Corruption and E-Government Theory
The principal-agent-client model considers corruption as a problem of asymmetric information (Klitgaard, 1988). According to the model, the principals engage public administrators as agents to deliver essential public services and information to the citizen clients. Since the agents have a greater knowledge of the administration than the principals and clients, there is always the problem of asymmetric information. If the agents take advantage of their position and pursue their own interests, this asymmetric information could potentially result in corruption. In this model, there are primarily two sources of corruption: asymmetric information and power. Jain (2001) posited that the existence of corruption requires three elements -- 1) discretionary power, which includes the power of legislation, administration, and regulation, 2) economic rents associated with those powers, and 3) less frequent detection of and low penalties for corruption. Once the three factors co-exist in a system, corruption is unlikely to avoid. Therefore, if the development of e-government could help to eliminate some or all of these three elements, then e-government would be an effective tool to cure corruption.
E-government involves the use of information technology to improve the efficiency of public service delivery and citizens’ quality of life (Carter and Belanger, 2005). During the early stages of e-government development, scholars identified the potential of new ICT tools to reduce corruption through multiple channels (Bhatnagar, 2003). These channels include accessible information, transparent rules, filing and tracking requests to public officials, and reducing discretionary power by standardizing service delivery. Studies have consequently focused on the relationship between e-government and corruption reduction, with many pointing towards a causal relationship in which e-government reduces corruption. Based on a panel of 149 countries (t=1996, 2006) and 2SLS regression, Andersen (2009) found that e-government reduced corruption significantly, even controlling for two corruption predictors: GDP per capita and press freedom. Using a panel of 70 countries (1998, 2005), Lio et al. (2011) confirmed the bi-directional causality between Internet adoption and corruption. Similarly, a later study by Elbahnasawy (2014) also concluded that e-government was an effective tool in reducing corruption. Moreover, as the phenomenon of e-government is often considered multi-dimensionally as e-information, e-transaction, and e-participation (Manoharan, 2013), the use of technology can reduce corruption across all dimensions. For example, e-information could reduce the issue of asymmetric information. E-transaction would address the issue of discretionary power and economic rents. E-participation would enable a more participatory community that reduce discretionary power and bring more policy awareness and transparency.