Corruption and Democratic Consolidation
Michael Johnston Department of Political Science Colgate University Hamilton, NY 13346
Tel: 315-228-7756 Fax: 315-228-7883
[email protected] [email protected]
Prepared for a Conference on "Democracy and Corruption" Shelby Cullom Davis Center for Historical Studies Princeton University March 12, 1999
Revised, June 2000 Abstract: This paper is an overview of major themes in a work in progress on corruption and democratization. It offers an exploration of connections among corruption, politics, and markets in newly-liberalizing countries. A new generation of corruption research has produced intriguing evidence on the developmental costs of corruption -- particularly in terms of economic development -- but too often implicitly treats corruption as essentially the same thing, with essentially the same causes and implications, wherever it occurs. I suggest that underlying difficulties of consolidation manifest themselves in at least four distinct syndromes of serious corruption with differing implications. Analyzing a country's corruption can help us understand its deeper consolidation problems. Further, considerable synergy is possible in the medium to long term among democratic, market, and anti-corruption reforms. The histories of countries where once-high levels of corruption have fallen, in the course of the evolution of more open and competitive politics, support this view. Their political and economic development have been made more sustainable, in turn, by lasting reductions in corruption.
I.
INTRODUCTION: AFTER THE THIRD WAVE
We begin with three questions. What are the relationships between political and economic liberalization in the countries struggling to consolidate democracy? What are the implications, for those countries, of corrupt connections between wealth and power? What are the prospects for reducing corruption, and how is this task interlinked with the broader processes of democratization, and with the role of the state?
The purpose of this paper is less to develop findings for specific countries than to ask what a generation of broad-based democratization and economic liberalization have taught us about politics, markets, and corruption. These concerns have been the focus of a great deal of research (see, for example, Elliott, 1997; Rose-Ackerman, 1999; Heidenheimer and Johnston, 2000), much of it highly quantitative and based on innovative statistical measures of corruption. But much of that work implicitly treats corruption as essentially the same thing wherever it occurs -- typically, as bribery -- and imposes essentially the same explanatory model upon it in all places and at all levels of seriousness. I argue, by contrast, that problems of consolidation and liberalization manifest themselves in varying syndromes of corruption with differing implications. This approach has sobering implications for reform: if serious corruption is "embedded" in broader and deeper development processes, it cannot be attacked as a discrete problem. But I also suggest that analyzing a country's corruption helps us understand those deeper problems, and that democratic, market, and anti-corruption reforms appropriate to a given society can reinforce each other. While economic liberalization will be a continuing theme in this discussion, my primary emphasis is upon democratic consolidation, because sound democratic institutions and healthy competition can make more of a contribution to both economic and anticorruption reform than we have generally acknowledged. The histories of countries where once-
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high levels of corruption have fallen support this view. Often, they reduced corruption in the course of fighting over other things, but did so by opening up political and economic participation and strengthening institutions -- accomplishments made more sustainable, in turn, by lasting reductions in corruption.
From Transition to Consolidation.
The euphoria that accompanied “Third Wave”
transitions to democracy (Huntington, 1991) has given way to more difficult realities in many countries. While economic problems have made most of the headlines, political problems have been equally pressing, if less easily described with statistics. Linz and Stepan (1996: 5) suggest that democratic consolidation has been attained when democratic processes and institutions become “the only game in town”. By this rule of thumb, many new market-oriented democracies have a long way to go. New democratic institutions have yet to earn legitimacy or demonstrate a capacity for effective governance. Market economies have been proclaimed, but legitimate economic activity languishes -- or develops in very uneven ways -- while the illegal sector thrives. The institutional foundations of markets (capital and credit markets, solid currencies, courts, and transparent business practices) are weak. Political influence and economic activity are only partially institutionalized within official state and market frameworks; as a result, wealth, power, and connections between them are pursued through illicit channels, and create new, unaccountable institutions of their own (O'Donnell, 1997: 46).
Most of the new democracies have embarked upon what Przeworski has called a “NorthWest Passage” (1995: 3), simultaneously seeking the affluence of the North and the democratic politics of the West. Both politics and economies have been liberalized, with the expectation that that synergy would develop between them, sustaining further positive changes. This view is understandable: there is a marked (if markedly imperfect) association between democracy and
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market-based affluence among the countries of the world. Active markets both sustain affluence and help build democracy by enhancing citizens' autonomy and security, while a democratic state not only guarantees basic rights and civil liberties, but maintains the institutional and policy foundations of the marketplace. In such a setting civil society and its normative foundations gather strength, further aiding democratization (Cooter, 1997), and leaders who show the political will to act against serious problems win broad-based support. This state of affairs is an ideal: advanced countries have their difficulties, there are poor democracies (e.g. India), and wealthy undemocratic regimes (Kuwait and Singapore). Still, in many advanced countries open politics and economies support each other -- a goal that has guided national renewal in many countries.
But the "North-West Passage" is fraught with peril. The scenario of mutually reinforcing democracy and markets is a better description of what consolidating countries lack than a plan for achieving their goals (O'Donnell, 1997: 45). Questions of sequencing are left unanswered. There is evidence that early market-based growth is a better foundation for democracy than early democracy is for growth (Barro, 1997; Bardhan, 1993, 1997; Alesina, 1998), but for most thirdwave countries rapid political liberalization came first, often accompanied by high economic expectations. Synergy itself -- the linchpin of the strategy -- was often left to chance: democracy and markets would support each other, even if nobody knew quite how. Subsequent developments suggest that while democracy and markets are both liberal modes of behavior, they are asymmetrical in many ways, and need a framework of strong institutions to protect expanded participation and to restrain its excesses.
