To Be Corrupt or Not Be Corrupt

Journal of Money Laundering Control
To be corrupt or not to be corrupt: Understanding the behavioral side of corruption in

Indonesia
Hendi Yogi Prabowo,
Article information:
Downloaded by Universitas Sebelas Maret, UPT PERPUSTAKAAN UNS At 03:16 29 October 2017 (PT)
To cite this document:

Hendi Yogi Prabowo, (2014) "To be corrupt or not to be corrupt: Understanding the behavioral side of
corruption in Indonesia", Journal of Money Laundering Control, Vol. 17 Issue: 3, pp.306-326, https://
doi.org/10.1108/JMLC-11-2013-0045
Permanent link to this document:
https://doi.org/10.1108/JMLC-11-2013-0045
Downloaded on: 29 October 2017, At: 03:16 (PT)
References: this document contains references to 58 other documents.
To copy this document: permissions@emeraldinsight.com
The fulltext of this document has been downloaded 2286 times since 2014*
Users who downloaded this article also downloaded:
(2012),"Corruption and control: a corruption reduction approach", Journal of Financial Crime,
Vol. 19 Iss 4 pp. 384-399 <a href="https://doi.org/10.1108/13590791211266377">https://
doi.org/10.1108/13590791211266377</a>
(2010),"What is corruption corrupting? A philosophical viewpoint", Journal of Money Laundering
Control, Vol. 13 Iss 1 pp. 45-54 <a href="https://doi.org/10.1108/13685201011010209">https://
doi.org/10.1108/13685201011010209</a>
Access to this document was granted through an Emerald subscription provided by emerald-srm:604154 []
For Authors
If you would like to write for this, or any other Emerald publication, then please use our Emerald for
Authors service information about how to choose which publication to write for and submission guidelines
are available for all. Please visit www.emeraldinsight.com/authors for more information.
About Emerald www.emeraldinsight.com
Emerald is a global publisher linking research and practice to the benefit of society. The company
manages a portfolio of more than 290 journals and over 2,350 books and book series volumes, as well as
providing an extensive range of online products and additional customer resources and services.
Emerald is both COUNTER 4 and TRANSFER compliant. The organization is a partner of the Committee
on Publication Ethics (COPE) and also works with Portico and the LOCKSS initiative for digital archive
preservation.
*Related content and download information correct at time of download.

The current issue and full text archive of this journal is available at
www.emeraldinsight.com/1368-5201.htm
JMLC
17,3
To be corrupt or not to be
corrupt
Understanding the behavioral side of
306 corruption in Indonesia
Hendi Yogi Prabowo
Centre for Forensic Accounting Studies, Faculty of Economics, Islamic

University of Indonesia, Sleman, Indonesia
Abstract
Purpose The purpose of this paper, which is based on authors study, is to shed light on the
behavioral elements of corruption in particular the decision-making process undertaken by potential
offenders to construct a solid basis for effective corruption eradication strategy in Indonesia.
Design/methodology/approach This study examines corruption cases in Indonesia in the past
two years which have been investigated by the Indonesian Corruption Eradication Commission as well
as relevant literature on corruption to gain a better understanding of corruption offenders behavior.
Findings The author establishes that by looking at the behavioral side of corruption we may gain
more understanding on potential offenders way of thinking as a reference in dealing with corruption.
The discussions in this paper suggest that when potential offenders are exposed to pressure/motivation,
opportunity and rationalization to commit corruption, they will (consciously or subconsciously) assess
all the perceived benefits and costs before deciding to commit (or not to commit) corruption.
Understanding the mechanics by which potential offenders decide to engage (or not to engage) in
corruption will provide government and decision makers with a solid basis for formulating an effective
corruption eradication strategy.
Research limitations/implications This study utilizes only secondary data sources to build its
analysis on the perceived benefits and costs of engaging in corrupt practices. For future studies,
primary sources, such as incarcerated corruption offenders, will offer a more accurate view of the actual
decision-making process behind corrupt practices.
Practical implications This paper contributes to the development of effective corruption
eradication strategy in Indonesia by introducing the fraud decision scale as a framework by which
appropriate measures will be devised so as to yield the intended results.
Originality/value Instead of taking the more popular legal or political standpoint, this paper takes
an unconventional view of assessing corruption problem from the behavioral perspective.
Keywords Corruption, Indonesia, Fraud, Fraud triangle, Rationality, Fraud investigation
Paper type Research paper
Introduction
Fraud is all over the media these days. It comes in many shapes and sizes and can be
perpetrated by anyone. According to a global study by the Association of Certified
Fraud Examiners (ACFE), annual losses from fraud worldwide are estimated to be $US
Journal of Money Laundering Control
Vol. 17 No. 3, 2014
pp. 306-326 The author would like to acknowledge the support provided by the Directorate General of Higher
Emerald Group Publishing Limited
1368-5201
Education of Indonesia (Dirjen Dikti) for the funding of this study through its Doctorate
DOI 10.1108/JMLC-11-2013-0045 Development Programme (P2D).
3.5 trillion (Association of Certified Fraud Examiners, 2012, p. 4). In Indonesia, Behavioral side
according to the Corruption Eradication Commission (KPK), the total losses from
corruption from 2004 to 2011 were estimated to be around Rp 39.3 trillion ($US 3.4
of corruption in
billion) (VIVAnews, 2012). Efforts have been devoted to eradicate fraud from the face of Indonesia
the planet with little or no success. Many countries have now been working together to
eradicate corruption, which indicates the growing awareness of the importance of
uniting our strength against common enemies. Fraud investigation and prosecution 307
have been extensively conducted by governments in their attempt to diminish the
threats of fraud, such as corruption in their jurisdictions. Anti-fraud scholars and

practitioners are now also extending their efforts to cover areas previously untouched
by traditional measures, such as education and culture. This paper approaches the
issues of corruption eradication in Indonesia from an unconventional perspective by
focusing on the behavioral side of the corruption problems in particular to shed light on
how potential offenders eventually decide to engage in corrupt acts and how to prevent
them from doing so in the first place.
Fraud in the society

According to Wells (2008, p. 8), fraud is essentially crime for gain that uses deception as
its principal modus operandi. Wells (2008, pp. 8-9) argues that under the common law,
fraud is characterized by four general elements:
(1) a material false statement;
(2) knowledge that the statement was false when it was uttered;
(3) reliance on the false statement by the victim; and
(4) damages resulting from the victims reliance on the false statement.
In reality, fraud evolves rapidly over time due to which new forms and methods emerge
seemingly every day. To perform their duties effectively, fraud investigators will
commonly refer to the existing legal definition of fraud as set by the existing laws. For
example, in Indonesia, as the most recognized type of fraud, corruption has been clearly
defined by Law No. 31 Year 1999 as amended by Law No. 20 Year 2001 on the
Eradication of Corruption. As defined by the laws, there are 30 types of corruption in
Indonesia which fall into 7 categories: causing losses to the nation, bribery, occupational
embezzlement, extortion, deception, conflict of interests in procurement of goods and
services and gratification (Ardisasmita, 2006, p. 4).
According to the KPKs database, there are five major schemes of corruption in
Indonesia: procurement of goods and services, bribery, budget misappropriation,
unauthorized collection and licensing (Corruption Eradication Commission, 2012).
Based on the number of cases investigated by the KPK, bribery is the most common type
of corruption in Indonesia which merits special attention (Figure 1).
Understanding fraud offenders

