The Exploration of Digitalization as a Means to Combat Corruption: Examining the Integrity Benefits of Embracing Digitization

In the modern world, digitalisation has emerged as a potent weapon in the global fight against corruption. This transformation, facilitated by open contracting data standards, has yielded significant savings in countries like South Korea and Ukraine, amounting to billions of dollars.

One of the most impactful areas of digitalisation is in social protection programs. In India, for instance, the introduction of digital payments and biometric identification has drastically reduced leakages in social transfers, significantly reducing corruption.

The digitalisation of bureaucratic procedures also plays a crucial role in reducing opportunities for bribery. By cutting red-tape, digitalisation removes the need for unnecessary interactions, thereby reducing the opportunities for illicit transactions.

However, it's important to note that the quality of these digital databases is still, at best, uneven and incomplete. Managing and mitigating risks to privacy and cybersecurity is necessary during digital transformation to ensure that the benefits outweigh the potential drawbacks.

Integrity-tech, the use of digital technologies as anticorruption tools, is being embraced by various actors, including government entities, accountability institutions, civil society, and civic-tech startups. One such example is the partnership between tech-based, data-powered startups like Linkurious and Neo Technology, and the International Consortium of Investigative Journalists, which aided in the Panama Papers scandal.

Governments are not immune to the risks associated with digital transformation. They expose themselves to cybercrime and ransomware attacks, and the sharp rise in governments' tech budgets and the increasing complexity of technological solutions create new corruption risks.

The coronavirus crisis has provided an opportunity to reinvent government, rebuild trust, and accelerate the global fight against corruption. Digital transformation is central to recovery plans, requiring agile government, cutting red-tape, and corruption-proofing reactivation programs.

Audit agencies are leveraging artificial intelligence robots to red-flag irregularities in government procurement and uncover anomalies in emergency health spending. The smarter use of data analytics is proving to be a game changer in the integrity space.

Robust regulatory frameworks are necessary to prevent abuses and breaches of privacy during digital transformation. Various government agencies and organizations have implemented integrity-tech solutions for corruption prevention, focusing on areas like bribery, conflicts of interest, fraud, cartel law, and money laundering prevention.

Digitalisation can disrupt corruption by reducing discretion, increasing transparency, and enabling accountability. However, it's crucial to remember that the fight against corruption is a continuous process, requiring vigilance and a commitment to transparency and accountability.

This article was originally published on the Development Matters blog and cross-posted on AI Policy Observatory. The Open Data Charter identifies 30 datasets that are critical for anti-corruption purposes, highlighting the importance of data in the fight against corruption. The costs of red-tape can be substantial, with Mexico's costs representing as much as 3.4% of its GDP. Even petty bribery can have a significant impact, costing the Mexican economy US$650 million in 2019.

Argentina's digitalisation efforts have resulted in savings estimated at US$2.1 billion, with the elimination of 600 norms that did not aggregate value. Tax authorities have also used digital technologies to increase tax compliance and reduce tax fraud, such as e-filing of tax obligations and sophisticated algorithms like Connect in Britain.

In conclusion, digitalisation offers a powerful tool in the fight against corruption. However, it's essential to approach this transformation with caution, ensuring that robust regulatory frameworks are in place to prevent abuses and breaches of privacy, and that the quality of digital databases is maintained to ensure their effectiveness in combating corruption.