Algorithmic financial trading with deep convolutional neural networks: Time series to image conversion approach 6 Corruption in Slovenia Matic BOROŠAK(a), Štefan ŠUMAH (b) (a), Ph. D Candidate, Postgraduate Student of FKPV, Celje, Qlinlife d.o.o (b), Dr. of Economy sciences, Omco d.o.o, Žalec Article info A b s t r a c t Article history: Accepted 28 September 2018 Available online 31 December 2018 Keywords: Corruption, Slovenia, fight against corruption, Perception of corruption, typology, causes A lot has been written about corruption, especially regarding the corruption in post- communist countries, and Slovenia is not an exception. The forms of corruption are similar to those in other countries in transition, the reasons for corruption in Slovenia well known and the typology well processed. Most of the corruption in Slovenia occurs in the area where public and private spheres come together, with strong networks remaining, and where also systemic corruption occurs. However, there has not been any progress in corruption fighting. Opinion surveys show that the perception of corruption is high (the personal experience with corruption proved very high during the conducted research), however, people are not very familiar with the it (all its forms and consequences) and therefore, in order to successfully fight corruption, actions should be taken in the form of education and in the sense of raising public awareness of the harmfulness of corruption. At the same time the political will is also lacking, which, however, in the fight against corruption has not been shown by any government so far. 1. Introduction Many scientific and professional articles on corruption in transition countries have been published. Especially the countries that were created by the collapse of the Soviet Union are a real laboratory for the investigation of corruption. And how is the corruption in Slovenia different from the corruption in other transition countries? Actually, only in a few things. The corruption in Slovenia is more sophisticated, more obscure and less crude than in some of the other post-communist countries, there is less use of force, threats and links to organized crime (except regarding the organized economic crime). However, negative impacts are similar or identical (only the extent of these impacts can be 1 Old boys – a network of individuals, who have been cooperating with each other in the business, friendship and political sphere for a long time, while most of the connections originate from the time of the previous regime (ex- Yugoslavia) 2 Originates from the word UDBA, which means ‘state security administration’. The administration was later replaced with SDV – ‘state called into question). The state administration still exhibits the remains of the old administration, loyal to the previous regime or the previous leaders, as well as the remains of the old socialist structure in the judiciary and other important services and institutions that impact the functioning of the state (the police, the secret services). Old commitments and friendships still remain, old economic links and connections to old politics and economy (the so-called Old Boys1) as well as links, based on the remnants of the Communist Party and of former intelligence and security services (the so-called UDBA- mafia2), which do not select resources for their operations and use a number of methods that are similar to those in other socialist countries (compromise, security service’, however, the term UDBA remained in use. The UDBA mafia therefore means the still connected ex-members of the state security administration, who are still influential in all sectors of the society (from economy to health care and culture). 7 extortion, covert coercion, media influence, etc.). In Russia, a similar network of people who remained closely connected and assist each other whenever necessary consisted of people who were in high positions in Komsomol (Dobovšek, Mimič, 2005, p. 39). If both branches functioned separately, the influence of corruption would be easier to manage, however, the great danger for both the democracy as well as the economy is that both branches are connected. The mentioned is due to the old economic connections, the remains of the old administration, as well as the judiciary and the remnants of the so called UDBA-mafia which are interconnected and operate in a coordinated manner. The links remained also because the President of the Communist Party of Slovenia had the highest function in the republic, and was also superior to the national executive council (the government of the republic of Slovenia) and directly superior to the national security intelligence service (SDV) (the state security service - the communist police), while the political top had complete control over the appointment of directors or administrations in (state) enterprises (only vetted staff, according to the political line). During the transition from socialism to democracy in 1991, the president of the new independent Slovenia became the last president of the League of Communists of Slovenia. As lustration was not performed, the connections and networks remained more or less practically. Through the transition, the so-called continuity forces acquired the political, economic power, and still dominate the majority of the leading media, part of the state administration and the judiciary. At the same time, the stagnant and relatively low-paid bureaucratic apparatus, high regulation and limitations applying to the economic activities and a still great state’s share in large and important companies lead to corruption in itself. A special area is also public health, where millions are getting lost through non-transparent and often falsified public procurement (in this area the networks and the interests of old continuity structures already severely intertwine with the emergence of new actors), while many doctors try to earn money on the side. The inventory transformation was led by gradualism, instead of changing rapidly, and all too many important companies became only a money bucket for supplying various consultants, suppliers and politicians of both poles. 