Bad Governance & Corruption by Perpustakaan_Integriti

BAD E C N A N R E V O G N O I T P U R R O C & Richard Rose & Caryn Peiffer

POLITICAL CORRUPTION & GOVERNANCE

Political Corruption and Governance Series Editors Dan Hough University of Sussex Brighton, UK Paul M. Heywood University of Nottingham Nottingham, UK

This series aims to analyse the nature and scope of, as well as possible remedies for, political corruption. The rise to prominence over the last 20 years of corruption-related problems and of the ‘good governance’ agenda as the principal means to tackle them has led to the development of a plethora of (national and international) policy proposals, international agreements and anti-corruption programmes and initiatives. National governments, international organisations and NGOs all now claim to take very seriously the need to tackle issues of corruption. It is thus unsurprising that over couple of decades, a significant body of work with a wide and varied focus has been published in academic journals and in international discussion papers. This series seeks to provide a forum through which to address this growing body of literature. It invites not just in-depth single country analyses of corruption and attempts to combat it, but also comparative studies that explore the experiences of different states (or regions) in dealing with different types of corruption. We also invite monographs that take an overtly thematic focus, analysing trends and developments in one type of corruption across either time or space, as well as theoretically informed analysis of discrete events. More information about this series at http://www.palgrave.com/gp/series/14545

Richard Rose · Caryn Peiffer

Bad Governance and Corruption

Richard Rose Centre for the Study of Public Policy University of Strathclyde Glasgow, UK

Caryn Peiffer School for Policy Studies University of Bristol Bristol, UK

Political Corruption and Governance ISBN 978-3-319-92845-6 ISBN 978-3-319-92846-3 (eBook) https://doi.org/10.1007/978-3-319-92846-3 Library of Congress Control Number: 2018943674 © The Editor(s) (if applicable) and The Author(s), under exclusive licence to Springer International Publishing AG, part of Springer Nature 2019 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, express or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. Cover image: © MartinPrague/iStock/Getty Images Plus Cover design by Akihiro Nakayama Printed on acid-free paper This Palgrave Macmillan imprint is published by the registered company Springer International Publishing AG part of Springer Nature The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland

Preface: Why This Book Is Important

Governance is a recurring word in the discussion of public policy because it describes the relationship between governors and governed, an inevitable feature of every political system. The quality of governance varies greatly between political systems, but the attention given to good and bad governance is unbalanced. A Google search finds 47 million references to good governance and fewer than 7 million to bad governance. However, more societies are subject to bad governance than to good governance, and corruption is a major cause. The introduction of elections in formerly undemocratic regimes has not guaranteed that a country enjoys good governance, and bad governance can be found not only in developing countries but also in parts of Europe and Northern America too. Corruption takes many forms. The United Nations Convention Against Corruption casts a wide net in describing ‘the scourge of corruption’. It includes not only the payment of bribes, the most common form of corruption, but also the tolerance of organized crime, dealing in drugs, money laundering, and handling stolen assets. Since the Convention was published in 2005, a total of 175 member states have signed it, including many where corruption is a significant feature of governance. They could do so without censure for their national practices because the Convention lacks the means of effective enforcement. Consistent with the UN’s respect for national sovereignty, member states are asked to consider adopting good governance laws insofar as they are v

Preface: Why This Book Is Important

in keeping with their national constitutions. Even if a constitution rhetorically endorses normative standards of good governance, the practice can still be corrupt. This book is about the experience of ordinary people with governance when they come into contact with officials delivering public policies at the grass roots of their society. The services delivered include both the ‘good’ goods of public policy such as education and health care, and the necessary but not always welcome services of the police and officials issuing documents such as identity cards and driving licences. The view of government at the grass roots is very different from that at the top of government. In the words of a Chinese proverb: The mountains are high and the emperor is far away. Our approach is unique because we analyze empirical evidence from sample surveys asking more than 175,000 people about their experience of governance. The surveys are not confined to countries with good governance nor do they concentrate exclusively on badly governed countries. They cover a cross-section of the world’s population in 125 countries of Africa, Asia, the Middle East, Europe and North and South America. For billions of people, corruption is not just a subject for academic scrutiny but a familiar experience of what happens when they meet public officials face to face. Globally, an estimated 1.8 billion people annually pay a bribe to get a public service that they are entitled to receive, such as health care, or to avoid onerous regulations requiring such things as a permit to make a living as a street trader. The number of people experiencing bribery each year is so large because many of the countries viewed as practising good governance, such as the Scandinavian states, have only a few percent of the world’s population. Conversely, corruption is high in the world’s most populous countries. In India, an estimated 807 million people are caught up in bribery each year, and in the People’s Republic of China, 290 million. The 10 countries contributing the largest number of bribe payers to the global total include undemocratic countries such as Russia, as well as countries that hold free or partly free elections such as Mexico and India. The impact of corruption on societies is bad because a significant amount of money that should be spent on national development is diverted into the pockets of politicians and public employees delivering services. In the words of UN Secretary-General Kofi Annan when endorsing the UN’s 2005 Convention Against Corruption:

