Bloated bureaucracy

Corruption damages nations by making firms inefficient.

A study by Professors Ernesto Dal Bo and Martin Rossi of the Universidad de San Andrés in Argentina was the first to show the correlation between corruption and business inefficiency.

According to this study, quoted in an article by Marguerite Rigoglioso of the Stanford University School of Business, researchers postulate that corruption, or the misuse of an office for private gain, leads to unnecessary inflation of employee ranks and thus greater operational inefficiency. This in turn, creates a less favorable business climate and ultimately serves as a serious drag on a nation’s wealth.

Researchers studied data from 80 electricity distribution companies in Latin America and found that in countries with higher government corruption, firms used significantly more employees to do the same job. They found that if a country with a median corruption level like Brazil were to lower its corruption level to that of the least corrupt country like Costa Rica, its utilities firm would use seven percent fewer workers.

They posit several nefarious corruption-related scenarios that may inflate employee ranks. One is that a manager may be hiring more employees not so that the firm can do a better job, but simply to make his own job cushier. Corruption comes into play when that manager may influence a regulatory official to, in turn, allow the firm to hike electricity prices to cover the cost of these employees, Dal Bo explained.

That, he said, hurts the economy because not only does it unnecessarily raise the cost of electricity to consumers, including industry, but also by not being put to more productive work, those extra employees represent missing wealth to the country.

Another problematic scenario, the study pointed out, may occur when regulators harass firms with costly “official” requests. In exchange for being relieved of these requests, firms may spend resources, both human and monetary, courting officials of various types. These outlays will inflate labor and operational costs, it added.

When viewed at the microeconomic firm level, the study found that corruption destroys a country’s wealth and confirmed that systemic social issues affect business by shaping the environment in which it operates.

It concluded that more corruption in a country is strongly associated with more inefficient firms in the sense that they employ more inputs to produce a given level of output.

The same can be said for government bureaucracy.

Take the case of the Philippines.

Canada, with a total land area of 10 million square kilometers, has only 10 provinces, while the Philippines, with only 343.45 sq km, has 82 provinces, each with its own little bloated bureaucracy.

Former budget secretary Amenah Pangandaman earlier said that if five percent of the two million government personnel would be reduced, that’s P14 billion worth of savings for personnel services. In 2024, 33 percent of the P5.7 trillion budget was allotted to personnel services. And this number does not include the millions employed by local government units, as well as casual, temporary, and contractual government employees.

A House report earlier mentioned that LGUs account for over 679,000 contractual employees, representing over 72 percent of the total government workforce as of mid-2024.

A bill filed by House Rep. Ivan Guintu last year paints an even worse picture.

He said that, based on the Civil Service Commission’s inventory of government human resources as of June 2024, there are 2.977 million government employees, of whom 939,771, or 31.57 percent, are contractual.

The Philippine government has over 186 departments, agencies and other offices many of which do overlapping functions but are yet unable to solve the problem, like housing and poverty for instance.

In Canada, there were 367,772 federal government personnel. Including provincial and municipal government employees, the number would reach 950,000 jobs.

And no doubt that the Canadian bureaucracy is more efficient at doing its job.

Last year, Republic Act 12231 or the Government Optimization Act was signed into law, authorizing the President to restructure, merge, or abolish executive agencies to eliminate redundancies and improve efficiency.

We should have fewer government employees with high salaries and benefits, so they can work harder and say no to bribes and other corrupt practices. But we should not stop there. A full shift to digitalization, transacting with government offices through computer-based processes, will not only speed up processes but also eliminate needless human transactions with corrupt government officials.

Allegations that stand up in court

As the Ombudsman moves closer to potential filings related to the floor control controversy, including cases that may involve former House Speaker Martin Romualdez, the real task is determining whether the evidence can sustain the weight of the charges being considered.

Not every anomaly becomes a crime, and not every connection becomes liability. Early stages usually produce fragments such as testimonies, documents, project irregularities and financial red flags. These pieces may suggest patterns, but they do not automatically form a prosecutable case. They still need to be tested, verified and linked in a way that satisfies the legal definition of a specific offense.

That process takes time and often reveals gaps. In practical terms, not all leads carry the same legal weight. If a key link is missing, the case weakens.

There is also a tendency to treat investigative findings as final conclusions. In reality, they are starting points. A referral for further investigation is not a finding of liability. It signals that more evidence is needed. Even a recommendation to file charges does not guarantee success in court. It simply means that the case appears sufficient to proceed at that stage. From there, the real test begins.

This is why prosecutors must build cases not just to be filed, but to endure.

That requires discipline in deciding how far a case should go. There is often pressure to pursue the broadest theory, to include the most prominent names, and to reflect the scale of the controversy. But expansion without sufficient evidence carries risks. It can stretch legal theories too far and expose weaknesses that could undermine the entire case.

In some situations, restraint is the stronger strategy. Focusing on provable acts, narrowing the case to what can be clearly established, and allowing evidence to define the scope are not signs of hesitation. They are necessary safeguards. When a case collapses, the impact goes beyond the individuals involved. It raises concerns about the process and the credibility of the institutions behind it. Those effects can last long after the case is over.

The challenge, then, is not simply to act, but to act with precision. Accountability requires it. The rule of law depends on it.

In the end, the strength of any anti-corruption effort will not be measured by how broad it is, but by how well it holds up in court. And that strength is built on evidence that holds.

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