A Portrayal of Distrust in Governmental Institutions in North Cyprus: Reflections from Data

1. A Portrayal of Distrust in Governmental Institutions in North Cyprus: Reflections from Data BRESE/BBS Trust Research Workshop 9 July 2008 Gizem Ö. GÜVEN

2. Research Context • Business Ethics Practices • North Cyprus • Unrecognition for more than 30 years • Post War Society; Cypriot Turks • SMEs • 95% of businesses Gizem Ö. GÜVEN

3. Main Research Questions • How and in Relation to What Do Cypriot Turk SME Owner-Managers Make Their Decisions From the Business Ethics Perspective? • What Account Do They Give For the Motives of These Decisions? Gizem Ö. GÜVEN

4. Data Collection • Cypriot Turk SME owner-managers in North Cyprus whose parents were also born in Cyprus to ensure any impact of elements related to nativity on their attitudes such as; values, culture, socio-psychology (post-war) and the like. • 40 participants (February – March 2008) Gizem Ö. GÜVEN

5. Distrust in Government Distrust Trust Not to Trust Not to Distrust Clear Distinction - Cases of Distrust and Trust Two opposites of the same spectrum view adopted Ullmann-Margalit, E. (2004) Trust, Distrust and In Between. in Hardin, R. (ed). Distrust. New York, USA:Russell Sage Foundation. Gizem Ö. GÜVEN

6. Distrust in Government • “If trust is nothing more than the reasonable factual expectation that another will behave in a relevant manner, then it is nothing more than, say, the trust with which we sometimes inductively assert that the sun will rise tomorrow morning because, after all, it has always risen every morning that we can remember. We may similarly inductively trust some part of the government in this very limited sense because we may simply extrapolate from behaviour until this moment to predict future behaviour...This means ... that we can trust some government bodies and agents to continue to act corruptly against our interests, we can trust others to continue to be incompetent to do what they are appointed to do, and we can trust many agents of government to lie to us with regularity about important matters for which they are responsible.” Page 25 Hardin, R. (1999) Do We Want Trust in Government? in Warren, E. M. (ed). Democracy and Trust. Cambridge, United Kingdom:Cambridge University Press. Gizem Ö. GÜVEN

7. Distrust in Government Distrust More Distrust • Particularly destructive in complex societies Rose-Ackerman, S. (2001) Trust, Honesty and Corruption: Reflection on the State-Building Process, European Journal of Sociology. 42(3):526-570. Gizem Ö. GÜVEN

8. Distrust in Government:Example of Poland • Research in 1988: 88% of people blamed the economic and social problems on ‘bribery, corruption and abuse of power for private benefits’ where the rhetoric of family, strong interpersonal ties, mutual trust based bonds that were nationalistic or religious created the regime which was the object of distrust. • Similar patterns in North Cyprus Sztompka, P. (2000) Trust: A SociologicalTheory . Cambridge UK, Cambridge University Press. Gizem Ö. GÜVEN

9. Reasons for Distrust • Bribery • Cronyism • Kickbacks • Nepotism • Unfair Competition Primary Reasons of Participants Gizem Ö. GÜVEN

10. Reasons for Distrust • Uncertainty of Cyprus Conflict & Negotiations which continues for more than 40 years. • High Unemployment Rates • Economic Instability • Major Dependency on aid from Turkey Secondary Reasons of Participants Gizem Ö. GÜVEN

11. Reflections from Primary Data Cronyism • P3: “we have cronyism; every government when they come to power they appoint their partisans. If every government appoints their partisans who are unconscious / unknowledgeable to a high position, that doesn’t work (how is this going to work).” Gizem Ö. GÜVEN

12. Reflections from Primary Data Bribery • P5: “I ask about it to some of my friends while joking around by saying; ‘how do you give bribes, I mean you are going to offer bribe to a person, how can you do it?’ and they tell me; ‘we go to the person, we say look brother, you do this for us, and wish whatever you want from us, we will do it for you. When we say this, that person gets the message’. Gizem Ö. GÜVEN

13. Reflections from Primary Data Bribery • P16: “First of all, there is no government support, just the opposite, there are many issues where they create obstacles; things that limits us to compete with certain people. For example, yesterday we brought in merchandise, it was looted in customs. Bribery. One gets one piece, the other one gets another piece and you cannot say anything, when you say something you cannot get your merchandise out of customs or instead of paying 3 you pay 5 to get it. You have to obey, the people there can loot your goods. They just take it, they say I am taking this, they take it and go. To whom you will complain about it? If you complain them to their supervisors, he/she says give two pieces to me as well and I will take care of it” Gizem Ö. GÜVEN