Thus, while the Third Wave has brought welcome political and economic opportunities, as well as new connections between wealth and power, many of these are not what had been hoped for. For many citizens "democracy” has meant increased poverty and insecurity in personal
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life, and ineffective leadership in the public realm: [D]emocracy may be the most common form of government in the world, but outside of the wealthy industrialized nations it tends to be shallow, illiberal, and poorly institutionalized. If there are no immediate threats of democratic collapse in most of those countries, neither are there clear signs that democracy has become consolidated and stable, truly the only viable political system and method for the foreseeable future. In fact, of the more than 70 new democracies that have come into being since the start of the third wave, only a small number are generally considered to be deeply rooted and secure. The remainder appear for now “’condemned’” to remain democratic” while they “muddle through as ‘unconsolidated democracies’” (Diamond, 1997: xv). II. CORRUPTION AND DEMOCRACY: ELUSIVE CONCEPTS
Corruption has been a particularly difficult problem for consolidating countries. Often, it is deeply entrenched (Johnston, 1998) -- indeed, is the real locus of political/economic synergy, albeit of a particularly damaging type. Weak political and market institutions allow a variety of illicit practices to flourish; at times they become tightly organized political and bureaucratic networks, protected by violence if necessary. These in turn impede democratic and market processes, and undermine their credibility. Where democracy and growth are weak, the losers from corruption may be dependent upon, or intimidated by, corrupt officials and entrepreneurs – or may simply find it prudent to avoid them (Alam, 1995). And so the cycle goes.
Corruption neither accounts for all that is bad, nor cancels out all that is good, in any society. Serious cases rarely have a single cause, or amount solely to the wrongdoing of bad individuals. Instead, it is embedded in a country’s developmental situation and is linked to other problems. It is fashionable to describe serious corruption as a dread disease -- “the cancer of corruption” is a popular phrase (Time 151:25 (international ed.), 22 June 1998) -- leading to systemic collapse unless it is eradicated. But precisely because it benefits powerful interests, while weakening potential competitors and disrupting accountability, corruption can be a durable
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and long-standing state of affairs (Johnston, 1998). What is Corruption? One of the most intractable debates in the literature has been over definitions (Philp, 1997; Johnston, 1996; Thompson, 1993, 1995; Scott, 1972; Heidenheimer, 1970; Nye, 1967). Clearly corruption involves the abuse of public roles and resources for private benefit. But in rapidly changing societies the term is often applied to quite disparate actions and circumstances (Hao and Johnston, 1995). Distinctions between "public" and "private" can be difficult to draw. Benefits may be intangible, long-term, widely dispersed, or difficult to distinguish from legitimate constituent services (Thompson, 1993, 1995). The demands and expectations driving corrupt dealings can become so ingrained into a system that they go unspoken. How can we reliably distinguish corrupt activities from acceptable ones?
And by what standards to we identify "abuse"? One school of thought contends that definitions based on laws and other formal rules are best by virtue of their relative precision, stability and broad application (Nye, 1967; Scott, 1972). Critics reply that at times the law enjoys little legitimacy, that definitions of corruption must address the question of its social significance -- not just its nominal meaning -- and that cultural standards or public opinion thus offer more realistic definitions (Gibbons, 1988; Peters and Welch, 1978). Relying upon cultural standards alone, however, may so “relativize” or fragment the concept that its core meaning and any hope of useful comparisons are lost. Still others contend that classifications of specific actions ignore fundamental issues of morality and justice in society at large, and neglect important political values such as good representation, deliberation and accountability (Dobel, 1978; Euben, 1978; Moodie, 1980; Philp, 1987; Thompson, 1993) – values particularly critical to consolidating democracy.
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I can scarcely resolve this debate here. Instead, I will treat corruption as the abuse of public roles or resources for private benefit, recognizing that terms such as "abuse", "public", "private", and even "benefit" can be matters of considerable dispute. In the countries that concern us here, enough activity clearly fits this definition that we need not resolve every ambiguous case. But at a more basic level disputes over the meaning of corruption can be an important substantive concern. A lack of consensus over the working distinction between “public” and “private”, for example, can be a useful indicator of weaknesses in institutions. Moreover, particularly in undemocratic societies corruption issues may be orchestrated from above, or can be a “vehicle issue” for grassroots grievances (Sands, 1990; Hao and Johnston, 1995). Not all of these grievances fit analytical definitions of corruption, but they still raise questions of openness, fairness, and accountability; critics can target individual officials without directly challenging the regime. Often the most important issue may not be what the term “corruption” means, but rather who gets to decide what it means, and how widely those decisions will be accepted.
Variations in Corruption.
The political and economic forces shaping corruption, and being
influenced by it, can vary greatly from one time and place to the next. While the new generation of empirical research of the past decade has brought new evidence to the debate and has clarified may long-standing questions, much of it implicitly treats "corruption" and "bribery" as synonyms. This takes place less at the level of conceptualization than of measurement: a variety of international "corruption scales" have appeared (see, for a survey, Johnston 2000), often based upon the views of international businesspeople. Statistical treatments comparing such indices to other indicators across a large number of countries have revealed intriguing patterns (see, for example, Mauro, 2000), but treat whole societies as single data points and in effect impose the same assumptions and models upon countries as diverse as Denmark and Nigeria.
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In a later section, I will attempt to break out several different syndromes of corruption, which I will suggest reflect underlying imbalances in political and economic participation, and in the accessibility and autonomy of institutions. While all fit the broad definition offered above, they differ in their techniques, underlying causes, and implications for the societies in which they occur. Appropriate reform strategies will differ among these syndromes as well.
Democracy, Transitions and Consolidation
Democracy is at least as difficult to define as corruption. Indeed, it is a classic example of a “contested concept” (Gallie, 1965) and has been employed by scholars in numerous and not always precise ways (Collier and Levitsky, 1997). Huntington divides contemporary definitions of democracy into three main families – those based on the “sources of authority for government”, “the purposes served by government”, or “the procedures for constituting the government” (Huntington, 1991: 6). The first seems straightforward, for democracy literally means “rule by the people”. But nearly every country now claims to be a democracy in that broad sense, including many that no one would regard as democratic in practice. The second approach is not much more useful here, for once we move beyond very general goals (“human wellbeing”), the purposes of government become matters of considerable dispute. (Indeed, the opportunity to engage in such disputes is a hallmark of democratic politics.) The third strategy – to define democracy in terms of the way the government is constituted – is best for our purposes here. A minimalist approach in some respects, it still identified ideas basic to understanding democratic consolidation.
Dahl, for example, writes of polyarchies: not pure or direct democracies, but …relatively (but incompletely) democratized regimes, or, to put it another way … regimes that have been substantially popularized and liberalized, that is, highly inclusive and extensively open to public contestation (Dahl, 1971: 8-9).
