Gender Does Not Matter with the Corruption Practices in Namibian Enterprises Actually ()
1. Introductory Background
An anecdote helps understand the issue of corruption in business. A university Development Economics professor introduced a topic on the link between doing business, investment, service, and profit. The association was simple: make an investment, produce goods and services to be paid for by your clients, and you will make some profit. At the end of the lecture, a student, not convinced about the argument made by the Professor, commented: “Professor, I want to be a businessperson in my country. However, you cannot do any business in my country without bribing to get permits to do business. You have not taught me where to get the bribe and how to bribe. Where do I get the bribe, and how do I bribe?” Corruption has become so critical in business that it is demanded that where to get a bribe and how to give it is taught in class.
This paper examines the link between gender and the corruption practices in Namibian enterprises. Corruption has received much attention in academia and policy circles due to its multifacetedness in understanding and empirically proven adverse effects in the society. In trying to understand corruption, there have been categorizations such as public corruption, private corruption, pervasive corruption, arbitrary corruption, petty versus grand corruption, and organized versus unorganized corruption (Bahoo et al., 2020). Beneath the categorizations, there have been attempts to define the concept. The definition of corruption as an illegal activity in terms of bribery, fraud, financial crimes, abuse, falsification, favoritism, nepotism, manipulation, and misrepresentation by public or private officials, domestically or internationally, in a social, business, or governmental context conducted through misuse of authority or power by government or firms officeholders for personal gain and benefit, financial or otherwise (Bahoo et al., 2020: p. 2), seems to be comprehensive, touching upon the three characteristics of illegal activity, misuse of power or authority, and personal benefits, which most definitions refer to. Such definitions are corruption as the “manipulation of some sort to obtain personal benefits at the expense of others (be it the state, organization, or the citizens)” (Suleiman & Othman, 2017: p. 103), a “behavior which deviates from the formal duties of a public role because of private-regarding (personal, close family, private clique), pecuniary or status gains” (Nye, 1967: p. 419); transaction between the private and public sector actors through which collective goods are illegitimately converted into personal payoffs (Heidenheimer et al., 1989: p. 6); the misuse of public office for private gain (World Bank, 1997); the “abuse of entrusted power for private gain” (Transparency International, 2009), and commission or omission of an action, an abuse of trust, or changing the legal or the ethical obligations to have some private benefit (Agatiello, 2010). Corruption as the misuse of public authority for personal gains (Aurora, Teixeira, & Luís, 2015; Neudorfer & Theuerkauf, 2014); an informal payment that negatively affects enterprises’ innovativeness (Daniel, 2012); dishonest or illegal behavior of government officials (Hammed, 2018); an act of malfeasance by government officials for personal enrichments while performing tasks entrusted to them by the general public (Bardhan, 1997).
Corruption is a global phenomenon and has been with human civilizations over time (Wells & Hymes, 2012); neither is corruption a contemporary phenomenon as traces of corruption have been found in ancient cultures (Suleiman & Othman, 2017). However, corruption has had varying degrees in different countries, as can be seen from the Corruption Perception Index Reports by Transparency International from 1995 to 2021. These Indices have become a global indicator of the public sector corruption, offering annual snapshots of the relative degree of corruption by ranking countries and territories from all over the globe. The latest Corruption Perception Index 2021 has measured public sector corruption in 180 countries and territories, giving each a score from zero (highly corrupt) to 100 (very clean). Some highlights are essential to show how global corruption is. While the highest-scoring region is Western Europe and the European Union, with a score of 66/100, the lowest-scoring part is Sub-Saharan Africa, with 33/100. Sixty-eight percent of the countries scored below 50, and the average global score has remained static at 43. Since 2012, 25 countries have significantly improved their scores, but 23 countries have declined considerably in the same period. Over time, however, Namibia’s levels of perception of corruption range from 45 out of 100 scores in 2009 to 49 out of 100 scores in 2021, the latest report. While in 2009, Namibia ranked 53, in 2021, Namibia has ranked 58. Over time, Namibia has scored an average of 49.2 out of 100 on the Corruption Index. Hence, on a Corruption Index scale between zero (highly corrupt) and 100 (very clean), Namibia features in the middle, neither highly corrupt nor very corrupt, but just corrupt.
