Monday, March 27, 2000

Newe Review for Poland

The fatal shooting of a veterinarian in Warsaw last week was apparently just the tip of the iceberg when it came to trigger-happy law enforcement agents. In a Jelenia Góra courtroom, officers from an anti-terrorist squad shot two out of eight gang members, charged with theft, extortion, and manslaughter, dead after the defendants detonated two grenades in the corridor. Three policemen were injured by grenade splinters. Police spokesman Paweł Biedziak said a preliminary investigation indicated that the squad acted properly and fired only when there no one could be caught in the cross-fire. Interior Minister Marek Biernacki commented that: "Crime is becoming increasingly brutal today and the courts have to be prepared for it. It is a sad thing that two persons died in the melee but it was the criminals who started shooting. The police reacted correctly." President Kwaśniewski noted that: "Until now we thought that such things could happen only in foreign movies." As a reaction to this incident the Ministry of Justice has decided to install metal-detector gates in larger courthouses in Poland. The Polish press, based on the defendants' hyper-active bladders prior to the incident, speculated that the grenades had been hidden in the courthouses toilets.

The following day, in the north-western city of Szczecin, another anti-terrorist unit had been watching too many action movies and succeeded in thoroughly demolishing one apartment, damaging the walls in an adjacent one, destroying a staircase, and smashing a number of windows in the building as well as in neighbouring blocks. Not bad for a day's work; fortunately no one was actually hurt. The unit was trying to blast down the door of the flat to get to the criminals inside, only they used a bit too much force. Well, they did manage to get the door down and caused an estimated PZL 300,000 (USD 73,000) in material damages, which will be covered by the State Treasury.

Friday, March 03, 2000

Bribery Culture, or the Republic of Zloties When bribery becomes so pervasive as to constitute an invisible social geography, one where the unannounced rules of life must be understood, a bribery culture develops.
Ewa Pagacz Issue #48, March 2000

When my mother had a cerebral hemorrhage, after the ambulance and emergency room care, the first item needed was bribe money. In Poland, a good bribe can keep death at bay for awhile.
Although health services remain socialized, there has been a de facto partial privatization through bribery and cost transfers. My mother's shared room provided only a bed. The ward nurse gave me a list of necessaries, beginning with soap and ending with a bedpan. "Families have to take care of such things," she told me. "The government doesn't have money to support hospitals and we lack the basics." So I ran out to purchase the items from the nearest store.
After much waiting for an examination, a physician told me that a CAT scan would be needed, but that the hospital did not have the facilities to provide one. A nearby hospital did have the necessary facilities, he told me, but at this hospital there already was a long queue of patients waiting for scans. The message was clear: if I wanted my mother to be examined as soon as possible, I would have to pay a bribe. Without hesitation, I paid the head nurse 1 million old zloties (about $25) and my mother got a CAT scan. There was no time to analyze the ethical questions. My mother's life was at stake and time meant everything.
The scan results were bad news and, twelve hours after her stroke, my mother had to be transferred to a neurological clinic in another city. However, they could not operate until the next morning and an imported medicine was needed to stabilize her condition. Three days dosage cost one and a half times my monthly salary as a teacher, and so off I went to borrow funds. The next morning I stood at the clinic pharmacy, waiting for it to open. When it did, the pharmacist handed me a form requiring a 'voluntary donation' to the clinic. I might have refused, but it was understood that if I refused to make a donation, then when the supply finished in three days I would probably not be able to buy more. I would be told "Supplies are limited." So again I paid a bribe. Twenty-nine hours had elapsed from the time of my mother's stroke until she received her desperately needed medication. In the West this medication would be have administered within an hour.
I had run out of money but my sister was speeding home from Germany with the marks we needed for 'free' health service. She arrived with a thick roll of bank notes and a large bag filled with boxes of chocolates, bags of coffee, bottles of cognac, and other 'proofs of gratitude' for distribution among the hospital staff. It is through small bribes of chocolate, coffee, cognac and the like that patients are able to assure themselves of quality care. Mother survived an operation and lay attached to a medication pump that, we discovered, was the family's responsibility to monitor. At this point we had been awake for over forty-eight hours; we were desperately afraid of falling asleep and being unable to monitor our mother's medication. A bribe to the floor nurse ensured that she would check the machine. This is the system, and public ideals or private conscience are irrelevant.
Now listen to Wladyslaw Frasyniuk, a Sejm deputy from Wroclaw, in a recent interview: "We... have to convince our citizens that there is no need to give an envelope when you go to the doctor, because the doctor and the hospital are paid for the cost of your treatment. But these are habits that we've had for years, that without the envelope our mothers are convinced that they will die because no one in the hospital will take care of them. That's not true. [Despite that] these habits sit deeply in our consciousness." There is ethical blame-shifting here, one that points to bribery culture without acknowledging the miserable state funding for health services. Mothers know the truth: such noble sentiments are words, not realities.
