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CIAO DATE: 3/99
Explaining Political Corruption: An Institutional-Choice Approach *
Department of International Relations
Florida International University
International Studies Association
40th Annual Convention
Washington, D.C.
February 16–20, 1999
Abstract
This paper presents and institutional-choice model that addresses the problem of political corruption, the abuse of public office for private gain. The institutional-choice model first employs a rational-choice game, and then through a constructivist analyses links the game solutions to a surrounding institutional structure that influences agent decisions. This paper models political corruption as a coordination game among a state’s ruling elite and citizen groups—a game with multiple solutions that reveal the range of corruption expected among states. A constructivist theory of rules is then used to build the causal mechanisms explaining the domestic and international causes of political corruption. The paper highlights the need to build self-enforcing mechanisms to police the conduct of public officials.
Introduction
What are the domestic and international causes of political corruption? Why is it so difficult to uproot endemic political corruption in developing states? These two questions are at the core of four decades of scholarly corruption research. While this research vastly increased our knowledge of the corruption phenomenon, it has not produced a general theory of corruption.
What do we know empirically about the sources of corruption? We know state levels of corruption are highly correlated with their levels of political rights, civil liberties, economic freedom, and economic product (see Table A1-Appendix A). A multivariate regression model of corruption, controlling for economic product and including independent variables of democracy (political rights and civil liberties combined), economic freedom, and cultural stream (where the state’s population and political ideas originated), explains 82 percent (r2=.82) of the variance in state corruption levels—impressive results for any social science model (see Table A2-Appendix A). These aggregate statistical results generally support the profusion of scholarly corruption studies that offer a plethora of political, economic, and cultural variables as the principal causes of high corruption levels. Despite these immense scholarly attempts to explain corruption, there still remains no interdisciplinary causal mechanisms to do so.
Political corruption became one of the “hot” foreign policy topics of the 1990s, in contrast to the period before 1990 when political corruption appeared of little concern to the international community. Robert McNamara, former President of the World Bank, asserted in the early-1990s that “the subject of corruption could not have been discussed [in international forums] 20, 15, or even 5 years ago” (Vogel 1993). Many analysts point to Cold War politics to account for the international community’s neglect of the pre-1990s world corruption problem (Elliot 1997a: 8-11). The U.S. and Soviet superpowers cared little about corruption in a state’s political or economic systems, provided the state remained a loyal ally or client within the respective superpower’s sphere of influence. In the post-Cold War 1990s, the democratization trends in Asia, Africa, Latin America, and the former Soviet bloc, combined with advances toward global free trade, brought the efficiencies of state political and economic systems under world microscopes—revealing the underlying web of corruption pervading developing states.
Why should we worry about corruption? Recent empirical studies demonstrate that high political corruption levels weaken democratic institutions, reduce foreign and domestic investment, and slow overall economic growth (Mauro 1997; Rose-Ackerman 1997, 1998; World Bank 1997). In summarizing recent findings on the effects of corruption, Elliott (1997b) offers:
When it is pervasive and uncontrolled, corruption thwarts economic development and undermines political legitimacy. Less pervasive variants result in wasted resources, increased inequity in resource distribution, less political competition and greater distrust of government. Creating and exploiting opportunities for bribery at high levels of government also increases the cost of government, distorts the allocation of government spending, and may dangerously lower the quality of infrastructure. Even relative petty or routine corruption can rob government of revenues, distort economic decision making, and impose negative externalities on society, such as dirtier air and water or unsafe buildings (Elliott 1997b: 175-176).
The 1990s found numerous international organizations reacting to the growing international concern over the degrading political and economic effects of corruption. 1 The United Nations, Organization of American States, European Union, World Trade Organization, Organization of Economic Cooperation and Development, Group of Seven, Council of Europe, World Bank Group, International Monetary Fund, U.S. Agency for International Development, and U.K. Department for International Development, among others, instituted a variety of anti-corruption initiatives. It remains too early to assess the success of these numerous anti-corruption efforts. Despite the increased international anti-corruption discourse, many believe corruption levels are actually increasing in developing states. Thus, there remains great uncertainty in international anti-corruption circles as to the potential success of these wide-ranging initiatives (see Elliott 1997b & Tamesis 1998).
The goal of this paper is to lay the foundation for a general theory of political corruption. This paper provides a fresh, synthesized approach to explaining the political corruption phenomenon through employment of the constructivist approach to social science. Constructivism, as developed by Nicholas Onuf (1989, 1997, 1998a), allows analysts to build social theories by linking a variety of political, economic, and cultural factors that would otherwise seem unrelated. I draw on the strength of constructivism to synthesize material from a variety of social science disciplines in developing my explanations for the sources of political corruption. Constructivism allows me to disaggregate the variables of democracy, economic freedom, and cultural stream, thereby assisting in uncovering the theoretical propositions of a general theory of political corruption. My theory emerges from employment of an institutional-choice model, a model that incorporates constructivism’s stance that theoretical explanations emerge from the analysis of social rules that govern the interaction between agency and structure.
This paper proceeds as follows in developing a general theory of political corruption. First, I address the “definitional quagmire” that has hampered scholarly corruption research. Second, I develop my institutional-choice model of political corruption containing two principal components: (1) an internal rational-choice (agency) Political Corruption Game, and (2) an external structure including a Political Corruption Institution. Third, I analyze the Political Corruption Game revealing the range of corrupt activity a state may exhibit. Fourth, using the constructivist theory of rules, I analyze the social rules that make up the Political Corruption Institution and their linkage to the Political Corruption Game. Finally, as an example of the usefulness of my general theory of corruption, I take the results from my institutional-choice analysis and evaluate recent international anti-corruption efforts.
The Definitional Quagmire
Among the hundreds of scholarly studies of corruption, there appear almost as many proposed definitions of this complex concept. This lack of an agreed upon definition of corruption is one reason a general theory of corruption never emerged. Past corruption conceptualizations focus primarily on behavior-based definitions classified as either public-office-centered, market-centered, or public-interest-centered (see Heidenheimer, Johnston, & Le Vine 1989: 8-11). For example, Nye provides a public-office-centered definition of corruption frequently used in scholarly studies:
Corruption is behavior which deviates from the formal duties of a public role [office] because of a private-regarding (personal, close family, private clique) pecuniary or status gains; or violates rules against the exercise of certain types of private-regarding influence (Nye 1967: 966).
Van Klaveren offers a classic market-centered definition of corruption:
A corrupt civil servant regards his public office as a business, the income of which he will...seek to maximize. The office then becomes a “maximizing unit.” The size of his income depends...upon the market situation and his talents for funding the point of maximal gain on the public’s demand curve (Van Klaveren 1957).
Friedrich provides a public-interest-centered definition of political corruption:
The pattern of corruption can be said to exist whenever a powerholder who is charged with doing certain things, i.e., who is a responsible functionary or officeholder, is by monetary or other rewards not legally provided for, induced to take actions which favor whoever provides the rewards and thereby does damage to the public and its interests (Friedrich 1966: 74).
In the face of the many conflicting definitions of corruption, Lancaster and Montinola rightly highlight that “...problems of definition, operationalization, and measurement have thus far constrained most students of corruption to ideographic single case studies....the lack of cross-national empirical studies prevents a more complete understanding of general causes of political corruption” (Lancaster & Montinola 1997: 185).
A second contentious issue in defining corruption is the question of what exactly entails corrupt behavior. In the simplest terms, a corrupt behavior is any act that violates the existing societal rules against corruption. Since the formal and informal rules that specifically define corrupt behavior in most states not only constantly change, but also vary both among and within states—it is nearly impossible to develop one consolidated list of corrupt behaviors that pertains to all states or even to one state across time. Therefore, to help conceptualize this additional point of corruption uncertainty, Heidenheimer proposes three typologies of corrupt behaviors encompassing a continuum from White to Gray to Black(Heidenheimer 1989: 161). White corruption signifies that neither the elite nor masses consider the behavior as corrupt and would not support punishment for its occurrence. Gray corruption entails some elements, usually the elite, that may want to see a behavior punished, while others do not, and with the majority of both the elite and masses ambivalent to the behavior. Black corruption indicates that both the elite and masses condemn the behavior and demand that it be punished.
