measures can be used to strengthen the principal oversight on the actions of the agents and therefore, using the principal-agent theory, the e-government plan can be visualised. As mentioned above, Indonesia is considered to be one of the most corrupt countries in the world, it scored 33 points out of 100 on the 2018 Corruption Perceptions Index reported by Transparency International. Hence, the government has adopted e-government strategy by using ICT as a tool to promote transparency and accountability as well as for fighting corruption by allowing public access to information. Unlike Japan, which is one of the least corrupt countries according to the Corruption Perceptions Index, Indonesia has adopted e-government as an anti-corruption tool in terms of promoting transparency and accountability whereas Japanese government’s main goal for adopting e-government was to develop the public services that it delivers to the citizens.

The government in Indonesia has launched three platforms: the first is company register, which provides a list of companies registered including details on contact, directors, commissioners, shareholders and financial reports; the second is the government budget, produced by the Ministry of Finance and which includes details on budget data for government institutions; finally public procurement, which provides details on contracts, tender announcement as well as the government procurement plan, all information can be available via diverse range of websites, for example the budget data also publish on the open data budget portal (Maail, 2017). The government also realised that corruption has affected the public sector particularly government procurement as it was reported by Indonesia Corruption Watch (ICW), that in 2015, Indonesia lost Rp. 3.107 trillion (US$ 230 million) because of corruption in government procurement. In the same context, the Corruption Eradicate Commission (KPK, 2016) asserted that corruption in the government procurement is one of the most common types of corruption in Indonesia. Maail (2017) indicate that government procurement sector is considered in Indonesia as a high risks sector that is handled by KPK, especially as the government spends 30% of its budget in that sector thus leading to a huge waste of the public money. In addition, the government has launched several initiatives to prevent both corruption and fraud in public procurement. For example, to increase the level of accountability in the sector, citizens are allowed to raise complaints that relate to the procurement activities via the e-Pengaduan portal. Also, the National Public Procurement shares all the data that relates to public procurement with the civil society such as Indonesia Corruption Watch, hence the ICW can analyse and match the data in attempting to capture any potential fraud (Maail, 2017). However, corruption remains a big challenge in the public procurement sector in Indonesia. Researchers find that poor oversight of government procurement procedures creates opportunities for corrupt government officials to fraud (Wicaksono, Urumsah, & Asmui, 2017). Maail (2017) indicates that only 30 per cent of the procurement budget has been subjected to e-procurement; moreover, the published data is complicated and difficult to understand and criticized due to the lack of sufficient data to illustrate the details of the government projects and contracts.

Transparency International Indonesia has launched Check My School website; which allows the public to share their complaints about the schools services including their budget. The system belongs to the Ministry of Education which receives 20% of the public budget, the ministry transfers the school operation cost to schools and they are not allowed to take fees from students. However, some schools still request the fees from students. There is also another initiative named LABOR, through which system citizens who naturally monitor the public services delivery can directly submit their complaints. The LABOR system exists in 80 ministries and institutions, and is managed by the Presidential Staff Office. However, it has been noted that there is a problem in this system where there is no contact between the presidency and other government departments (Siti et al, 2017). In 2016 the Indonesia’s Corruption Eradication Commission (KPK) in cooperation with the GIZ program Assistance in Preventing and Combating Corruption in Indonesia (APCC) launched the JAGA app, which aims to develop public services such as education and medical care. All government institutions have to provide the JAGA with the details about services which they provide. The JAGA makes this data accessible for citizens and encourages them to compare that data with actual services they have been provided. This system is used by 2000 users, and the most important obstacle noted is that JAGA may not always be able to provide information that citizens really need ( Kossow & Dykes, 2018). The Indonesian experience with e-government indicates that so far the government is not able to successfully launch a programme that will help it to curb corruption. There are many reasons for this. The first is the sheer geographical challenge that Indonesia faces due to its large territory. This is different from the Japanese experience because Japan is smaller in comparison. The second is that Indonesia does not have the economic and financial resources that Japan has, and which is essential to building a strong ICT infrastructure. Indonesia needs financial capability to build the infrastructure, as well as train its public sector employees so that they can adapt to ICT systems for e-government deliverables. The third is that corruption in Indonesia is more deeply seated and is prevalent amongst both the lower level public officials as well as highest ranking government officials. This makes the principal-agent nexus in corruption more complex in Indonesia and harder to countenance unless the government takes sincere measures for countering corruption through e-government.

Conclusion

Corruption is a major problem for governments as well as citizens as is seen in the experiences of Japan and Indonesia. Both these case studies show that corruption can be a problem because it eats into the economic health of the country, makes citizens doubtful and mistrustful of their governments and public officials, and is an obstacle in the delivery of services to the citizens. Although corruption can be in the nature of private as well as public corruption, this research was only related to public corruption. The case studies of Japan and Indonesia were used to show how corruption can be tackled with the help of e-government. Literature considered in this dissertation and the two case studies of Japan and Indonesia indicate that there is a link between e-government and decrease in corruption. In Japan, e-government was applied for the purpose of providing better delivery of government services to the citizens. While decreasing corruption was not the stated goal behind application of e-government in Japan, literature does indicate that application of e-government leads to decrease in corruption. In Indonesia, application of e-government practices and measures have been done for the purpose of decreasing corruption in Indonesia. Literature set in Indonesia also indicates that there are many e-government applications that have been introduced to that country. There are reasons why e-government practices and measures impact the levels of corruption in the country. The most important reason is that due to the application of e-government in delivery of government services, there is a decrease in the face to face interactions between the public officials and the government agents. Face to face interactions have been shown in literature to be the major reason why there is petty corruption. In rent seeking cultures, face to face interactions facilitate conditions in which public officials get the opportunity to demand bribes from the citizens if the citizens want access to the services that are offered by the government. E-government, such as, measures that allow people to pay their tax online, or apply for services in an online environment, minimise face to face interactions between the government and the citizens.