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Beginning with the premise that “a key characteristic of a democracy is the continuing responsiveness of the government to the preferences of its citizens, considered as political equals” (Dahl, 1971: 1), Dahl argues that to do that a government must maintain for its citizens three “unimpaired opportunities”: 1. To formulate their preferences 2. To signify their preferences to their fellow citizens and the government by individual and collective action 3. To have their preferences weighed equally in the conduct of the government, that is, weighted with no discrimination because of the content or source of the preference (Dahl, 1971: 2). From these basic opportunities he derives eight “guarantees” essential to maintaining a polyarchy in a large society: 1. 2. 3. 4. 5.
Freedom to form and join organizations Freedom of expression Right to vote Eligibility for public office Right of political leaders to compete for support 5a. Right of political leaders to compete for votes 6. Alternative sources of information 7. Free and fair elections 8. Institutions for making government policies depend on votes and other expressions of preference (Dahl, 1971: 3). Dahl thus directs our attention to two aspects of development central to this analysis: participation and institutions. Polyarchy without participation is an absurdity, but participation without an effective institutional framework would be futile and chaotic, and its outcomes would satisfy few conceptions of democratic life. Participation and institutions -- and in particular, the varying imbalances between them on display in democratizing societies -- will be essential in defining major syndromes of corruption.
Democratic Transitions and Consolidation.
Democratization is a work in progress in most
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Third-Wave countries. It has generally taken place in two steps. First is a relatively brief -- and often dramatic -- transition, in which an old regime is toppled, votes (or reforms) itself out of existence, or simply crumbles. Then comes a longer and more difficult period of consolidation, in which the leaders and primary political groups of the new system seek to deepen its base of social support, demonstrate its (and their own) effectiveness, and establish it as the only acceptable arena for advocating interests, resolving disputes, and making policy. Consolidation requires not only a sustainable democratic government but also acceptance and participation on the part of society. A shift to a market economy (or efforts to reform existing market institutions), while analytically a distinct process, has generally accompanied the democratic consolidation efforts of the last decade, often becoming a key index of the new regime’s effectiveness.
III. PARTICIPATION, INSTITUTIONS, AND BALANCE Democracy and markets seem most likely to succeed, and to support each other, and corruption is least likely to become pervasive and entrenched, in societies enjoying open yet structured competition within the economic and political arenas, and institutionalized boundaries and paths of access between them. Competition enhances economic vitality and political accountability, while weakening the ability of political and economic interests to dominate their own arenas or intrude unduly upon the other. Citizens possessing economic and political alternatives are less vulnerable to exploitation and dependency, and thus in a better position to resist corruption (Alam, 1995). But while competition must be genuine and vigorous, it must also be orderly and fair: total laissez-faire in the economy is likely to enrich the few and impoverish the many, while a political free-for-all will not yield stable democratic mandates. Instead, it will likely produce a state of political insecurity in which politicians, unsure of their hold on power, enrich themselves as quickly as they can (Scott, 1972; Knack and Keefer, 1995).
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Such a balance is made both necessary and more complicated because liberal politics and economies are asymmetrical in significant ways. Democratic politics rests not only on open competition, but also on institutionalized assumptions of equality (e.g.. "one person, one vote"). While driven by private interests, democratic competition is expected to be fair, and to aggregate the expressions of those interests1 into broadly-accepted public policies. Markets, by contrast, incorporate few presumptions of equality, either in process or outcome; such procedural rights and mechanisms of accountability as exist are grounded primarily in ownership, not citizenship. Gains are presumed to be private and separable. Competition, while open to new participants, is continuous and much less structured than politics, with a wider range of uncertainty in outcomes; losers are routinely driven out of markets, and winners enjoy advantages, in ways that lack real political parallels. Political regimes hold power over a limited territory and population, while markets are increasingly global.
If these asymmetries did not exist corruption would not be a problem. Public -private distinctions would make little sense; more or less anything could be bought and sold, and public office could be used like any other resource in the pursuit of private gain. But they do exist -indeed, are integral to modern conceptions of the liberal state -- and thus there must be workable, and accepted, boundaries and distinctions between state and society; public and private roles and resources; personal and collective interests; and market, bureaucratic, and patrimonial modes of allocation (Johnston and Hao, 1995). In well-balanced systems there are realms where official power may not intrude, and things that may not be bought and sold. Institutions on both sides must have some degree of autonomy: both public officials need to carry out their work in an uncompromised, authoritative way, while private property and contracts must be respected. Where such boundaries exist, free interaction within each realm is more secure: it will be more 1
I thank Dr. Salvador Valdes-Prieto, Centro de Estudios Publicos in Santiago, Chile, for his comments on this point.
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difficult for economic interests to turn politics into an auction, and for officials to plunder the economy. But legitimate paths of access between the two arenas are still needed: policies must reflect economic realities, and self-interested behavior must be subject to the rule of law. If connections between the political and economic arenas do not legitimately exist, they will be created corruptly.
Corruption as a Threat to Participation and Institutions The synergy described above is a goal, not a recipe for successful development. It can be, and is, disrupted and prevented by many problems. But while it remains the hope of countries embarked upon simultaneous economic and political liberalization, it is threatened in fundamental ways by corruption.
Some connections between corruption and development problems are clear. When aid and investment are diverted to offshore banks, poor nations become poorer. Where political and bureaucratic authority are put out for rent, due process and civil liberties are endangered, and formal policies become a sham. It was once claimed as a benefit of corruption that it cuts through political stalemates and bureaucratic bottlenecks, and is thus a useful way of getting things done. But these benefits are likely to flow to the few and the well-connected (and, at times, to their personal clienteles), while the costs are often extracted from the poor and powerless in the form of exploitation and lost opportunities. These costs are no less real for being difficult to measure.
At a deeper level, corruption disrupts (or preempts) orderly competition and weakens institutions. Klitgaard's explains why with a schematic equation (1988: 75): Corruption equals Monopoly plus Discretion, minus Accountability.
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Klitgaard used this formulation to analyze bureaucratic corruption, which flourishes where officials have exclusive control over valuable goods or decisions (monopoly) and can decide how to distribute them (discretion) without having to answer for their actions (a lack of accountability). Extensive corruption repeats this logic again and again, across an entire system. Monopoly plus discretion undermines competitive participation: consider the bureaucrat who awards a contract on the basis of bribes, rather than to the best bidder, and machine politicians who use the police to intimidate poll watchers. Discretion minus accountability weakens official institutions, often creating new illicit ones. Policy decisions are put up for sale, rules of fair political and economic conduct go unenforced, and powerful figures in each arena can plunder the other. Meanwhile, those seeking to resist such abuses through established channels will accomplish little, and may in fact place themselves in danger.