Johnston refers to the confusing attempts to conceptualize corruption as a “definitional quagmire” (Johnston 1994: 3) and argues that we are unlikely to ever find a satisfactory single definition of corruption (Johnston 1998: 89). Therefore, this paper does not dwell on finding a precise definition of corruption, but instead presents a general conceptualization of political corruption that serves both political and material realities.
The World Bank defines corruption as the “abuse of public power for private gain” (World Bank 1997). This paper adopts this simplified conceptualization while limiting the scope of the “abuse of public power” to only senior government officials. Corruption scholars and policy analysts label high-level governmental (political) corruption as “grand corruption,” i.e., corrupt acts that involve senior government officials including, senior agency officials, military and police commanders, senior judges, legislators, cabinet ministers, and even chiefs of government and state (Moody-Stuart 1996). These public officials constitute a state’s ruling elite who make governmental policies and whose decisions allocate a society’s limited resources. This is in contrast to petty or bureaucratic corruption that involves mid- and lower-level officials such as agency bureaucrats, immigration officials, customs clerks, policeman, etc.—those who simply execute government policies. The incentives underlying political and bureaucratic corruption are quite different which calls for their analytic separation. This paper’s conceptual definition of political corruption—the abuse of public power for private gain—becomes clearer as the analysis proceeds.
The Political Corruption Institutional-Choice Model
Institutional-choice models allow the analysis of social behavior that is “bounded” by social institutions. Ostrom (1990), a pioneer in the institutional-choice approach, develops not only how varied institutional structures affect rational decision-making, but also how rational decisions affect the institutional structures themselves. From her analysis of the management of common pool resources (CPRs), Ostrom argues that when individuals make choices, they affect not only the current operational situation (i.e., they choose their current behavior), but their decisions also affect the operational rules (institutions) that govern future operational situations. Missing from Ostrom’s analysis, however, are specific causal mechanisms that link institutional structures to actual decision-making processes. Constructivism provides these causal linkages in this paper’s development of a general theory of political corruption.
Constructivism offers its own ontological approach to social analysis. At least some constructivists believe that reality is affected by both material and social factors. Constructivists offer that “the manner in which the material world shapes and is shaped by human action and interaction depends on dynamic normative and epistemic interpretations of the material world” (Adler 1997: 322). These constructivists believe that the properties of agents and structures are both relevant to explanations of social behavior. To constructivists, “ideas” have structural characteristics and interacting individuals act purposively on the basis of their personal ideas, beliefs, judgments, and interpretations (Adler 1997: 323-325). Methodologically, the constructivist approach falls somewhere between the empiricist/materialist and idealist/interpretive philosophies of social science (Adler 1997: 323). Similar to other logical-empirical approaches to social science, Onuf’s version of constructivism believes that natural science methods may be applied to social science analysis and that empirical validation of its theoretical explanations is important.
In consonance with Ostrom’s institutional-choice analysis of CPRs, a principal constructivist tenet is that people (agents) and society (structure) co-constitute each other in a continuous process. As Onuf explains:
General prescriptive statements, hereafter called rules, are always implicated in this process [the co-constitution of agents and structure]. Rules make people active participants, or agents, in society, and they form agent’s relations into the stable arrangements, or institutions, that give society a recognizable pattern, or structure. Any change in a society’s rules redefines agents, institutions, and their relation to each other; any such change also changes the rules, including those rules agents use to effectuate or inhibit changes in societies. (Onuf 1997: 7; emphases in original.)
A main goal of constructivism is to provide both theoretical and empirical explanations for the emergence, maintenance, and change to social institutions. To constructivists, social institutions are individual rules, or sets of rules, established in consonance with material realities. Theoretical explanations emerge from the analysis of the interaction of rules, agents, and structures. Constructivists analyze how these interactions constitute or cause individual behavior by providing agents with direction and incentives for action, and how these interactions influence changes to institutions (rules) (Adler 1997: 329). Constructivists build causal mechanisms through the employment of a constructivist theory of rules (see Onuf 1989, 1997, 1998a). One significant advantage of the constructivist analytic framework is that it allows the development of theoretical explanations across multiple levels of analysis. Constructivism permits the analysis of the interaction of rules, agents, and structures while simultaneously considering a variety of variables (rules) associated with the individual, state, and international levels of analysis.
Figure 1 presents this paper’s analytic model combining Ostrom’s (1990) groundbreaking institutional-choice work and Onuf ‘s (1989, 1997, 1998a) constructivist tenets. It should be noted at this point that even though reference is made throughout this paper to the Figure 1 Political Corruption Institution, this institution is assumed to have both positive and negative effects, i.e., it can both deter and foster corrupt activities within a state.
| Figure 1: Political Corruption Institutional-Choice Model. |
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The Figure 1 institutional-choice model consists of both external and internal worlds. The external world constitutes the institutional structure that influences the internal world of agent decision-making (agency). The internal world constitutes the agent’s rational-choice decision process. Another way to look at Figure 1 is as a complex melange of factors that define the opportunities (external world) and agent willingness (internal world) that can lead senior government officials to engage in corrupt (or non-corrupt) behavior (see Lapalombara 1994). Figure 1 also displays a feedback loop that symbolizes how agent behavior (decision-making) affects not only the external world Political Corruption Institution, but also the internalized rules of individual agents (the constructivist process of co-constitution).
The Figure 1 external world includes the domestic and international political, economic, and cultural rules that constitute the Political Corruption Institution. Also included in the external world is situational information about expected benefits and costs surrounding political corruption. The situational information and Political Corruption Institution combine to encompass the institutional-choice structure which influences agent rational decision-making.
Figure 1’s internal world displays the basic elements of a rational-choice game designated the Political Corruption Game in this paper. In rational-choice analysis, the interaction of the agent’s internalized rules, incentives, expected costs, expected benefits, and discount rates all lead to an agent’s ordering of preferences that ultimately influence the agent’s final behavior (decision). In the analysis of political corruption, this internal world process becomes even more complex as there is not one but several interacting agents making decisions. The Political Corruption Game in this paper designates an abstract strategic (interactive), non-cooperative game among a state’s: (1) ruling elite, and (2) other citizen groups (opposition elite, business elite, security forces, voters, etc.)—i.e., between opponents that have interests in either changing or maintaining the Political Corruption Institution.
The final causal mechanisms explaining political corruption emerge from the analysis of social rules that link the Political Corruption Game and Political Corruption Institutions. This analysis is carried out through employment of the constructivist theory of rules (explained in more detail in following sections). The overall institutional-choice analysis highlights the theoretic explanations for the existence and robustness of political corruption.
The Political Corruption Game
The Political Corruption Game reveals the game solutions (equilibriums) corresponding to the range of corrupt activity a state may exhibit. The game developed in this paper is a modification of the Sovereign-Constituency Transgression Game developed by Weingast (1997). 2 The abstract Political Corruption Game models the strategic interactions among three sets of players. The first set consists of a state’s ruling elite (RE). The RE are the senior government officials, elected or appointed, who make governmental policies and whose decisions allocate society’s limited resources. I assume that the RE’s goals are foremost to remain in office (retain power) and secondarily to maximize their receipt of the state’s social surplus (defined below). These two RE goals are related, because unless they retain power the RE are unable to maximize their receipt of the social surplus. The second and third sets of players are two citizen groups (A and B). I assume that the goals of both citizen groups are to maximize their respective receipt of the state’s social surplus.