Therefore, there is a decrease in corruption due to application of e-government as there is a decrease in the face to face interactions between citizens and the public officials. This is seen in both Japanese as well as Indonesian case studies. Especially in the case study of Indonesia, we saw how the decreased face to face interactions between citizens and government officials led to decrease in petty corruption. The same cannot be said about grand corruption. Grand corruption is of a nature which is very different from petty corruption and the impact of e-government will not be the same for both kinds of corruption. Petty corruption involves low ranking government officials. On the other hand, grand corruption involves very high level officials. The case studies of both Japan and Indonesia have shown us that while it is easier to take action against lower ranked public officials, the same cannot be said of high ranked officials. In Japan as well as in Indonesia, there has been a lack of action against high ranking government figures despite serious cases of corruption against such people. Moreover, e-government is not likely to have a major impact on grand corruption. Grand corruption is of such a nature that it involves major dealings and such actions are rarely the kinds that will be attracted by e-government measures. For that reason, it is likely that despite the application of e-government measures, there will not be any impact on grand corruption due to the e-government measures alone. However, in one sense more serious cases of corruption as compared to petty corruption, can be tackled by e-government measures. These are in the area of procurement. Procurement contracts are often high value contracts and such contracts see corruption of a high value kind. In countries where procurement contracts are done through the discretion of the public officials, there is a likelihood of corrupt practices being used to issue procurement contracts. The application of e-procurement in Indonesia and Japan have shown that it is possible to tackle corruption in procurement contracts by adopting an online method of application and issuance of procurement contracts. Both Japan and Indonesia have adopted e-governance in the area of procurement contracts, and both countries have shown that there is a decrease in corruption in procurement after the application of this system.

Corruption in public sense is also connected to discretion of the public officials. Wherever public officials are given discretion, there is always a chance and opportunity that public officials will misuse their discretion and ask for bribes and indulge in other corrupt practices to exercise their discretion in the favour of the bribe giver. Therefore, one way of decreasing corruption in public spaces is to decrease the area of discretion of the public officials. With respect to this, e-government can prove to be valuable exercise because by application of e-government measures, the government reduces the area of discretion given to the public servants. Finally, it may be said that e-government alone cannot be successful in tackling corruption. Law and policy statements are required to reduce corruption in the public services. In other words, an active anti-corruption method cannot be replaced by e-government. This is understood from the experiences of both Japan and Indonesia. In both countries, e-government has been able to tackle corruption in the petty sense but not in the grand sense. Grand corruption cannot be tackled by e-government alone and requires a strong response of anti-corruption law and policy as well as will of the government and the judiciary. Both the case studies of Japan and Indonesia have shown that despite there being laws to curb grand corruption, actual response in the nature of indictment and prosecution of high level officials has been significantly low. This also has a message for the advocates of e-government that just by applying e-government we cannot expect the corruption levels in the states to go down unless there is a strong political will to enact strong anti-corruption measures, and honest judiciary to prosecute cases of grand corruption. Similarly, if e-government measures lack actual tools for tackling corruption, these measures will not be able to tackle corruption effectively. To conclude, e-government measures formulated specifically to respond to corruption can be used to tackle corruption.

An important point to be considered here is that socio-economic differences in two countries can mean that there are also differences in how the two countries experience e-government and how far e-government can impact levels of corruption in the two countries. Effective e-government needs infrastructural support, existence of a skilled workforce, and a skilled citizenry that is proficient in the use of computer and ICT technologies. Citizens have to access e-government services and use them if the e-government model is to be successful in a country, which means that citizens must be proficient in computer usage and use of ICT technologies. This is the first place where the differences between the Japanese and Indonesian experiences become relevant. There has to be a trained and skilled workforce in the government so that they can apply e-government services as per the practices established by the government. This is the second place where the differences between the Japanese and Indonesian experiences become relevant. To explain the above two points further, one may note that Japan is a developed country with a far smaller population as compared to Indonesia. Indonesia has a bigger population and more geographical area under its control but it does not have the economic development comparable to Japan. Japanese government can develop and apply e-government practices more efficiently than Indonesia because they have the economic strength to develop such programmes, apply them, train their workforce and keep upgrading the e-government programmes and their workforce skills. Compared to Japan, Indonesia is not in a position to expend as much capital into developing such e-government programmes and training their workforce. This becomes an impediment for Indonesia to have as much success with their e-government programmes as Japan has had. Secondly, as Japan has a more proficient citizenry as far as use of computer and ICT technologies is concerned, e-government programmes are more successfully applied there because a skilled citizenry is able to access the e-government programmes and services. Indonesia still has some way to go in this regard.

Finally, it may be noted that the application of e-government in an effective manner requires development of ICT technologies and infrastructure. This needs financial investment by the government. Any government which wants to create a strong and effective e-government practice, will have to invest considerable capital into developing infrastructure and resources for the same. This is not seen in Indonesia at the same level as it is seen in Japan. Therefore, Indonesia has not been able to develop as efficient and effective a structure of e-government as Japan has developed. To conclude this dissertation, it may be reiterated that e-government is useful for reducing corruption, especially corruption of a petty nature because it reduces the interactions between public officials and the citizenry. This reduces the scope for corruption and bribery for the services that the citizenry wants to access from the government. However, the application of e-government does not necessarily reduce the scope for grand corruption. In the case of Indonesia, if it wishes to implement e-government of the same nature as Japan, it will have to improve its ICT infrastructure and invest in training its workforce so that the e-government programmes can be effectively implemented as they have been implemented in Japan.

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