Linking structural challenges with best practice in water governance: Understanding cultural norms in institutionalized corruption Presented by Diana Suhardiman at the 2016 Stockholm World Water Week, in Stockholm, Sweden, on August 31, 2016. Seminar: Good water governance for inclusive growth and poverty reduction: Session 2 on successful case studies of good water governance

1. Linking structural challenges with best
practice in water governance:
Understanding cultural norms in
institutionalized corruption
Diana Suhardiman
Senior Researcher and Sub-Theme Leader Governance and Political Economy
International Water Management Institute
Stockholm, 28 September-2 September 2016

3. Principle 9: Mainstream integrity and transparency practices across
water policies, institutions and governance frameworks for greater
accountability and trust in decision making through:
• Encouraging norms, codes of conduct or charters on integrity and
transparency in national or local contexts and monitoring their
implementation
• Establishing clear accountability and control mechanisms for
transparent water policy making and implementation

4. • Our ability to mainstream integrity and transparency across water
policies, institutions and governance frameworks will also depend on
how we can tackle the problem of systemic institutionalized
corruption
• Understanding the different elements and rationales behind
institutionalized corruption is crucial to find potential entry point for
change

5. • The importance of institutions, organizational culture, and social
relations embedded in patronage networks in the overall shaping of
corruption rules and practices
• How corruption practices can be justified as the prevailing social
norms
• The need for structural change to eradicate corruption

6. What is the Indonesian system of
institutionalized corruption?
• The Indonesian system of institutionalized corruption is practiced by
strategically blurring ‘bribe’ with ‘token of appreciation’, mimicking a
centuries old political system of gift giving called the upeti system
• Upeti literally means: ‘tribute to the king from his followers’
• In modern day Indonesia government officials focus their career
advancement through upeti delivery to higher officials in return for
desirable bureaucratic positions

7. Key elements of the upeti system
• Institutionalized corruption is practiced as part of project
management activities
• Officials have to deliver money, luxury goods, and additional services
to their supervisors, to ensure bureaucratic promotion and/or to get a
project head position
• High officials within the agency select their candidate for the project
head position primarily based on their interest to use the position as
their service point for upeti delivery
• Project heads focus on manipulating the management of project
funds

8. Key elements of the upeti system
• The budgetary fund is an officially registered project fund that is
supposed to be used to conduct project activities
• The non budgetary fund is part of the project fund that is informally
used by the agency to cover its bureaucratic expenses without these
expenses being officially registered

9. The characteristics of the upeti system
• The upeti system relies on the collective culture within the
government agency
• The project head plays an important role in negotiating with the
different parties involved
• The project head establishes a wide if not all inclusive corruption
network

10. “The agency covers health, education, and social expenses of its staff
(such as when some officials are severely ill, need support to finance
their children’s higher education, or extra cash to celebrate a wedding
ceremony) relying primarily on the reserved funds”
interview with official from the agency, 2004

11. Key analysis
• The upeti system prevails over public and legal anti corruption
discourses because it is politically grounded and culturally embedded
• Unlike the public and legal anti corruption discourses, which are
external to the everyday practices of administrative and political
corruption, upetism operates within and structures that domain

12. “One’s involvement in corruption practices is linked to one’s social
relationships and political networks, and less on one’s choice and how
one perceives corruption practices in the first place”
interview with official from the agency, 2004
“Government officials involved in corruption practices do not view this
involvement as a stigma, but merely an opportunity to extend their
career and income”
interview with officials from the agency, 2004

13. Key analysis
• The notion of norms, codes of conducts, or charters on integrity and
transparency could lost its meaning when corrupt actors are
convinced that they are doing the ‘right’ thing
• The upeti system sets the prevailing norms that need to be followed
by officials of the agency, that is to deliver bribes to high officials in
return for a good bureaucratic position through mismanagement of
project funds
• The way project funds are managed through regular financial
reporting becomes the codes of conducts in institutionalized
corruption.

14. Implications for anti-corruption strategies
• Policy reform to eradicate institutionalized corruption can only be
effective if it is able to counter argue the prevailing
cultural/organizational norms that support institutionalized
corruption
• Institutionalized corruption is also reproduced in myriad everyday
practices
• Change can also start from reconfiguring some of these everyday
practices
• In the irrigation sector, such change can start from a shift from
infrastructure oriented development to field level interventions to
improve water service provision towards more equal water delivery

15. Thank you for your attention
d.suhardiman@cgiar.org