After a couple weeks in recovery, Mother was transferred to a regular hospital, which meant new arrangements with different hospital staff. They were quite pleased to receive the expected envelopes with money, but there was little effect on the care. Mother's condition deteriorated and she died.
If death were Polish, it could have been bribed too.
Prices of LifeWhen bribery becomes so pervasive as to constitute an invisible social geography, one where the unannounced rules of life must be understood, a bribery culture develops. In such a culture, even the simplest everyday goods and services are acquired by a bribe. It is not the amount of the bribe that is significant. What is significant is the act of bribery itself. In a bribery culture, this act becomes a 'natural' way of acquiring goods. When services or goods become difficult to obtain, despite consumer demand, bribery flourishes. Bribes become a feature of everyday life for ordinary people, a means of ingratiating as much as an exchange at the margin. But these are behavioral and economic exchanges that arise from and perpetuate an enormous reservoir of social cynicism.
The issue of bribery has been addressed within the OECD, largely because the financial elites of richer western European countries have gotten tired of paying bribes as a normal cost of business in poorer southern and eastern European countries. As Witold Michalek, president of a business organization, said, "Most of our members are furious about bribes being the only way of arranging such things as permits or concessions. The amounts of bribes are fixed. It's everybody's secret." As a result of such sentiments, a new OECD treaty makes it illegal for companies based in OECD member nations to bribe foreign public officials to win or retain business. Firms caught in the act are barred from other government contracts in OECD countries.
"Transparency" has become the new social catchword, one that promises that the financial environment will be open to global capital, not that foreign corporations will be transparent to local people. "Transparency" does not address genuine ethical concerns surrounding social honesty; rather, it is a code word for stable conditions for market penetration. An NGO like Transparency International, best known for publishing an annual perception of corruption index that ranks countries by level of corruption, operates in the interests of Western investment capital. It functions at a level and scale far removed from the experiences of everyday bribery culture. For a Western corporation, bribery represents uncertainty and potential loss of profitability, not a question of survival; for working people, that invisible culture represents a terrain that needs constant recognition and negotiation in order to survive, let alone prosper. Western business people abroad are concerned with what Upton Sinclair in The Brass Check called "bribery wholesale"; poorer people must deal with "bribery retail."
During the pre-war era, bribery in Poland existed at what was probably a pan-European level. During the communist era, from 1948 through the transitional period in the 1980s, bribery spread like cancer. Every occupation came to rely on bribery. Shop assistants took bribes so that customers could purchase goods available only 'under the counter'; teachers took bribes to give children better grades; professors got their share to admit students to university faculties. The courts administration was and remains notoriously corrupt.
Clerks were one of the most interesting species produced by the bribery culture during the communist era. You almost had the impression that you were dealing with a genetic mutation of a clerk, one who seemed to have grown a third arm with an open hand that constantly reached out to receive a personal donation for an ordinary service. People who have lived in such societies immediately know the score; others may find it difficult to believe. There are simply unwritten laws that you must obey if you want to live at a reasonable level without fighting an unending battle against rotten social structures.
The world of communist Poland was not a world where you could simply go to a car agency and choose any model or color, or contact a real estate agent for advice on which suitable apartment is available. This was a world where 'ordinary' citizens first had to file a request for approval to purchase goods. Apartments, cars or telephones were not everyday commodities, but state-controlled luxuries. Money in hand was insufficient: citizens needed approval and permission. Therefore, you filed a request and handed it to a clerk who put it on a pile of hundreds of similar requests. The system created a clerkdom, a class that lived off bribes. An upright citizen could, of course, file a request without adding a bribe. That meant that your request might remain unnoticed at the bottom of a pile for a very long time, or might even get lost permanently. One of my family members could not afford the necessary bribe and went without a telephone for seventeen years.
How did people find out whom to bribe and what the bribe was? This was invisible knowledge, as no price list was published. The knowledge was something you grew up with; you acquired it through living within the system. You learned to understand the body language of someone who, through certain gestures or facial expressions, suggested that a problem could be solved if a bribe was "attached". You learned to read between the lines, to read the code words used to suggest what you should do: the word "bribe" was, of course, never used. Under the communist government, words like "attachment" were used in its place. In present "free market" language, the terminology and legal form have simply mutated and become more official. As Sejm deputy Frasyniuk phrases this new language for under-the-table payments, "If you [look] at a contract, this is not called a bribe. It's called a commission. No European company would call that a bribe, they would call it a 'provision'." Capitalism or communism, bribery needs its euphemisms.