Preface: Why This Book Is Important

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This evil phenomenon is found in all countries but it is in the developing world that its effects are most destructive. Corruption hurts the poor disproportionately by diverting funds intended for development, undermining a government’s ability to provide basic services, feeding inequality and injustice and discouraging foreign aid and investment. Because corruption is good for public officials who pocket bribes, bad governance can be maintained indefinitely when the people who benefit most also have the most political power.

The impact of corruption on governance depends on the behaviour of politicians and public officials. The first chapter distinguishes between the narrow formal definition of corruption and the much broader informal definition. Formal standards are set out in laws that specify the bureaucratic procedures that public officials ought to follow, such as treating all citizens impartially. Bad governance is the consequence of public officials breaking laws by such actions as demanding a bribe to deliver a service that a person is entitled to receive free. Informal standards of how politicians ought to behave are held in the minds of voters, for example that politicians should not use their public office to accumulate private wealth or make misleading promises in pursuit of winning elections. Whereas formal standards are enforced in courts of law, informal standards are enforced in the court of public opinion. When the behaviour of officeholders meets both standards, good governance is the result. When one standard is violated and the other is not, the quality of governance is in dispute. When both standards are violated, governance is doubly corrupt. Many people are more concerned with getting what they want from governance than with whether public officials adhere to formal standards. This is particularly the case for people who depend on public services because they lack the money to buy private health care or education. Chapter 2 shows how people satisfice, that is, getting what they want by the book, by hook or by crook. In the first instance, officials satisfy claimants by following standards of impartiality set out in bureaucratic rules. When this does not happen, people may get what they want by pulling hooks, using personal connections to get around indifferent or slow-moving public officials. If that does not work, the crooked alternative is to pay a bribe to get what you want. Many social science theories offer explanations for the chief influences on whether people get what they want by the book or by other means.

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The most familiar measures of corruption, such as the Corruption Perceptions Index (CPI) of Transparency International and the World Bank Governance Index, characterize national political systems as a whole. They do so on the basis of expert perceptions of the extent to which there is big bucks corruption in the award of multi-million or billion dollar contracts for infrastructure projects such as building roads, drilling for oil, or the purchase of expensive military aircraft. The beneficiaries are a relatively few big businesses, since only such companies have the capital to invest in producing these goods and services. They also have ample funds to pay large bribes to obtain contracts from a relatively small number of high-ranking government officials. Describing a country as corrupt or as an exemplar of good government implies that bad or good governance is pervasive in its political system. However, no country is perfectly free of corruption or corrupt in everything its public officials do. The CPI rating emphasizes differences in the degree of good or bad governance; on its 100-point scale the best-governed countries are rated at 90 and the worst at 10. The median country has a rating of 38. Because governance involves many different activities, a political system can be bad in some parts while good in others. In the United States and in Europe, a city can have corrupt police who accept bribes from drug dealers while teachers offer a high quality of public education in keeping with formal standards. There are big differences in corruption between governments within continents as well as between continents, including countries at similar levels of economic development. The third chapter tests statistically major theoretical explanations of why national levels of corruption differ. Major causes are differences in historical legacies, the extent of contemporary democracy, and foreign aid money that can be diverted to the private benefit of public officials. Within a national political system, services differ in the opportunities that they offer officials to demand bribes. This is especially true of grass-roots services that are delivered retail by face-to-face encounters between low-level public officials and ordinary citizens wanting their services. A police officer can turn a blind eye to a motoring offence in exchange for cash in hand, but a post office clerk cannot ensure the prompt delivery of a parcel to a distant city if offered money under the counter. Citizens likewise differ in whether they have contact with public services, thus becoming vulnerable to corruption. Older women, for example, are more likely to make use of health services than are young

