TL;DR: Corruption means something. Corruption is bad in a lot of ways. It’s caused by a lot of things. It can potentially be combated in a lot of ways.
Part 1: What is corruption?
It’s hard to fight against something that you have no understanding of. And I suspect most people have no understanding of corruption. When people see paradigmatic examples of corruption in the news, they rightly condemn and denounce it. But when it comes to fighting corruption systematically and effectively, most people are at a loss for how to even start.
Part of the reason for this is because people don’t know what corruption should mean. Various international organizations like the World Bank and Transparency International define corruption as “the abuse of public office for private gain.” But this is hardly an uncontroversial definition. Interpol, for instance, broadens this definition to “the abuse of entrusted power for private gain.” One important difference between the two definitions is that the former targets individuals associated with the state, whereas the latter includes individuals like executives of private corporations.
In any case, both definitions are fraught with ambiguous interpretations. For example, what counts as private gain? These are typically thought to be economic improprieties like embezzlement or bribery, but what about social improprieties like appointing one’s family (nepotism) or friends (cronyism) to a position for which they are not the most qualified candidate? And what is a public office? Many functions typically thought to be in the state’s responsibility are now outsourced to private companies. Prisons are one example of this. If a prison warden of a privately contracted company accepts a bribe to smuggle in drugs, are they being corrupt in the narrow sense of the word? The phrase “private gain” is also ambiguous. If a politician accepts a questionable donation on behalf of their political party but receives no personal benefit, have they acted corruptly? When you throw in the fact that different cultures have different norms for how public officials ought to behave, the problem of defining corruption becomes exceptionally more difficult.
Other problems arise when trying to define concepts related to corruption. For example, what distinguishes a gift from a bribe? Before moving on, think about this carefully. You may find that the distinction is blurrier than you first imagined. Holmes offers six general guidelines for identifying the difference. (An explanation of each guideline would make this post too long.)
- The intention of the donor
- The expectation of the recipient
- The timing of the giving
- The value of the “gift”
- The legal perspective
- The perceived social acceptability of the transaction
Because of the myriad difficulties in defining corruption, Holmes stipulates a definition for her book while acknowledging that this necessarily limits its scope. She lists five necessary criteria for corruption. An action/omission is corrupt when:
- It involves an individual or group that occupies public office
- The public office involves a degree of authority relating to decision-making powers, law enforcement, or defence of the state
- It is motivated at least partly by personal interests or the interests of the organization to which the party belongs, and these interests must run counter to the interests of the state or society
- The action is done clandestinely, and the actors know that their actions might be considered illicit
- The action is perceived by a significant proportion of the population or the state as corrupt.
Part 2: Why is corruption a problem?
Saying corruption is bad is banal and unhelpful. Saying exactly how corruption is bad in all its ugly ways allows people to form more targeted and effective interventions and to form more precise hypotheses for future research. Here are a seven ways corruption can be detrimental to the welfare of a nation.
First, for developing countries, the presence of corruption may severely reduce the amount of aid sent. Potential donors may refuse to send aid because they rightly believe that most of the resources sent are being siphoned away to the leaders for personal gain. Unfortunately, the people most hurt by this are often the poorest people in society.
Second, corruption can cause a sense of us vs them thinking within society both vertically and horizontally. Vertically, because the citizens of a country may see their public officials as skimming off society’s wealth at the expense of ordinary people. Horizontally, because people who are unwilling or unable to pay bribes for what they need may be resentful of those who can and do. This may lead to a “return to the family.” That is, people may increasingly tighten their social circles to include only those with whom they have a kinship relation. One potential negative consequence of this is a greater hostility towards other groups, which may in turn exacerbate ethnic conflicts.
Third, higher levels of corruption may lead to a greater sense of insecurity, both among the public and among the officials themselves. People who distrust the police, for instance, may be wary of reporting crimes or cooperating with authorities. This may lead to greater crime rates, which would lead to a greater sense of insecurity. Moreover, even a public official sincerely motivated to help their society may have their ambitions stifled by an oppressive atmosphere of corruption. They may hesitate in fulfilling their normal and proper functions or refuse to do them altogether.
