The Bribery Market in Iran's Economy

The Cultural Deputy of the Judiciary, which is supposed to combat bribery, recently stated at a gathering of cultural deputies from courts across the country: "Currently, bribery and corruption around the Judiciary have increased." According to government officials, bribery is a chronic problem, as a few years ago, Ebrahim Amini, the temporary Friday prayer leader of Qom, declared "bribery in various forms" as the third plague of the Islamic Republic's judicial system, stating: "These bribes are sometimes monetary, sometimes involve giving positions, sometimes as gifts, and even sometimes as Imam's share." An important point in this statement is the exchange of services and the distribution of job opportunity rents among judicial officials. Bribery in the form of service exchange—or what is commonly referred to as favoritism—is one of the most complex types of bribery. However, bribery is not limited to the Judiciary; a significant portion of government institutions suffer from it to varying degrees. For instance, it was recently announced that the 24th branch of the Court of Appeals in Khorasan Razavi issued a final verdict regarding 21 defendants in a "bribery" case, of which about 16 were officers and agents of the police force. According to Khorasan, the case began in 2012 following the discovery of about 500 grams of heroin in Mashhad and was investigated in Branch 903 of the Revolutionary Court. The expansion of bribery can also be inferred from the criticism of another Friday prayer leader in Qom, Reza Ostadi, regarding organizations and institutions: "Unfortunately, corruption is seen in some government organizations and institutions, where they resolve people's issues by taking bribes, under-the-table payments, and gifts, and this is not befitting of the Islamic system." The bribery chain has even extended to the City Council. According to Ali Mostafavi Nia, the prosecutor of Rasht County, two former members of the Rasht City Council are serving prison sentences, and a third is on the run. The Director General of Inspections in Kerman Province recently stated: "According to a survey, over 80% of people believe that our administrative agencies are corrupt, and our own judgment is the same, but we believe that corruption is perpetrated by the administrative apparatus, not the people." The bribery network as a type of service exchange market indicates that the most prevalent type of management corruption in Iran occurs in the exchange of services among officials and managers. Given the mentioned penalties in the law, which are not necessarily effective, the service-money relationship is more often realized as a service-service relationship. Such a relationship is more hidden, making it more difficult for judicial and police discovery and intervention. Of course, the service-to-service relationship, which occurs under titles such as helping others or goodwill, helping relatives, eventually leads to a monetary relationship, but it is difficult to determine how and at what stage this relationship turns into money. It can be claimed that a complementary part of every type of management corruption and bribery is "facilitation." The bribery market, like any other market, has supply and demand sections as well as intermediaries and brokers—referred to here as facilitators. The difference is that the role of intermediaries in the bribery market is much more sensitive and important. The more the need for secrecy in the exchange of services increases, the more important the intermediary becomes. Therefore, it can be claimed that a complementary part of every type of management corruption and bribery is "facilitation." Facilitation is a type of brokerage of services between clients of the administrative system and employees. The expansion of "facilitation" is so significant that Gholamhossein Esmaili, the head of the Tehran Judiciary, mentioned in an interview this July that over 500 brokers and facilitators have been identified. This same individual reported last year the "arrest of 300 brokers, facilitators, and individuals who unjustly defamed judges" in the first eight months of the previous year. The factors, conditions, and consequences of bribery emergence are at least conditional on the existence of two conditions: first, the opportunity for bribery and second, the motivation for bribery. The existence of opportunity is primarily managerial and organizational, while the motivation for bribery has an individual aspect. Within the current bureaucracy of Iran, most analyses emphasize the role of the individual and the motivation of the briber or bribee and criminal matters. However, the process of emergence and dynamics of bribery in its various forms is what matters. In developed countries, based on scientific management, efforts focus on analyzing the emergence of bribery opportunities and on prevention and deterrence of its occurrence. Simultaneously, researchers in the field of management corruption and bribery acknowledge that a significant portion of such activities remains hidden, like the tip of an iceberg, and is often not discovered; thus, its level never reaches zero. The extensive size of the government, government intervention in the market, and restrictions on economic freedom, along with a non-competitive economy, create opportunities for bribery. Therefore, in an economy dominated by the government and quasi-governmental entities, where the market environment is less competitive, the opportunity for bribery for government employees to take a share of monopoly rents will also be facilitated. Economic crimes usually manifest as networks of crimes and are not isolated islands. For example, bribery, as an economic criminal activity, is part of the black economy and has a close relationship with tax evasion and money laundering. Funds obtained through illegal and illicit activities—such as embezzlement and bribery in the public sector—are such that spending them transparently and legally is difficult. This is why such funds—at least in appearance—must be converted into legally obtained assets. This process is called money laundering. Therefore, wherever there is bribery, one should look for other economic crimes. Bribery, as one of the manifestations of management corruption, is not only an economic, managerial, political, or legal phenomenon but also a developmental issue. Institutions such as the World Bank and Transparency International have concluded that achieving economic development goals is not possible without addressing the issue of management corruption manifestations. This is especially evident in so-called transitional countries, which are transitioning from a centralized economy to a market economy. Traditionally, in the framework of classical economic development theories, little attention was paid to management corruption as an obstacle to economic development or income distribution imbalance. However, now, the program to combat management corruption is considered a component of the development agenda.