2. Causes and Typology of Corruption The old players are always joined by new ones, those who also want their share or participation in the distribution of state money. However, these networks or individuals strive for money much than the ideology. According to Dimc (2009, p.66), the impact of informal networks is high in all areas; the economy, politics, state institutions, health, media, etc. these areas are, due to the small size of the country, closely intertwined, which further stimulates or promotes the formation and growth of informal networks. Such policy of demanding something in return is present in all areas, from legislation making, financing of business, financing of elections, employment, etc.). In addition, Slovenian ethical and moral standards do not yet have a tradition, as opposed to the countries with long-standing democracy and are not yet fully built (there still exist the thought patterns from the times of socialism and social equality is still one of the greatest values, etc), which also applies to professional standards, and therefore the public officials sometimes do not decide according to professional and ethical standards, which would, depending on the job they occupy, be expected from them. Appendix to the Explanation of the Proposal of the Law on Preventing Conflicts of Interest and Restriction of Corruption (the first proceedings, EVA: 2003 -2011- 0042) identifies similar causes for the development of corruption in Slovenia: • Economic and social causes: corruption in Slovenia is not existentially conditioned, and serves only to improve the material position of individuals; the old and new elites, by combining economic and political power, are establishing dominance in new conditions, which creates favourable conditions for the development of “state capture” and administrative corruption, the privatization of individual state functions progresses slowly, private companies are still too dependent on politics. • Legal causes: the still unfinished reform of the legal system, subject to frequent, also non-systematic and inconsistent changes, which, on one hand, cannot meet all the challenges of real life, and on the other do not 8 provide effective responses to detected socio- pathological practices; large backlogs. • Institutional causes: public administration in Slovenia has not yet been depoliticised, employment and promotion are not based on purely meritocratic principles, clientelism and nepotism have developed, and above all the political favouritism, while the internal and external control mechanisms have not yet been sufficiently developed and effective (the risk of corrupt individuals is small or non-existent), the decision- making is not yet transparent enough, the discretionary powers are too wide, the system of responsibility for wrong political and business decisions is not functioning, there is no coordinated approach to the prevention and suppression of corruption, the private sector almost does not deal with the dangers of corruption. • Cultural causes: the culture of exclusively state intervention still holds for mediation in the event of irregularities, and according to the opinion polls, the deciding politicians enjoy only a low level of people's confidence, the non-governmental sector has only begun to develop, the level of citizens' awareness of their and institutional rights and obligations is low, the level of anti-corruption sensitivity or awareness is growing slowly, the high ethical standards are rarely formulated, the useful ethical codes are more an exception than the rule, the role of the media in detecting and exposing corruption could be bigger. • External causes: free competition in the conditions of the global economy exposes the Slovenian companies to additional risks. The rapid and intense adaptation of the acquis while integrating into international integration could also have resulted in the unverified adoption of foreign regulations, doctrines and practices. From the analysis of the trends of corruption it is evident that (especially in the transition countries, including Slovenia) the most cases of corruption occur in areas where the state sphere and economy are intertwined, and where the most of money is made (Dobovšek, 2008, p. 195), which is exactly the sphere that also includes public procurement. Public procurement appears in all corruption surveys in Slovenia as well as in Europe at the very top of the corruption risks (even the corruption 3 Public-private partnership – hereinafter PPP investigations most commonly deal with fraud in procurement) and, according to Peteh (2001, p. 25), the negative tradition continues from the former social property system, where the unwritten rule was that whenever a big investment (roads, bridges, etc.) was built, so was a smaller, private one (for the local