14. Reflections from Primary Data Bribery • P10: “You bring a container for example, when you bring this one container merchandise your commissioner tells you ‘Lets empty your container after usual working hours because it is more appropriate like that. Then you see that customs officers, government’s employees customs officers, gets over time from the government. They work after 5pm so that they can get paid overtime, but on top of that, even though they come with their personal cars, they request money for taxi, for food an the like expenses and you pay extra. Last time, I paid 500 YTL (≈200GBP) extra because of that whereas usually the normal procedure should not take more than 200 YTL (≈ 82GBP).” Gizem Ö. GÜVEN

15. Reflections from Primary Data Nepotism • P16: “In the very near past, I know that one night, personally the minister has been woken up, the law has been edited, and the next morning it has been presented to the Council of Minsters and got approved. It was about business. I know that for one person they changed and can change the law overnight.” Gizem Ö. GÜVEN

16. Reflections from Primary Data Kickbacks • P16: “I thought about suing X Ministry. They were going to accept bids for contract of a 100 page book. You enter the bidding normally, let say its normal value is 10,000YTL (≈4000GBP), we gave 10,000YTL offer. They say to the other company, ‘you give 7,000YTL (≈ 2800 GBP) so that you can have the contract and we will take care of it’. The normal expense of 100 page book is 10,000 YTL, the person gives an offer of 7,000 with a loss and gets the contract. Later, they increase the page numbers to 160 page and they say because of the difference the cost of this job is 25,000YTL (≈ 10,300 GBP) and they pay 25,000 to the person. He/she gets the contract by offering 7,000 but you cannot get with 10,000. They are suppose to open another call for bids if they increase page numbers.” Gizem Ö. GÜVEN

17. Reflections from Primary Data Kickbacks • P6: “We had a factory within our organisation. I had approximately 100 employees there, we were making wood and iron works there. We were trying to supply both our organisation’s demand and at the same time supply to the market, and it was going very good. After a while, because of the political reasons, they shut down that factory and they gave our organisation’s contracts to outside companies to their partisans.” Gizem Ö. GÜVEN

18. Reflections from Primary Data Bribery / Kickbacks • P14: “ Partisanship is very open now...They do not support local production... They should give contracts to people who are in luggage/bag business, but they give it to people that have nothing to do with this business. Favouritism! For example I am the manager of X institution, I give the contract to my relatives or friends by saying come an enter this bidding, go to Turkey, pay and have it made there and bring them here. No one asks the person how did you made these bags, or no one asks to the manager why did you give this contract to this person, did he/she give the best offer? For example, Name Surname, this man “eats” (earns, gains like a ‘tornado’) large amounts of money.” Gizem Ö. GÜVEN

19. Conclusion • Commonality • Primary Reasons were mentioned by all of the participants except very few who said there is no corruption, no bribery and very limited cronyism just like “in most of the developed countries”. • Gathered documentation (including Parliament Reports) on many major cases which happened only in 2008 involving very top members of the Parliament in cases of corruption and bribery. • Secondary Reasons there is a very long-term concern among the public, reflecting on newspapers, TV & Radio, impacting every aspect of their lives (confirmed by all 40 of the participants and various documentations) Gizem Ö. GÜVEN

20. Conclusion • There are many examples similar to the quotations presented • “Corruption occurs when dishonest politicians and public officials help others in return for payoffs” (Ackerman, 2001:527). • Over 40 years, distrust created more distrust as explained and similar to Poland example, participants blame corrupt system that they refer as “Düzen” (Primary Distrust Reasons) as the cause of economic and social problems (Secondary Distrust Reasons). (≈85-90% of 40 people). • According to the participants, until now whoever got the power exploited it. Therefore, reflecting back to the quotation presented from Hardin (1999); since this was always the case until now, inductively they trust that the circumstances of distrust will continue. Gizem Ö. GÜVEN

21. References • Bahceli, T. (2004) Under Turkey’s Wings: The Turkish Republic of Northern Cyprus, the Struggle for International Acceptance. in Bahceli, T., Bartmann, B. and Srebrnik, H. (eds). De Facto States: The Quest for Sovereignty. Great Britain:Routledge. • Hardin, R. (1999) Do We Want Trust in Government? in Warren, E. M. (ed). Democracy and Trust. Cambridge, United Kingdom:Cambridge University Press. • Rose-Ackerman, S. (2001) Trust, Honesty and Corruption: Reflection on the State-Building Process, European Journal of Sociology. 42(3):526-570. • Schoorman, F. D.; Mayer, R. C. and Davis, J. H. (2007) An Integrative Model of Organisational Trust: Past, Present, and Future. Academy of Management Review. 32(2):344-354. • Sztompka, P. (2000) Trust: A SociologicalTheory . Cambridge UK, Cambridge University Press. • Ullmann-Margalit, E. (2004) Trust, Distrust and In Between. in Hardin, R. (ed). Distrust. New York, USA:Russell Sage Foundation. Gizem Ö. GÜVEN