Several additional assumptions are required to structure the Political Corruption Game. First, I assume that all citizens have values and beliefs about corrupt behavior. In other words, citizens can differentiate between a legitimate and corrupt act. This does not assume that any automatic mechanism creates a societal consensus about corrupt behavior. Citizens may in fact have widely divergent views about the nature of corruption (i.e., Heidenheimer’s White to Gray to Black typologies). Second, I assume that the RE do not hold power indefinitely. The RE may lose office (power) if there is a total loss of citizen support. For example; even strong authoritarian regimes can lose power if they lose the support of their security forces. I assume that the RE require the support of at least one group of citizens to remain in power—therefore the citizens hold some leverage over the RE’s goal to remain in power. Third, I assume that the state’s economy produces a social surplus. The social surplus is an abstract concept that defines a state’s political, economic, and cultural resources that are available for distribution for the public good. All players share in the social surplus, but the quantities produced and its distribution depend upon RE political decisions. I also assume a set of political, economic, and cultural rules exist that are compatible with at least a minimal level of political, economic, and cultural prosperity leading to a social surplus. Whether these rules are enforced and prosperity actually occurs depends upon the interaction of the players.
The Political Corruption Game begins with the RE holding political power. The RE may choose their behavior along a continuum ranging from appropriating the majority of the social surplus for their own benefit (total systemic corruption), to respecting the rights of all citizens to share equally in the social surplus (no corruption). Power thus allows the RE the opportunity to gain at the citizens’ expense, e.g., by not respecting citizen property rights or through outright theft from the national treasury. When the RE act corrupt toward the citizens (i.e., appropriate more than their share of the social surplus), there is a resultant social surplus loss, reflecting the potential destruction of political, economic, and cultural resources due to the RE’s corrupt behavior—an assumption consistent with recent corruption research findings. Individual citizen groups also face a social surplus loss if they challenge the RE.
The Political Corruption Game is diagrammed in Figure 2. The RE move first and have strategies to: (1) act corrupt toward both citizen groups (A and B), (2) act corrupt toward only one citizen group (either A or B), or (3) not act corrupt toward either citizen group. Citizen groups A and B then move simultaneously and may either (1) acquiesce, or (2) challenge the RE’s corrupt behavior. The game payoffs are detailed in Figure 2. Total social surplus is maximized when there is no RE corrupt behavior and neither citizen group challenges—where the RE receive 2 and each citizen group 8. 3 This assumes that the RE gain some minimal social surplus from being in power. However, the RE may value corrupt acts, leading to distributional consequences. The RE increase their payoff for each citizen group they act corrupt toward. As corruption destroys half of all social surplus involved, RE corruption toward both citizen groups costs each group 6 (3 to RE and 3 lost). When the RE act corrupt toward only one citizen group, the other group shares some of the benefits in exchange for their support of the RE. In cases where the RE act corrupt toward only one group, the RE gain 2 and the citizen group supporting the RE gains 1. All challenges to RE corrupt behavior cost the individual group challenging 1. The outcomes of the game are determined by the strategy employed by the three players. 4 The below analysis looks both at the solutions to Figure 2’s four individual subgames and the overall game.
| Figure 2: The Political Corruption Game. |
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The Figure 2 Political Corruption Game reveals two key insights. First, preventing RE corrupt behavior is primarily a coordination problem among citizen groups. If both citizen groups act together, they can prevent corruption. However, if they fail to act in concert, the RE are able to act corrupt toward citizens and still retain power. As is typical of coordination games, how one citizen group reacts to the RE’s corruption depends upon how they anticipate the other citizen group will react. If one group anticipates that the other group will always challenge RE corrupt acts, then it is better off always challenging. However, if one group anticipates the other will always acquiesce to the corruption, then it is better off always acquiescing. Second, since there are multiple solutions (equilibriums) in the overall game, we must look for focal points to understand why one solution may occur versus another. Focal points identify factors exogenous to the game model (information asymmetries, material realities, etc.) that help explain the particular game solutions. Thus, focal points help coordinate social expectations within the social context in which the strategic interaction occurs (Schelling 1960: 57, 59, 111-113; Knight 1995: 102). The focal point solution concept is discussed further as I analyze each subgame separately.
First Subgame—Systemic Corruption
The first subgame, where the RE act corrupt toward both citizen groups, is similar to the classic Prisoner’s Dilemma (PD) game (see Morrow 1994: 77-81). In the first subgame both subgroups are much better off if they coordinate their behavior and both challenge the RE. However, without a coordination mechanism—some type of binding agreement—the first subgame has a dominant strategy solution where both citizen groups are better off acquiescing to the RE’s systemic corruption. As the Figure 2 game reveals, RE’s that act corrupt against both groups of citizens still face the loss of power—if the citizens can solve their coordination problem.
The corruption literature points to two focal points as to why the citizen coordination problem is not overcome in the first subgame. First, it is likely that the RE includes the states’s security forces (military and police) who manifest the use of force, or the threat of the use of force, to maintain the subgame equilibrium where all citizens acquiesce to RE corrupt activities. Therefore, the robustness of this first subgame solution could depend on how willing the RE are to use force against their citizens. Second, citizens may see the behavior of the corrupt RE, especially the behavior of a corrupt but popular ruling sovereign, as a “god given right” that is not to be challenged. In some societies, this ideological influence leads to traditional expectations that citizens only have a right to the meager social surplus that Figure 2 allots for this subgame solution. The robustness of focal point solutions relying on ideological influence is directly related to the strength (legitimacy) of the respective ideology. What is more likely in those states that are systemically corrupt, as the first subgame depicts, is that a combination of these two focal points—RE force possession and ideological influence—are utilized to ensure citizens do not construct a coordination mechanism.
Examples of systemic corruption depicted in the first subgame are generally found in totalitarian, sultanistic, or strong authoritarian states where the RE strive for maximum social surplus to enhance their personal power. Typically such regimes treat the state’s treasury as their personal bank account or feel state resources are for the RE’s personal benefit. Many contemporary systemically corrupt states (Cuba, Iraq, Nigeria, North Korea, etc.) exhibit these tendencies.
The Second/Third Subgames—Pervasive Corruption
The second and third subgames, where the RE act corrupt toward only one citizen group, exhibit symmetrical solutions. In each of these subgames, as a result of one group sharing in the RE’s corruption against the other group, the citizen group not transgressed against has a dominant strategy to always acquiesce. Knowing that the group not acted corrupt toward will always acquiesce (and will even support the RE in its corrupt behavior), the citizen group transgressed against will also always acquiesce to the RE’s corrupt activity. Again, as with the first subgame, the second and third subgame solutions can only be overcome by citizen coordination. However, it is the payoff structure of the game itself, not exogenous focal points, that substantially explains the robustness of these two subgame solutions. Since one citizen group is receiving an inordinate share of the social surplus in the second and third subgames, there is no incentive for the group not acted corrupt toward to coordinate with the other citizen group. Constructing citizen coordination when the RE act corrupt against only one group is therefore extremely difficult.
The focal point solution in the second and third subgames is typical of regimes where the ruling elite (including all major parties) have allied themselves with one citizen group (normally the business elite) and conduct a range of corrupt activities to the detriment of the other citizen group (normally the masses). This type of pervasive corrupt behavior can usually be found in newly democratizing states where, although the state has begun to adopt participatory democratic norms, political decision-making remains more authoritarian than democratic. For example; such pervasive corruption is typical in the newly democratizing states of Latin American and the former Soviet bloc. On a lesser scale, meaning at lower levels of corrupt activity, this situation may also be typical of older democracies (i.e., U.S., France, Japan, Italy, etc.) where the RE are historically allied with big-business to the detriment of other citizen groups.
The Fourth Subgame—Sporadic Corruption
The fourth subgame solution, where the RE do not act corrupt against either citizen group, maximizes the overall social surplus, but finds the RE with only a meager portion of the surplus (2) as payment for their wielding the responsibility of state power. In this subgame it never pays a citizen group to challenge the RE, provided there is no corrupt RE behavior to challenge. This subgame solution requires that citizens solve their coordination problems. Finding the focal point that highlights why citizens are cooperating is often difficult.