Fraud offenders have always been a fascinating object to study. Many have tried to
delve deeper into the twisted and yet logical minds of fraudsters which no scientists to
date have been able to fully understand. Despite its complexities and difficulties,
understanding fraudulent minds is essential in understanding how to defeat them.
JMLC Currently, governments have devoted their resources to mitigate fraud in their
jurisdictions. Special laws have been enacted to severely punish fraud offenders in the
17,3 hope of discouraging potential offenders from ever committing fraud in the future.
Additionally, anti-fraud task forces have also been established all around the globe to
create hostile environment for fraudsters. Nevertheless, all these efforts do not seem to
be enough to put fraud to an end. In Indonesia, for example, every now and then, new
308 corruption cases emerge with new suspects, some of whom are high-ranking officials.
Recently, the KPK arrested the Upstream Oil and Gas Regulatory Special Task Force
(SKK Migas) Head, Rudi Rubiandini, for allegedly accepting bribes from an executive of
Kernel Oil Private Limited, a Singapore-based oil trading company (Prabowo, 2013c).
Many believe that Rudis case is just the tip of the iceberg, with a number of other
high-ranking officials within the Energy and Mineral Resources Ministry believed to be
involved in the scheme. The KPK is currently working around the clock to find out just
how deep the rabbit hole really is (Prabowo, 2013c). Prior to his career in government,
Rudi was a professor at the Bandung Institute of Technology. His stint at the energy
ministry and the upstream oil and gas regulator had put him on the map as a leading
petroleum expert (Prabowo, 2013c). SKK Migas itself has the authority to sign
cooperation-sharing contracts and appoint sellers of oil and/or gas that may generate
maximum profits to the state (Prabowo, 2013c).
So far, as investigation and prosecution are concerned, the Indonesian Government
has spent their resources in investigating and prosecuting corruptors. However, the fact
that corruption remains a major problem in the country suggests that new approaches
need to be taken. Based on the data from the Anti Corruption Clearing House, from 2004
to 2013, there have been 596 major cases[1] of corruption in Indonesia uncovered by the
KPK, which means that on average 57 major cases are uncovered each year over the past
decade (Corruption Eradication Commission, 2013). In the Transparency Internationals
2012 Corruption Perception Index, Indonesia is ranked 118th out of 174 countries
(Transparency International, 2012). This also means that, despite scoring better than the
previous year, Indonesia remains in the bottom 30 per cent of the most corrupt countries
in the world. One of the major drawbacks of the current anti-corruption measures is that
they overemphasize on investigation and prosecution. In reality, corruption seems to
Figure 1.
Corruption cases
investigated by the
corruption eradication
commission (2004-2012)
regenerate faster than the authorities can cut it back. This suggests the need to devote Behavioral side
more efforts to suppress its regenerative healing factor so as to increase the effectiveness
of the repressive measures.
of corruption in
To understand how corruptions regenerative healing factor works we must first Indonesia
understand why people commit fraud. Based on the works of criminologist Donald Ray
Cressey, the fraud triangle is an example of a model of crime occurrence analysis which
focuses on the so-called trust violators[2]. Cresseys theory suggests that for a trust 309
violation to occur, three elements must be present: motivation, opportunity and
rationalization.
In terms of motivation, Cressey (1950, p. 97) argued that in all cases that he had
studied, non-shareable problems always preceded the criminal violation of financial
trust. Non-shareable describes the situation where a problem-bearer cannot inform
other people, let alone ask for help. This creates a somewhat strong motivation for
committing fraud. When motivation exists, any opportunity to commit fraud can be
considered as a solution to a persons non-shareable problem. As Cressey (1950, pp.
123-124) stated:
The trusted person must have a certain amount of knowledge or information about trust
violation in general, and specifically he must be aware that the violation of his trust will aid in
the solution of the problem.
The perceived opportunity to commit fraud is commonly associated with the perception
that a control weakness is present and the likelihood of being caught is small (Dorminey
et al., 2012, p. 558). Such opportunity can be optimized only when offenders have the
ability to act without being detected (Dorminey et al., 2012, p. 558). According to the
ACFEs global study, living beyond means is the most common behavioral symptom
of fraud offenders all around the globe (Association of Certified Fraud Examiners, 2012,
p. 57). Other symptoms include financial difficulty, family pressure and organizational
pressure (Association of Certified Fraud Examiners, 2012, p. 57). These symptoms also
represent common pressure/motivation for committing fraud. On the other hand, based
on the same study, another common symptom, unusually close relationship with
vendor or customer, represents an opportunity arising from the lack of employee
rotation due to which an employee may stay in one position longer than he or she should
have and becomes personally close to the vendor or consumer (Association of Certified
Fraud Examiners, 2012, p. 57). Such closeness is then misused to commit fraud.
To complete the triangle, rationalization is a way for the offender to justify their
actions. It is essentially an attempt to reduce cognitive dissonance resulting from
misconducts (Murphy and Dacin, 2011, pp. 609-612; Dorminey et al., 2012, p. 558). As
argued by Ramamoorti (2008, p. 525):
Specifically, trust violators and fraud perpetrators must be able to justify their actions to
themselves and others as a psychological coping mechanism to deal with the inevitable
cognitive dissonance (that is, a lack of congruence between their own perception of being
honest and the deceptive nature of their action or behavior). This explanation led to the
inclusion of rationalization as one of the elements in the conceptual framework provided by
the Fraud Triangle []
According to Cressey (1950, p. 201), rationalizations are not merely ex post facto
justifications for conduct which have already been enacted, but are pertinent and real
reasons which the person has for acting. This is to say that offenders may have their
JMLC justifications before or after their actions. Clark et al. (2006, pp. 135-136) are of the
opinion that rationalization can take various forms, such as: its just temporary,
17,3 management doesnt care, management participates in, expects and rewards this
kind of behavior, no one is hurt and the company is helped and I deserve this.
The fraud triangle has been used to explain many of major fraud cases in the past
where, given the presence of the three causal factors (pressure/motivation, opportunity
310 and rationalization), the otherwise honest people chose to become full-fledged fraud
offenders. A recent noticeable trend in the corruption cases in Indonesia is that the
perpetrators are seemingly getting younger and smarter by the day. Among the most
well-known examples of this case is that of Gayus Tambunan, a young low-level
government tax official who was involved in money laundering and embezzlement for
major companies in Indonesia (Kimura, 2012, p. 187). What really made Gayus a media
attention was his bold act in bribing police and immigration officials so as to be able to
enjoy frequent trips abroad during his detention time (Kimura, 2012, p. 187). Angelina
Sondakh is another example of how vulnerable young generation is to the temptation of
corruption. Before being convicted to corruption, Angelina, a former Indonesian beauty
queen, was a promising young politician who served as a member of the House of
Representative (DPR). A thing worthy of note about Angelinas case is that she was one
of the models for the Democratic Partys anti-corruption advertisement during the
election campaign in 2009 (Prabowo, 2012b). Many believe that the promise of being a
clean political party was a factor behind the partys victory in the last election (Prabowo,
2012b). Similarly, the case of Nazaruddin, a former treasurer of the Democratic Party
who allegedly arranged kickback deals for the 2011 SEA Games in Palembang, Sumatra
(Kimura, 2012, p. 188), is an example of how some Indonesian young politicians these
days cannot withstand the temptation of corruption. Nazaruddins case caught media
attention for his adventurous escape to Singapore, Vietnam, Cambodia, Spain and the
Dominican Republic before his arrest in Colombia (Kimura, 2012, p. 188).
Despite its complexity, the author believes that a fraud is essentially an outcome of a
decision-making process by a potential offender in which a number of variables are
taken into consideration before the decision is made. Many criminologists believe that
offenders are always seeking for the greatest benefits in their actions as an application
of the rational choice theory. The rational choice perspective itself is a universal concept
acknowledged by a number of different fields of study and was believed to be inspired
by Cesare Beccaria with his well-known work, An Essay on Crimes and Punishments
(1872) (Beccaria and Voltaire, 1872; Hayward (2007, p. 233). As stated by Satz and
Ferejohn (1994, p. 71):
The theory of rational choice plays a central role in the social sciences. The received view
among philosophers who study rational-choice theory (both proponents and critics) holds that
the theory is psychological and individualistic. Rational-choice theory is taken to be a
psychological theory in that it explains a persons actions in terms of her mental states. A
rational choice or action is one in which the agent takes the best available action given her
preferences and beliefs. The theory is also taken to be an individualistic theory in that it applies
directly only to individuals (that is, only individuals have preferences).
In other words, when making decisions, people are generally guided by their rationality.
As proposed by Nida-Rmelin (2010, p. 64), an individual is said to be guided by
rationality when he or she follows normative principles of adequacy that may or may
not be consciously present or accessible to the thinker. There have been discussions and
debates regarding the boundaries of rationality (Sen, 1994; Caplan, 2006; Velupillai, Behavioral side
2010; Spickard, 1998; McClennen, 2010). Some scholars argue that an individual is said
to be rational when he or she is using means to achieve ends so as to maximize his or her
of corruption in
utility (Mises, 1966, pp. 19-22; Wintrobe, 2002, p. 18). Caplan (2006, p. 93) in his work Indonesia
argued that the three most commonly used standards of rationality are: responsiveness
to incentives, narrow selfishness and rational expectation. Being responsive to incentives
is concerning to ones awareness of the potential benefits based on which he or she 311
makes the decision to act (Caplan, 2006, pp. 93-98). Narrow selfishness is essentially
related to ones predisposition to put his or her personal interests before others in
making decisions. Rational expectation is related to long-term expectations from ones
acts (Caplan, 2006, pp. 93-98). Sen (1994, p. 385) argued that in a decision-making
process, it is essential for a rational person to make the decision consistently in pursuit
of his or her objectives in which he or she aims at maximizing the expected value of his
or her payoff measured in some utility scale. For example, in economic activities,
markets are known to work the way they do due to the millions of decisions made daily
by consumers and producers, each rationally calculating profit and loss (Spickard, 1998,
p. 100).
In criminal activities, just like in any other activities, offenders will seek the greatest
of the benefits with the least of the costs. Furthermore, as Hayward (2007, p. 233) argued
that basically, in terms of criminality, it is essentially human nature to search for
pleasure and to avoid pain, and thus, human action is organized around calculative
strategies aimed at utility maximization. Related to the above discussions, author
believes that from the cost benefit point of view, a potential offender who is exposed to
Cresseys fraud causal factors (pressuremotivation, opportunity and rationalization)
will then attempt to assess his or her situation in particular related to the potential
benefits and costs of engaging or not engaging in corrupt acts. Whatever option he or
she chooses, it will always be one with the highest-perceived net benefits. In the case of
rampant bribery in Indonesia, many businessmen in Indonesia seem to be willing to
bribe public officials to make things happen or to get things done faster because it is
known to be a common practice in the country and that anyone who does not do it will
be likely to lose the competition (Kuncoro, 2006). From the so-called game theory
perspective, assuming that there are two parties (briber and bribe) in a bribery
transaction, then the bribery itself is a result of players choosing their optimal strategies
after considering their own and each others actions (Lianju and Luyan, 2011, p. 104). In
this case, the best decision for both parties according to their judgments is to pay and to
receive bribe. To keep their transaction hidden from the authorities, they will do their
best to acquire information about each other as well as being cautious and maintaining
secrecy (Lianju and Luyan, 2011, p. 104). According to Ernst & Youngs 2013 Asia
Pacific Fraud Survey, for example, 36 per cent of the surveyed Indonesian respondents
believed that it is commonplace to use bribes to win contracts in their industry (Ernst &
Young, 2013, p. 2). Of 681 executives, senior managers and working-level employees
from corporations with a turnover in excess of $US 500 million were surveyed for the
study, with 100 of them from Indonesia. Ernst & Youngs study suggests that Indonesia
will not see the end of bribery problems anytime soon.
So far as the rational choice theory is concerned, before committing a corrupt act, a
public official will most likely (consciously or subconsciously) assess its potential net
benefits. As argued by Kristiansen and Ramli (2006, p. 210):
JMLC Based on the rational choice theory, the model presumes that an agent, like a bureaucrat, will
become corrupt if the net benefits from corrupt practices exceed those of honesty. Costs related
17,3 to payback to principals or risks of being detected and sanctioned by them, for instance, the
politicians or the judiciary, need to be taken into consideration.
Many scholars have attempted to formulate mathematical models for explaining the
rational process of rational decision making (Velupillai, 2010). In reality, however, the
312 net benefit calculation that occurs in an offenders mind is much more subtle and
complex than any mathematical model can fully explain, as it involves weighing
different factors subjectively based on his or her perception of the realities of the world
he or she lives in. Nevertheless, from the existing cases, it is still possible for us to
identify some common patterns in such mental process that can be used as a basis for
designing the most viable intervention mechanism to increase the chance of getting not
committing fraud as the end result of potential offenders cost benefit calculation.
Although different offenders may consider different cost benefit elements, evidence
suggest that some elements appear to be commonly used by many fraud offenders to
calculate the net benefits of engaging in fraudulent activities. For example, in the case of
bribery in Indonesia, the common benefits that may have been expected by public
officials who accept bribes include, but are not limited to, living an extravagant life, and
desire to attain high status, power and prestige and loyalty to superiors and
organizations. On the other hand, they may also recognize the risk of detection
and prosecution, guilt and fear, disappointment, humiliation and possible restitution as
the costs or negative consequences that may come with the action. For every perceived
element, the potential offender will determine its weight by assigning a subjective value
that, in reality, may not be mathematically quantifiable. Nonetheless, for the sake of
providing a simple illustration of the weighing process, we assume such value as
quantifiable, albeit subjectively so (Table 1).
Subjective value Subjective value
Perceived benefits of accepting Perceived benefits of not