or state important persons) or a “social” facility (for wider community). These statements are confirmed also by the study by Kurdija (2009), which he carried out for the Commission for the Prevention of Corruption of the Republic of Slovenia, where the respondents expressed the belief about the relatively high levels of corruption in public services, especially in public procurement. The next such big opportunity for corruption is the public-private partnership3. The public infrastructure and the public services play an important role in the modern society, and the state should be the one that provides this, and thus pursue the public interest of the society. The provision of such “goods” requires more and more investments, which (often) exceed the budgetary capacity of the state, and the state is trying to solve this problem of the deficit in the state budget by linking it to the economy. By concluding a public- private partnership, the state transfers part of the financial burden to a private partner, thus enabling the implementation of projects that are in the public interest but could otherwise not be (most likely) implemented by the state itself. The latter is also the main reason why the state introduced the public-private partnership; to enable it and encourage private investments in projects that are in the interest of public. At first glance it seems that a public-private partnership presents a solution or rather the response to many financial problems of countries when it comes to providing public infrastructure, services and public good. However, at the same time such a partnership gives the public officials, office holders and political leaders the opportunity to “access” private funds. There is a great temptation to plan and implement the PPP project by placing in a privileged position a favoured individual or company, due to acquaintanceship or promised benefit. It is obvious that even although a public-private partnership is “offered” as a means of 9 reducing corruption, the process itself allows or provides a number of corrupt practices (Banovec, 2013). Although dissatisfied with the current state of affairs in the country, the Slovenians are still politically apathetic and of a rather pessimistic character, they stick to the “go with the flow” dogma, which means that they do not regard protests or uprisings as one of the solutions and are even not of the opinion that the early elections might improve the situation. This political apathy is also reflected in the creation of CDOs4 that would respond to the problems of inadequate political and socio-cultural governance in the country, while at the same time the strong influence of institutionalized religious communities on the public and policy making can be noticed. Comparisons of official data on poverty, income inequality, unemployment, etc. gathered in the annual reports of the Ombudsman, the Red Cross, Karitas, social assistance centres, etc., are also interesting. There is a noticeable gap between the official statistics on one hand and those who directly deal with people's problems on the other, which raises doubt about the official data. Due to the reduced access to a better living standard (social security is becoming payable), some are reducing their ethical standards (by using social networks and connections to obtain social security, avoid paying taxes, moonlight, abuse the position, etc.) in order to achieve a higher level. Nevertheless, the Slovenes appreciate honesty and fairness, while integrity is becoming an increasingly recognizable value, one that is also clearly demanded from the power holders (one of the effective slogans for winning the election is precisely the reference to morality, ethics and transparency). Political apathy and mistrust of citizens in the rule of law reflect the low support to the government, political parties and the current political activity in general. Corruption is perceived as a major problem, one that could be reduced through the Commission for the Prevention of Corruption, the media and partly the law enforcement agencies (Habič et. all, 2012, p. 9). 4 CSO - Civil society organization 5 Corruption of white collars is the corruption of highly qualified officials, who are the carriers of specific powers, and highly trained professionals, which are: ministers, state secretaries, According to the different types of corruption, the Commission for the Prevention of Corruption assessed the corruption in Slovenia as follows (KPK, 2010, page 8): • Slovenia is a country with a relatively low level of administrative corruption when compared to other (post) transition countries in the wider Europe (member of the Council of the European Union); even in comparison with some older EU members (for example, Italy, Greece); • With regard to white collar corruption5, certain indicators show that Slovenia is in a better position than other (post) transition countries and comparable to some of the old EU member states (the Mediterranean basin). This form of corruption is closely linked to the cases of economic and public finance crime that Slovenia has been facing in the recent years. • The past and current economic and financial crisis in Slovenia revealed the long-standing development of systemic / institutional corruption. However, in 2014, after the assessment of the situation, the CPC became more critical of the corruption of white collars. According to the assessment of the commission, the corruption of white collars is strongly