Turning to the decision process of the RE in the context of the overall game, the fourth subgame solution is not a solution (equilibrium) for the overall game. Why? The RE’s payoff for the fourth subgame (2) is the lowest for any of the four. Going into a Political Corruption Game as structured in Figure 2, the RE know that without citizen coordination mechanisms in place, all citizens will likely acquiesce on all plays. Therefore, according to the above analysis, if the RE know they possess adequate force or strong ideological influence over their citizens, they are most likely to chose to act corrupt against both citizen groups as in the first subgame, and thereby retain power and maximize RE receipt of the social surplus (8). However, if there is even slight uncertainty in the RE about its hegemony over all citizens—in other words, the RE do not know if they can prevent citizen coordination—then the RE are better off to act corrupt toward only one citizen group (as in the second and third subgames). The lower payoff of this strategy (4 versus 8) is offset by the robustness of the RE strategy to act corrupt toward only one group. Therefore, without some other focal point mechanism, the RE are unlikely to select a strategy to act corrupt toward neither citizen group as depicted in the fourth subgame.
Contrary to this prediction of the Political Corruption Game, there are states where the RE do not act corrupt toward any citizen groups. This is typical in states of Western and Northern Europe (Denmark, Finland, Sweden, Iceland, etc.) where little political corruption occurs. This situation is characteristic of states where corruption is at best the sporadic behavior of individual officials—assuming that no state is completely free of all corruption. In these states, as depicted by the fourth subgame, the focal point solution appears to surround the fact that there is general agreement among citizens concerning their willingness to challenge the RE. In other words, citizen groups have worked out their coordination problems, allowing them to maximize overall social surplus. This focal point solution is considered self-enforcing—meaning the RE know the citizens have solved their coordination problems and will challenge any RE corrupt activity—and therefore, the RE are unlikely to engage in any corrupt acts. The robustness of this focal point solution is directly related to the continued willingness of citizen groups to challenge RE corrupt acts.
The search for explanations of this fourth subgame focal point solution, where the RE do not act corrupt against any citizen group, is a major focus of the scholarly corruption literature. Explanations for this fourth subgame solution generally surround the strengthening of democracy and implementation of free trade and open economies—the conditions found in states of Western and Northern Europe where the fourth subgame solution most occurs. The Figure 2 Political Corruption Game generally supports these scholarly explanations, but the causal mechanisms that underlie the fourth subgame solution remain missing. To better develop a general theoretical framework for political corruption, one that includes causal mechanisms for the causes of political corruption, my analysis now turns to the Figure 1 Political Corruption Institution which “bounds” the Figure 2 Political Corruption Game decision-making process.
The Political Corruption Institution
The Political Corruption Institution encompasses domestic and international political, economic, and cultural rules. According to the institutional-choice model and constructivist tenets employed in this paper, it is necessary to identify specific rules, or rule-sets, that comprise the Political Corruption Institution and then demonstrate the linkages between the various rules and the Political Corruption Game agents. The goal is to identify the mechanisms that most influence agent decision-making and thus support the multiple focal point solutions in the Figure 2 Political Corruption Game. This analysis is carried out through the employment of Onuf’s constructivist theory of rules. 5
The Constructivist Theory of Rules
To constructivists, social rules link people (agents) and society. Rules tell people what they should do, what they must do, and what they have a right to do. When agents fail to follow rules, other supporting rules bring consequences. In light of their material circumstances, agents follow or disregard rules in order to achieve their goals. Institutions are simply patterns of stable rules. Structure is a stable pattern of rules, institutions, and their unintended consequences.
Complex institutions, like political corruption, consist of a constantly changing mix of three different types of rules. 6 Each type of rule performs distinct functions. First, general instruction rules delineate the principles, beliefs, or norms that inform agents of the purposes of the particular institution. Instruction rules tell agents what they should do. Second, directive rules then repeat and elaborate what the instruction rule principles have to say. Directive rules support instruction rules by telling agents what they must do. In order for directive rules to be effective, they must be supported by other rules (i.e., sanctions) that stipulate the consequences if an agent does not follow a particular directive rule. Third, commitment rules then create roles for agents—the unintended consequences of supporting the instruction rule principles, beliefs, or norms. Commitment rules tell agents what they have a right or duty to do. Commitment rules give some agents well defined powers, while assuring other agents that those powers will not be abused. How well the three types of rules perform their assigned function depends upon their formality and strength. A rule’s formality concerns how well the rule is supported by other rules. A rule’s strength is determined by how frequently agents follow the rule.
The mix of the three different types of rules results in three distinct forms of rule—or methods that govern society. While all three types of rules generally exist in every society, those societies with a stronger proportion of instruction rules are ruled by hegemony. The concept of hegemony used here follows the analysis of Gramsci who argued that a ruling class had to persuade other classes in society to accept its moral, political, and cultural values—thus making the ideas of culture and ideology central to the ruling system (see Gramsci 1971). As Onuf describes:
Hegemony refers to the promulgation and manipulation of principles and instructions by which superordinate powers [ruling elite] monopolize meaning which is then passively absorbed by the subordinate actors [citizen groups]. These activities constitute a stable arrangement of rule because the ruled are rendered incapable of comprehending their subordinate role. They cannot formulate alternative programs of action [i.e., coordinate challenges to RE corruption] because they are inculcated with the self-serving ideology of the rulers who monopolize the production and dissemination of statements through which meaning [rules] is constituted (Onuf 1989: 209-210).
Hegemony typically corresponds to the form of rule in today’s totalitarian, sultanistic, and strong authoritarian states.
Societies with a stronger proportion of directive rules are ruled by hierarchy. Onuf offers:
Hierarchy is the paradigm of rule most closely associated with Weber because, as an arrangement of directive rules, it is instantly recognizable as bureaucracy. The relations of bureaux, or offices, form the typical pattern of super- and subordination, but always in ranks, such that each office is both subordinate to the one(s) above it and superordinate to the ones below....The visualization of this arrangement of ranks linked by directives is the familiar pyramid of organization charts (Onuf 1989: 211, emphasis in original).
Hierarchy, as a form of rule, is not only characteristic of some states with totalitarian, sultanistic, and strong authoritarian regimes, but also in states with weak authoritarian and weak (developing) democratic regimes. While many developing states have embraced democratic participatory principles and norms, they may still operate under authoritarian political decision-making systems typical of hierarchical ruled states. Overall, regimes with varying strengths of hierarchy are probably the most common form of rule among world states.
Finally, societies with a stronger proportion of commitment rules are ruled by heteronomy. The use of this term is traced to Kant who referred to “heteronomy” as a condition of not having autonomy (see Onuf 1989: 212). Heteronomy defines a condition where rational decision-makers are never fully autonomous, but whose decisions toward particular ends are bounded both by societal rules and their material means. Formal commitment rules stipulate promises by some agents, promises that then become the rights (i.e., promises kept) of other agents. Commitment rules massively restrict the autonomy of agent behavior. As commitment rules (promises) become stronger in a society, a corresponding increased level of social “trust” also ensues. Commitment rules are often the unintended consequences of the strengthening (widespread societal following) of directive rules. Historically, states with the strongest proportion of commitment rules—those exhibiting the strongest heteronomy—are today’s established liberal-democratic states.
Relating the above brief discussion of the constructivist theory of rules to the results of the Figure 2 Political Corruption Game allows initial hypothesizing about a state’s level of political corruption and its corresponding form of rule. Table 1 summarizes the constructivist theory of rules presented above and the hypothesized relation between political corruption levels and forms of rule.
Table 1: Constructivist Theory of Rules and Hypothesized Political Corruption Levels.
| Type of Social Rules | Instruction Rules | Directive Rules | Commitment Rules |
|---|---|---|---|
| Rule’s Function— Tells agents what they: | should do (principles, beliefs, and norms). | must do. | have a right or duty to do. |
| Associated Form of Rule | Hegemony | Hierarchy | Heteronomy |
| Typical Regime Types | Totalitarian, Sultanistic, Strong Authoritarian | Weak Authoritarian, Weak Democratic | Established Liberal-Democratic |
| Hypothesized Corruption Levels | Most Corruption | Moderate Corruption (Pervasive) | Least Corruption (Noor Sporadic) |
| Corresponding Figure 2 Subgame | First | Second/Third | Fourth |
The Appendix A statistical results support the above hypothesis in that a state’s level of political corruption corresponds closely to its form of rule (strength of democracy). However, the analysis still has not provided the causal mechanisms that explain the domestic and international causes of political corruption. For these mechanisms we must look deeper into the specific rules that constitute the Political Corruption Institution.