bribe accepting bribe
Extravagant life 10 Peace of mind 5
High status, power and prestige 10 Long professional career 5
Loyalty to superiors and 10 Satisfaction for being 5
organization honest
Respect from the society 5
Perceived costs of accepting Perceived costs of not
bribe accepting bribe
Risk of detection and 5 Potential financial 10
prosecution difficulty (low income)
Guilt and fear 5 Low status, power, and 5
prestige
Disappointment 5 Intimidation from 5
Table I. Humiliation 5 coworkers and superiors
A simple illustration of Possible restitution 5
subjective cost benefit Perceived net benefits of 5 Perceived net benefits of 0
assessment to accept or accepting bribe (benefitscosts) not accepting bribe
reject a bribe (benefitscosts)
The above table illustrates a simple example of how a potential bribee weighs his or her Behavioral side
perceived net benefits from accepting a bribe. From the example, assuming that the
potential offender relies only on the given identified cost benefit elements, the final
of corruption in
decision would be to accept the bribe simply because the option has higher perceived net Indonesia
benefits compared to the alternative. In reality, there are numerous external factors that
may influence a potential offenders subjective value. Weak legal system and ineffective
anti-fraud agencies in a country, for example, will make the value of risk of detection 313
and prosecution lower than if the system is strong and backed with effective anti-fraud
agencies.
Wealth and power

In most, if not all, cases of corruption in Indonesia, extravagant lifestyle has always been
the most noticeable behavioral trait of the offenders. For example, a suspect in the
Drivers License Simulator procurement fraud who is also a Police General, Djoko
Susilo, is believed to posses at least $US 5.6 million worth of personal assets based on the
findings of the KPKs investigation (Kompas, 2013a). Such amount of personal assets is
believed by the commission as being suspiciously high for even a high-ranking police
officer. Referring to ACFEs biannual global fraud survey, living beyond means is
consistently ranked as the most observable behavioral symptoms of fraud offenders
(Association of Certified Fraud Examiners, 2012, p. 57). This is also applied to
corruption cases in Indonesia where in almost every case uncovered by the KPK,
immediately after the arrest of a prime suspect, a huge amount of personal assets were
confiscated by the commission indicating his or her extravagant lifestyle.
Public officials excessive desire for material wealth has been deemed as among the
major causes of the rampaging corruption in Indonesia. This is believed to have
contributed to the high demand for civil servant positions in the government. In fact,
evidence suggests that there is even an underground market for those who are willing to
pay a huge amount of money to succeed in civil servant recruitments (Kristiansen and
Ramli, 2006). The new civil servants who obtain their positions by bribing the
recruitment committee, recouping their investment in turn by, among other things,
accepting bribes from various sources (Kristiansen and Ramli, 2006). This will then
create deviant culture or sub-culture within public institutions that becomes a fertile
ground for corruption to grow and flourish in the government.
Just as with material wealth, many public officials in Indonesia are often seen as in an
endless pursuit of status, power and prestige. Many of them are struggling to be at the
highest positions in their organizations and are willing to do anything to achieve it.
Regional elections are an example of such a struggle. Since the fall of the Soeharto
regime in 1997 followed by the decentralization reform in 2001, the Civil Service had
undergone some major changes among which was the abolition of the former strictly
hierarchical relationship between the central government, provinces and districts
(Kristiansen and Ramli, 2006, p. 215). With this new system, instead of answering to a
higher level government, regional heads at provincial and district levels are now held
accountable to regional legislative bodies (Kristiansen and Ramli, 2006, p. 215). The
numerous elections as a result of the decentralization had put enormous financial
pressure on political parties in Indonesia. Anyone who wishes to compete in an election
must first gather enough financial ammunition to fund his or her campaigns to win
enough votes to be in the legislative body or to be the head in his or her region or district.
JMLC Such fierce competition creates pressure/motivation for the contenders to unlawfully
obtain and use fund to secure their success. As Mietzner (2007, p. 240) puts it:
17,3
[] Money politics has become a household phrase in Indonesia to depict the moral
decadence of party politicians, describing their dual practice of accepting bribes from patrons
and distributing money to gain or maintain office. Echoing these popular sentiments, domestic
and foreign observers have described the parties as rent-seeking entities, driven by oligarchic
314 interests and personal greed, With their legitimacy in decline, parties are generally seen as the
weak link in Indonesias consolidating democracy, This perception, in turn, has fuelled
demands for non-party figures to playa greater role in political life.