Corruption happens in enterprises, but enterprises also play a crucial role in much of the corruption that occurs in society, and they are also essential contexts for corruption themselves (Castro et al., 2020). In enterprises, the standard corrupt practices include stealing, deception of customers, tax evasion, sale of fake products, sale of expired products, tampering with measurement scales, bribery, and poor service delivery (Onyeonoru et al., 2019). In starting businesses, the areas in which corruption is most present are obtaining subsidies, grants, finances, issuing construction permits, and registering property (Ivanovi-Djuki et al., 2019). Corruption has a negative impact on enterprises, such as employer’s inefficiency (Nhung & Phuong, 2021), enterprise performance (Page & Okeke, 2018), loss of tax revenue (Ezebilo et al., 2019), deterioration of enterprise financial performance (Nam et al., 2020), survivability risks (Nam et al., 2020), financial fragility (Le & Doan, 2020), time-wasting and increased costs (Ivanovi-Djuki et al., 2019). The examination of the impact of corruption on employers’ efficiency in Vietnamese firms has shown that the unofficial expenses in the industry and the total informal costs accounting for 10% or more of revenue have negatively affected the labor efficiency of the enterprises. Assessing the effects of corruption on Nigerian enterprises has shown that corruption represents an obstacle to Nigerian enterprises’ performance (Page & Okeke, 2018). A study in Papua New Guinea found that corruption in enterprises leads to the loss of revenue from tax (Ezebilo et al., 2019). In Vietnam, when investigating the effects of corruption on the performance of newly established enterprises, it was found that corruption deteriorated enterprise financial performance, imposed a more harmful impact on the performance and survival of private domestic enterprises compared to the state-owned enterprises and that foreign firms took advantage of corruption to enhance their performance and survivability (Nam et al., 2020). A study to examine the effects of corruption on the financial fragility of SMEs in 62 countries over the period from 2012 to 2018 showed that an increase in the degree of corruption is positively correlated with the financial fragility of SMEs in developing countries, which is more pronounced in countries with less economic freedom and lower levels of the independent press (Le & Doan, 2020). A study in Serbia has shown that corruption in starting businesses negatively affects the time needed to start a business, the costs of its registration, and the provision of initial capital (Ivanovi-Djuki et al., 2019).
Some studies have linked gender and corruption in enterprises. In a study that involved multi-countries (more than 100 countries) in analyzing whether female managers and female owners of firms perceived corruption differently, results showed that both female managers and female owners perceived corruption to be lower relative to men; additionally, while the older firms perceived corruption to be a more severe obstacle, the sole proprietorships did not see it as a major as such (Goel & Nelson, 2019). A paper that tested the hypothesis that corruption discourages more female than male entrepreneurs from applying for credit in 68 countries worldwide demonstrated that female entrepreneurs were more discouraged by corruption to ask for credit than male borrowers. In terms of corruption, the discouragement was accounted for by women having less managerial experience in dealing with corruption than men (Statnik et al., 2022). In a study to examine the relationship between gender differences in entrepreneurship and firm-level bribery in 32 emerging economies, it was found that the female entrepreneurs experienced a higher level of bribery than the male entrepreneurs; it was also found that the impact of gender on bribery is more among firms in countries that are more corruption-prone and less among countries with a higher female graduation ratio at the tertiary level; additionally, it was found out that the enterprises that are managed by female have a lower likelihood of obtaining a construction permit, securing a government contract, or holding an operating license. One of the possible explanations for the high level of bribery among the enterprises managed by women in emerging markets is the survival motive (Nguyen et al., 2021). A study in Latin America that tested a proposition that women behave differently concerning bribing based on higher ethical or moral standards found that women in positions of influence (i.e., firm ownership and top management) are equally associated with firm-level bribing. The study also revealed that women receive, on average, a more significant payoff from bribing compared to their male counterparts. This study implies that promoting women into high-level positions based on their superior morality is an ill-conceived presumption (Wellalage et al., 2020). In a study to assess whether female managers impact negatively or positively on the corrupt behavior of family SMEs (household businesses) and non-family SMEs (Small and Medium-sized Enterprises) in Vietnam, it was found that family SMEs (household businesses) are more likely to engage in corruption and that the female participation in the management team of SMEs promotes firms to be less involved in unethical practices such as bribe (Tran et al., 2022). One of the findings in a study that aimed at responding to whether a corrupt politico-institutional environment affects the demand for