present in Slovenia, while there is less administrative corruption, although the Commission receives a lot of complaints about suspected irregularities in administrative procedures. According to the commission, the systemic corruption is especially important, as it often goes hand in hand with the defective legislation, thus providing a number of opportunities for individuals or groups to place their own interests before the interests of the community or the state (KPK, 2014, p. 3). Similarly, to the findings of the CPC, the World Bank Institute's survey carried out in 2004 (Finance, 2006) found that in Slovenia there are fewer problems with illegal corruption than with legal or lawful corruption (a common denominator of legal corruption around the world, that is the phenomenon of exploitation of informal powers and political ties for one’s own benefit, directors of directorates, senior ministry officials, members of parliament, directors of public, public-private and private companies, as well as the experts on law and operation of the state apparatus. 10 is the political irresponsibility). One of the co-authors of the study (Pedro Vincente) also added that legal corruption is a phenomenon when the media in the country usually do not have independent or good control of the work of politics; they also do not have control of lobbying and other forms of informal influence that lead to the exchange of services between the state, companies and individuals. The anti-corruption laws do not apply to these softer forms of corruption. In his doctoral dissertation, Škrbec (2013, p.107) investigated also the causes and motives for the occurrence of corruption in Slovenia and found the four most common ones. The first or most common cause and motive for corruption is the improvement of the economic status (thus greed). The second most common cause are past habits6, since the people in ex-Yugoslavia looked for ways to circumvent the system and the rules of the game. The third cause of corruption is of a systemic nature, as the system itself has an impact on the increase of corruption, while the fourth most frequent cause is the smallness of Slovenia and the functioning of the bonds and acquaintanceships, which makes the regulation of things in Slovenia specific; the country being so small that everybody knows everybody makes it easier to create informal networks and, which are, therefore, also easier to conceal. People thus meet through informal networks and together search for ways to meet their own interests. He also states (p. 120) that the Slovenes are selfish creatures and that, when something is good for them, they respect it, but otherwise they try to find a bypass of such restrictions or things that do not suit them. The legal culture in Slovenia is at a level where people respect the law only when they have a personal benefit from it. Those who strictly observe the law in Slovenia are exemptions rather than the rule and are in public sometimes even stigmatized as “idiots, fools” or something similar. Grodeland (2005) in his study similarly finds that the majority of respondents in Slovenia believe that the Slovenes do not respect the rule of law and that the 6 Partially already after World War I, and even more so after the Second World War, the so-called balkanization of Slovenia occured, when after the confrontation with the pre-war economic and political elite, the authority and the leading role in the country were taken over by the former NOB fighters, who and often introduced the “Balkan mentality” in the political as well as the wider social space. Slovenia, as the most economically developed republic, search for holes in the law is a national sport. According to Grodeland, the Slovenes in general consider that it is necessary to be inventive, and they respect only the part of the laws that benefits them. According to the respondents, the non-observance of laws originates mainly from the communist past. As previously mentioned, major problems and a major source of corruption in Slovenia are also informal networks, both old, stemming from socialism and new ones, created only to gain benefits, while there is also the interweaving of both. The existence of the networks and the connection of these with corruption was confirmed by the survey of 2003 - 2004 (Dobovšek in Dimc, 2007, p.76), as well as by the research of the Norwegian Institute for Urban and Regional Research (Grodeland, 2005). There are, however, quite a few studies or studies of corruption (as well as the networks that allow it), among which I would like to mention also Tonin (2009), who studied corruption at the level of municipalities, in particular the operation of mayors and their influence: the mayors have become all-powerful “local sheriffs” that are involved in all disputes of social life, and have also become the creators of local informal networks, which enable them to achieve their goals, both public and private (p. 4). The informal network thus ensures that even those who in various public tenders only lend their name and who, by fixing an excessive price, make it possible to select a specific provider, get their share. The network between the mayor and the local economic operators intertwines into a strong interdependence, where the exit from the network is almost impossible and can mean the loss of position, the loss of work, and, ultimately, the prosecution of those involved (p.8). I would also point out the study of the effects of corruption on business between economic operators, the results of which are indicative of how poorly people in leading positions prepare for business cooperation. It is true that in business transactions everything is directed to the realization of the transaction within a certain period of time, so that no additional costs are incurred, similarly experienced a great arrival of workers from the south of Yugoslavia, which further caused the change in mentality of both workers and officials. The term “rule of law” was not taken seriously (Heršak in Brioschi, 2003, p.240), since Tito himself stated that judges should not adhere to the law “like blind person clinging to a lamp post”. 