Moreover, those who win and sit in the office by fraudulent means (e.g., buying votes)
will then attempt on recouping their investment by any means necessary. Evidence
shows that at the regional level, there have been many cases of corruption in Indonesia
perpetrated by the head of the regions. Corruption commonly occurred in the areas such
as goods and services procurement, budgetary misappropriation and bribery. Such
areas are prone to corruption due to, among other things, the need for political funding
in particular during the regional elections. According to the Ministry of Internal Affairs,
there are approximately 36 per cent of the heads of regions who are having legal
problems related to the goods and services procurement, 44 per cent are involved in
budget misappropriation and the rest are involved in bribery, unauthorized collection
and inappropriate license granting (Kompas, 2012).
Organizational misbehavior
Due to the numerous arrests of high-ranking public officials in Indonesia by the KPK,
public institutions in Indonesia are now under the magnifying glass more than ever
before. In June 2013, the Indonesian Forum for Budget Transparency (FITRA)
published a list of the top five most corrupt provinces, cities and municipalities
(Prabowo, 2013a). In its report, FITRA highlighted regional governments lack of
competency in managing their resources and suspects that corruption is a major cause
of the inefficiencies (Prabowo, 2013a). According to FITRA, the most common
corruption schemes in these areas include fictitious procurement, mark-up, unfinished
work, disbursement fraud and low-quality goods (Prabowo, 2013a). Judging by the
number of high-ranking public officials arrested by the KPK, the public now sees
corruption as a culture in public institutions in Indonesia. Referring to Cresseys fraud
triangle, when corrupt acts become commonplace in a public institution, it will also
become a rationalization for its members to engage in corrupt acts. This is so because
evidence suggests that higher levels of exposure to corruption in daily life may promote
a tolerance and an acceptance of corruption that are reflected in norms of behavior
(Alatas et al., 2009, p. 664). Referring to the differential association theory, Donegan
and Ganon (2008, p. 6) argued that:
[] socialization is always complete and that people do not consciously violate the norms of
the society with which they identify. Adherents assert that everyone primarily identifies with
a single culture and consistently complies with its norms, but that multiple cultures can exist
simultaneously in the same or closely contiguous areas and that affiliation retains a degree of
flexibility. Cultures with which individuals identify can be national, ethnic, or religious, and
can include street gangs and corporations.
Murphy and Dacin (2011, p. 605) believed that the egoist/local ethical climate is likely to Behavioral side
lead employees to engage in fraudulent acts without thinking about it. Because loyalty
to superiors is often considered as a supreme virtue in an organization, such behavior
of corruption in
will quickly become a culture when authoritative figures are also involved. As Murphy Indonesia
and Dacin (2011, p. 605) put it:
[] obedience to authority, an organizations ethical climate and normalization, and forecasts.
Each of these situations may alone overpower the recognition of committing fraud, or they 315
may interact with one another.
In an institution where corruption is part of its organizational culture, not only do

potential offenders have an excuse (rationalization) to commit the offence, they may also
receive some supports from other coworkers or even superiors (Donegan and Ganon,
2008, pp. 7-9).
No bad deed goes unpunished

Corruptors, just like the rest of fraud offenders, think rationally before engaging in
corrupt acts. This also includes weighing the possible negative consequences that might
occur from their offences. As one of the common perceived costs of corruption, the risk
of detection largely depends on the effectiveness of a countrys anti-corruption agency.
This is so because, historically speaking, relying on the conventional law enforcement
agencies alone has proven to ineffective in combating corruption (Organization for
Economic Co-operation and Development, 2008). Anti-corruption agency is now
recognized as an important part of a nations institutional architecture and grand
strategy against corruption (Sousa, 2010, p. 6). Two important elements must be
possessed by an anti-corruption agency to ensure its effectiveness, independence and
capability (Quah, 2010). Established in 2003, the KPK has been known for its
uncompromised independence in investigating even corruption cases involving
high-ranking public officials. Nevertheless, the agencys lack of funding and facilities
appears to be its Achilles heel in combating corruption in the country (Prabowo,
2013b). An alleged cause for this problem is the fact that the funding for the agency must
be approved by the very same institution whose many members have been investigated
for corruption allegations, the DPR (Prabowo, 2013b).
In terms of detection and prosecution, despite the existing legal instruments,
sanctions for corruptors in Indonesia are still considered to be soft compared to those of
many other countries. According to an Indonesian Corruption Watch activist, Tama S.
Langkun, on average, corruptors are only sentenced to two to five years in prison in the
past three years (Jawa Post National Network, 2013). Further, according to Tama, only
a handful of corruptors were sentenced to more than ten years in prison (Jawa Post
National Network, 2013). For, example, Police General Djoko Susilo was recently
sentenced to ten years in prison for his role in the Drivers License Simulator
procurement fraud (Kompas, 2013b). Compared to his confiscated personal assets which
represent the losses caused by his crime, many believe that the sentence is too light to
give any deterrence effect.
In principal, so far as theories are concerned, crime offenders punishment may be
aimed at forcing them to pay for what they did to the society (retributivism view) (Kolber,
2013). Nevertheless, some also believe that it should give future benefits at least to the
society as the victim of the crime (consequentialism view) (Kolber, 2013). Benefits to the
JMLC society include promoting deterrence and the incapacitation and rehabilitation of
offenders (Kolber, 2013, p. 1,145). In terms of imprisoning corruption offenders,
17,3 deterrence is tied to the perceived harsh treatment an inmate would have to endure
during the sentencing period (Kolber, 2013). In relation to this matter, a major problem
in Indonesia is that even when corruption offenders were managed to be locked up in
prison for their crime, it did not seem to give them what prison is supposed to be giving
316 to criminals. According to the Vice Chairman of the Peoples Consultative Assembly,
Ahmad Farhan Hamid, corruption convicts often receive better treatment and facilities
in the prisons compared to common criminals (Waspada Online, 2013). Therefore, there
is little evidence that the deprivation of liberty had an intimidating effect on the
convicted persons (Lambropoulou, 1999, p. 246). These will greatly diminish the chance
for rehabilitation for the offenders which in turn reduces the expected benefits for
the society. The fact that many public officials have been incarcerated for corruption is
seen as constituting to the notion that serving jail time is a normal part of Indonesian
public officials lifecycle. In other words, this shows the process of normalizing the
abnormal (Wright, 2007, p. 16) which, if not properly dealt with, will be part of the
countrys culture and will likely be passed on to future generations.
Honesty does pay