public subsidies for credit access by small and medium-sized enterprises (SMEs) helmed by female entrepreneurs in the European SMEs was that a corrupt environment negatively influenced SMEs managed by female entrepreneurs more than male ones (Bonanno et al., 2020). In a paper that analyzed the effect of corruption in South Asia on credit access for SMEs and credit constraints faced by female-owned and male-owned SMEs, it was found that generally, corruption increased the probability of SMEs credit constraints by 7.63% and that bribery is slightly more effective when used by female SME owners: when male-owned SMEs pay bribes, they are on average 0.61% more credit-constrained than their counterparts; on the other hand, for female-owned SMEs paying bribes, they are on average 0.78% more likely to be less credit-constrained compared to female SME owners who do not pay bribes (Wellalage et al., 2019). In analyzing the effect of gender on bribe paying, it was found that women were 0.80 times as likely as men to pay a bribe, and they are significantly less likely to pay a bribe than men for a permit and to the police (Peiffer & Rose, 2014). In a study focusing on whether female managers of firms perceived or experienced corruption differently, covering more than 100 developing countries, it was found that female managers perceived corruption to be lower (Goel & Nelson, 2021).
As it has been seen, some studies have linked gender and corruption in the enterprises, particularly in terms of the perceptions about corruption by the female managers and owners of firms (Goel & Nelson, 2019), the impact of corruption on applying for credit between female and male entrepreneurs (Statnik et al., 2022), gender differences in enterprise-level bribery (Nguyen et al., 2021), women’s moral standards and bribing (Wellalage et al., 2020), corruption in family SMEs and non-family SMEs (Tran et al., 2022), corrupt institutional environment and public subsidies for credit access by SMEs helmed by female entrepreneurs (Bonanno et al., 2020), the gendered effects of corruption on credit access and credit constraints (Wellalage et al., 2019), and gender and bribe paying (Peiffer & Rose, 2014). It has been argued that due to the unequal gender relations in society, women are more exposed to corruption and its consequences. As women form a considerable proportion of the informal sector, which is highly contaminated by corruption, there is a greater likelihood that they are under constant pressure to yield to corruption (Sida, 2015). Is this argument valid everywhere and in all circumstances? There is a lack of literature and empirical evidence to show the gendered bias of corruption practices in Namibian enterprises. In Namibia, where 38% of women are top managers of enterprises (Kamanzi, 2022), it is not known empirically who is affected most by corruption practices between the women and men’s top-managed enterprises. Hence, the purpose of this study is to test whether there is a significant difference in the corruption practices between women and men’s top-managed enterprises in Namibia.
For a more equal participation in public life by both women and men, cleaner business is necessary (World Bank, 2001). This concern implies a need to strategize for ways to deal with corruption, an undesirable phenomenon that negatively affects society, contributes to the imbalance in the distribution of public and private goods, and adversely affects the economy and society’s confidence in governance and the institutions’ efficiency. More creative efforts and strategies from different perspectives are needed. Much as anti-corruption legislation and policies exist at all levels, corruption still finds its way and has remained a constant influencer of our societal dynamics (Krastev et al., 2020). Therefore, this study, taking a gender perspective, adds insights into the relationship between gender and corruption among SMEs. It provides information about how gender relates to the likelihood of corruption practices in the entrepreneurial settings of Namibia. The findings are essential to address the corruption practices gaps that gender differences might have exacerbated. The results also inform the public grand policy goal of a corruption-free society. More specifically, this study is critical because it adds to the literature regarding the gendered dimension of corruption practices in women and men’s top-managed enterprises by giving insights to the following questions: Given the background that women have historically suffered from gender inequalities in many aspects, are there also gender inequalities in the corruption practices? Does the corruption inequality go beyond the individual women and women’s groups to even institutions that women manage? Namibia embarked on a journey to deal with corruption already in 1996 when the Cabinet approved the creation of an ad hoc “Ministerial Committee on the Promotion of Ethics and Combating of Corruption” and a “Technical Committee” to develop legislative and administrative proposals for a comprehensive anti-corruption regime in Namibia and the involvement of the public, civil society, citizens and the business community (Hopwood, 2007: p. 9). Are there pointers to a corruption-relieved Namibia in business, regardless of the topic’s sensitivity, given the grand cases such as the Fishrot? Regardless of whichever enterprise suffers from the corruption practices, whether women or men in top-managed enterprises, recommendations are needed to benefit a corruption-free status for all the enterprises in Namibia.