These connections are reciprocal. Entrenched corruption (Johnston, 1998) pre-empts competition and weakens institutions, but it will also be easier to build corrupt networks where competition and institutions are weak. Powerful interests use corrupt influence to protect illicit advantages, in the process weakening potential competitors and reformers. Extensive corruption can create, or reflect, networks of influence that obliterate boundaries between the political and economic realms. Where Dahl's opportunities and guarantees are secure, and political or economic alternatives exist, people may confront the problem directly. But where corruption is entrenched, citizens will more likely respond in what Alam (1995) calls evasive ways -- dropping out of politics or the mainstream economy, foregoing economic benefits, or moving away -- or in illicit ways, using corrupt connections of their own. Such responses protect individuals from the worst effects of corruption, but do little to reduce it. Indeed, they can play directly into the hands of corrupt interests.
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The Costs of Corruption: Tentative Evidence. Solid evidence of corruption can be difficult to find, and the measures we have are problematical. The victims of corruption are usually wellremoved from the events themselves, while witnesses generally share an interest in secrecy. All corruption benefits someone, or else it would not occur, and there are varieties (such as petty patronage) in which rewards are widely distributed. But such benefits must be judged against their costs -- often long-term, collective, and intangible (Johnston, 1982). Corruption was once seen by some (e.g. Leff, 1964) as helping integrate political systems, and aiding economic growth by creating informal markets and price systems. But recent evidence suggests that corruption significantly harms economic and political development, particularly when we consider its broader, long-term effects instead of analyzing particular exchanges in isolation (Rose-Ackerman, 1996).
The evidence is most persuasive for economic development. By substituting illegitimate payments for competition and legitimate policy, it diverts talent (both official and entrepreneurial) away from productive activities into rentseeking (Rose-Ackerman, 1996). Far from cutting "red tape", corruption is linked to increased inefficiency (Kaufmann, 1994; Kaufmann and Kaliberda, 1996) as bureaucrats contrive new requirements and delays to extract more payments. It reduces investment in human development and the quality of public services (Mauro, 2000; Rauch, 1995), and amounts to a substantial tax upon foreign direct investment (Wei, 1997). Far from facilitating entry into developing economies, corruption is most extensive where overall openness of an economy is least (Elliott, 1997). The proceeds of corrupt deals contribute little to growth: after they have made up for low salaries, they are likely to be spent on luxury goods or to flow toward countries offering safer institutions and better returns. Meanwhile, investors in high-corruption states are likely to focus on short-term profits, and to keep their assets as mobile as possible (Keefer, 1996) -- scarcely a recipe for sustained development. Not
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surprisingly, investment is disrupted most where corruption is high and the predictability of its rewards is low (World Bank, 1997). Even so-called "petty corruption" is a serious concern: demands for payments in exchange for licenses, passage along roads, and basic services help keep poor people poor, and force many small enterprises into the informal sector.
Political development too is likely to be delayed or distorted. Corruption, as a form of influence based on money, access, and expertise, typically benefits the “haves” at the expense of the have-nots. Patronage networks may bring large numbers of people into the political process, but they control citizens rather than empowering them, neutralizing their biggest asset -- the strength of numbers -- through the politicized use of divisible incentives (Johnston, 1982; Webman, 1973). Where corruption is entrenched, and playing the role of political opposition means little more than cutting oneself out of the benefits, orderly political competition can implode into a disorganized scramble for spoils (Easterly and Levine, 1996). When political change does threaten corrupt elites, they may respond by taking as much as they can, as quickly as they can take it (Scott, 1972: Ch. 5). Democracies do have corruption, of course, as concerns over campaign financing and the power of lobbying groups demonstrate. But they also benefit from an underlying consensus on the rules, from independent law enforcement bodies and political oppositions, and from the voters’ ability to throw out the government without toppling the constitutional regime. Corruption may be a continuing issue in those societies, but it is unlikely to threaten their basic democratic character.
The complexity of these interconnections can be seen in the following scatter plot. It presents, for 83 countries, the 1995 UN Development Program Human Development Index (HDI) -- a weighted index of factors such as literacy, education, life expectancy, and affluence -- plotted against the 1998 Transparency International Corruption Index, inverted so that 10 indicates
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greater corruption. 2 I use the HDI figures here because they are a more broad-based indication of development as a quality-of-life issue than GDP alone. The linear correlation between corruption and development is strongly negative (r = -.6709, one-tailed p=.000), but the plot suggests a more complex picture.
2
The 1995 HDI (http://www.undp.org/hdro/98hdi1.htm) is the latest available. While the 1999 TI data are now available (http://www.transparency.org/documents/cpi) and include a few more countries, I use the 1998 Corruption Perceptions Index here because of closer proximity in time to the HDI figures. In any event, the Pearson correlation coefficient between 1998 and 1999 TI corruption ratings for counties included in both years is .9933 (p=.0000).
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1.0 DE N
CA N R FSI N IC NOT H N WE N WED S W AZUUKL SIN
.9
L UX
US A I R E GE R A U S HK
FR N
S P NJ P N
BE L
GR C IT A
IS R CH L P O R
CO S
RO K U RU S LO
C ZR H UN
AR G V EN CO L
ME X
P OL
TH I
M ALM A S BR A
.8
B LR
BU L
TU R
UNDP Human Dev elopment Index 1995
TU N
JAM
JOR PER
SA F
.7
RU ES CU
RU M
E ST
PA R
LAT
BOT
P HI
UK R
CH N
NA M
INS
GU E A GY B OL
SA L
.6 M OR
NIC
HO N
D RV
Z IM
.5
GH A
.4
ZA M M AW
C AO K EN IND P AK
N IG IVO
SE N
TAZ UG A
.3 -.5
0.0
.5
1.0
1.5
2.0
2.5
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3.5
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Inverted TI Scale (10 minus index) 1 995 HDI: http ://www.und p.org/hdro/9 8hdi 1.htm 1 998 TI In dex: http ://www.tran sparency.de/documents/cpi/i ndex.html
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5.5
6.0
6.5
7.0
7.5
8.0
8.5
9.0
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10.0
In Anna Karenina, Tolstoy tells us that "Happy families are all alike; every unhappy family is unhappy in its own way." Successful market democracies are indeed tightly clustered at the low-corruption end of the plot. By contrast, there are many varieties of undemocratic systems, economic problems, and forms of corruption. Corrupt influence can be used to exploit and defend a wide variety of illegitimate advantages, and such influence may insulate a system from democratizing and market forces. For these reasons we might expect high-corruption/low development countries to differ among themselves a great deal.