Preface: Why This Book Is Important

men. The global evidence presented in Chapter 4 shows that on average 17% report paying a bribe for the use of a public service in the past year; 57% receive services by the book; and 26% are not at risk because they have not had any contact with public services in the past 12 months. Since the incidence of bribery varies between services, people who use several public services may have a mixture of experiences, sometimes paying a bribe and sometimes not. The extent to which people experience the effects of bad governance varies both within countries and between countries. Social scientists explain differences between individuals by reference to their socio-economic characteristics, their attitudes, and their experiences, while accounting for cross-national differences by reference to national context. The two approaches are combined in statistical analysis in Chapter 5. The results show that differences in historical legacies and contemporary contexts are just as important as differences between individuals in determining bribe-paying for public services. Since there are big differences in the extent to which people contact services, we also test whether differences in the life cycle and in gender influence the likelihood of individuals paying a bribe. Whereas an ordinary person can argue that their personal indiscretions are a private matter, it is much harder for public officials to separate private and public behaviour. Moreover, even if their behaviour is not illegal, it can still be judged as falling short of informal standards that public opinion uses to assess the behaviour of politicians. In many long-established democratic countries, the payment of bribes is much less common than the incidence of politicians behaving badly. Hence, in Chapter 6, we report the results of a specially designed survey that asked people in Britain, France and Spain their perceptions of politicians behaving badly. It found that only a minority of citizens think most politicians behave disreputably in their private lives or take money for doing favours. The most common form of bad behaviour reported is that of politicians saying one thing to get elected and doing the opposite once in office. Bad governance challenges standards of how citizens ought to behave, such as voting in elections and trusting their political institutions. Instead of mobilizing people to be good citizens, corruption may demobilise people, discouraging them from voting and encouraging distrust in governors. In Chapter 7 we test the impact of corruption on citizenship by analyzing nationwide sample surveys in Africa, Latin America

Preface: Why This Book Is Important

and formerly Communist countries of Eastern Europe and the Soviet Union. Exposure to corruption has little effect on whether people vote; the major influences are social characteristics such as age and education. Ordinary people are not dupes or fools. If people see their government as corrupt, they are more likely to distrust their governors. If people see their politicians breaking informal standards, especially making promises to win votes that they abandon once in office, they are much more inclined to distrust their governors. The theory of open governance is that making transparent what happens in the corridors of power will reduce formal and informal corruption. Public officials will avoid seeking bribes for fear of being subject to legal sanctions, and politicians will avoid behaving badly for fear of being indicted in the media and convicted in the court of public opinion. For this to happen, there must be stakeholders with the institutions and incentives to hold politicians to account for their actions. In democratic political systems, journalists and opposition politicians are free to do so and law enforcement officials are prepared to live up to their name rather than serve the interests of corrupt policymakers. However, where corruption is relatively high, civil society institutions tend to be kept weak by governors, and both law enforcement institutions and their officials are part of a system of corruption. The evidence presented in Chapter 8 shows that opening up governance to popular scrutiny is unlikely to break a vicious equilibrium of bad governance. In countries with high levels of corruption, people know from their own experience what bad governors are doing, but they are also hesitant to challenge powerful rulers to stop abusing their offices for private gain. Our study diagnosing the causes of corruption concludes with a chapter recommending ways of reducing corruption. It cautions against recommendations for the adoption of best-practice anti-corruption policies that ignore the historical legacies and contemporary institutions that are maintaining systems of bad governance. It also cautions against one-size-fits-all remedies that do not recognize differences between bigbucks corruption in the purchase of military aircraft and petty bribes that ordinary people pay to local officials. Because corruption varies greatly between public services, reducing corruption requires making changes in how services are delivered at the grass roots of government, and not just changing leaders and institutions at the top. Nine principles identify actions that governors can take if they have the political incentives and will to do so. The principles do not require