2. Materials and Methods
The study uses the Namibia Enterprise Survey 2014/2015 collected by the World Bank1. A representative sample was derived from the firms that were stratified according to the sectors of manufacturing industries and the services sectors and the regions of Windhoek/Okahandja, Walvis Bay/Swakopmund, and Oshakati/ Ongwediva. A random sampling of the respondents targeted the sample size of 600 enterprises; the survey reached 469 enterprises. 196 (42%) of enterprises were sampled in Windhoek/Okahandja region, 144 (31%) in Walvis Bay/Swakopmund, and 129 (27%) in Oshakati/Ongwediva.
To determine an association between the corruption practices among female and male top-managed enterprises, the study first identifies the corruption practice indicators from the Namibia Enterprise Data Survey (NEDS) 2014/2015. The indicators should have a minimum of 30 observations to allow statistical analysis (Islam, 2018: p. 6)2 Secondly, the corruption practice indicators are presented using descriptive statistics (frequencies and percentages). The descriptive statistics show the extent of corruption practices for the female and male top-managed enterprises. Thirdly, the null hypothesis is tested for an association of corruption practices between women and men top-managed enterprises of Namibia using the Chi-square test. The test compares the distribution of the categorical variables of the corruption practices in a sample of women and men’s top-managed enterprises. The Chi-squared test tests the following null (H0) hypotheses:
1) Gender has no association with corruption as an obstacle.
2) Gender has no association with giving a bribe for an electrical connection.
3) Gender has no association with giving a bribe payment for a water connection.
4) Gender has no association with giving a bribe for a business license.
According to the Chi-squared test, the null hypothesis is rejected if the chi-squared statistic is greater than the critical value from the Chi-squared distribution. The critical values are 3.84, 5.99, 7.82, and 9.49, with corresponding degrees of freedom of 1, 2, 3, and 4, respectively, at an alpha level of 0.5. Greater chi-square statistics than these critical values of specific corresponding degrees of freedom lead to the rejection of the null hypothesis and acceptance of the alternative hypothesis (Kim, 2017).
3. Results
Table 1 summarizes the indicators of the corruption practices and their extent. These indicators are derived from the Namibia Enterprise Data Survey 2014/ 15.
Using a rule that indicators with a minimum of 30 observations allow statistical analysis (Islam, 2018: p. 6), the indicators that are retained for further analysis in the association between gender and corruption practices are corruption as an obstacle, informal gift or payment for an electrical connection, a water connection, and an operating license. While half of the enterprises (50.35%) acknowledge that corruption is not an obstacle, on another end, 9.15% describe corruption as a major obstacle; an equal proportion (each 14.26%) describes corruption being a minor and a moderate obstacle. Above 90% report not having experienced being requested for an informal gift or payment for electricity and water connection and an operating license.
Table 2 summarizes the results of performing the Chi-squared test on comparing corruption practices among women and men’s top-managed enterprises.
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Table 1. Extent of corruption practices.
Source: Data analysis from World Bank Namibia Enterprise data 2014/2015.
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Table 2. Chi-squared test results of corruption practices in women’s and men’s top-managed enterprises in Namibia.
Source: Data analysis from World Bank Namibia Enterprise data 2014/2015.