And indeed the pattern is not a simple one. There is a cluster of affluent low-corruption democracies in the upper left -- happy families happy in similar ways? But Singapore -- nobody's democracy -- is also in the upper left. There are high-HDI countries at all levels of the TI scale, and high-corruption countries at almost all levels of HDI. Mexico, Italy, Greece, the Republic of Korea, and Argentina, for example, have HDI levels higher than corruption scores alone would predict. Moreover, the quadratic regression line suggests that as corruption increases, HDI scores drop more and more precipitously. At that end of the plot, the results are diverse (unhappy families unhappy in many different ways?) -- evidence, perhaps, that the connections among corruption, development, and democracy are complicated and variable.
The void in the lower left might suggest that reducing corruption makes high levels of development nearly a certainty, but it seems much more likely that societies successful at development have the resources and institutional capacity to reduce (or mitigate the impact of) corruption in the process of addressing many other challenges. If corruption could be decisively attacked as a discrete problem we should find at least a few low-corruption, low-development cases, but we do not. Very likely, high HDI levels and moderate-to-low corruption have common antecedents: one hypothesis is that sound institutions and open, competitive economies and
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political systems contribute to a kind of low-corruption equilibrium (Johnston, 1998). Highcorruption countries, by contrast, differ greatly both from more developed countries and from each other. Corruption does not just "happen to" a society; more likely, it is embedded among many interlinked difficulties.
This plot can only frame these hypotheses; particularly if we are concerned about qualitative variations among corruption situations, it cannot authoritatively test them. The TI data too have their problems (Johnston, 2000). But the contrasts above suggest that there may well be several different kinds of corruption-and-development syndromes to investigate.
IV. SYNDROMES OF CORRUPTION Institutional and participation problems come in many varieties. To distinguish among them, I find it helpful to think in terms of two kinds of balance -- balance between the openness and autonomy of institutions and the elites who run them, and between political and economic opportunities for participation. Ideally, institutions should be open to influence and feedback from a wide range of sources, but at the same time need to be sufficiently autonomous to make and implement policies effectively. The balance between political and economic opportunities refers, not to the absolute range of such opportunities, but rather to the question of whether it is relatively easier to amass wealth or to win power. Where the openness and autonomy of institutions are in balance, officials are accessible but not excessively exposed to private influence; they can make authoritative decisions but do not use their power arbitrarily. But where official power is poorly institutionalized, it can be overly exposed to private influence, while officials whose autonomy is excessive can exploit their powers as they please. And as Huntington (1968) has argued, where political opportunities are scarce corruption occurs as people use wealth to buy power, while where economic opportunities are few, power will be used to pursue wealth.
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Where these institutional and participation imbalances are pronounced, there is the potential for corruption – corruption that will reflect, in its stakes and patterns of influence, the particular imbalances of a given society. Efforts at reform will have to take those deeper problems into account.
These ideas are illustrated in the diagram below. The arrows as axes are meant to indicate continua: toward the center of the table, openness vs. autonomy of institutions, and opportunities for political and economic participation, are relatively balanced. Toward the extremes the imbalances are greater: to the left, openness outweighs autonomy by increasing margins, while to the right the reverse is the case; toward the top, economic opportunities exceed the political, while toward the bottom it is easier to win power than wealth. A more complete discussion of these corruption syndromes appears in Johnston (1997).
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Corruption: Four Syndromes INSTITUTIONALIZATION Open Institutions
Autonomous Institutions
PARTICIPATION Econ Opportunities> Political Opportunities INTEREST-GROUP BIDDING
ELITE HEGEMONY
Strong private interests, accessible elites; economic competition; interests use wealth to seek influence; corruption is largely individual and non-systemic
Entrenched elites exchange scarce political access for wealth
USA, Germany, UK; many liberal democracies
China (guandao); military regimes; pre-ICAC Hong Kong; South Korea, LDP Japan
RISK OF EXTREME CORRUPTION
Political Opportunities> Economic Opportunities FRAGMENTED CLIENTELISM
PATRONAGE MACHINES
Fragmented and politically insecure elites build personal followings that are poorly disciplined, unstable; mafiyas, violence and intimidation may be linked to corruption
Strong elites control mass participation and limit competition via patronage, and capitalize upon followers' poverty; political monopolies; parties or personal followings hierarchical and tightly-controlled; parties extend power into state and society
RISK OF EXTREME CORRUPTION Russia; pre-1992 Poland; Peru (pre-Fujimori); early phases of Tammany Hall (New York); pre-1994 Italy; many African civilian regimes
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Mexico, Sicily, Suharto's Indonesia; Malaysia; mature Tammany Hall machine
Many other factors, of course, influence the form and extent of corruption in any given society. A country's colonial heritage, for example, can be significant in many ways, not only for its broader social effects but also because of the differing administrative and institutional strategies left behind by the hegemon. Similarly, exogenous factors -- regional economic trends, or the rapid influx of oil or drug money, to name but two -- could radically reshape the balances (or imbalances) denoted by the two axes. The value of this scheme, it is hoped, is that in preliminary ways it draws out the varieties of corruption problems to be found in various countries, shows the contrasting "deep causes" that help shape them and that define the landscape for reformers, and points to some of the major connections between corruption and problems of democratic consolidation.
In the upper-left quadrant economic interests pursue political power in a setting of open institutions, producing kind of interest-group politics, and occasional corruption, familiar in many democracies. In the upper right, autonomous elites enrich themselves by manipulating access to relatively scarce political opportunities; because of the scarcity of such alternatives, political opposition is weak and there is a danger corruption will spiral out of control. In the lower-left quadrant, elites are poorly institutionalized and economic opportunities are scarce; political entrepreneurs build personal followings by promising material rewards, but find it difficult to "deliver". Their followings are thus poorly-disciplined (see, for the early years of Tammany Hall, Shefter, 1976), and leaders must compete with other factions by promising ever-larger spoils. Again a corruption spiral is a real possibility. Finally, in the lower right powerful elites facing weak political challengers build tightly-disciplined followings by exploiting economic need; for the poor, politics is a way to put food on the table. The resulting political machines can become deeply entrenched. A corruption spiral is unlikely, however, as machine leaders have an interest in maintaining the status quo and the political and economic means with which to do so.
