Complexity management of corruption in Iran’s oil industry applying soft system dynamics methodology (SSDM)

Abstract

PurposeOil is the natural resource recognized as the most important source of revenue in oil-dependent countries and is most often referred to as being susceptible to corruption owing to its strategic importance. A major challenge in addressing and encountering the problems in complex social systems, such as corruption, is how to structure the problematic situation and how to capture mental models of the stakeholders involved in the situation, and also how to identify the system’s behavior in response to various policy intervention attempts in the long run. This study aims to shed new lights on modeling and simulating corrupt system of the oil industry, as a complex social system needed to be structured according to social system theories’ principles.Design/methodology/approachParson’s theory is applied as a basic framework to capture the complexities of a corrupt system, dividing the system into political and structural, economic, legal and judicial and cultural and social sub-systems. Then soft system dynamics methodology, which is a combination of the two well-known methodologies, soft system methodology and system dynamics, is applied to model and simulate the complexities involved in the oil industry of Iran, which owns the second-largest oil reservoir in the world and its economy is much dependent on the oil revenue, struggles with corruption, and plans for a large amount of anti-corruption activities.FindingsAfter simulating and calibrating the model, three groups of policies, namely, “reducing corruption opportunities,” “reducing corruption demand,” and “increasing anti-corruption capacity” are implemented in the model. As to the simulation results, due to the mutual inter-causality of opportunity and demand for corruption, individual application of each group of policies will not be helpful for long, rather a combination of policies will conduce to substantial improvements in declining corruption in the oil industry.Originality/valueThe developed model addresses the dynamics of the complex socio-economic system of corruption in the system of oil industry via modeling and simulation. The developed four-dimension system dynamics framework could be considered as a guidance for corruption modeling in general and as a basic model for corruption modeling of oil-dependent countries’ systems in particular.