The results, as presented in Table 2 can be described as follows:
1) After performing a Chi-Square Test of Independence to assess the relationship between corruption as an obstacle and gender, there was no significant relationship between the two variables, X2 (4, N = 567) = 8.3030, p = 0.081. There is no difference in experiencing corruption as an obstacle between women’s and men’s top-managed enterprises.
2) After performing a Chi-Square Test of Independence to assess the relationship between making a bribe payment after applying for an electrical connection and gender, there was no significant relationship between the two variables, X2 (1, N = 66) = 0.0070, p = 0.933. There is no difference in making a bribe payment after applying for an electrical connection between women’s and men’s top-managed enterprises.
3) After performing a Chi-Square Test of Independence to assess the relationship between making a bribe payment after applying for a water connection and gender, there was no significant relationship between the two variables, X2 (1, N = 31) = 0.0405, p = 0.841. There is no difference in making a bribe payment after applying for a water connection between women’s and men’s top-managed enterprises.
4) After performing a Chi-Square Test of Independence to assess the relationship between making a bribe for an operating license and gender, there was no significant relationship between the two variables, X2 (1, N = 34) = 1.0909, p = 0.296. There is no difference in making a bribe for an operating license between women’s and men’s top-managed enterprises.
4. Discussion
There are two key findings in this study: 1) that very many enterprises (90%) do not have an experience of being requested to give a bribe for services, and 2) that whether the enterprise is managed by women or by men in Namibia, corruption as an obstacle, giving a bribe for electricity or water connection, and giving a bribe for an operating license are likely to be experienced by both female and male top-managed enterprises equally. Graft, which is an experience of being requested for a bribe (Fodol, 2021), is one of the most ordinary practices in business (Onyeonoru et al., 2019) to survive markets (Nguyen et al., 2021), and hence that in Namibia, most enterprises do not experience it is a contra finding. It is possible to account for the low graft situation by considering the long, focused, and collaborative efforts of the Namibia nation’s struggle to combat corruption from the mid-1990s (Hopwood, 2007).
The finding that there of similar experiences of corruption is contrary to the finding that there is a higher level of bribery among female-led firms in emerging markets (Nguyen et al., 2021), that the female managers perceive corruption to be lower relative to men (Goel & Nelson, 2019), that with the women managers in firms there is a likelihood of less involvement in unethical practices such as bribe (Tran et al., 2022), that they have a greater likelihood to be under constant pressure to yield to corruption in informal settings compared to men (Sida, 2015), and that women are significantly less likely to pay a bribe than men for a permit (Peiffer & Rose, 2014), that female managers perceive corruption to be lower (Goel & Nelson, 2021). However, in terms of bribing, the finding is consistent with the study that found that women were as likely as men to pay a bribe (Peiffer & Rose, 2014).
5. Conclusion
Gender does not matter in the corruption practices in Namibian enterprises. Whether the enterprise is managed by women or by men, corruption practices impact on both women and men managed enterprises equally. Hence, there is no gender corruption inequality but gender corruption equality in the Namibian enterprises. Nonetheless, there is a need for further research in Namibia to account for the factors that have led to less graft experience and the gender corruption equality in Namibian enterprises.
Acknowledgements
We want to acknowledge the support of our employee, the University of Namibia (UNAM), for the moral support and time to write this paper. We thank our colleagues at Oshakati Campus, together with the MA Development Studies students, who provided insights and expertise that greatly assisted the writing of this paper through the seminars. However, they may not agree with all the interpretations and conclusions of this paper. We greatly thank Dr. Judith Namabira for assisting with theoretical and methodological inputs in this paper.
NOTES
1Dataset downloaded from https://login.enterprisesurveys.org/content/sites/financeandprivatesector/en/library/library-detail.html/content/dam/wbgassetshare/enterprisesurveys/economy/namibia/Namibia-2014-full-data.dta [29th July 2021].
2Much as there is lack of documented evidence to support that a sample size of 30 is the magic number for non-normal distributions, there is, however, always a suggestion that a sample size of 30 will produce an approximately normal sampling distribution for the sample mean from a non-normal parent distribution (Islam, 2018).