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These categories are suggestive at best, intended to suggest ways in which contrasting forms of corruption are shaped by deeper developmental situations. But if this idea is valid, reforms will have to be tailored to those deeper causes and developmental situations. Too often reform programs consist of "wish lists" -- bombarding the problem with any and all good ideas that fall to hand -- rather than fitting reforms to the situations in question. This might only make things worse: imposing American-style decentralizing reforms upon a case in the lower-left quadrant, for example, would likely intensify the political free-for-all.
These connections are reciprocal, however, and here the analysis offers further possibilities. If corruption problems reflect underlying political and economic imbalances, then understanding a country's particular corruption syndrome could be an important clue to its deeper development difficulties. Reforms that address those development problems (see below) can disrupt the negative synergy in which institutional and participation imbalances beget corruption which further undermines institutions and participation. The argument also suggests that -- in the words of that unlikely model of reform, Richard J. Daley -- "good politics is good government." Fostering good politics, and then using those processes to restrain corruption, is a long-term task with many reverses. But a number of countries with once-high levels of corruption have seen those problems reduced in part through the spread of competitive politics and of institutions that balance autonomy and openness, as I will discuss in the following section.
V. DEMOCRATIZATION AND THE LIMITATION OF CORRUPTION Anti-corruption efforts should aim not just at detecting, discouraging and punishing particular kinds of corrupt practice -- though such efforts are of indisputable value -- but also at addressing deeper problems of political and economic development. This would include the following:
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INSTITUTIONS: • Where accessibility of elites decisively exceeds their autonomy, enhance official autonomy by regulating channels of private influence, improving internal bureaucratic management, and enhancing state capacity • Where elites' autonomy decisively outweighs their accessibility, open up channels of mass participation, accountability and bureaucratic access PARTICIPATION: • Where economic opportunities greatly exceed political opportunities, enhance the depth and equality of political competition • Where political opportunities greatly exceed economic opportunities, encourage broad- based economic growth
Just as each corruption syndrome is defined by two imbalances, the broad strategies above work in pairs, with the goal being greater balance in terms of institutions and participation. Redressing the imbalances of an upper-left case might require greater institutional autonomy for decision makers -- new rules regulating political donations, for example, in the case of elected officials -and enhanced political competition. An upper-right situation might require both opening up access to institutions and increasing the political opportunities available in society. In the lower left, greater institutional security for elites and pro-growth policies would be a more appropriate strategy. And in the lower right, broad-based economic growth and enhanced accessibility and accountability of top political figures -- the latter, perhaps, not unlike recent political reforms in Mexico -- might be a general strategy. This is not to underestimate the difficulty of such changes: "pro-growth policies" in Russia and enhanced accountability in China, for example, are obviously formidable challenges in their own right. But looked at this way, reforms can be embedded in consolidation agendas just as corruption is embedded in development problems.
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Democratization as Reform: Historical Precedents This approach also suggests close links between democratization, broadly defined, and reform. Indeed, a very brief look at some important historical developments suggests that corruption has at times been checked in the course of deep-rooted conflicts between the power of those who rule and the claims of those who do not. These conflicts, and their political settlements, helped hammer out better institutional frameworks capable of checking official power and private interests. Often, this was done in the course of fights about other issues, with self-conscious attempts at anti-corruption reform only one part of the process. But such contention reflected basic political developments -- the emergence of new groups (van Klaveren, 1989 ed.) and new conceptions of obligation and justice (Peck, 1990) -- and played a critical role in giving shape and significance to the idea of corruption (Johnston, 1993).
Consider, as a point of departure, an absolute autocrat. In the modern behavior-oriented sense of the concept, this person cannot commit a corrupt act: what limits exist upon his power?3 To whom or what, beyond his own wishes, is he or she accountable? Before contemporary notions of corruption, and the limits upon which they rest, can have any meaning, at least two important changes must occur: the emergence of a degree of political pluralism -- that is, the existence of "intermediary groups" (van Klaveren, 1989 ed.; Theobald, 1990: Ch. 2) beyond the sovereign's personal control capable of making politically significant demands -- and the definition of bounded political roles with impersonal powers and obligations.
Pluralism. Debates over political propriety once began and ended with what Friedrich (1974: 102) calls "The ancient rule that 'the King can do no wrong'." Theobald adds that "If we go back
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In a classical sense, of course -- such as Aristotle's notion of "corrupted constitutions" -- this kind of rule could be judged corrupt by its very existence if -- as the assumptions here suggest -- the autocrat were able to be the judge of his own case.
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to the pre-modern era...the state is not regarded as an impersonal legal entity but as the living embodiment of an inheritance which reached into the dim and distant past." The state, he adds, was "an emanation of the Royal household... personal property" in the sense both of a claim to territory, and of office as private property (Theobald, 1990: 19-20).
Not every pre-modern state began in precisely this way. But the notion of "corruption", in the context of the modern democratic state, require limitations are placed upon official power, which in turn are maintained -- and in times of political change, redrawn -- through the contention of countervailing centers of power. If a sovereign must take others' interests -- and power -- into account, he or she might eventually be made "responsible" in a rudimentary sense (Friedrich, 1974: 13). Early intermediary groups were scarcely tribunes of the people, moral innovators, or indeed advocates of any interests beyond their own. Even when pluralization has proceeded to some degree, it is more likely to be check abuses through political stalemate than via positive moral principles. Friedrich makes this point in discussing "government with estates": Legislation played only a secondary role in the medieval governmental process. Laws were few and legislation rare, and medieval constitutionalism could thus concentrate its attention on the problem of the regulation of the abuse of the monarchic executive's power (Freidrich, 1974: 27). But eventually the process of opposition changed the opposition itself: "the Parliaments of the Middle Ages, which were primarily courts, found themselves confronted with the fact that the law had increasingly to be made rather than discovered and declared (Friedrich, 1974: 31)."