Fourth, building and safety inspectors have sometimes turned a blind eye to construction companies that have not met the appropriate standards by, for example, using subpar materials. The result is the deaths of hundreds of people when the shoddily built apartments, schools, and houses eventually collapse.
Fifth, corruption, by its very nature, allows people to do things that would otherwise be prohibited by a just society. The scale of human trafficking and endangered animal trafficking are significantly higher than they would otherwise be without the collusion of corrupt government officials. The same is true for the trafficking of weapons as well as illegal logging and deforestation.
Sixth, corruption can have significant effects on a country’s economy. The perception of corruption may make potential investors wary of a country, which will slow down the growth of its economy. It may also restrict the country’s admittance into certain international organizations such as the EU or the Schengen Zone. Another economic consequence of corruption is a lower revenue for the state, since corrupt officials may exempt citizens or firms from paying fines, taxes, etc. Further, corruption can lead to greater rates of poverty. In a 1998 study by the IMF, researchers analysed data from an 18 year period and found that the more corrupt a country was, the more impoverished its citizens. Moreover, poverty is known to be associated with poorer mental and physical health. Finally, corruption may discourage firms from competition. After all, why improve one’s product or service when you can instead bribe an official to grant you a virtual monopoly over a certain area?
Seventh, corruption may have adverse effects on the political and legal system of a country. Corruption can undermine the competitiveness of elections. Two ways this might happen are through ballot-rigging or vote-buying. A lack of genuine political competition may make extremist politicians who promise to eradicate corruption more attractive. Once elected, however, these politicians are rarely effective at actually reducing corruption. The presence of corruption may also lead politicians to accuse and counter-accuse each other of complicity with corrupt officials. This may cause citizens either to become cynical and alienated from the political system or to become outraged, leading to mass unrest and an overthrow of the regime.
The foregoing discussion of the harms of corruption, however, should not lead us to the conclusion that we should do absolutely everything we can to combat corruption. This may seem counterintuitive, but it reflects a rather commonplace lesson in economics. There is an “optimal amount” of corruption. Holmes mentions the work of Robert Klitgaard who says that “the costs of countering corruption should not exceed the economic damage being wrought by that corruption; the point at which corruption is being maximally combated relative to resources is the optimal amount.” In other words, if we could snap our fingers to completely get rid of corruption, we should. But since it would take billions if not trillions of dollars to eradicate corruption, we should be mindful of the resources we’re actually spending on the problem. A dollar spent combating corruption is a dollar that’s not spent on a cure for cancer, or on a space program, or on growing kumquats.
Part 3: Explaining Corruption
Many explanations may be obvious. For the sake of completeness, I’d like to include them anyways.
a. Psycho-Social Explanations
The first explanation is simple: greed. When people desire more resources, whether it be money or the basic necessities of life, they will sometimes do illicit things to get those resources. Corruption, on this view, is a product of a more-or-less rational calculation of what the risks and benefits are of bribery, embezzlement, etc. However, this is hardly a completely satisfactory explanation. It doesn’t entirely explain how we see corruption manifested in all its myriad ways. Different people may have the same greedy disposition but consider different resources valuable. Moreover, two people may want to acquire the same thing, but one may have greater moral scruples. Or perhaps two people are identical in every way except the fact that one is more often in contact with public officials, or is better at bribing public officials, or has greater knowledge of the legal system. The simplistic belief that greed is the sole explanation of corruption is, at best, woefully naive.
A second explanation for corruption is similar to the first: ambition. People not only want to acquire resources; they also want to have prestige. They want to be promoted and respected and recognized by their peers. People want to have a feeling of power over others, and this may lead them to engage in illicit activities to pursue that ambition if upward mobility is blocked through the official channels.
Third, corruption may be a result of a sense of insecurity. A child, for instance, growing up in difficult circumstances may feel the need to acquire resources just in case something terrible happens again. A politician in a country going through turmoil may likewise be afraid for their own financial and physical security. Countries where unemployment is on the rise may see people flocking to influence public officials to appoint them to a secure government position. In any case, the desire to survive can powerfully motivate a person to engage in corruption.