As lies and deception are at the heart of any fraud, honesty would have been the cure for
the disease. However, just as lies can be a complex matter to discuss, comprehending the
mechanics and boundaries of honesty can be a task of great challenge in itself. The
notion of honesty has been the subject of discussions among many scholars (Smith,
2003; Basuchoudhary and Conlon, 2000; Slavin, 2006). For example, Smith (2003, p. 517)
argued that:
What distinguishes an ideally honest person, someone who epitomizes honesty through and
through, is not simply his refraining from deliberately uttering falsehoods to others. An honest
person will, among other things, admit his uncertainty when he experiences doubts about
some issue. He will not profess a belief or opinion before it is firmly established in his mind. He
will admit error or fault, when appropriate, and assume responsibility for his actions rather
than manufacture excuses or feign ignorance. He keeps his agreements.
No one would disagree that honesty is a fundamental virtue in life that everyone should
aim to have. Nevertheless, some also argue that there are times when honesty may be
perceived to be disadvantageous and counterproductive (Basuchoudhary and Conlon,
2000). For example, as Basuchoudhary and Conlon (2000, p. 140) put it:
[] potential survey respondents may not be certain about the confidentiality of their
responses. If certain questions are especially embarrassing, then honest respondents may
choose not to participate in the survey at all rather than answer the embarrassing questions
truthfully. Thus, embarrassing questions could lead to sample selection bias for all questions
on the survey. An increase in the number of honest potential respondents could therefore lead
to less accurate information being collected by the survey.
In reality, what an individual perceives about the disadvantages of honesty does not
always represent the actual case. In most if not all cases, being dishonest will eventually
bring nothing but damages and suffering including for the dishonest people themselves.
The world had witnessed the fall of mighty corporations such as Enron and WorldCom
that was caused primarily by their executives misconducts in the form of financial
statement manipulation which had caused many shareholders to lose their money and Behavioral side
eventually their trust in the stock market. Hsieh (2004, p. 174) argued that a revelation of
dishonesty will be likely to damage trust in relationship as there will be questions on one
of corruption in
partys regard and affection for the other. As for the offenders, having their deception Indonesia
uncovered is the worst thing that could happen (Hsieh, 2004, p. 174). They may have to
face investigation and prosecution for their offence and may end up in prison. For
example, the greatest Ponzi scammer, Bernard Madoff, was sentenced to 150 years in 317
federal prison for his robbing Peter to pay Paul scheme.
After deceiving others, an offender will be likely to attempt to cover his offence by,
among others, lying about its true nature. And as the lie continues, he or she will fall
down the slope of lies in which each lie will increase the risk of detection an exposure by
anyone with access to the facts (Hsieh, 2004, p. 175). At a certain point, when his or her
own consciousness questions the validity of his or her act, self-deception will then
emerge by which an offender deceives not others but himself or herself. Self-deception is
essentially a form of dishonesty with oneself to evade certain thoughts or knowledge
(Smith, 2003, p. 526). This process is particularly common in the rationalization element
of Cresseys fraud triangle where a fraud offender deceives himself into believing that
his or her fraudulent act is not a fraud at all. Essentially, the basic aim of self-deception
is to render ones wrongdoing unreal to oneself (Hsieh, 2004, p. 175).
Mastery over self-deception techniques will avoid or at least reduce guilt from
fraudulent act which becomes a foundation for rationalization element in the fraud
triangle. Self-deception is used to rig an argument to make pre-determined conclusion
appear justified (Smith, 2003, p. 523). Nevertheless, self-deception will have an addictive
effect in the long run which makes offenders unable to stop from lying to themselves.
The disconnection from reality as a result of self-deception will result in the inhibition of
moral growth, as it will prevent offenders from seeing their moral flaws and thus
diminishing incentives for reform (Hsieh, 2004, p. 179).
With regard to the above discussion, one may infer that promoting honesty in the
society may reduce fraud. The question is when dishonesty appears so profitable, how
do we convince people otherwise? In other words, how do we tell people that honesty is
indeed more profitable especially in the long run? As part of ethical value, honesty is
indeed more profitable for organizations and individuals. Studies suggest that
companies that promote ethical conduct outperform those that do not (Hughes et al.,
2008, p. 30). This is so due to the facts that ethics appeal to the customers as well as
investors, and it is also a productivity enhancer by which companies bottom lines will
be improved (Hughes et al., 2008, pp. 31-50). Similarly, honest individuals who do not
live in fear of detection and prosecution (i.e. due to past misconducts) will be more
productive than those who do. A person who is always willing to see the facts as they are
will be free of self-deception, and his or her morality will grow over time by learning
from his or her past mistakes. Fraud offenders who continuously rationalize their
fraudulent acts will miss the opportunity for self-improvement. This is so because
unwillingness to admit mistakes will prevent offenders from correcting or learning from
them (Hsieh, 2004, p. 180). For a company that does not perform well at a given
accounting period, assessing the unfavorable variances against its budget will shed
light on what needs to be fixed in its operation for future improvement. In other words,
companies may improve its performance by learning from its past mistakes in their
operation. Companies such as Enron and WorldCom did not bother to look at their
JMLC unfavorable variances in their operation, but instead resorted to financial statement
manipulation to create an impression that the problems have been taken care of.
17,3
The right strategy for the right results
Too often, we assume the rampaging fraud in a country as a problem of the weak law
enforcement. While this might be true to some extent, in reality, focusing on law
318 enforcement alone is far from enough to eradicate fraud, such as corruption. In
Indonesia, despite the extensive efforts by the KPK, corruption in particular bribery
remains a major problem in the country. For this, the author would like to propose a
different approach in mitigating the corruption problems in Indonesia by introducing
the so-called Fraud Decision Scale model of corruption eradication (Figure 2).
As previously discussed in this paper, when exposed to a situation with three fraud
causal factors, pressure/motivation, opportunity and rationalization, a potential fraud
offender will weigh (sometimes subconsciously) the perceived net benefits of each
option (to commit or not to commit fraud) before making a decision. This means that a
corruption eradication strategy needs to cover most if not all aspects of the fraud
decision-making process. The first step is to identify all possible perceived benefits and
costs of committing and not committing fraud in the society. This requires collaboration
between academics and professionals in thoroughly gathering and analyzing data from
the society based on which the cost benefit elements are then identified. All of the
identified cost benefit elements must then be addressed properly in a systematic
national effort to eradicate corruption which involves all members of the society. Such
effort needs to be focused on reducing the net benefits of committing corruption and
increasing the net benefits of not committing corruption.
Table II. shows an example of various initiatives that can be taken to tip the balance
of the fraud decision scale in favor of not committing fraud which means that
Opportunity
Perceived Perceived
Net- Benefits Net-Benefits
of Comm g Fraud of Not Comm g fraud
Figure 2.
Fraud decision scale
Pressure/Motivation Rationalization
Moral and ethics Improving

Strengthening Prison system and lessons at Moral and ethics Building positive Building strong remuneration
Costbenefit anti-corruption Increasing penalties administration schools and lessons in the organizational internal control system in
elements/initiatives agency for offenders improvement universities family culture in public offices public offices
Perceived benefits and costs of accepting bribes

Extravagant life
High status, power
and prestige
Loyalty to superiors
and organization
Risk of detection
and prosecution
Guilt and fear
Self Disappointment
Humiliation
Possible restitution
Perceived benefits and costs of not accepting bribes
Peace of mind
Long professional
career
Satisfaction for
being honest
Respect from the
society
Potential financial
difficulty (low
income)
Low status, power
and prestige
Intimidation from
coworkers and
superiors
Note: The matrix illustrates the expected effects (i.e. increasing [] or decreasing []) of a set of initiatives in influencing the subjective values of the perceived cost benefit elements in
the fraud decision triangle
framework
Table II.
on the fraud decision scale

eradication matrix based
Example of bribery
319
Indonesia
of corruption in
Behavioral side
JMLC regardless of the presence and size of pressure/motivation, opportunity and
rationalization, it will be unlikely for public officials to succumb to the temptation of
17,3 corruption. Such initiatives may cover areas such as anti-corruption agency
development, increasing penalties for offenders, nurturing the young generations moral
and ethics through formal education in schools and universities as well as through
education in the family, just to name a few. Note that Table II is just an example of how
320 a national strategy on corruption eradication can be systematically formulated. In
practice, there are many more initiatives that can be undertaken to eradicate corruption
than what the table depicts.