Preface: Why This Book Is Important

a change in the hearts and minds of public officials. They require such things as applying the common-sense principle that people will have no need to pay bribes to public officials if their posts are abolished. Face-toface contacts between claimants and officials can be eliminated by introducing computers that enable individuals to get what they want by filling in online forms that follow procedures consistent with good governance. Onerous laws and regulations requiring permits and licences that give officials opportunities to collect ‘rents’ (that is, bribes) can be repealed. Such actions not only reduce opportunities for bribery but also increase the efficiency and ease of using public services. Even though the piecemeal reform of particular services will not deliver good governance in its entirety, at a minimum it can reduce the impact of bad governance on citizens. Because governance is of immediate concern to large audiences outside the academic world, we have written this book in language that can be understood by readers engaged in the political process as well as by social scientists. We give examples of corrupt activities in order to put flesh on the bare bones of numbers and abstract concepts. We also pay attention to the fuzziness of standards that are used in formal and informal descriptions of corruption. We present the results of statistical data analysis in clear text, tables and graphics. Since this book is not a Ph.D. thesis, we dispense with a lengthy review of the vast literature of aspects of corruption. We do not need to go into great technical detail comparing different ways in which surveys ask questions about corruption, because we have covered this topic thoroughly in our 2015 book with Palgrave Macmillan, Paying Bribes for Public Services. In researching and writing this book we have drawn on our experience of dealing with governance in Africa, Asia, Latin America and post-Communist Europe, as well as in Western Europe and the United States. Richard Rose has been asked to pay a bribe by an urban American politician who dishonestly wanted money in exchange for votes that the politician couldn’t deliver, and offered a bribe in an East European country to co-operate in politically framed research. Caryn Peiffer has had to pay bribes for services in Indonesia and southern Africa. Both have had experience in getting things done in all kinds of places ranging from up the Amazon, to Belfast, southern India, Moscow and Sicily. The fall of the Berlin Wall in 1989 stimulated Richard Rose to design survey questionnaires collecting empirical data about how ordinary people cope with systems of bad governance in conditions of high

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uncertainty and risk in 17 countries of Central and Eastern Europe and successor states of the Soviet Union. Since 1998 Rose has been a pro bono member of the Research Advisory Committee of the Transparency International Secretariat in Berlin, advising on the design of its survey work. Caryn Peiffer draws on fieldwork in Botswana and Zambia performed as part of research for a Ph.D. thesis at Claremont Graduate School. Subsequently, Peiffer has done research on problems of governance in Uganda, South Africa, Indonesia and Papua New Guinea and lectured for the Afrobarometer. The preparation of this book has been made possible by a five-year grant from the British Economic & Social Research Council to examine the global experience of corruption (ES/I03482X/1). Supplementary support for the study of Politicians Behaving Badly has come from Bernhard Wessels of the Democracy Programme of the Wissenschaftszentrum Berlin and from a European Union grant on open governance to the Italian research institute RISSC (the Research Centre on Security and Crime), Padua. Papers about corruption have been presented at seminars and conferences in London, Oxford, Sussex, Berlin, Brussels, Cape Town, Gothenburg, Oslo, Paris, Venice, Warsaw and Washington. We owe particular thanks to the Global Corruption Barometer team at the Berlin Secretariat of Transparency under the leadership of Dr. Robin Hodess and to Coralie Pring, Manager of TI’s massive data bases. Ohna Robertson was prompt and accurate in going through the many revisions of the text, tables and figures in this book and Karen Anderson’s copyediting helped make this book clearer for the general reader. Glasgow, UK Bristol, UK

Richard Rose Caryn Peiffer

About the Book

More than 1.8 billion people pay the price of bad government each year: a bribe to a public official. This is because bad governance is much more widespread than good governance, and corruption is a major cause. In developing countries it affects social services such as health care and education, and such law enforcement institutions as the police. When public officials do not act as bureaucrats delivering services by the book, people can try to get them by hook or by crook. In Western democracies, people normally get what they want through processes of good governance. Corruption also takes the form of violating informal standards. Politicians mislead voters, saying one thing to get elected and doing the opposite once in office. Large businesses exploit loopholes in laws to avoid paying billions in taxes and make extra charges in contracts for military equipment and building infrastructure. The book’s analysis draws on unique evidence: a data base of sample surveys of 175,000 people in 125 countries in Africa, Asia, the Middle East, Europe and North and South America.