11 and that with each business transaction, the goal due to which this transaction was concluded is also achieved. In all cases, it is also expected from the manager that the business will conclude with profit or increase liquidity. All of this is becoming the fundamental goal of each director, who often completely forget all ethical standards, consequently become victims of the desire to achieve the goal regardless of the risk (Partljič, 2012, p. 67). It is also sad that the research by Ernst & Young consulting firm, published in Die Welt (2013), reveals that Slovenia is a notorious record holder in Europe, as the share of managers for whom bribery is common is 96 per cent. Slovenia is followed by Croatia with 90 per cent and Ukraine with 85 per cent (also a former communist state). 3. Systemic Corruption Alongside individual types of corruption (administrative, corruption in public procurement, corruption in health care, etc.), the systemic corruption also presents a significant problem of corruption in Slovenia. According to researches carried out by international institutions, and the theories of various experts who have been closely involved in corruption and practice, known from various events around the world, the indicators that influence the development of systemic corruption, which is among the more widespread also in Slovenia, are as follows (Commission for the Prevention of Corruption, 2011): • the existence of economic monopolies, negotiations with cartels and limited competition, large national and local infrastructure projects, • little chance that corruption will be detected and properly sanctioned by supervisory institutions and law enforcement authorities, • the process of economic liberalization and privatization with the influence of politics, • lengthy court proceedings, • distrust of the political system and institutions of the rule of law, and the uncertainty of political and economic events in the country, • poor control over public procurement, • incomplete system of internal audits regarding the efficiency of public money, • weak control of supervisory authorities in the economy and low degree of ethics between the actors in the business performance, • politicization or non-transparent privatization of public media, especially media space, • inefficient and non-transparent financing of entrepreneurship by the financial institutions, • the influence of lobbies on the legislative process. Dobovšek and Škrbec (2012) similarly confirmed with their research, as they found that corruption in Slovenia affects the state's functioning, especially the doctrine of the rule of law, its functioning and the way people think or establish certain values. Most of the corrupt practices are done by those who should be examples of a correct and fair attitude towards matters of public interest in all areas of social relations and processes (officials and public office holders). 4. Perception of Corruption In his article, Malnar (2011) notes that Slovenia is characterized by a significant gap between official statistical indicators of social inequality and their public opinion perceptions. Pursuing of minor inequalities means also a spontaneous rational strategy of providing one's own social “just in case” security. This is particularly likely in an environment characterized by the extremely low public confidence in politics on one hand, and at the same time extremely high expectations about the role of the state in ensuring the material well- being on the other. This “paradox”, which is another highly interconnected unified element of political space in Slovenia, is probably the key to explaining the gap between the statistics and the public opinion. According to the data, the “a priori” demands of the public for the reduction of inequality are not motivated by the experience of social deprivation, but rather by the favourable material position of most households and the associated fear of losing the achieved prosperity, while small inequalities are understood as a condition or a support system of its continuity. Similarly goes for the large gap between the official statistics of corruption and the perception of corruption in the survey, and it could therefore be assumed, according to Malnar's findings, that the high perception of corruption generates fear of it (nothing to fear but fear itself). The fact is that there is a connection between the perception of corruption and the living standard. If we take into account that the mentality of Slovenes folds 12 also the tendency to revolt and “rebel” - especially if someone interferes with their acquired standard of living, which is derived from the psychological profile of Slovenes (Musek, 1997) - then it can be concluded that often, when detecting the first changes in indicators that show a decline in the standard (economic agents respond quickly and rationally to changes in the market), the corruption detection index also increases. The first such indicator of the fall in the living standard is the rise in the unemployment, while the second is the fall in the purchasing power. The above graph shows that there are some correlations between the index of corruption perception, unemployment and purchasing power. Especially in 2008, when unemployment was at the lowest, the corruption perception index was at the highest, or rather, with the decline in unemployment, the corruption detection index rose, and vice versa. After the beginning of the rise in unemployment, the corruption perception index began to fall (that is, when the unemployment is low, the corruption perception is also low and vice versa). The same findings were identified by other authors who have studied the impact of the living standard and social conditions on the perception of corruption (e.g. Melgar, Rossi and Smith, 2010). Similarly goes also for the graph that shows the relationship between the corruption perception index and the purchasing power (here, too, the curves, especially the tops and the bottoms, match). Figure 1: Ratio between the index of corruption perception and unemployment Source: Šumah and Mahič, 2015, p.25 Figure 2: Ratio between the index of corruption perception and purchasing power Source: Šumah and Mahič, 2015, p.25 Both are in the survey statistically confirmed with the least square’s method (the p-value is low, indicating that there is a statistically significant link between unemployment and the corruption perception index, or the impact of unemployment on the change in the corruption index is statistically significant): Corruption Perception Index = 6.96099 + (- 0.130923 x Unemployment) If unemployment increases by one percent (unemployment is given in %), the corruption perception index drops in average by 0.130923 percentage point (the perception of corruption increases). Similarly applies to the correlation between the corruption perception index and the purchasing power. Here also there is a statistically significant link between the change in the purchasing power and the change in the corruption perception index, or the impact of the change of the purchasing power on the change of the corruption index is statistically significant: Corruption Perception Index = 6.96099 + 1.06806 x Purchasing Power If purchasing power increases by one percent, the corruption perception index increases by 1.06806 percentage point on average or the perception of corruption decreases (Šumah and Mahić, 2015). Undoubtedly, the increased perception is influenced also by the collectivism and the socialist ideology of “equality”, which were forced upon by the previous system, and which did not suit the personal structure and the tradition of the Slovenes. Of course, the system could 13 not force a substantial change of the personality profile, however, the profile was already affected by the transformation of the mentality of the people. The Slovenes still have difficulties to say goodbye to the forced mentality of egalitarianism without responsibility, which diminishes creativity, and so people often choose an easier way (also through corruption). Although the great changes liberated the Slovenes from two debts - they became independent and at the same time shook off the collectivism that was foreign to their culture - the habits and part of the “socialist folklore” still remain. The summary of the most important findings of the indirect measurement of corruption in Slovenia since 2000 (Škrbec, 2009). If the main findings of the indirect measurement of corruption after 2000 are summarized, it can be seen that: • compared to the period before 2000, the period after 2000 was enriched by researches, the share of them increased remarkably, the share of Slovenia's corruption surveys also increased by 100%, • 42% of respondents believe that corruption is a major problem in Slovenia, • mostly respondents believe that since the last elections (in 2004) things got worse as regards to the incidence of corruption, however, the most noticeable shift in the situation happened between December 2007 and February 2008, • the majority of respondents think that bribes in public services are accepted by “quite a few civil servants”, • if the answers “has somewhat increased” / “has increased significantly” are calculated, the sum represents approximately 62% of the respondents’ answers, • the greatest likelihood of an incidence of corruption, according to the personal opinion of the respondents, is in the health sector, • in all the assessed areas, the proportion of respondents who believe that corruption in this area is probable, far exceeds the proportion of those who had a real experience with the corruption in that area, • the inefficient prosecution and too low sanctions are the main cause of corruption, followed by a lack in legislation, • the majority of respondents actually experienced corruption in public procurement, in health care, in the conduct of police and inspectors, etc., • according to the respondents, the most important actors in the prevention of corruption are Commission for the Prevention of Corruption or the former Office for Prevention of Corruption, then the media, followed by the Police, the Office for Money Laundering Prevention, Inspectorates etc., • in the case of the indirect measurement, the influence on the formation of a subjective opinion on the prevalence and forms of corruption are largely caused by the media and then by personal experience, • one of the findings of the 2008 survey is that more than half of the respondents (55.4%) believe that the level of corruption in Slovenia will increase in the coming years, while a quarter (25.5%) is of the opposite opinion. 