For ordinary people during the communist era, the value of a bribe differed according to the complexity of the "problem" to be solved. Cash payments were not always involved. For example, to file a request, the simple act of filing was "naturally" connected with handing in the form with one of those ubiquitous bags of coffee or boxes of chocolates. Checking the status of an apartment application at the local housing authority? Applying for any official document? Planning on getting a fishing license? Then bring a bag of coffee. In the 1980s coffee, chocolates and hams were so scarce that they became coin of the realm. Passing along a ham, some bars of chocolate or a few pounds of coffee was the price you paid to make certain that your request would not be put on the bottom of a pile. The citizen who wanted to have a request put somewhat higher in the pile had to arrive with, for example, a bottle of good foreign cognac or a few boxes of Western cigarettes. To move a request to the top of a pile required substantial resources and some imagination.
An uninformed citizen who arrived at an office with a request but without the necessary "attachment" was a rare and unwelcome sight. This sort of uncomprehending fellow usually received a special contemptuous look which meant that the request would be filed without further action.
Years of flourishing bribery culture turned the act into a routine. Entering an office with an "attachment" became a habitual behavior unaccompanied by feelings of embarrassment or disgust; there were few social debates about the ethics of the phenomenon. In some years, when store shelves were literally empty and basic goods became luxuries, bribery became a means of survival. The bribe currency slid downscale to the level of a few pounds of meat or several rolls of toilet paper. Since toilet paper was almost unavailable, a few rolls — especially the softest kind — made a better bribe than money. Toilet paper was more valuable than cash.
Success Pays OffBribery has found an enduring home where salaries are lowest: education and health services. Where human needs were most pressing and budgets were most threadbare, bribery culture spread roots that have endured the economic transformation from communism to a "free market".
When institutions of higher education were scarce, it was not enough to pass entrance exams with good results. University applicants also needed, of course, an "attachment," the value of which depended on the market demand for a given academic department. In the 1980s, for those who wished to remain in the country, the medical faculties commanded the largest entrance bribes. For those who saw their future elsewhere, the English department took the highest bribes. When I was finishing high school and considering university studies in art history, the entrance price was equal to the cost of a good Western car. This still continues in eastern Europe. The latest issue of Lingua Franca reports that at the International Relations faculty of St. Petersburg State University in Russia, admission costs an $8,000 bribe.
Grades meant another bribe opportunity. The rates varied depending on the type of grade change in question. You paid a different rate to get an A than you did to change a failing grade to a passing one. How did you know how much and for whom? Again, years of experience and acquired knowledge of unwritten norms. But even if you did not know, the information was easy to find out. You could phone a friend whose child had been a university student and had bribed their professors. Or if your friend didn't have they exact information, they usually would know somebody else who, again, knew somebody else who, in turn, would provide you with the names and numbers. There was in other words a subterranean chain of information about the going rates.
Today in Poland an A for a university course costs about $500; a pass for comprehensive examinations costs approximately $1,500 (or almost a year's working-class income). Bribes are receivable in kind: for example, a university professor gives an A grade to the child of the manager of a building company in exchange for renovation work on the professor's house. Although not as prevalent as monetary bribes paid by parents, sexual bribery by students is fairly common. It has given the term "oral examination" an entirely different meaning.
Of course, there is a risk connected with such procedures because there have always been honest people who not only would refuse to accept a "proof of gratitude" but also would feel utterly offended at the slightest suggestion of a bribe. From all appearances, though, they belong to a minority.
The unstable economic situation in eastern European countries has affected bribery culture. In some countries the culture has faded, while in others it has grown, depending on economic conditions. In countries with a steady rate of economic improvement, a wide variety of goods and services is slowly becoming available, limiting bribe opportunities. The days of meat and toilet paper bribery are gone, for present. But since many professions remain underpaid, bribes fill the gap between low salaries and a constantly increasing cost of living. Only a small minority of eastern Europeans receive higher education and face ethical questions at the upper end of the economic ladder, where these questions are more affordable. Bribery culture is a class phenomenon, a means of equalization, and a bribe pries open class structures. Most hospital bribes go to low-wage nurses and ward staff, not to physicians.
From the perspective of those who serve the state, not control it, bribery is simply another means of economic advancement that normal public service cannot provide. Border police service is low-paid but lucrative work, so much so that a major bribe is required in order to obtain an appointment to share in the bribe-taking. Recently one group of Polish border police was discovered to have permitted the import of 6,000 new cars for lowered customs duties, in return for a portion of the duties avoided. Some senior government officials have suggested that the customs service is so corrupt that it needs to be disbanded and rebuilt entirely.