Domestic Causes of Political Corruption
The search to find specific rules constituting the Political Corruption Institution is facilitated by the work of Johnston (1994). Johnston isolated several of the specific domestic rules within state political and economic institutions that cause political corruption. Johnston’s work builds on that of Rogow and Lasswell (1963) as he focuses on the effects of a state’s “system of public order” defined as “the relationships between power and private interests—standards enjoying the support, or at least the acquiescence, of politically significant groups in both state and society” (Johnston 1994: 13). Constructivists would define “systems of public order” as “rules complexes—mixes of instruction, directive, and commitment rules.” Specifically, Johnston identifies four political- and economic-based rule-sets that encompass a state’s anti-corruption “system of public order.” 7 These four general rule-sets include:
The analysis now turns to assessing each of Johnston’s four domestic anti-corruption rule-sets within a constructivist framework.
The Political Corruption Institution instruction rules (principles, beliefs, norms) are contained in Johnston’s rule-sets addressing the boundaries between public and private spheres and the method of state resource allocations. In his seminal work Bribes, Noonan (1984) traces the evolution of the concepts of bribery and corruption from 3000 BC. Noonan’s historical treatise reveals how as the concept of official bribery developed over time it became correlated ever closer with the idea that public officials (kings, judges, legislators, elected officials, etc.) must put aside their private interests in dealing with public matters. In his conclusion Noonan offers:
The notion of fidelity in office, as old as Cicero [106-43 BC], is inextricably bound to the concept of public interest distinct from private advantage. It is beyond debate that officials of the government are relied upon to act for the public interest distinct from private advantage (Noonan 1984: 704).
Shumer (1979), when analyzing Machiavelli’s (1469-1527 AD) conceptualization of corruption—a topic central to Machiavelli’s discourse on Republican governments (Onuf 1998b: 44-47)— argues:
One dimension of [Machiavelli’s] political corruption is the privatization both of the average citizen and those in office. In the corrupt state, men locate their values wholly within the private sphere and they use the public sphere to promote private interests (Shumer 1979: 9).
The writings of Rousseau (1712-1778 AD) also encompass the idea that government officials, selected by the people to manage society’s business, must carry out their duties in a manner transcending personal interests (Rousseau 1978: 59-64). Thus, as western ideas of good government evolved, it is clear that a primary anti-corruption principle (instruction rule) emerged defining why public matters must be separated from private interests. To not separate private from public spheres presents government officials with almost unlimited opportunities for corruption. Exactly how a society defines corruption in instruction rules (i.e., its view of public versus private spheres; Heidenheimer’s White to Gray to Blacktypologies) varies due to numerous factors both within the state and over time.
The second instruction rule surrounding political corruption developed later and surrounds methods of state resource allocation (authoritative, patrimonial, or market). Beginning with the writings of Smith (1723-1790 AD), Ricardo (1772-1823 AD), and other liberal nineteenth and twentieth century economists, theorists argued that to achieve economic efficiency, state political interests must be prohibited from subverting market forces (see Crane and Amawi 1991: 55-82). As the result of reducing the opportunities for governmental official rent-seeking or outright theft of public resources, an unintended consequence of an open and free market system is a reduction of political corruption levels. Governmental intervention in the market in the form of authoritarian or patrimonial methods of state resource allocation increases the opportunities for political corruption. Such authoritarian and patrimonial methods range from situations where the RE use the national treasury and state resources as their own personal property to those where ruling parties use wide-scale patronage networks to direct the benefits from state resources into the personal and political party accounts of the rulers. Theobald’s (1990) analysis of corruption in underdeveloped societies found two key arguments supporting the instruction rule logic for open and free markets:
According to constructivist tenets, the instruction rules addressing the boundaries between public and private spheres and the method of state resource allocations must be supported by directive rules that elaborate what the instruction rule principles have to say. States with strong anti-corruption directive rules should display less corruption than states without. Identifying the existence, formality, and strength of such directive rules can often be problematic. First, in totalitarian, sultanistic, or strong authoritarian states, anti-corruption directive rules may not even exist, just as the instruction rules defining boundaries between public and private spheres and efficient methods of state resource allocation may not exist. Second, states with authoritarian regimes, or even weak democratic regimes, may have legal directive rules that support corrupt activity, such as those legalizing widespread patronage. Knight highlights that one RE advantage (i.e., a social surplus) is their right to promulgate their own rules (Knight 1992: 64)—thus further strengthening their ability to act corrupt toward citizens. Finally, developing states may have so many directive rules, i.e., a bloated bureaucracy, that it is almost impossible to manage or ensure societal compliance. Theobald found the condition of overdeveloped public sectors as typical in his study of corruption in underdeveloped societies (Theobold 1990: 86).
A further constructivist tenet is that directive rules, to be effective, must be supported by sanctions—agents must know the consequences if they choose not to follow directive rules. Sanctions for not following directive rules are the function for Johnston’s last two domestic rule-sets concerning the extent of elite accountability and the extent and control of mass political participation. Both of these rule-sets focus on removing the RE from office if they act corrupt—in other words, these are the principal mechanisms that explain citizen (in)abilities to solve their coordination problems.
The extent of elite accountability includes a variety of factors. First, a state’s RE, both governmental and non-governmental (business), can police themselves through a process of competitive politics. Johnston offers that where the RE are capable of checking each other, more interest will enter into the societal debate over acceptable political and administrative (i.e., non-corrupt) conduct (Johnston 1993: 15). Second, governmental systems include important “tools”—administrative procedures (open contracting, audits, etc.), law enforcement, prosecutors, judicial systems, prison systems—to ensure the RE follow society’s directive rules or else are held accountable for their non-compliance. Unfortunately, in many authoritarian and developing states these governmental “tools” are either non-existent or easily circumvented by the RE. Third, a state’s media plays a key role in ensuring RE accountability. An independent investigative media is often the primary conduit for information regarding elite misconduct. Fourth, and maybe the most important factor in ensuring elite accountability, is the extent and control of mass political participation—so important a factor that it is addressed as its own rule-set.
The extent and control of mass political participation goes to the heart of the citizen problem of constructing coordination mechanisms in the Figure 2 Political Corruption Game. This rule-sets concerns two key factors: (1) the extent and control of citizen voting rights, and (2) the extent of civil society participation in political decision-making after elections. In totalitarian, sultanistic, and strong authoritarian regimes, those dominated by instruction rules (ruled through hegemony), there is often no, or only limited, citizen voting rights. In weak authoritarian or developing democratic regimes, those dominated by directive rules (ruled through hierarchy), while elections may be more open and freer, they may still be controlled for the benefit of a particular ruling elite—i.e., the election directive rules may favor the regime in power. The lack of free and fair elections helps explain why citizen groups are unable to solve their Political Corruption Game coordination problems and force a corrupt RE from power in the first, second, and third subgames of Figure 2. Elections alone, however, are not the most significant factor in policing elite. Even more important is the participation of civil society in political decision-making after the election. Without widespread civil society participation there is increased opportunities for the RE to engage in corrupt activities.
Johnston (1998) argues that social empowerment is an essential element to preventing political corruption. Social empowerment includes the strengthening of “groups and interests which make up civil society—that is organizations, enterprises, and informal social networks active in the realm between individuals and government” (Johnston 1998: 9). Where civil society is weak, citizens become vulnerable to exploitation and are unable to construct the coordination mechanisms necessary to police the RE in the Political Corruption Game. Where civil society is strong, citizens are able to build coordination mechanisms that can lead to the focal point solution of the fourth subgame in the Figure 2 Political Corruption Game—where the RE does not act corrupt toward any citizen group. In constructivist terms, a strong civil society should lead to the development of anti-corruption commitment rules (rule through heteronomy). A self-enforcing focal point solution to the fourth subgame should occur where the RE have made it their duty (promised) not to act corrupt and citizen groups take this promise as their corresponding right. Additionally, the RE know if they break this promise and act corrupt, both citizen groups will automatically challenge the RE actions—the self-enforcing aspect of the focal point solution. Therefore, the strength of mass political participation, specifically the strength of a state’s civil society, is the key mechanism in determining the focal point solution in the Figure 2 Political Corruption Game’s fourth subgame—where the RE do not act corrupt toward any citizen group.