Developing and strengthening the anti-corruption agency (i.e. KPK) is certainly
crucial in investigating corruption allegation in Indonesia. Nevertheless, the agency
may also function as a means for deterring potential offenders from even thinking about
committing corruption due to the higher risk of detection and prosecution. Increasing
penalties for offenders along with prison system improvement will influence their cost
benefit calculation, as they will perceive that all the money from the crime will not be
worth their harsh time in prison.
As places where young generations minds are equipped with various skills and
knowledge to prepare them for future competition, educational institutions play an
important role in eradicating corruption in Indonesia in instilling ethics and moral into
young minds. Therefore, it is of utmost importance for educational institutions to be a
corruption-free environment for students to learn about honesty and integrity.
According to the Transparency International (2013, pp. 15-20):
Children who are confronted by corruption and a disregard for human rights in their early
childhood and within their schools may not develop an appropriate sense of dignity, integrity
and respect for human rights. They may become accustomed to corruption and the disregard
of human rights, and consider these practices a natural part of social interaction []
Corruption in education is particularly harmful in that it normalises and breeds a social
acceptance of corruption at the earliest age. As young people rarely have the ability to question
the rules of the classroom, they can internalise corrupt views of what it takes to succeed, and
carry these forward into society. When this becomes a social norm, its cycle begins anew in
each generation.
In Indonesia, the National Examination is conducted every year for all school students
throughout the nation. From the students point of view, the nationally standardized
exam is a defining moment by which their next phase of their education will be decided
which put enormous pressure for them to pass it. Unfortunately, from time to time, such
pressure had also caused some students to take a short cut and cheat at the exam. For
example, on the first day of the 2012 National Exam, according to the National
Examinations Center, there were over 250 reports of problems and irregularities, some
of which indicated possible academic frauds (Prabowo, 2012a).
News coverage revealed that students at a number of schools in Indonesia resorted to
academic cheating during the National Exam supposedly to guarantee their success.
Some of these acts were even captured by television cameras and broadcasted nationally
(Prabowo, 2012a). Despite the Education Ministers claim that reports on academic
cheating during the exam was lower in 2012 than in previous years, concern must be
given to how such misconduct will shape Indonesias future generations (Prabowo,
2012a). To overcome possible problems, the Indonesian Government took very serious
measures to secure every years National Examination involving even the National
Police in ensuring the integrity and accountability of the entire process of the exam Behavioral side
(Prabowo, 2012a). A member of the House of Representatives even argued that the
security measures for the National Exam amounted to preparations for a war (Prabowo,
of corruption in
2012a). Indonesia
Evidence from countries around the world suggest that developing wide-ranging
programmes on integrating anti-corruption initiatives into school curriculum and
classroom activities is essential in eradicating corruption at least in the area of education 321
(Transparency International, 2013, p. 14). Many believe that students behavior is a
splitting image of societys morality (Malgwi and Rakovski, 2009, p. 210). In other
words, nurturing students honesty and integrity will ensure that the future leaders of a
country will be more immune to corruption. Students need to be taught about the
importance of, for example, living a modest life so as to distance themselves from the
temptation of corruption. They also need to learn about satisfaction from being honest
individuals and respectable members of the society. They need to understand that
money, power and prestige cannot always buy happiness.
As a serious crime, corruption will have detrimental effects on the society as its
victim, at least in the long run. Due to corruption, for example, society will be deprived
of their rights for public facilities, health, education, just to name a few. However, as the
potential victims of corruption, a society with high levels of education will have higher
awareness about corrupt acts and thus may act as whistleblowers to uncover the
schemes (Eicher et al., 2009, p. 207). This suggests another contribution of education to
the eradication of corruption in Indonesia.
Building positive organizational culture also deserves a special attention in
eradicating corruption in Indonesia. This is so because ones individual mindset is often
influenced by the collective mindset in his or her working environment. This includes
also criminal mindset that underlies corruption within organizations. In Indonesia,
many public officials who were previously seen as men of integrity, presumably after
being exposed to corrupt culture of his institutions, are finally involved in corruption.
According to the Ministry of Internal Affairs, there are approximately 36 per cent of the
heads of regions who are having legal problems related to the goods and services
procurement, 44 per cent are involved in budget misappropriation and the rest are
involved in bribery, unauthorized collection and inappropriate license granting
(Kompas, 2012).
Matsueda (2006, p. 5) advocated that from the so-called differential association
theory perspective, criminal behavior is generally learned in a process of
communication in intimate groups. From the view of the social dominance theory (SDT),
an organization is more likely to endorse corrupt behavior if it has high social
dominance orientation (SDO) attitude (Rosenblatt, 2012; Partto and Stewart, 2011).
According to the SDT, in a group-based social hierarchy, there will always be those who
are dominant and those who become subordinates which will result in inequality that
will be preserved by any means necessary (Partto and Stewart, 2011, p. 1). The dominant
individuals in the hierarchy who always try to maintain inequality are believed to be
more prone to the temptation of corruption. As Rosenblatt (2012, p. 238) put it:
At the individual level, I propose that socially dominant individuals, who believe that they
belong to superior groups of people, are likely to be less aware of organizational corruption by
feeling that they are more entitled to the use of power at the expense of others to get ahead and
to maintain their dominant positions. In addition, members of subordinate groups are also
JMLC likely to have lower awareness of corruption when they show more favoritism and support for
the members of the more powerful groups to increase their sense of worth and to preserve
17,3 social order. At the institutional level, I argue that hierarchy-enhancing institutions reduce
members awareness of corruption by developing and enforcing structures, norms, and
routines that promote informational ambiguity and maximize organizational focus on
dominance rather than ethics.
322 With regard to the fraud decision scale, organization members with high SDO attitude
will assign higher subjective value to loyalty to superiors as well as high status, power
and prestige, and thus it is better for them to bend or even break the rules than to
betray their fellow group members and superiors. Rosenblatt (2012, p. 242) believed
that, as part of a hierarchy enhancing group or community, a high SDO individuals
ultimate objective is to raise through the ranks and sit on top of the food chain so that
he or she may enjoy power and privileges others can only dream of. For achieving this
state, playing by the groups rules is a prerequisite even if that means committing
corruption (Rosenblatt, 2012, p. 242). Matsueda (2006, p. 6) argued that a person will
likely be involved in criminal behavior when he or she perceives committing crime as
more beneficial than not, acquires the necessary skills and techniques and sees the
opportunity for the offence to be perpetrated. By interacting with other individuals
within his or her organization who have somehow normalized corruption, he or she will
gradually view that the net-benefits from engaging in corrupt acts exceed those of not
being corrupt. Over time, a potential offender will acquire the necessary skills and
techniques for committing corruption, and when the opportunity to perpetrate the
offence is present, he or she will not be hesitant to take the chance. To diminish
opportunity to commit corruption in an organization, strong internal control must be
built and maintained so as to close loopholes which may be exploited for fraud.
To enhance its immunity to corruption, it is important for an organization to avoid
itself from becoming nothing more than a hierarchy enhancing entity, but instead it
should balance it with hierarchy attenuating culture which promotes equality and is less
prone to corruption (Rosenblatt, 2012, pp. 240-247). An organization must have in place
strong anti-fraud initiatives that can suppress pressure/motivation, opportunity and
rationalization to commit fraud. For example, a global study by the ACFE suggests that
one of the most common causes of fraud is financial pressure (Association of Certified
Fraud Examiners, 2012, p. 57). Low income may drive an otherwise honest person into
choosing the path of fraud. For this, it is also important for an organization to have a
good remuneration system and pays employees a fair salary. Other measures which
may diminish fraud causal factors within an organization include regular job rotation,
employee counseling program, segregation of duties and employee vacation plan.
Conclusion
Very often we look in the wrong direction in attempting to solve corruption problem in
Indonesia by assuming that it has everything to do with law enforcement. Under such
assumption, resources have been devoted to bring as many offenders as possible to
justice. However, such an approach does not seem to yield the expected results as new
offenders emerge seemingly every day. Taking an unconventional view, this paper sees
corruption particularly in Indonesia as an outcome of a rational decision-making
process in which individuals perceive and analyze their environments to decide the best
acts to make in achieving their objectives. The discussion in this paper suggests that
each time a potential offender is exposed to an environment where pressure/motivation, Behavioral side
opportunity and rationalization to commit corruption are present, he or she will
consciously or subconsciously assess all the perceived benefits and costs before
of corruption in
deciding to commit or not to commit corruption. In doing so, he or she will assign a Indonesia
subjective value to each cost benefit element for the purpose of weighing and
comparing the perceived net-benefits. This paper also introduces the fraud decision
scale model to illustrate how the presence of the fraud causal elements in the fraud 323
triangle will affect ones decision to commit or not to commit fraud and how to prevent
it. Understanding the mechanics by which a potential offender decides to engage or not
to engage in corruption gives decision makers a solid basis in formulating an effective
strategy to eradicate corruption in a country. By increasing the perceived net-benefits of
not committing corruption to the point where committing corruption will be seen as a
disadvantageous option, it is expected that, at least in the future, the threats of
corruption in Indonesia will be greatly diminished or eradicated.
Notes
1. According to the Law No. 30 Year 2002 on the KPK, only corruption cases with estimated
losses of more than Rp 1 billion ($US 87,500) are investigated by the KPK.
2. The fraud triangle concepts, which were initially proposed by Donald Ray Cressey, are now
among the most well-known frameworks for analyzing frauds around the world. In his
original work, during the course of his PhD study, Cressey often (if not always) used the term
trust violation in describing the offence in question embezzlements. For more discussion,
see Cressey (1950). For his PhD study, Cressey, in the late 1940s, interviewed nearly 200
incarcerated embezzlers, including convicted executives. For more details on Cresseys
research method for his PhD, see Cressey (1950, pp. 27-55).
3. Created using MS-Word 2007 automatic reference system with APA style.
References
Alatas, V., Cameron, L., Chaudhuri, A., Erkal, N. and Gangadharan, L. (2009), Gender, culture,
and corruption: insights from an experimental analysis, Southern Economic Journal,
Vol. 75 No. 3, pp. 663-680.
Ardisasmita, S. (2006), The definition of corruption from legal perspective and the
e-announcement for a more open, transparent, and accountable governance, National
Seminar on the Improvement of the Government Goods and Services Procurement System,
Jakarta, Commission for the Supervision of Business Competition, available at:
www.kppu.go.id/docs/Artikel/Seminar%20PBJ.pdf (accessed 20 May 20 2013).
Association of Certified Fraud Examiners (2012), Report to the nations on occupational fraud and
abuse, Association of Certified Fraud Examiners, available at: www.acfe.com/uploadedFiles/
ACFE_Website/Content/rttn/2012-report-to-nations.pdf (accessed 17 October 2012).
Basuchoudhary, A. and Conlon, J.R. (2000), Are people sometimes too honest? Increasing,
decreasing, and negative returns to honesty, Southern Economic Journal, Vol. 67 No. 1,
pp. 139-154.
Beccaria, C.B. and Voltaire (1872). An Essay on Crimes and Punishments, W.C. Little & Co,
Albany.
Caplan, B. (2006), Terrorism: the relevance of the rational choice model, Public Choice, Vol. 128,
pp. 91-107.
JMLC Clark, A.P., Kenyon, W. and Shel, A. (2006), Money laundering, in Golden, T.W., Skalak, S.L. and
Clayton, M.M. (Eds), A Guide to Forensic Accounting, John Wiley & Sons, New Jersey,
17,3 pp. 509-546.
Corruption Eradication Commission (2012), Corruption investigation based on the types of
cases, Corruption Eradication Commission, available at: http://acch.kpk.go.id/en/statistik-
penanganan-tindak-pidana-korupsi-berdasarkan-jenis-perkara (accessed 15 October 2012).
324 Corruption Eradication Commission (2013), Recapitulation of corruption case handling,
Corruption Eradication Commission, available at: http://acch.kpk.go.id/statistik (accessed
8 November 2013).
Cressey, D.R. (1950), Criminal violation of financial trust, PhD Thesis, IN University,
Department of Sociology.
Donegan, J.J. and Ganon, M.W. (2008), Strain, differential association, and coercion: insights from
the criminology literature on causes of accountants misconduct, Accounting and the
Public Interest, Vol. 8 No. 1, pp. 1-20.
Dorminey, J., Fleming, A.S., Kranacher, M.-J. and Riley, R.A. Jr. (2012), The evolution of fraud
theory, Issues in Accounting Education, Vol. 27 No. 2, pp. 555-579.
Eicher, T., Garca-Pealosa, C. and Ypersele, T.V. (2009), Education, corruption, and the
distribution of income, Journal of Economic Growth, Vol. 14, pp. 205-231. doi:10.1007/
s10887-009-9043-0
Ernst & Young (2013), Asia-Pacific fraud survey report series 2013, Ernst & Young, available
at: www.ey.com/Publication/vwLUAssets/2013_Asia-Pacific_Fraud_Survey/$FILE/EY-
Asia-Pacific-Fraud-Survey.pdf (accessed 30 October 2013).
Hayward, K. (2007), Situational crime prevention and its discontents: rational choice theory
versus the culture of now, Social Policy and Administration, Vol. 41 No. 3, pp. 232-250.
Hsieh, D.M. (2004), False excuses: honesty, wrongdoing, and moral growth, The Journal of Value
Inquiry, Vol. 38 No. 2, pp. 171-185.
Hughes, P., Kaidonis, M. and Anderson, U. (2008), Fraud programs, Fraud Magazine, Vol. 22
No. 4, July/August.
Jawa Post National Network (2013), Sanctions for corruptors have deterrence effects, Jawa Post
National Network, available at: www.jpnn.com/read/2013/08/12/185779/Hukuman-
Koruptor-tak-Bikin-Jera- (accessed 11 September 2013).
Kimura, E. (2012), Indonesia in 2011: a glass half-empty, Asian Survey, Vol. 52 No. 1, pp. 186-194.
Kolber, A.J. (2013), Against proportional punishment, Vanderbilt Law Review, Vol. 66 No. 4,
pp. 1141-1179.
Kompas (2012), Procurement prone to corruption, Kompas, 18 April, available at:
http://nasional.kompas.com/read/2012/04/18/01411420/ (accessed 15 October 2012)
Kompas (2013a), Djoko Susilos total assets are increased by Rp. 21 Billion, Kompas, 21 August,
available at: http://nasional.kompas.com/read/2013/08/21/0845067/Total.Harta.
Kekayaan.Djoko.Susilo.Bertambah.Rp21.Miliar (accessed 6 September 2013).
Kompas (2013b), Punishment for corruptors is too light, Kompas, 9 September, available at:
http://nasional.kompas.com/read/2013/09/09/1113063/Hukuman.Koruptor.Terlalu.Ringan
(accessed 11 September 2013).
Kristiansen, S. and Ramli, M. (2006), Buying an Income: the market for civil service positions in
Indonesia, Contemporary Southeast Asia, Vol. 28 No. 2, pp. 207-233.
Kuncoro, A. (2006), Corruption and business uncertainty in Indonesia, ASEAN Economic
Bulletin, Vol. 23 No. 1, pp. 11-30.
Lambropoulou, E. (1999), The sociology of prison and the self-referential approach to prison Behavioral side
organization and to correctional reforms, Systems Research and Behavioral Science, Vol. 16
No. 3, pp. 239-252. of corruption in
Lianju, S. and Luyan, P. (2011), Game theory analysis of the bribery behavior, International Indonesia
Journal of Business and Social Science, Vol. 2 No. 8, pp. 104-107.
McClennen, E.F. (2010), Rational choice and moral theory, Ethical Theory and Moral Practice,
Vol. 13 No. 5, pp. 521-540. 325
Malgwi, C.A. and Rakovski, C.C. (2009), Combating academic fraud: are students reticent about
uncovering the covert?, Journal of Academic Ethics, Vol. 7 No. 3, pp. 207-221.
Matsueda, R.L. (2006), Differential social organization, collective action, and crime, Crime, Law
and Social Change, Vol. 46 Nos 1/2, pp. 3-33.
Mietzner, M. (2007), Party financing in post-soeharto Indonesia: between state subsidies and
political corruption, Contemporary Southeast Asia, Vol. 29 No. 2, pp. 238-263.
Mises, V.L. (1966), Human Action, Contemporary Books, Chicago.
Murphy, P.R. and Dacin, M.T. (2011), Psychological pathways to fraud: understanding and
preventing fraud in organizations, Journal of Business Ethics, Vol. 101 No. 4, pp. 601-618.
Nida-Rmelin, M. (2010), Thinking without language: a phenomenological argument for its
possibility and existence, International Journal for Analytic Philosophy, Vol. 81, pp. 55-75.
Organization for Economic Co-operation and Development (2008), Specialised anti-corruption
institutions-review of models: anti-corruption network for Eastern Europe and Central
Asia, Organization for Economic Co-operation and Development, available at:
www.oecd.org/corruption/acn/library/39971975.pdf (accessed 17 November 2012).
Partto, F. and Stewart, A.L. (2011), Wiley online library, Social Dominance Theory, available at:
http://onlinelibrary.wiley.com/doi/10.1002/9780470672532.wbepp253/pdf (accessed 20
October 2013).
Prabowo, H.Y. (2012a), The national exams and future fraudsters, Jakarta Post, 2 May, available
at: www.thejakartapost.com/news/2012/05/02/the-national-exams-and-future-fraudsters.
html (accessed 6 May 2012).
Prabowo, H.Y. (2012b), Democratic party crisis: pathways to the dark side, Jakarta Post, 27
February, available at: www.thejakartapost.com/news/2012/02/27/democratic-party-
crisis-pathways-dark-side.html (accessed 6 May 2012).
Prabowo, H.Y. (2013a), Civil servants, corruption, and organizational misbehavior, Jakarta Post,
available at: www.thejakartapost.com/news/2013/07/24/civil-servants-corruption-and-
organizational-misbehavior.html (accessed 10 September 2013).
Prabowo, H.Y. (2013b), Combating corruption: who can touch the untouchables?, Jakarta Post,
10 October, available at: www.thejakartapost.com/news/2012/10/10/combating-
corruption-who-can-touch-untouchables.html (accessed 16 February 2013).
Prabowo, H.Y. (2013c), The slippery road to corruption, Jakarta Post, 27 August, available at:
http://m.thejakartapost.com/news/2013/08/27/the-slippery-road-corruption.html (accessed
27 August 2013).
Quah, J.S. (2010), Defying institutional failure: learning from the experiences of anti-corruption
agencies in four Asian countries, Crime, Law and Social Change, Vol. 53 No. 1, pp. 23-54.
Ramamoorti, S. (2008), The psychology and sociology of fraud: integrating the behavioral
sciences component into fraud and forensic accounting curricula, Issues in Accounting
Education, Vol. 23 No. 4, pp. 521-533.
JMLC Rosenblatt, V. (2012), Hierarchies, power inequalities, and organizational corruption, Journal of
Business Ethics, Vol. 111 No. 2, pp. 237-251.
17,3 Satz, D. and Ferejohn, J. (1994), Rational choice and social theory, Journal of Philosophy, Vol. 91
No. 2, pp. 71-87.
Sen, A. (1994), The formulation of rational choice, The American Economic Review, Vol. 84 No. 2,
pp. 385-390.
326 Slavin, M.O. (2006), Affective honesty and compassion come in many forms: discussion of love
(and hate) with the proper stranger: affective honesty and enactment, Psychoanalytic
Inquiry, Vol. 26 No. 2, pp. 239-253.