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Contents

1 Setting Standards for Good and Bad Governance 1 1 What Corruption Is About 2 2 Countries Mix Good and Bad Governance 10 3 Evidence of Corrupt Governance 15 References 18 2 Getting What You Want from Governance 21 1 Satisficing by the Book, by Hook or by Crook 22 2 The Health of the Body Politic 28 3 Comparing Explanations of Corruption 32 References 36 3 Exploiting National Government 39 1 Corruption at the Top 40 2 Measuring National Corruption 44 3 Explaining National Differences in Corruption 50 References 58 4 Exploiting People at the Grass Roots 61 1 How People See Public Institutions 62 2 How Public Services Differ 65 3 Contact Varies by Service 68 4 Experience of Bribery Varies Too 71 References 81 xv

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Contents

5 Explaining Who Pays Grass-Roots Bribes 83 1 Theories of Who Pays Bribes 84 2 Both Levels Matter 87 3 Differences Between Services 93 References 104 6 Politicians Behaving Badly 107 1 Tolerated and Shameful Behaviour 109 2 The Extent of Bad Behaviour 114 3 Punishment in the Court of Public Opinion 121 References 125 7 The Impact of Corruption on Citizens 127 1 Theories of the Impact of Corruption 129 2 Corruption Has Little Impact on Voting 132 3 Corruption Gives a Big Boost to Distrust 136 References 143 8 Making Government Transparent 145 1 Conditions for Transparency 147 2 Stakeholders in Open Data 151 References 164 9 Reducing Corruption 167 1 Changing Institutions 169 2 Targeting Vulnerable Services 174 3 Changing Services at the Grass Roots 177 4 Implications for Better Governance 183 References 185 Appendix 187 Index 197

About the Authors

Professor Richard Rose is a pioneer in the comparative study of public policy through quantitative and qualitative analysis. He has given seminars in 45 countries across Europe, North and South America, Africa and Asia, and his writings have been translated into 18 languages. He is a Fellow of the British Academy and founder-director of the Centre for the Study of Public Policy. Dr. Caryn Peiffer researches problems of governance in developing countries across Africa and Asia, using quantitative, qualitative and experimental methods. She is a Lecturer in International Public Policy and Governance at the School for Policy Studies, University of Bristol, UK.

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List of Figures

Chapter 2 Fig. 1 Global consensus bribery is wrong

Chapter 3 Fig. 1 Big variations in corruption within every continent

Chapter 4 Fig. 1 Perceptions of corruption in institutions Fig. 2 Contact with services high in every continent Fig. 3 Bribery varies between and within continents Fig. 4 Consistent payers of bribes the exception

64 69 72 75

Chapter 5 Fig. 1 Impact of significant influences on paying bribe

Chapter 8 Fig. 1 Why corruption not reported 161 Appendix Fig. A.1 Percentage paying bribe by country 188

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List of Tables

Chapter 1 Table 1 Combining legal and informal standards of corruption Table 2 Corruption surveys analyzed in this book

6 17

Chapter 2 Table 1 Getting things done by hook or by crook

Chapter 3 Table 1 Contextual influences on national corruption (dependent variable: National Corruption Perceptions’ Index ordinary least squares regression)

Chapter 4 Table 1 Contact varies by public service Table 2 Bribery for services after controlling for contact

70 74

Chapter 5 Table 1 Combined individual and institutional influences on bribery 88 Table 2 Comparing influences on contact and bribery by service 98 Table 3 Heckman analysis of influences on contact and bribery 100 Chapter 6 Table 1 Table 2 Table 3 Table 4

Popular perceptions of Politicians Behaving Badly Partisan influences on perceptions of politicians Punishments for bad behaviour Punishments if politicians say one thing, do another

116 120 122 124

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List of Tables

Chapter 7 Table 1 Corruption has little impact on going to vote 133 Table 2 Corruption increases distrust in government 137 Table 3 Breaking informal standards in Western Europe 141 Appendix Table A.1 Table A.2 Table A.3 Table A.4 Table A.5 Table A.6

Chapters 3, 5 and 7: Aggregate measures of national context Chapter 5: Individual measures Chapter 7: Afrobarometer variables Chapter 7: LAPOP variables Chapter 7: EBRD variables Conventions in reporting data

191 192 193 194 195 196

CHAPTER 1

Setting Standards for Good and Bad Governance

At the symbolic level, few citizens would say that they are against good governance and fewer still would endorse bad governance or corruption. However, because of their symbolic power, the terms governance and corruption are applied indiscriminately to describe what people like or dislike. Without standards for defining these terms, the result is confusion. Because the words governance and government share the same Greek root, they are often used interchangeably. Governance is a behavioural relationship between governors and governed. Government is a set of institutions established by a constitution and laws. A narrow definition of governance is that it is about relations within the government between principals, who decide what government institutions do, and public officials who act as their agents in the process of governance (cf. Peters and Pierre 2004). While these relationships are important for high-level politics, this focus ignores how public officials deal with the great mass of citizens living outside the national capital. Governance and government are linked. Institutions provide the laws, money and public employees that produce public services, while governance determines the experience that ordinary people have when they deal with officials delivering these services. These outputs include both the ‘good’ goods of public policy, such as education and health care, and necessary but not always welcome services, such as court orders. © The Author(s) 2019 R. Rose and C. Peiffer, Bad Governance and Corruption, Political Corruption and Governance, https://doi.org/10.1007/978-3-319-92846-3_1