International Causes of Political Corruption
Before leaving the discussion of mechanisms that explain the causes of political corruption, I must also address the role played by the international community. The first international factor is the widespread practice of foreign businesses offering bribes to RE in order to receive contracts or commercial favor in the RE’s host-state (see Lambsdorff 1998). Within the Figure 1 institutional-choice model, the practice of foreign business bribery becomes a situational benefit as part of the external world structure affecting the RE’s internal world Political Corruption Game decision-making process. The huge amount of bribes available on the international market makes the practice of foreign business bribery an extremely important factor in analyzing individual political corruption cases. Currently, only the U.S. has a law, the U.S. Foreign Corrupt Practices Act (FCPA), that makes it illegal for U.S. businesses to pay bribes to foreign governmental officials. One goal of the Organization of Economic Cooperation and Development’s anti-corruption efforts is to extend the U.S. FCPA concept to other industrialized states.
The second international factor surrounds the international community’s role in holding corrupt RE accountable (i.e., a part of the elite accountability rule-set). This second factor entails two key issues: (1) the role of state sovereignty, and (2) the granting of asylum to fleeing RE.
After World War II, and in conjunction with the acceptance of the principles of decolonization in the United Nations (U.N.) Charter, the community of sovereign world nations grew rapidly from the original 51 to today’s 185 U.N. members. Jackson (1990) offers that to facilitate this rapid growth in the community of states, the general principles of national sovereignty changed radically. Before the war, Jackson argues rules of “positive” sovereignty existed—whereby a state had to meet certain distinct criteria before being accepted into the community of sovereign states. Positive sovereignty assumed states possessed the wherewithal to provide political goods for their citizens (i.e., defense, human rights, health, education, and other public goods). Those accepted into the community of states with positive sovereignty enjoyed the right of non-intervention along with other international immunities. After the war, and with the formation of the U.N. and the collapse of colonialism, a new set of sovereign principles came into effect—principles dispensed indiscriminately to all newly emerging states. Jackson coins these new principles as “negative” sovereignty, conditions where the norms of sovereignty and non-intervention were simply bestowed on a new state by the international system. Negative sovereignty did not require any particular substantive condition in the new state, only the observance and forbearance of other members of the international community (Jackson 1990: 1, 11). Secure in their standing as full-fledged United Nation members with full non-intervention rights, new state RE were free to concentrate on domestic governance and national development (and more often than not corrupt practices).
As the U.S. and Soviets competed for Cold War spheres of world influence, an international norm (instruction rule) arose whereby the superpowers took an active role in ensuring the negative sovereignty of their client states. In an international atmosphere supporting non-intervention in other state’s internal affairs, many states found their sovereignty further safeguarded by the political and military power of their protective superpower—while the superpowers conveniently ignored the totalitarian or authoritarian domestic practices of those loyal to their respective sphere. As a result, corrupt dictators such as Noriega, Duvalier, Somoza, and Ceaucsescu, among many others, were doubly protected (by sovereignty and superpower force) as their corrupt regimes depleted national treasuries and diverted state resources for their own private interest. In the 1990s, this superpower protection is no longer a factor; however, the Cold War legacy of systemic corruption remains in many of the states formerly part of the U.S. and Soviet spheres.
A second international factor surrounding RE accountability is the practice of granting asylum to corrupt ousted RE. Corrupt state RE know if they are caught acting corrupt, they can receive all but automatic political asylum in another state. For example; in 1986, Haiti’s ousted President Jean-Claude Duvalier was given asylum in France after plundering the Haitian treasury. More recently, in early-1997, the cabinet of Ecuador’s former President Abdala Bucaram fled to asylum in Miami and Panama after looting millions from the Ecuadorian treasury during only six months in power. There are numerous examples of corrupt developing state RE being granted political asylum after robbing their states of hundreds of millions of dollars. This is best demonstrated by the estimated one to three billion dollars that ex-President Mobutu of Zaire stashed in Swiss accounts—accumulated primarily by channeling funds from Zaire’s copper, cobalt, gold, and diamond mines into his personal accounts (Drozdiak 1997: A21). Thus, while most of the scholarly corruption literature focus on the causes of political corruption from domestic sources, the above three international factors (rules)—foreign business bribery, negative sovereignty, and asylum granting—cannot be ignored as key contributors to the political corruption phenomenon.
The Role of Culture
While the above analysis identifies the domestic and international political and economic rule-sets explaining the sources of political corruption, it does not address the role of culture in causing political corruption. Huntington highlights culture as a cause of political corruption when he states that corruption is higher in states where “the interests of the individual, the family, the clique, or the clan predominate” (Huntington 1968: 71). Similarly, other corruption scholars look at culture in relation to kinship, traditional societies, senses of community, etc.; and offer that it is a significant variable in explaining corruption (see Scott 1972: 11-12; Johnston 1983; and Klitgaard 1988: 62-64). With cultural stream as a strong and significant variable in aggregate regression analyses of political corruption (see Table A2-Appendix A), it is not a factor that can be ignored in corruption analysis. Despite the interest in culture as a cause of corruption, a causal mechanism has not arisen to satisfactorily include culture in political corruption models.
Johnson (1997a, 1997b) and Grief (1994) provide insights that allow the inclusion of culture in this paper’s institutional-choice model. Johnson views culture not as a variable with attributes that can fully explain an institutional structure, but rather as a symbolic force that helps determine rational-choice game focal point solutions (Johnson 1997b: 23-26). He argues that culture can determine the realm of social (political and economic) possibilities (solutions) in a given game (Johnson 1997b: 17). He further offers that social actors (i.e., the RE) can exploit the symbolic force of culture to influence their desired game outcomes. In constructivist terms, different cultures can influence the mix of rules—instruction, directive, commitment—in the Political Corruption Institution.
Grief (1994) provides an analysis of culture that can be synthesized with both Johnson’s view of how culture works as a causal mechanism and with the corruption scholarship of Huntington, Scott, Johnston, and Klitgaard. In studying trade among organized societies of the medieval Mediterranean littoral, Grief found two distinct types of societal organization.
Grief’s observations of the differences among collectivist and individualist cultures correspond with other analyses of political culture going back to Weber (1922, 1930). In general, collectivist societies have more traditionalistic political cultures that are ambivalent about open markets, display paternalistic attitudes, prefer hierarchically organized societies, and place real political power in the hands of a small and self-perpetuating elite who often inherit the right to govern through family ties or social position (Elazar 1966: 92-93). Collectivist societies are based on informal rules and depend on informal social sanctions (clan social sanction, etc.) when rules are broken. Collectivist societies prevail in Eastern Europe, the Mediterranean littoral, the Middle East, Latin America, Asia, and Africa (Elazar 1970: 474). Individualist societies have either individualistic or moralistic political cultures that support free and open markets, display self-reliant attitudes, prefer minimal formal government (only enough government to ensure the public good), and place political power in the hands of elected officials that are expected to provide high quality government services (Elazar 1966: 86-92). Individualistic societies prefer legal rules and depend on legal societal structures (courts, etc.) to intervene when rules are broken. Individualistic societies predominate in Western and Northern Europe, Australia, the United States, Canada, and Israel (Elazar 1970: 474).