Smith, T. (2003), The metaphysical case for honesty, Journal of Value Inquiry, Vol. 37 No. 4,
pp. 517-531.
Sousa, L.D. (2010), Anti-corruption agencies: between empowerment and irrelevance, Crime,
Law, and Social Change, Vol. 53 No. 1, pp. 5-22.
Spickard, J.V. (1998), Rethinking religious social action: what is rational about rational-choice
theory?, Sociology of Religion, Vol. 59 No. 2, pp. 99-115.
Transparency International (2012), Corruption Perception Index 2012, Transparency
International, available at: www.transparency.org/cpi2012/results (accessed 7 March
2013).
Transparency International (2013), Global corruption report: education, Transparency
International, Routledge, available at: www.transparency.org/gcr_education (accessed 20
October 2013).
Velupillai, K.V. (2010), Foundations of boundedly rational choice and satisficing decisions,
Advances in Decision Sciences, Vol. 2010, pp. 1-16.
VIVAnews (2012), Busyro: state losses from corruption totaling Rp. 59.3 trillion, VIVAnews,
available at: http://nasional.news.viva.co.id/news/read/372282-busyro kerugian-negara-
akibat-korupsi-rp39-3-triliun (accessed 7 November 2013).
Waspada Online (2013), Corruptors being spoiled in prison, Waspada Online, available at:
www.waspada.co.id/index.php?optioncom_content&viewarticle&id295260:
koruptor-dimanja-dalam-penjara&catid59:kriminal-a-hukum&Itemid91
Wells, J.T. (2008), Principles of Fraud Examination, 2nd ed., New Jersey, John Wiley & Sons, NJ.
Wintrobe, R. (2002), Can suicide bombers be rational?, paper presented at the Annual Meeting of
the McArthur Preferences Network, Philadelphia, available at: http://time.dufe.edu.cn/
jingjiwencong/waiwenziliao/solidarityandsuicide.pdf (accessed 6 November 2013).
Wright, P. (2007), The cultural commodification of prisons, Social Justice, Vol. 27 No. 3, pp. 15-21.
About the author