Fourth, peer approval/disapproval may explain why certain individuals become corrupt. Police officers who join corrupt units, for instance, are more likely to become corrupt themselves. This need not be because they are exceptionally ambitious, but rather it’s consistent with people’s innate tendency to conform to the will of those around them. It may also be out of a sense of fear. Police officers in areas with rampant crime activity may have their own lives or the lives of their loved ones threatened if they do not bend to corruption.
Fifth, another lens with which to explain corruption is called “labelling theory.” The idea is that once a state or society labels someone a criminal, they are likely to remain one unless steps are taken to redress this. If, for instance, the media constantly claims that customs officers accept bribes, some officers may end up doing so. The thought would go something like this: “They’ll think we’re accepting bribes regardless of whether or not we do it, so why not actually do it?”
b. Cultural Explanations
First, several studies have been done that link the dominant religion of a country with its level of corruption. Apparently, Protestant countries are less corrupt than Catholic countries, which are less corrupt than Orthodox countries, while Christian countries are generally less corrupt than Muslim countries. The causal reason behind these trends is a matter of speculation that is addressed further in the book.
A second cultural explanation involves people’s attitudes towards the family and the state. The more people trust their family and friends over the state, the more corruption there is in that country. Trust towards strangers is also important. The less the people of a country trust strangers, the more corrupt that country is. Again, the causal direction is a matter of speculation.
A third explanation involves a country’s historical past. It’s been argued, for instance, that former colonies are more corrupt because the imperial powers would often rely on local tax collectors. The tax collectors would take bribes from the locals, and once the imperial powers left, bribery had already become entrenched as a social norm. Further, individuals in former colonies may have residual antipathy to government institutions and view their own current government as illegitimate and hence have no qualms about subverting it through corruption.
Fourth, countries with common law systems may be less corrupt than countries with civil law systems. The judiciary in the former are often more independent of the political elite and hence less prone to social corruption. Additionally, common law systems are often more transparent than civil law systems.
Fifth, cultures which recognize the rule of law are less corrupt than those without such a recognition. In authoritarian regimes, for instance, leaders seen siphoning off the wealth of the nation into their offshore bank accounts for their own personal gain foment distrust amongst the population and cause the legitimacy of the government to come into question. This may discourage people from participating in the legal system, choosing instead to pursue justice by their own means. In one clever study, researchers looked at the parking behavior of foreign diplomats in New York City. They found that “there is a strong correlation between illegal parking and existing measures of home country corruption.”
c. System Related Explanations
One system related explanation for corruption involves the privatization of industries which were formerly run by the state. As the state sells off its industries, businesspeople may offer bribes or kickbacks to public officials to gain an early advantage. This was a major factor in explaining corruption in post-Communist transition countries in the 1990s.
Another explanation has to do with the economic characteristics of a country. Almost invariably, the poorer the country, the greater the corruption. Income inequality, too, is associated with greater levels of corruption. And countries with more protectionist trade policies are also more likely to be corrupt.
The size of government also appears to have an effect on corruption. However, this relationship depends on a country’s level of democracy. In robust democracies, it seems a larger government is associated with less corruption. Whereas in countries with little or no democracy, larger governments mean greater corruption.
A final potentially relevant political variable explaining levels of corruption has to do with the gender proportions of public officials, where political systems with greater proportions of female officials tend to have less corruption (though this explanation along with all of the above explanations have been challenged.)
Part 4: What Can Be Done?
One straightforward suggestion to get rid of corruption is to take it more seriously in the legal system. Botswana, for instance, boasts a level of corruption relatively low in Africa partly because of its high rates of prosecution. Moreover, legal reform aimed at discouraging corruption can take the form of higher conviction rates and more severe penalties. There are problems with this approach, however. In several countries, a conviction of corruption may be met with the death penalty. Moreover, people may be framed or falsely accused for political reasons, and their trials may be a farce.