14.9% of respondents think that corruption will remain the same. As part of the research for this article, a short survey of people's experiences with corruption was also made. The survey was conducted through social networks and e- mails. It reached 1649 respondents. 360 surveys that were filled were appropriate for the analysis with the SPSS programme. A surprisingly high percentage of respondents have personal experiences with corruption (157 out of 359 respondents, or 43% of the respondents whose answer to the question whether they had had a personal experience with corruption was positive). Especially interesting, however, is the analysis of differences in experience with corruption by gender: Gender Total Male Female Experience with corruption 1 88 69 157 2 82 120 202 Total 170 189 359 14 a. 0 cells (0,0%) have expected count less than 5. The minimum expected count is 74.35. b. Computed only for a 2x2 table There are differences in the experience with corruption according to gender. Chi-square is 8.47, the statistical significance is 0.003. There are differences in the proportion of men who have experienced corruption, which still shows certain patriarchalism in an otherwise fairly equal Slovenian society. However, there is nevertheless a huge difference between the perception (i.e. indirect measurement) and the official records, which is best seen if a comparison is made between the official records available and the perception. If only official records were considered, it could easily be concluded that the corruption in Slovenia is, in fact, a small problem. DISCUSSION Corruption is indeed a multi-dimensional process. On one hand there is the provider of the benefits, on the other the recipient, while both are aware of the action that remains a secret. The third link in the chain is then everyone else; the injured parties. Although not every act of corruption is yet a criminal offense, it is unethical and harmful to the economic and political development of the society. The actors involved are usually those who have political, economic power and power of decision- making (Integrity, 2013), and, as the philosopher Karl Popper wrote in his book Open Society and its enemies, the biggest problem is not who should direct, but how to control the one who directs, that is, how to organize the political and social institutions in order to prevent the weak and incompetent rulers from causing harm. However, as there is no general and unmistakable way to prevent the tyranny or the corruption of the influential people, the price of freedom is eternal alertness (Brioschi, 2003, p. 125). Slovenia (as well as other transition countries) is thus facing a hard nut of corruption to crack, if it wants to approach the success in the fight against corruption similar to some economically prosperous countries with a rich tradition of democracy. The European path begins with the legal order, political and social equality, and above all with the cosmopolitan cultural identity. After the acceptance of these values, a culture of mutual understanding and dialogue will also succeed. Until now, the post-socialist countries that have reconstructed their failed democracy (the so called “brake down countries”) after the fall of the Berlin Wall have not yet traversed from the (post)transition to transformational learning society. Slovenia, being one of the youngest and the smallest among them, has no transitional experience in this area (Novak, 2011). Therefore, in the fight against corruption, Slovenia must be inspired by older and more successful democracies, and the mentality of the people, not individuals changed, as it will only thus succeed in the fight against corruption. C h i-S q u a re T e sts V a lu e d f A sy m p . S ig . (2 -sid e d ) E x a c t S ig . (2 -sid e d ) E x a c t S ig . (1 -sid e d ) P e a rso n C h i-S q u a re 8 ,4 6 6 a 1 0 ,0 0 4 C o n tin u ity C o rre c tio n b 7 ,8 5 7 1 0 ,0 0 5 L ik e lih o o d R a tio 8 ,4 9 0 1 0 ,0 0 4 F ish e r's E x a c t T e st 0 ,0 0 4 0 ,0 0 3 N o f V a lid C a se s 3 5 9 15 It can also be argued that people often do not recognize corruption, since it seems to already be a part of everyday life, a kind of folklore (typical of countries in transition), and those who get rich due to it are not condemned, but admired: “He got around it!” Or, if Kant's findings (Kant in Jager, 2015) of 1764 (which are still very true today) are used, fraudulent cunning is expanding and slowly establishing as the rule or “the maxim of behaviour”. Those who are most cunning often climb to the highest positions, the mass media are putting them on a pedestal, they become role models to young people who are raised by their parents and the mass media brought up in the spirit of “delusional success”. Whoever does not follow this maxim because he cannot (a simpleton) or refuses (an honest man), is subject to ridicule. An interesting point of view about what influences illegal or criminal behaviour was presented by the Nobel Prize winner Becker in his research by means of economic analysis (1974, p. 43-47). To put it simply, according to him, a person is a rational thinking being and the decision whether or