“From Detroit to Kabul, corruption matters.”
You and Khagram (2005) define corruption as the abuse of public power (people working within the public organizations) for private gain (137). Their comparative analysis of 129 countries incorporated a two-stage least squares method utilizing different measures of corruption according to the statistics gathered by the World Bank’s Control of Corruption Index and the Transparency International’s Corruption Perceptions Index (141). According to their research, “people are more likely to consider political institutions and rules in unequal societies as favoring the rich, as unjust, and as lacking legitimacy. More people are likely to circumvent laws and regulations when they are considered illegitimate” (139). In this manner, the more corrupt the public sphere is, the greater the chance that the peoples’ perception regarding government will be illegitimate. The authors further studied the causal influences of inequality relating to corruption.
You and Khagram’s (2005) analysis yielded that inequality increases corruption, particularly in democracies (154). They found that “corruption produces policy outcomes closer to those preferred by the rich than those favored by the median voter” (154). Hence, the greater the inequality within a democratic nation, the more likely that the elected officials will create policy that benefits them, and often, regulatory institutions that fail to stop the rich from exploitation and corruption. Their public policy response directly related to institutional design was quite ambiguous. They concluded, “One task of politics and public action is to shape institutions and social conditions so that people behave honestly because they believe that the basic structure of their society is just” (155).
Drury, Krieckhaus and Lusztig (2006) used time-series cross-section data of more than 100 countries from 1982-97 to examine corruption. They illuminated that “corruption has no significant effect on economic growth in democracies, while non-democracies suffer significant economic harm from corruption” (121). Here, the thesis was that authoritarian elites are more likely to engage in corruption because democratic institutions do not hinder them (124). For example, according to the authors, a “causal story may be that institutions such as political parties put in place mechanisms that constrain individual politicians from engaging in growth-impairing corruption” (133). Democratic institutions are more likely, according to the empirical evidence, to provide institutions, such as the judiciary, greater independence. This provides a check on corruption and increases the efficiency of the institution (133). In this way, increasing the democratic nature of the institutions will likely mitigate public corruption and increase prosperity (133).
Creating transparent and democratic institutions does not guarantee absent or diminished corruption; however, public accountability may create a forum to shun corruption. Drury, Krieckhaus and Lusztig’s (2006) empirical evidence showed that democracies do indeed reveal significant levels of corruption, but that “their leaders must refrain from growth-impairing corruption lest they be punished at the next election” (133). In fact, they wrote that a democracy’s electoral process stops corruption so that it literally has “no impact on its economy” (133). Further, their results demonstrated that “corruption has a negative effect in authoritarian regimes, but not democratic regimes” (131). Thus, corruption is mitigated in democracies but is not mitigated in authoritarian regimes.
Certainly, any Detroiter (e.g., me) would find the former paragraph a little comforting considering that Detroit’s last Mayor, yesterday, was found guilty of 24 of the 30 charges of corruption by a jury, which included racketeering and extortion. Then again, Detroit is bankrupt and might soon conduct the largest municipal bankruptcy in United States history. Therefore, Detroit should be a worthwhile research event for all social scientists.
For example, is Detroit “de facto” a competitive authoritarian regime, and not a democratic regime; whereas economic development has been wholly prevented in a democratic way; thereby significantly impairing economic growth? Comparatively, what are the economic and political patterns of America’s least corrupt large, urban municipality–and what is the range of empirical evidence with respect to the will of the median voters, economic gardening, public services, each city’s workers and benefits, institutions, structure and culture?
Persson (2002) utilized surveys assembled by Transparency International (TPI) that measured “grand corruption” at the highest levels of government. The score was from 0 (perfectly clean) to 10 (highly corrupt) (901). They found that “majoritarian elections are associated with smaller broad spending programs than proportional elections and with less corruption” (902). Their statistically significant, quantitative findings strengthened the argument that the more democratic the institutions; then, the less likely corruption will permeate society. For example, in Chile, a country “considerably less corrupt than its South American neighbors;” the regression registered at -2.5, yet the surrounding countries had a residual close to 0. The authors articulated that between a “quarter and a half of this difference might be due to Chile’s electoral system, the only one in the region where voters cast their ballots for individual candidates under plurality rule” (902).
Shleifer and Vishny (1993) defined government corruption as “the sale by government officials of government property for personal gain” (599). They complimented the former researchers regarding the evidence that an increase of democratic institutions statistically reduced public corruption. For example, Russia, under the authoritarian Communist regime, “had a monolithic bribe collection system” (610). Once the communist system collapsed and as democratic institutions formed, corruption revenues decreased (610). Authoritarian governments, overall, are not responsive to public pressure against corruption, which enables high levels of corruption. The greater the political competition within a country, the more likely that the candidates will be relatively free of corruption. The authors conclude, “It is implausible to think, for example, that the U. S. president maximizes corruption proceeds, since such a president is likely to be exposed and thrown out of office. Even in Japan and Korea, where corruption is very common, the level of bribes tends to be significantly lower than in Russia or the Philippines” (610). Thus, more economic and political competition reduces economic and political corruption (616).
Corruption is often a significant hurdle for comparative political scientists studying institutional development and stability. For example, the United Nations published a report January 9, 2010, stating that it is not violence or poverty as the number one inhibitor to Afghanistan’s progress, rather, corruption. The report announced that “nearly 60 per cent of the population said corruption is their biggest concern…that Afghans paid $2.5 billion in bribes over the past 12 months.” Maria Costa, the Executive Director of the UN Office on Drugs and Crime, contributed to the article, saying, “The Afghans say that it is impossible to obtain a public service without paying a bribe.” The survey methodology of this report was based on 7,600 interviews in 12 provincial capitals between 2008 and 2009. In this example, March and Olsen might be considered, “Civil unrest, demands for comprehensive redistribution of political power and welfare, as well as political revolutions and major reforms often follow from identity-driven conceptions of appropriateness more than conscious calculations of cost and benefits” (357).
Drury, A. Krieckhaus, J. and Lusztig, M. 2006. “Corruption, Democracy, and Economic Growth.” International Political Science Review / Revue internationale de science politique, Vol. 27, No. 2, pp. 121-136
Katznelson, I and Milner, H. 2002 Political Science: State of the Discipline. Norton.
Kwok, C. and Tadesse, S. 2006. “The MNC as an Agent of Change for Host-Country Institutions: FDI and Corruption.” Journal of International Business Studies, Vol. 37, No. 6, pp. 767-785
Montinola, G. and Jackman, R. 2002. “Sources of Corruption: A Cross-Country Study” British Journal of Political Science, Vol. 32, No. 1 (Jan., 2002), pp. 147-170.
Moore, B. 1996. Social Origins of Dictatorship and Democracy. Beacon Press.
Myerson, R. 1993. “Effectiveness of Electoral Systems for Reducing Government Corruption: A Game Theoretic Analysis,” Games and Economic Behaviour, 5, 118-132.
Persson, T. 2002. “Do Political Institutions Shape Economic Policy?” Econometrica, Vol. 70, No. 3 pp. 883-905
Shleifer, A. and Vishny, R. 1993. “Corruption.” The Quarterly Journal of Economics, Vol. 108, No. 3, pp. 599-617.
UN News Centre. 2010. Corruption, not insecurity, biggest concern for afghans – un report. Retrieved from http://www.un.org/apps/news/story.asp?NewsID=33519