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The delivery of services can be in keeping with the standards of good governance or corruption. How the process of governance is evaluated reflects the standards used to define corruption, as well as by how public officials behave. When ordinary Russians describe politicians as corrupt they usually have in mind officials abusing their public office for private gains that can be worth billions of roubles. When Britons refer to politicians as corrupt, they often have in mind behaviour that would be unacceptable among friends or people at work or that they would be ashamed of doing themselves. When dictators in poor countries are accused of corruption because they take money in return for awarding public contracts to private enterprises, they may claim that they are not acting corruptly but simply following their country’s traditional cultural practices.

1 What Corruption Is About To define corruption as a departure from good governance is logically clear but in practice of little help because the term governance has been stretched to cover a jumble of activities and political processes. For example, the World Bank defines governance as: The traditions and institutions by which authority in a country is exercised. This includes the process by which governments are selected, monitored and replaced; the capacity of the government to effectively formulate and implement sound policies; and the respect of citizens and the state for the institutions that govern economic and social interactions among them. (http://infor.worldbank.org/governance)

Social scientists are likewise expansive in their views. The Quality of Government Institute of the University of Gothenburg eclectically includes more than 2500 variables in its database about political institutions and processes, including some indicators of institutions that may facilitate corruption. To describe governance in positivist language as the normal way in which public officials relate to citizens can be taken to mean that the way public officials usually behave is how they ought to behave. In countries, where good governance tends to prevail, this can be a distinction without a difference. However, where officials often do not behave as they ought to, a positivist definition ignores the normative difference between good and bad governance. Where corruption is persisting, a behavioural

1 SETTING STANDARDS FOR GOOD AND BAD GOVERNANCE

characterization may interpret activities that appear corrupt by international standards as an equilibrium maintained by the holders of power delivering policies that benefit themselves and their supporters and that are accepted with resignation by people who lack the political influence to promote good governance (Mungiu-Pippidi 2015). The practice of governance also changes across time. Prior to the introduction of nineteenth-century reforms, England’s aristocratic governors used customary practices to maintain their political power and the material benefits of office. Until late Victorian times offices now regarded as public, such as seats in Parliament, could be bought and sold as private property. Those excluded from power campaigned successfully for the reform of traditional practices that they stigmatized as ‘Old Corruption’ (Rubinstein 1983). In the United States, urban politicians used democratic institutions to create political machines that controlled governance for the benefit of themselves and those who voted for them. Public contracts were given to major supporters and cash, food or low-level public jobs were given to ordinary voters in exchange for their votes. The practice of judging governments by what they do rather than by how they do it was embodied in the boast of Chicago machine politicians that it is ‘the city that works’. The phrase leaves open how it works. To compare good and bad governance in countries around the world today, a definition of corruption is needed that goes beyond endorsing that whatever is accepted in a given national context is internationally acceptable as good. It is even more needed by intergovernmental organizations such as the World Bank, which annually spends many billions in trying to improve economic and social conditions in countries in which its efforts can be frustrated when its money gets into the hands of officials who accept corruption as a normal part of governance. Making the definition of a concept relative to national context or loading it up with a dozen or more different meanings risks stretching it to the point at which it is no longer scientifically useful. Socially constructed definitions. The meaning of corruption cannot be confined to the black and white letters of a dictionary. It is socially constructed according to the context in which it is used and the normative standards of those using the term, whether they are social scientists, journalists, politicians or ordinary people. Review articles chronicle many different contemporary uses of the word (Varraich 2014; Kurer 2015). The number of meanings increases greatly when comparisons are made across time and space (see e.g. Heidenheimer and Johnston 2002: Part One).