not a person will commit an unlawful act is affected by three factors: • the benefit which is acquired through the unlawful act, • the probability of being caught, • the expected sanction if the person gets caught. By comparing the first factor to the other two, the person rationally decides whether or not the unlawful act would pay off, which Becker explains by the model of choice; when a perpetrator or a potential perpetrator prefers the risk or when the risk is on the brink, the perpetrator considers whether the realistic profit from the criminal act is greater or lesser than what would otherwise be received through less legally risky activities. This condition of “optimality” is, according to Becker, the main principle in decision-making, and not, for instance, the effectiveness of the police or the court. To put it in short, it is about considering the possible positive and negative effects (costs and benefits) and not thinking about whether something is right or wrong. Although this is a simple model, it can easily apply to an individual illegal (as well as an immoral) act, therefore also to corruption (Šumah and Mahić, 2017, p. 250). Therefore, if we derive from this model, the legislation should make the benefit from corruption smaller than the potential negative consequences. This can, however, only be done through a change in legislation which must provide protection for those who care, increase sanctions, and enable the law enforcement authorities to act more effectively. One of the possible solutions for the reduction of corruption is offered by Ariely (2012, p. 181) and based on the “broken windows theory”, described in 1982 by George Kelling and James Wilson in an article in the Atlantic magazine. The article dealt with establishing of order in dangerous urban neighbourhoods. The authors did not see the solution in the increased police presence on the streets but rather elsewhere. They noticed that the broken windows in disorderly neighbourhoods (which remain unfixed for a long time) “are asking” for additional damage to the same building and others in the immediate surroundings by themselves. The vandalism consequently expands and intensifies. If there are no broken windows, the next vandals will not be encouraged. This theory is difficult to confirm or deny, but is logical according to Ariely, and he thus suggests that petty crimes (in this case, the occurrence of small corruption) should not be overlooked, excused or ignored, as this will only increase the problems. In his opinion the said applies especially to politicians, directors, public officials and celebrities. It is true that he wonders if it would be right to subject them to stricter standards than ordinary people, however, it is necessary to be aware that people who are more under the scrutiny of others have a greater influence on the behaviour of the observers (and followers) and the consequences for the society are bigger when they do something wrong. Therefore, the reaction to all phenomena of corruption, even the smallest ones, should be immediate and without mercy, for the only way to fight corruption is zero tolerance towards it. Directors, public officials, politicians and similar persons should be under even more scrutiny, both in terms of their actions and their financial situation. The 16 reversal of the burden of proof7 for the control of the property, which was introduced into the Slovenian law in 2011, should thus be used more frequently. If we want to deal with or limit corruption, one of the easiest and most effective ways is to take the unlawfully acquired property away from people, in which case it is not necessary to prove the blame of those who are suspected of corruption; it is them who must prove where their property is from, and if they not convincingly do that, they are stripped of their possessions. However, there is too little done in Slovenia with respect to prevention and education, for only if one gets people to become aware that we are all paying or are being deprived due to corruption (worse roads, more expensive healthcare, etc.), a critical mass with zero tolerance for corruption can be created, and only thus can success in the fight against corruption be guaranteed. CONCLUSION However, the main measures for preventing corruption are still more transparency, the establishment of mechanisms to reduce the risk of corruption and the coherence of governance with the legislation and ethics of both the state and state-owned enterprises, which can only be achieved with a sufficient number of adequately informed citizens. Precisely for this reason, two coordinated directions of action are needed in the fight against corruption; the first is through education and awareness of citizens provide a critical mass, which will have zero level of corruption tolerance and at the same time provide political will for changes. References 1. Ariely, D. (2012). The (honest) truth about dishonesty. New York: Harper Audio. 2. Banovec, D. J. (2013). Javno-zasebno partnerstvo in možnosti korupcije. 14. SLOVENSKI DNEVI VARSTVOSLOVJA. Ljubljana: Fakulteta za varnostne vede. 7 The reversal of the burden of proof is one of the means in the fight against all types of organized crime. This form of crime brings huge profits to criminal organizations and individuals. Thus, acquired property brings more economic power that they use for the promotion of their own interests in the economy and politics. 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