There is an old Hungarian saying that “if you don’t know who is going to win the tender, then it isn’t you”, and according to an award-winning corruption study by Hungarian sociologists this is truer than ever. The report by István Jávor and Dávid Jancsics and its exploration of “technicization” has earned them plaudits from US management scientists, who consider it one of the most promising new ideas in the field of corruption studies. Technicization is defined as “when middle-level professionals and expert groups are used to legalize the corruption of the dominant coalition”.

The Role of Power in Organizational Corruption: An Empirical Study drew on 42 candid interviews with Hungary’s executives, middle managers, employees, politicians and investigative journalists. As well as investigating corruption in public tenders, it explores the organizational structures that enable Hungary’s endemic corruption.

Fixing a public tender is more complicated than making a secret deal between a politician and a company, because it requires a framework to make the whole process seem legal. The organizers need to produce the appropriate tender documents that are formulated in a seemingly legal, technically correct way, but are skewed via the inclusion of minor, technical conditions so that a friendly company is the only one with any chance of winning the tender. The authors call this process “technicization”. A high-level government official describes it thus:

“When you announce a tender it is difficult to make sure that your friend wins it… you begin a several-month-long ‘hack’. You try to find in your friend’s company those minor specialties that you will include in the call for proposals of the tender as expectations. You have to be very careful, because on the one hand you want to exclude competition, but at the same time you have to remain protected. You have to formulate a system of expectations that only your friend can fulfill. You have to customize all the tender documentation on him, but carefully, because there are some projects that are not only published in the official National Gazette Magyar Közlöny, but also at an EU level.”

According to the authors, middle-level managers and employees on every level of the company are needed for corruption. A company CEO said: “You always need the employers who can do the corruption… and you’ll always find someone to do the dirty work for you. They want to get a higher position, that’s why they do it. Several times they assist corruption for an easy life. I’ll do what my boss tells me and I don’t care about anything else… so having a conflict is not in their interest.” According to the authors of the analysis, most corruption is carried out at the middle level: they are the ones who legalize abuses, and turn off external and internal controls, according to the personal interest of the elite and themselves to avoid being caught.

Having completed their study in 2011, the authors initially struggled to get their findings published, failing to reach agreement with the Economics Review Közgazdasági Szemle and the Sociological Review Szociológiai Szemle.

The study eventually found a home at the Administration & Society journal and was voted Best Journal Article by the US Academy of Management in 2013. The jury said the work detailed corruption from a completely new perspective.

Hungary was ranked 20th of the EU-28 for corruption, below its CEE peers Estonia, Poland, Lithuania and Slovenia by Transparency International (TI) in its annual corruption report in 2013. It wrote that “in Hungary, state institutions responsible for supervising the power exercised by the government are headed by government loyalists. The almost complete elimination of checks and balances poses a serious risk of corruption in itself. Legislation often serves momentary political interests instead of the common good. Where replacing leaders was not enough, the competence of control bodies has been weakened through legislative amendments; civil control has been hindered by laws; or certain economic interest groups have been favoured,” TI added.

Referenced:

http://hvg.hu/itthon/20140821_Nalunk_nem_kellett_Amerikaban_dijaztak

http://aas.sagepub.com/content/early/2013/12/10/0095399713514845.abstract