Several states have agencies specifically tasked with investigating corruption. These agencies, called anti-corruption agencies (ACAs), sometimes investigate officials who live a lifestyle incommensurate with their stated income. However, many problems afflict these agencies. They are sometimes poorly funded. The lines of responsibility are blurred, especially when there are multiple such agencies tasked with similar goals. And these agencies are not always entirely independent of the people and organizations they are tasked with investigating.
Some states have tried using public shaming and blacklisting as a means to combat corruption. Corrupt officials’ names may be displayed on a government website, and companies found to have bribed a public official have sometimes been barred from certain government contracts.
Some states have tried combating corruption by improving the working conditions of public officials, particularly their salaries. This may not be a feasible option for some states, however, that are exceptionally poor and could not afford to do so. Further, without any disincentive, corrupt officials may decide to receive the higher salary and continue to receive bribes.
Other states have rewarded people who report corruption. This approach can backfire, however, by leading to false accusations. Further, whistleblowers may face severe repercussions. They may be threatened or they may face a cold shoulder from their colleagues.
Certain states have attempted to address the problem of corruption by rotating their public officials. The administration of a bureaucracy, for instance, will be continually replaced with new staff members. The theory is that by changing the staff members, gangs or organizations will be unable to establish their roots in the administration. Would-be bribers would no longer have an “inside man.” The cost of this policy, however, should be borne in mind. Administrations that are subject to this policy will, by definition, have inexperienced people working in their offices.
Another approach governments have tried is better auditing. In Indonesia, for instance, after a history of auditing only 4% of road-building projects, the government audited all new projects, leading to an estimated 8% reduction in corruption, an impressive result for such a simple intervention.
Other governments have used technology to their advantage by, for example, installing cameras at border crossings where customs officials are known to be corrupt.
At a broader level, governments have tried to improve the general morality of their citizens. The result of these measures has, at best, been lackluster, and, at worst, counterproductive. When a government continually pledges to clamp down on corruption and fails to deliver, the next pledge may be perceived to be all but a farce.
Other measures are more drastic. In Georgia, the president dismissed every traffic police officer and replaced them with new recruits, apparently to some success. In the capital of Colombia, Bogota, the mayor not only dismissed the traffic police but also hired a large group of mimes to mock people caught breaking traffic rules, again, to some success.
Scome countries have tried changing the gender balance of their public officials, also with some success. However, whether this is due to a change in the gender balance or the newness of the officials is a matter of debate.
In well-functioning democracies, the media has a crucial role to play in exposing corruption and pressuring governments to pursue action against corrupt officials. And citizens, too, can fight corruption by reporting known or suspected cases and expressing their concern about the issue to their representatives.
Part 5: Criticisms and Responses to the Anti-Corruption Movement
Some have accused certain international anti-corruption attempts of “cultural imperialism.” It’s true, some interventions are intrusive and may interfere with the sovereignty of a country, but this is often in countries where corruption is a well-known and where citizens want outside help, especially if that means foreign aid can ultimately get to the people who need it most.
Another criticism against anti-corruption measures is that they have a perverse incentive. They face what I call “The Batman Problem.” They’re fighting for a world in which they no longer have to exist. Though we can trust Batman to step down when the time calls, mere humans are sometimes beset by irresistible temptations. In effect, the anti-corruption agencies have themselves been accused of corruption. Though there’s an important insight in this criticism, it neglects an important fact. Corruption will never by completely eradicated. It can only be managed to tolerable levels. So long as humans continue to be human, anti-corruption measures will always be necessary.
Part 6: My Takeaways
After reading this book, I gained a greater appreciation for the scope and severity of corruption. My upbringing in the US has insulated me from the apparent seriousness of the problem. With a litany of examples and empirical data, Holmes thoroughly popped my bubble, and I’m thankful for that. The extremity of corruption, however, does not dampen my optimism about the overall state of the world. Knowing that amazingly astute scholars like Holmes are thinking about and working on this problem is an immensely comforting thought and inspires my confidence in the future. The exceptional breadth and crystal clear structure of this book are a breath of fresh air from the obscurantism and muddled thinking found in the news. I highly recommend this book to anyone who wants to learn more about corruption.
Holmes, L. (2015). Corruption: A very short introduction (Vol. 426). Oxford University Press, USA.
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