Based upon constructivist tenets, it can be concluded that collectivist cultures tend to have a stronger proportion of instruction and directive rules. Utilizing Johnson’s (1997b) idea that culture determines the realm of social (political and economic) possibilities, it appears that as the result of a hidden-hand-like mechanism, collectivist societies are steered to hegemonical or hierarchical forms of rule as their natural societal limits. Collectivist societies, because of their propensity to not cooperate with groups outside of their own family, religious, or ethnic group, find it extremely difficult, though not impossible, to foster commitment rules. This inability to foster commitment rules, and thus solve the citizen coordination problems in the Political Corruption Game, points to a mechanism explaining why it is so difficult for developing states to lower their political corruption levels. Individualistic cultures, on the other hand, tend to have a stronger proportion of commitment rules. For individualistic cultures, the hidden-hand inspires heteronomous societal rule as their natural objective. Individualistic cultures, through the strength of their commitment rules, are able to construct citizen cooperation mechanisms that are self-enforcing on the RE, thus lowering political corruption levels. Therefore, without giving culture too much credit as a causal factor, we can see how it does affect political corruption levels through its influence on the possible forms of state rule a society sees as its natural limits.
Summarizing a General Theory of Political Corruption
The above analysis highlights that the general causal mechanisms explaining political corruption are contained within the rule-sets—public versus private spheres, methods of state resource allocation, elite accountability, mass political participation—surrounding the corruption phenomenon. Specific rules within these rule-sets (type of elite competition, role of the media, etc.) provide further explanations for the range of corruption that a state may exhibit. A host of theoretical propositions can be gleaned from the above analysis. The central propositions, however, concern the levels of political corruption that can be expected in certain states. In constructivist terms, these theoretical propositions include:
Proposition 1: Those states with a preponderance of instruction rules** relating to political corruption, and lacking formal or strong directive and commitment rules** (i.e., those ruled by hegemony), will exhibit the highest levels of political corruption (expect systemic corruption).
Proposition 2: Those states with formal and strong directive rules** relating to political corruption, and lacking formal or strong commitment rules** (i.e., those ruled by hierarchy), will exhibit moderate political corruption levels (expect pervasive corruption).
Proposition 3: Those states with formal and strong commitment rules** relating to political corruption (i.e., those ruled by heteronomy), will exhibit the least political corruption (expect no or sporadic corruption).
** Rule-sets surrounding public and private spheres, methods of state resource allocation, elite accountability, and mass political participation.
Evaluating International Anti-Corruption Efforts
An empirical test of the above general theory of political corruption is beyond the scope of this paper; however, as a substitute my analysis now turns to demonstrating the usefulness of the above theory through an evaluation of the ongoing international efforts to curb corruption. This analysis looks at the international anti-corruption initiatives in general and evaluates their likely successes and failures. Tamesis summarizes the many international initiatives into two general categories of reform: (1) governmental actions, and (2) civil society strategies (Tamesis 1998: 129). I will use her categories to help frame my evaluations.
A major accomplishment of the international anti-corruption initiatives is to set forth, for the first time, the international principles and norms (instruction rules) surrounding the corruption phenomenon. Prior to the March 1996 Organization of American States’ Inter-American Convention Against Corruption, there were no internationally agreed upon definitions of corruption and no outlined procedures to engage the corruption phenomenon. Subsequent anti-corruption instruments by a variety of other international organizations further highlight how corruption undermines political and economic development, plus offer a host of procedures to deal with the corruption scourge. These include domestic requirements for RE to disclose personal assets and avoid conflicts of interest, efforts to strengthen domestic law enforcement and adjudication, and procedures to impede money-laundering and other banking practices that facilitate corrupt activities. Internationally, the 1997 Organization of Economic Cooperation and Development’s (OECD) convention on Combating Bribery in International Business Transactions targets the practice of foreign business bribery. Other instruments address international law enforcement cooperation, including extradition agreements to prevent fleeing corrupt RE from seeking asylum in other states. Thus, a major success of the international community’s reaction to the growing concern over political corruption is the impressive promulgation of international anti-corruption principles and norms (instruction rules).
As this paper’s analysis highlights, principles and norms (instruction rules) must be supported by directive rules and sanction rules—and here the international community has been far less successful. 8 Tamesis offers that international initiatives to improve governmental actions include “measures such as legal reforms, public administration and regulatory reforms, financial management and control systems, and intergovernmental accountability” (Tamesis 1998: 129-130). These governmental actions are at the heart of the directive rules needed to support the international anti-corruption principles and norms. Unfortunately, the success of these governmental actions are at best limited. Where states have accepted the external intervention of Transparency International (TI), a Berlin-based non-governmental organization formed in 1993 to fight corruption (see Endnote 1), or the anti-corruption assistance of organizations such as the U.S. Agency for International Development (USAID), results have been positive. However, without outside assistance, few developing states show progress in their own domestic efforts to thwart corruption.
A lack of RE domestic political will explains why there has not been greater success in controlling political corruption (see Kpundeh 1998). One indicator of this lack of domestic political will toward corruption reform surrounds the difficulty international organizations have in gaining state ratification of their international instruments. While there is much fanfare and publicity surrounding the initial signing of international anti-corruption instruments, the excitement seldom follows through in state ratification processes in signatory legislatures and executive branches. For example; on March 29, 1996, 21 of the 35 OAS members signed the Inter-American Convention Against Corruption. Almost three years later, only eight OAS members had actually ratified the convention. The OECD experienced similar problems in gaining ratification of its convention on Combating Bribery in International Business Transactions. Beyond the ratification processes, state RE are also reluctant to act on the domestic political and economic reforms needed to implement the international instruments (codes of conduct, legal reforms, accounting measures, extradition treaties, etc.). This lack of political will to carry through with domestic anti-corruption reforms is explainable from the second and third subgames in the Figure 2 Political Corruption Game—RE in states with pervasive corruption have no real incentives to initiate reforms.
Finally, this paper’s analysis reveals that without a strong proportion of anti-corruption commitment rules, major corruption reforms are unlikely. This analysis points to the strengthening of civil society as one method to develop commitment rules. Tamesis highlights that internationally initiated civil society programs “include increased citizen participation, civic monitoring, and political competition” (Tamesis 1998: 130). Johnston, however, points out that civil society programs that increase social empowerment have “yet to be tried in any conscious, integrated way” (Johnston 1998: 101). Therefore, it can be concluded that the ongoing international initiates have not gone far enough in addressing the causes of political corruption.
Based upon this paper’s general theory of political corruption, the ongoing international anti-corruption initiatives are evaluated to have little chance of real success in their current form. While the international community is commended for their promulgation of anti-corruption principles and norms (instruction rules), these actions are far from enough. International declarations of anti-corruption principles and norms, while vitally necessary, are not sufficient to assist states mired in systemic and pervasive political corruption. The international anti-corruption instruction rules are not being sufficiently supported with directive rules and their supporting sanction rules. Without effective directive rules, a state cannot build commitment rules (strengthen civil society)—and without commitment rules, my analysis reveals there is little real chance of arresting the corruption scourge. The greatest need, if not greatest challenge, for international anti-corruption programs is to find ways to institute and strengthen developing state directive rules and their supporting sanctions (i.e., governmental reform actions).
Beyond this pessimistic evaluation of international anti-corruption initiatives, there are some rays of hope. Those developing states requesting outside (TI, USAID, etc.) assistance are showing the political will to combat corruption. As this paper’s analysis highlights, real reform requires the time necessary to build commitment rules leading to societal trust and development of self-enforcing anti-corruption mechanisms. Working against most developing states’ long-term anti-corruption reforms are their collectivist political cultures that impede citizens from constructing coordination mechanisms that support corruption reform. There are new indications, even in states with collectivist cultures, that citizens can construct the coordination mechanisms needed to overcome RE corruption. For example; in December 1998, Venezuelan citizens turned their backs on their two traditional political parties and swept a new third party, running on a strong anti-corruption campaign, into office. Now, the Venezuelan challenge is to implement the directive rules associated with the new ruling party’s instruction-ruled campaign. Two final bright spots in anti-corruption circles are recent actions by the World Bank and International Monetary Fund (IMF) that show significant promise in changing RE corruption incentives and fostering domestic directive rules. World Bank policy now permits zero tolerance for corruption in its programs—giving RE’s desiring international development loans new incentives to avoid corruption (World Bank 1997). The IMF, through a new Good Governance program, also solicits “...transparency in government accounts, the effectiveness of public resource management, and the stability and transparency of the economic and regulatory environment for private sector activity” (Camdessus 1997). States expecting future IMF support must comply with these new norms of good governance. One thing is clear in the international effort against corruption—the campaign will be long and arduous.