The Emergence of Modern Political Roles. Limits upon corruption require explicitly public roles bound by impersonal obligations and endowed with limited powers. In our age of constitutionalism and bureaucratization, it is easy to take such notions for granted. But they too reflect political contention and long-term processes of change. At one time, having "a role in
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politics" meant being a personal client of the powerful. Public-private distinctions, and notions of service or merit were nonexistent; indeed, there were few obligations to anyone other than the sovereign or one's patrons. "Politics" was the exercise and defense of power, its ends often little more than self-enrichment; the governing normative system emphasized reciprocity and the notion of the sovereign as the personal embodiment of virtue (Peck, 1990). Norms of reciprocity were not just a free-for-all: there were meaningful limits upon behavior, including conceptions of duty and of appropriate (or inappropriate) exchanges. There were rules, then, and they mattered; they were not, however, the rules that apply to public life today.
But as the scope of societies increased and increasing pluralism gave rise to more numerous and powerful counter-elites and intermediary groups, political roles began to change. As ruling elites grew beyond the size of personal retinues and extended households. Wars, the acquisition of territory, and the emergence of extractive functions such as taxation and the courvee meant that sovereigns increasingly needed political support and effective work by minions whom they could not easily oversee or coerce. This extension of rudimentary administrative functions, for Theobald (1990: 19-20), marks the difference between patriarchalism -- in which "the state is viewed as personal property", and the dominant family is the frame of reference -- and patrimonialism, which "requires an administrative apparatus."
These changes gave rise to practices such as tax- and customs-"farming" (Swart, 1989 ed.; Peck, 1990: 38-44), whereby revenue-raising functions were franchised to syndicates of entrepreneurs who recouped their investments by keeping a share of the revenues. A related practice was the outright sale of offices, as in Stuart England (Peck, 1990; Scott, 1972: Ch. 3). Modern notions of merit played little role in such practices, and what we would call the "public" was still more to be exploited than served. But positions of personal favor were becoming more
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like full-time official roles with functional, as opposed to personal, duties. Tax- and customs-farming raised revenues in a relatively orderly manner, and to argue that an office could be purchased was to acknowledge that at some point it had been distinct from the individual holding it, and carried with it certain duties. The buying and selling of offices, or obtaining them in exchange for loyalty to a patron, did finally come to an end -- in part because of the political objections of those denied a share of the spoils -- but Scott sees this phase as part of a fundamental change in the role of the state:
Finally, in the nineteenth century, when the more democratic form of government limited the aristocracy, and the modern idea of the State came into existence, the conception of public office as private property disappeared. The State became considered as a moral entity and the exercising of public authority as a duty (Scott, 1972: 96). Many of these developments were matters of expediency, as with customs farming, but others emerged in the course of political conflicts in which corruption issues were useful clubs with which to belabor one's opponents. England's Parliament debated anti-bribery bills and measures to forbid or control the trade in offices in 1621, 1625, 1626 and 1628 (Peck, 1990: 196). These initiatives, however, are best understood in the context of the longer-term conflicts between Crown and Parliament over money, taxation, and religion, and of Parliament's wish to protect itself from the influence of Crown patronage. Similarly, when extensions and restorations of the franchise were proposed in this same pre-Civil War era, they were backed by "(s)urprisingly radical arguments...about the need to involve as many men as possible in elections to withstand the threat from the great to parliament's existence" (Hirst, 1986: 136). Similarly, Parliamentary impeachments of royal proteges such as Francis Bacon, Thomas Howard, Lionel Cranfield, and the Duke of Buckingham (Doig, 1984: 37-42; Hirst, 1986; Peck, 1990) were political contests over the extent of royal power as much as -- or more than -- inquiries into misconduct. At times new ideas about accountability and the limits of power emerged in the course of these struggles:
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in 1640-41, for example, Parliament impeached and tried the Earl of Strafford (Roberts, 1966), threatening to send him to the Tower. Strafford's accusers made the then-novel claim that despite his role of royal counselor he was accountable to Parliament and could be charged and tried despite royal objections. Strafford responded with a novel idea of his own: Parliament could not impeach him on its own, because both Parliament and counsellors were accountable to the electors.
Notions of good government were more often the means than the ends of such conflicts; the real point was a basic power struggle. Nonetheless, these ideas, formed in the heat of conflict, eventually became crucial to a new Constitutional Monarchy in which Parliament and royal advisors actually did come to occupy limited, publicly accountable roles. This was a gradual process, to be sure: later Parliaments still had to resist royal patronage. In the early 17th century the House of Commons established a Committee on Privileges to defend the independence of the House and its Members in the face of intimidation or bribes. Until the changes following the 1997 Nolan Report the Committee was the main anti-corruption watchdog in the Commons. It defended the principle that a Member's first loyalty is to the House -- a doctrine that would be recognized instantly by Members who fought Crown patronage in the 17th and 18th centuries.
Such conflicts continue today. Thailand's new Constitution, which includes extensive anti-corruption provisions, was drafted and supported by pro-democracy movements seeking means to resist abuses by well-connected military, business, and bureaucratic figures and their followers. Demands in Mexico for more open and honest political competition at all levels of the federal system are widely-regarded as essential anti-corruption steps. These have involved serious efforts to eliminate presidential "secret funds" and to curtail the patronage and vote-buying practices of the Institutional Revolution Party, which has ruled as a national political machine for
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most of the past century. At one level, America's recent impeachment wrangle was a fight over the location of boundaries between public and private roles and behavior. Corruption in the People's Republic of China reflects the wide imbala nce between extensive, and continuing, economic liberalization, and an unreformed political system. While it is relatively easy to search through British political history for early origins of today's democratic procedures and limits upon corruption, the likely outcomes of contemporary struggles are much less clear. But the basic point is that political development continues to shape the content and significance of our notions of corruption in fundamental ways, and does not stop at some presumed terminal point. In every society conflicts reshaping notions of corruption and relationships between the rulers and ruled continue; and in every society an understanding of those deeper processes and their links to syndromes of corruption is essential to analyzing and acting against corruption.
VI. CONCLUSIONS Any discussion of corruption in consolidating democracies will of necessity be at a high level of generality -- the more so if the emphasis is upon corruption as a problem embedded in broader economic and political changes. But as for our three initial questions, I can offer some answers, at least as the basis for further discussion and analysis.
