How Mobile Phones Eliminated Corruption: The Jhang Model

*By Edward Kutsoati *

A “silent revolution” on corruption, as Aremeyaw Anas calls it, may now be

underway in Ghana, following his recent revelations of corrupt practices at

Ghana’s main ship port at Tema. About a dozen officials of Customs, Excise

and Preventive Service (CEPS) will lose their jobs, and face the law.

Several more will be reassigned away from Tema ship port. These are

encouraging steps, but pretty far from what will be needed to stem corrupt

practices everywhere in Ghana so the country can create a better,

business-friendly economy.

The good thing is that, the “Anas tapes” has rekindled the debate on

corruption (including its causes and costs) and there have been loads of

suggestions on how to nip it in the bud. Most are not new, and all point to

a committed leadership. Others (e.g., the think-tank IMANI) advocate a

reduction in taxes and duties at the shipping ports so individuals and

businesses will have less incentive to substitute bribery for their tax

obligations. I like this idea; supported by the Laffer curve (named after

Art Laffer) which demonstrates that, beyond a certain tax rate, government

tax revenues actually falls with higher taxes, both due to the disincentive

to work (at a higher tax rate) and tax avoidance. The idea is applied in

Switzerland, where tax rates are low and there is almost 100 percent

compliance rate. However, alone, lower taxes will not eliminate corruption

in Ghana, at least not in the short to medium term.

If Ghana’s leaders really want to reduce, and hopefully eliminate

corruption, it will help to learn from success stories elsewhere. The ‘*

Jhang*’ model is particularly instructive: it is simple, cheap and

transparent – the basic requirements for a sustainable anti-corruption

strategy. More importantly, the main actors in this model are the people,

those who stand to benefit the most from a corruption-free society, with

help from their mobile phones. The strategy, a brainchild of Mr. Zubair

Bhatti, involves an audit (phone calls) to ascertain customer feedback, and

whether or not they were made to pay a bribe for a service.

Jhang District in the province of Punjab, Pakistan, has a population of 3.5

million, and was ranked amongst the most corrupt in Pakistan, in particular

its Land Transactions and Registration office in the city of Jhang, the

capital. Take a moment to think of the land registrar in Accra, and how a

piece of property can be sold to multiple buyers at the same time. Or think

of what it takes to obtain a driver’s license at the Driver and Vehicle

Licensing Authority (DVLA). A similar story ran in Jhang. Just about every

visit to the Lands Department (e.g., to register a piece of land; buy/sell a

piece of land; or transfer that land to a child) required a huge bribe.

Then Mr. Bhatti became a District Coordination Officer (DCO), and was given

oversight of the Lands Department in Jhang city. He designed a system where

staff at the Lands Office took down every client’s phone number, promising

that he would personally call them at the end of each day to find out if

they paid more than the due taxes, or were forced to “grease some palms,” or

whether they had been unsatisfied with the service. (In actuality, Mr.

Bhatti only called about 5 percent of the clients, selected randomly). A

typical phone call to a client includes the following questions: “How much

did you pay as tax today?”; “Were you asked to pay a bribe?” “Did you

complete your transactions today?” or “Were you satisfied with the service

offered to you today?” – a set of basic customer feedback questions. Each

call lasts only a few minutes and likely to costs less than 50 Ghana pesewas

of air-time. (Mr. Bhatti discussed the strategy at TEDx-Lahore:

http://www.youtube.com/watch?v=ZiB5-JGNArM ; with subtiles)

When Mr. Bhatt brought the first charges against a staff member who had

asked for a bribe, the others realized that he was serious. A couple more

“pink slips” followed and something miraculous happened. Clients reported of

a sudden improvement in services; no bribe was asked or taken; clients were

welcomed with smiles, to their surprise. Corruption had almost disappeared

in days. Even the World Bank became a fan, and last month the bank decided

to fund an expansion of the *‘Jhang’* model across the entire province of

Punjab.

The neat thing about the *Jhang (Zubiar Bhatti) model* is that (1) it works

and it is cheap; (2) it involves a proactive government – instead of waiting

for evidence of corruption, the government is out there seeking the

evidence; and (3) the results are immediate.

To be sure, the strategy of phone-call audits will only be effective in

checking low-to-middle level corruption (e.g., Tema ports, vehicle

registration at the DVLA, or applying for a passport). But it is conceivable

that if low-level corruption is successfully eliminated (through this

strategy or equivalent), employees will have the courage and moral authority

to expose the high level crimes within the same organization. Secondly, it

is possible that both the supply-side (e.g., the diasporan eager to clear

goods from Tema port or the driver license applicant) and the demand-side

(the government official) of corruption will collude on bribes to render a

phone audit ineffective. That will be sad though. But then, a government

would have done its part. The rest will depend on us, the people, and on how

badly we want to rid Ghana of this cancer, so we and our children can live

better lives.

*Edward Kutsoati a Lecturer at **Department of Economics, Tufts

University and an associate of IMANI and AfricanLiberty.org*