A FAIR number of studies have shown corrupt countries have more burdensome regulations than other nations. 

Corruption is itself a byproduct of high levels of government activity and regulations.

The abundance of natural resources in our country is both a blessing and a curse. A curse because it leads to increase corruption among government officials and politicians who do not have to rely on a productive economy. 

Any form of government intervention creates opportunities for corruption, even if the purpose of the intervention is to correct market failures.

Regulation opens the door to corruption, because without regulation, there are no regulators to bribe.

Policymakers may impose regulations so that they or their supporters can demand bribes from business owners and entrepreneurs wishing to avoid regulation.

Regulation is by nature designed to keep people from making choices they would have made in the absence of it. 

Many regulations exist to give officials the power to deny and to collect bribes in return for approvals, permits and licences.

Regulation may be motivated by corrupt officials who deliberately create monopolies and maze-like regulations so complex that bribery is the only way to beat the system. 

Increased regulation is also due to a distrust of societies. 

If people do not trust, they demand more regulation and more sanctions.

It is a paradox that it is the people themselves who demand more regulation even when they know that the government is corrupt.

As a result of increases in regulatory measures, a lot of entrepreneurs find it difficult to operate and engage in ethical behaviour. 

If one deviates from the rules, the environment almost demands that others act corruptly in order to survive. 

Those who adhere to the rules will more than likely suffer and be driven out of business. 

In a corrupt environment, criminal sanctions are inefficient deterrents due to the ability to purchase favourable decisions rather than suffer the actual penalty.

Businesses in industries that are willing to pay bribes might also find they are more heavily regulated than those in industries that refuse to do so. 

There is also the possibility of corrupt officials targeting business owners known to pay bribes.

Over-regulation is also attributable to weak governance. When the government is ineffective, officials might be more likely to demand bribes. 

Is deregulation an effective option? 

Anti-corruption efforts come with their own heavy regulatory framework which raises the cost for all that business owners, big or small. Only the best organised organisations, which are generally bigger and richer, will be able to comply. 

The whole process is in the end corrupted, in the sense that under these conditions, public policy no longer reaches its objectives.

Instead of deregulation, the Finance Ministry could initiate a partnership with small- to medium-sized companies and entrepreneurs to create new game rules where the government offers a streamlined approval process in exchange for a commitment from business not to offer bribes to officials.

The government can introduce legislation where the burden of proof on the accused to show they have acquired their wealth legally .
 
It is one thing to win fairly.  It’s quite another to be able to write the rules of the game and to write them in ways that enhance one’s prospects of winning. 

It’s even worse if you get to choose your own referees. – July 30, 2022.

* FLK reads The Malaysian Insight.

* This is the opinion of the writer or publication and does not necessarily represent the views of The Malaysian Insight. Article may be edited for brevity and clarity.