Two departments are primarily responsible for the police's reputation for corruption: the department of traffic and the department of internal affairs, formerly responsible for issuing passports. For years it has been a routine to put a bank note inside a driver's license while handing it without a word to a policeman who stopped a driver for speeding. The policeman takes the bank note and admonishes the driver instead of writing out a ticket. This kind of bribery applies to virtually all eastern European countries, especially the poorest. Germans in particular have found the system very convenient: there is no speed limit on German highways and speed limits annoy many German drivers. Since thousands of German tourists and businessmen cross the eastern borders every day, they too have learned the rules of the game. It is common practice to keep a pile of twenty or fifty mark notes prepared on the dashboard. All this does not mean that there are no honest police. There are, and drivers are prepared for such cases. If such a policeman angrily asks why there is a bank note in the license, the driver simply assumes an innocent look, pretending surprise. "A bank note? What bank note? Oh, I have money in all my pockets, it's everywhere. You don't think I'm trying to bribe you, do you?" Bribery culture invents its own forms of denial, its ritual backflips in the face of honesty.
Pseudo-IntegrityWhen Transparency International describes bribery culture it argues that this culture represents a holdover from an older and discredited communist system, and that it constitutes an obstacle to well-functioning capitalism. Their policy source book argues: "Corruption thrives in rigid systems with multiple bottlenecks and sources of monopoly power within government. A planned economy, where many prices are below market-clearing levels, provides incentives for payoffs as a way to allocate scarce goods and services. Transactions that would be legal trades in market economies are illegal payoffs in such systems." So, according to this mercantile logic, the transition from communism to capitalism just legalizes payoffs into normal payments. Or did they really mean to admit that?
All of this re-definition translates into an ensuing argument that de-socialization and privatization of national economies generates the continuation of bribery culture. As long as any degree of public control remains, according to this analysis, then corruption will remain. According to Transparency International:
If, however, pockets of state control remain, they may become the loci of payoffs. Thus, the privatization process itself, although ultimately reducing corruption by lowering state involvement in the economy, may initially be a source of corrupt activities as investors jockey for position. Therefore, the basic source of corruption is no longer the rigidity of the system, but the uncertainty surrounding it.
Notice here how the stunning rates of poverty throughout eastern Europe, often rates approaching fifty per cent, disappear behind the word "uncertainty." As eastern Europe has become a cheap labor colony and captive consumer market for Western investment, poverty levels have climbed astonishingly. When the OECD and Transparency International lecture on the need for developing "integrity systems" they clearly do not have in mind the absence of social integrity or elementary economic justice that capitalism has fostered. The notion that privatization programs which transfer public-owned economic resources into private pockets are a form of social corruption seems to have escaped them.
Ironically, no less a person than Jeffrey Sachs, the Harvard economist responsible for establishing state privatization programs throughout eastern Europe, has arrived belatedly at a similar view. At a Warsaw symposium last October, Sachs stated that he was wrong about advocating mass privatization in Poland, and in miscalculating the potential for corruption in Russia. Poland was correct to ignore his advice in 1990 and put off mass privatization, Sachs said, concluding — as have many others — that "it doesn't work." In Russia, he said, the holdover state-owned firms "did less badly than I'd thought. I had thought it would be just rape and pillage — and it wasn't." Sachs admitted that he completely underestimated "the depth of the corruption that happened with mass privatization in Russia and the Czech Republic." It would have been preferable had Sachs reached such realizations before advocating policies that inflicted mass displacements on work forces across eastern Europe.
Public perceptions of widespread corruption helped topple the Klaus government in the Czech Republic last year and corruption has become a central issue for the Putin government this year in Russia. Belarus has been described as a massive money-laundering machine disguised as a country. The enormous civic cynicism generated by elite corruption, accompanied by ever-growing poverty among working people, has given new life to bribery culture. 'Our small bribes are insignificant compared to the massive bribes that help create new wealth,' goes this thinking among ordinary people. Arguments that free-market corruption represents a transitional phase hold less and less meaning now, a full decade into the transition from communism. The horizon of promises continually recedes.
What eastern Europe is witnessing now is the creation of a new bribery culture. Prosperous Western societies do not recognize their own bribery culture: the payment of extra money for high-quality service is regarded as perfectly normal. Yet, to return to the beginning of this story, health care is a human right, not a commodity. To pay privately for better care is bribery in a truer sense of the word: bribery for highest-quality care. When it was a practical attempt to create choice within a no-choice system, bribery represented an attempt to get basic care. Today eastern Europe is watching the legitimization of privatization and social bribery on a grander scale, the creation of a new economic orthodoxy that people are only worth the 'bribes' they can pay.
Ewa Pagacz is an occasional essayist and unemployed college teacher. She thanks John Brady and Joe Lockard for their comments.