What are the relationships between political and economic liberalization in the countries struggling to consolidate democracy? It is commonplace by now to note that democratic and market consolidation are path-dependent -- that is, that history matters. While countries embarked on the "North-West Passage" may have common goals, they begin in different places and face distinctive sets of problems. For these reasons, consolidations, and the role of corruption within them, will be variable. A tendency to treat corruption as a single undifferentiated problem has been a blind spot in the current new generation of research; the
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same pitfall must be avoided with respect to democratic consolidation. Thus, in this paper I offer a scheme for identifying, and understanding the broader implications of, important contrasts among cases.
In successfully consolidated countries, open political and economic processes do seem to reinforce each other, fostering a degree of vitality and resilience in democracy and markets that is more than the sum of its parts. But noting this as a goal is not the same thing as planning a path for getting there. Positive interaction between liberalized political and economic realms is not a given. Indeed, negative synergy in which imbalances in the two sectors reinforce each other is also a possibility -- one in which corruption often plays a significant role, as suggested in the lower-left and upper-right quadrants of our table. I have suggested here that the economic and political challenges of consolidation require careful attention to both institutions and participation. This means, among other things, building a lasting balance between openness and autonomy of institutions, and between opportunities for political and economic participation. These, clearly, are formidable challenges.
What are the implications, for consolidation processes, of corrupt connections between wealth and power? While the new generation of research may not pay sufficient attention to varying forms and contexts of corruption, it has developed strong evidence to suggest that corruption undermines both democratic and economic development. A consideration of the role of monopoly and discretion in corruption helps us understand the ways it impedes open, competitive participation in the political and economic arenas, while the effects of discretion minus accountability are strongly negative for the institutions that maintain order within, delineate, and provide legitimate channels of access between, those arenas. In addition, serious corruption can create new institutions (such as patronage networks or groups of corrupt
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bureaucrats) and forms of participation (illicit influence over policy or official intrusions into the marketplace), and provide political protection for them, in such a way as to deepen consolidation problems even further. The result may be not just delays and distortions in intended forms of development, but the emergence of deeply entrenched corruption enjoying official protection and facing little real opposition. This can be a long-lasting phenomenon and can thrive off the economic problems and political weakness of the populations who supposedly were to benefit from Third-Wave liberalization. Indeed, to the extent that entrenched corrupt elites and networks maintain their positions by closing off economic and political alternatives, such corruption can be seen as a powerful force helping keep societies poor and undemocratic. Action against these problems is difficult to envision without closely-integrated anti-corruption strategies.
An important caveat is in order here. While there is little basis for arguing that corruption actually aids in consolidation, the effects of corruption must be judged not against ideal outcomes but against real alternatives. Corruption harms development and consolidation in Nigeria, Mexico, and the Philippines, but we cannot assume that without corruption all would be well. A Ministry of Development, cleansed of corruption, may still pursue poorly-conceived policies or suffer from a lack of critical resources. Further complicating the picture is the fact that we often have no way of knowing for sure what the likely alternatives to current problems might be. Most of the time, people in poor and undemocratic countries face a choice, not between bad and good, but between bad and worse. It could be, for example, that a country in the lower-left cell of my matrix -- confronting fragmented patronage and possibly mafiya-style violence -- would be better off moving into the lower-right cell (well-organized machine politics) and pursuing consolidation from that point.
What are the prospects for reducing corruption, and how is this task interlinked
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with the broader processes of democratization? Despite the foregoing, I plead guilty to being a pathological optimist. Both contemporary cases, such as South Korea, Italy, Uganda, Botswana, and Chile, and historical examples (of which I was able to provide just a sampling in this paper) suggest that effective action against corruption is possible and has real benefits. High levels of corruption can be reduced, and low to moderate levels can be sustained, by a mix of actions at both the "micro" level -- reforms of institutions, procedures, and personnel -- and at the "macro" level: fostering open, balanced, fair political and economic competition, and building strong, legitimate institutions. Again, the steps needed in a given society will depend upon its starting point and particular array of difficulties. And often, as the historical cases show, such deep changes will be a part of long-term process of opening up politics -- one revolving more around the contention among political interests than around reform as such.
In that sense though there are two lessons. One, good politics may in fact be a basis for good government, despite a long reform tradition in the United States aimed at separating the two wherever possible. Second, just as corruption is an embedded problem in the broader developmental situation, anti-corruption reforms must be interlinked with diverse democratization and economic development strategies. Arguably, the three depend upon each other for success. Some of these aspects of democratization will entail opening up and safeguarding the formal political process: honest, competitive elections and transparency in political finance are examples. Others, though, will involve creating alternatives to the more informal kinds of exploitation on which serious corruption can feed, and through which corrupt officials pre-empt opposition. Bringing marginal groups and regions into the mainstream political and economic systems might enable them to respond to corruption directly, rather than evasively or illicitly (Alam, 1995). It may be the literacy programs for women and young girls can be part of an effective anticorruption strategy, for example. Strengthening civil society will pay off both in terms of more
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broad-based participation and in stronger social and normative institutions (Cooter, 1997).
These are obviously long-term measures; in no way do they remove the need for more immediate "micro" responses. In fact, they depend upon reforms at that level if they are to be sustained over time. Further, there will be many reverses, some as ironic results of success: for example, as tightly-integrated networks of corruption break up, the short-term result may be not more honest government and business dealings, but a corrupt scramble to extract any gains possible in a newly-insecure environment. Questions of balance are important as well: if efforts to build effective political participation proceed faster than efforts to strengthen institutions, or if institutions weaken and elites come to feel politically insecure, another corruption scramble may break out (Scott, 1972: Ch. 5).
There is, therefore, no anti-corruption cookbook or tool kit; and as the historical examples show, it may be difficult to say at any one time where we stand in the process of deep reform. But while corruption has significant negative effects upon democratic consolidation and economic development, successes are possible. Getting to that point is undeniably difficult; it may involve, not so much a range of new policies, as new ways of thinking about things we already do in the course of pursuing development. This, however, is just another way of saying that much as corruption is a problem deeply embedded in developmental situations and trends, lasting reform must begin at an equally fundamental level. The large number of democracies clustered toward the less-corrupt end of the various international rankings suggests that once established, democracy can resist the worst excesses of corruption with considerable success.
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