Hendi Yogi Prabowo is the Director of the Centre for Forensic Accounting Studies at the Islamic
University of Indonesia. He obtained masters and PhD degrees in Forensic Accounting from the
University of Wollongong, Australia. Hendi Yogi Prabowo can be contacted at: hendi_prabowo@
yahoo.com
To purchase reprints of this article please e-mail: reprints@emeraldinsight.com

Or visit our web site for further details: www.emeraldinsight.com/reprints
This article has been cited by:
1. Carl Greppin, Bo Carlsson, Adrian Wolfberg, Nnaoke Ufere. How expatriates work in dangerous
environments of pervasive corruption. Journal of Global Mobility: The Home of Expatriate Management
Research 0:ja, 00-00. [Abstract] [PDF]
2. Rizki Hamdani, Kumalahadi, Dekar Urumsah. 2017. The Classification of Corruption in Indonesia: A
Behavioral Perspective. SHS Web of Conferences 34, 10002. [Crossref]
3. Madelijne Gorsira, Adriaan Denkers, Wim Huisman. 2016. Both Sides of the Coin: Motives for
Corruption Among Public Officials and Business Employees. Journal of Business Ethics . [Crossref]
4. Yogi PrabowoHendi, Hendi Yogi Prabowo. 2016. Sight beyond sight. Journal of Financial Crime 23:2,
289-316. [Abstract] [Full Text] [PDF]

To Be Corrupt or Not Be Corrupt

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

To Be Corrupt or Not Be Corrupt

Uploaded by

Copyright:

Available Formats

Journal of Money Laundering Control

To be corrupt or not to be corrupt: Understanding the behavioral side of corruption in

To cite this document:

*Related content and download information correct at time of download.

Centre for Forensic Accounting Studies, Faculty of Economics, Islamic

threats of fraud, such as corruption in their jurisdictions. Anti-fraud scholars and

Fraud in the society

Understanding fraud offenders

Subjective value Subjective value

Perceived benefits of accepting Perceived benefits of not

Wealth and power

demands for non-party figures to playa greater role in political life.

In an institution where corruption is part of its organizational culture, not only do

No bad deed goes unpunished

Honesty does pay

Moral and ethics Improving

Perceived benefits and costs of accepting bribes

on the fraud decision scale

than what the table depicts.

Inquiry, Vol. 26 No. 2, pp. 239-253.

About the author

To purchase reprints of this article please e-mail: reprints@emeraldinsight.com

You might also like