Conclusion
This paper’s institutional-choice model presents a synthesized approach to answering my first research question concerning the domestic and international causes of political corruption. Through employment of the institutional-choice model, I was able to develop a general theory of political corruption that highlights the causal mechanisms (social rules) explaining this phenomenon. Every state exhibits differing mixes of the social rules underlying these causal mechanisms—and the mixes are constantly changing. To determine the causes of political corruption in a particular state, the analyst must identify the existence, formality, and strength of specific political and economic rule-sets surrounding public and private spheres, methods of state resource allocation, elite accountability, and mass political participation. Additionally, the analyst must identify a state’s general cultural rules—whether the society is collectivist or individualist—in order to ascertain the likely limits of that state’s form of rule (hegemony, hierarchy, or heteronomy) and thus determine just how non-corrupt a state may become.
The institutional-choice analysis in this paper also provides an answer to my second research question regarding the difficulty in uprooting endemic political corruption in developing states. The Figure 2 Political Corruption Game analysis revealed the robustness of focal point solutions when states are systemically (first subgame) or pervasively (second/third subgames) corrupt. In scenarios where the RE act corrupt toward only one citizen group (second/third subgames), the resultant focal point solution presented no incentives for the RE, or citizen group supporting the RE, to move toward any other solution (equilibrium). Additionally, the Political Corruption Institution analysis highlighted the difficulty for citizen groups in constructing coordination mechanisms—especially when those citizen groups are members of a collectivist society. These two factors—lack of incentives toward corruption reform and inability to resolve coordination problems—make it difficult to uproot the systemic and pervasive corruption in developing states.
Since this paper only set the foundation for a general theory of political corruption, there remains a wealth of theoretical and empirical work for future research. A first challenge beyond this paper is to further disaggregate the rule-sets surrounding public and private spheres, methods of state resource allocation, elite accountability, and mass political participation to identify the most important individual rules for explaining political corruption and then analyze the interaction among these rules, agents, and structure. Once the individual rules are identified, the researcher is challenged with turning the rules into operationalized concepts that can be adequately measured. Empirical explanations for political corruption depend upon this operationalization and measurement process. Researchers should also revisit the Political Corruption Game and experiment with differing numbers of players, assumptions, and payoffs to determine their affects on game solutions. One area for particular attention is to develop a series of comparative statics to determine the effects of changing variables in the Political Corruption Game model.
While this paper only focused on political corruption, a similar analysis is needed to develop a general theory of bureaucratic corruption. The institutional-choice model in this paper provides an excellent framework for devising such a theory. First, a Bureaucratic Corruption Game should be developed—one drawing extensively from the insights in the several corruption principle-agent-client analyses (Klitgaard 1988, Khan 1997, Rose-Ackerman 1978). A Bureaucratic Corruption Institution analysis would then probably investigate many of the same rule-sets addressed in this paper. The results of this effort should find many similarities among the causes of political and bureaucratic corruption—especially as to the robustness of the bureaucratic corruption problem. No doubt bureaucratic corruption, just as this paper highlights for political corruption, requires the building of self-enforcing mechanisms to ensure public officials separate their public duties from their private interests.
Table A1: Correlation Matrix (Pearson Correlations)*
| Corruption Rating (1) | Political Rights (2) | Civil Liberties (3) | Economic Freedom (4) | GDP Per Capita (5) | |
|---|---|---|---|---|---|
| Corruption Rating | 1.000 | ||||
| Political Rights | -.587 | 1.000 | |||
| Civil Liberties | -.692 | .890 | 1.000 | ||
| Economic Freedom | -.725 | .554 | .690 | 1.000 | |
| GDP Per Capita | .835 | -.619 | -.681 | -.686 | 1.000 |
Table A2: Multivariate Regression Analysis of State Corruption.
| Independent Variables | Standardized Beta | Unstandardized B | Std. Error | Significance |
|---|---|---|---|---|
| Democracy (1) | -.125 | -.179 | .097 | .069 |
| Economic Freedom (2) | -.154 | -.598 | .279 | .035 |
| Cultural Stream (3) | .457 | 2.487 | .434 | .000 |
| GDP Per Capita (4) | .288 | .00008 | .288 | .002 |
| N = 84 | R2=.82 | F = 90.71 | Model Significance =.000 |
Dependent Variable: Transparency International Corruption Perception Index (1998).
Scale: 0 (most corruption) to 10 (no corruption).
Notes: 1. Average of a state’s ratings for political rights and civil liberties form Freedom House (1996). Scale: 1 (most democratic) to 7 (least democratic).
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Endnotes
*: Prepared for presentation at the 40th annual meeting of the International Studies Association, Washington, D.C., February 16–20, 1999. Back.
Note 1: In 1993, Transparency International (TI), a Berlin-based non-governmental organization, was formed to fight world corruption. Working with a variety of international and domestic organizations, TI focuses on raising awareness of world corruption and helping states implement national integrity systems. TI sponsors national chapters in 92 states, organizes international anti-corruption conferences, and publishes an annual Corruption Perception Index—judged the most reliable and valid comparative measurement of state corruption levels. In December 1994, the Miami Summit of the Americas included anti-corruption as one of its 23 issue initiatives. This Summit initiative was followed up with the March 1996 Organization of American States’ Inter-American Convention Against Corruption. In response to the growing international anti-corruption wave, in September 1996, the International Monetary Fund (IMF) adopted a good governance program whereby continuing IMF support was made contingent on states following the good governance guidelines. In December 1996, the United Nations (UN) adopted General Assembly Resolution 51/59 on Action Against Corruption, followed in the same month by the UN Declaration Against Corruption and Bribery in International Commercial Transactions. Building on its anti-corruption efforts begun in the late-1980s, and spurred by the Group of Seven, in May 1997, the Organization of Economic Cooperation and Development approved its own convention on Combating Bribery in International Business Transactions. While these were the major international anti-corruption initiatives, a number of supporting initiatives were also promulgated by other organizations. Back.
Note 2: See Weingast (1997) for a more complete explanation of this game approach. The Political Corruption Game in this paper adopts Weingast’s game payoff structure and most of his assumptions. The game version presented here does not consider agent discount factors. Back.
Note 3: This is the initial payoff starting point from which other payoffs are calculated. Back.
Note 4: This analysis assumes a single play game. However, in reality the Political Corruption Game is an iterated (repeat play) game with ongoing interaction between the RE and citizen groups. The payoff structure of a repeated play version of the Political Corruption Game invokes the “folk theorem”—meaning that virtually any of the outcomes could be sustained as an equilibrium. In particular, the equilibriums of the single play game presented in this paper are the most probable equilibriums of the repeated play game, and delineate the range of corrupt activity that may occur in any state. Therefore I will not analyze the other less probable game solutions. Back.
Note 5: A thorough description of Onuf’s constructivist theory of rules is beyond the scope of this paper. For a general description of his analytic framework see Onuf (1997, 1998a). A more comprehensive and technical description of his framework is found in Onuf (1989). The constructivist theory of rules presented here is a synthesis of material from Onuf’s works. Back.
Note 6: Much of the growing constructivist literature refers only to two types of rules, regulative and constitutive rules (see Ruggie 1998). In Onuf’s constructivism, all rules are deemed to have both regulative and constitutive properties. To Onuf there are only three types of rules—instruction rules, directive rules, and commitment rules—that govern social action. Back.
Note 7: Johnston (1994) defined these issue areas as “role-defining conflicts,” which on closer inspection are rule-sets. Johnston in fact identified five rule-sets—the fifth being the “nature of elite conflict” which I include as a component of the “extent of elite accountability.” Back.
Note 8: While still too early to make definitive evaluations of the success of international initiatives, the late-1990s Transparency International annual Corruption Perception Indexes show little significant improvement in state corruption levels. Back.
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