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The English word corruption is derived from the Latin corrumpere, something that fails to meet a particular standard (Oxford English Dictionary 1936, vol. 1: 400). A computer programme can be described as corrupt if it does not meet the standard set by the computer’s operating system. The best-known political use of the term is Lord Acton’s dictum: ‘Power tends to corrupt, and absolute power corrupts absolutely’. The statement leaves open the standards that are broken by the corruption of power. In philosophical terms, corruption has a family of meanings with a degree of kinship; it also has family disputes. Because corruption invariably has negative connotations, it tends to be used as a synonym for bad governance. The positivist approach of contemporary social science favours reducing the meaning of corruption to a single characteristic that can be expressed numerically for use in quantitative analyses testing theories of the causes and consequences of corruption. A legal approach is likewise narrow but it relies on written texts that specify illegal practices in the delivery of public services, the only numbers employed are those used in enumerating the clauses of a law. The most commonly quoted definition is that of Transparency International: ‘the abuse of entrusted power for private gain’ (www. transparency.org). Its anti-corruption glossary lists 60 entries with different examples of corruption, such as mutually beneficial collusion in money-laundering. Imputing so many different meanings to the term threatens to drain corruption of any particular meaning. Like democracy, another concept that has dozens of different meanings, the significance of corruption for governance means that it cannot be abandoned. It also challenges writers to be clear about what they mean when they describe activities as corrupt. In this book, the core meaning of corruption is that it violates formal bureaucratic standards or informal normative standards about how public office-holders ought to behave, or both. Formal bureaucratic standards are set out in laws and regulations. Violations of these standards can be assessed through normal legal processes and enforced by courts. Informal standards are norms about how governors ought to behave. These standards are ‘soft’ laws. They are social psychological expectations held in the mind rather than recorded in statute books. In a political system of good governance, informal norms can re-enforce legal standards, for example public officials ought not to take money in exchange for doing favours. If there is a consensus within a society that

1 SETTING STANDARDS FOR GOOD AND BAD GOVERNANCE

a public official has broken an informal standard, then he or she can be punished for corrupt behaviour in the court of public opinion. When both formal and informal standards of political behaviour are weak or lacking, then politicians will be left to their own devices to decide how to behave. When the breakdown of the Soviet Union led to the transformation of Communist societies, behaviour that appeared corrupt to Western advisors was justified on the grounds of the ‘primacy of surviving by mutual social favours’ (Sajo 2002: 2; cf. Rose 2009: Chapter 5). The primacy of survival is today specially relevant in failed states. An economic theory based on the premise that individuals pursue their own self-interest can lead to public officials profiting surreptitiously from the sale of state-owned assets such as the trade in oil or even ‘stealing the state’ by transferring assets to a new breakaway entity that they control (Solnick 1998). In the absence of a state with the effective power to enforce any standards, the optimal outcome is, in the words of an economist, ‘efficient predatory behaviour in a lawless world’ (DablaNorris 2002). A necessary condition of characterizing the behaviour of officeholders is that there are laws formally setting standards that public officials ought to apply impartially when making decisions about who receives benefits or must comply with obligations. In short, public officials should behave like bureaucrats in Max Weber’s universalistic definition of a modern state (1947). If they do not, then their behaviour is corrupt. In a political system that has not adopted the bureaucratic rules of a modern state, corruption in this sense cannot exist. If an official shows favouritism in dispensing services to relatives and friends, this may be considered appropriate by the standards of the national culture. If an official is given money after delivering a benefit to an individual or waiving an obligation, in the absence of a law making this illegal, it is not bribery. Anthropologists describe this as a customary act of gratitude and economists as a rational transaction in which you get what you pay for. In such a context, only by importing modern standards can customary behaviour be described as corrupt. Bureaucratic governance in the Weberian sense is a nineteenth-century development in Europe (Anderson and Anderson 1967; Finer 1997). In countries and continents, where its standards have been incorporated slowly and incompletely in the past half-century, public officials can operate by a mixture of informal traditional standards and formal laws and regulations modelled on contemporary international standards.

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Table 1 Combining legal and informal standards of corruption

Legal

Normative Acceptable Unacceptable

Yes

Acceptably bureaucratic Shameful

Tolerated Doubly corrupt

In states with a legacy of Marxist–Leninist standards or some other form of dictatorship, those in power can enforce laws selectively to their own advantage and the disadvantage of their opponents (Johnston 2014). Informal normative standards provide an additional means for judging acts of public officials as corrupt. Public officials tend to be held to higher normative standards of behaviour than people in charge of private-sector enterprises, where the standard that matters most is making money. They are also held to higher standards than entertainment celebrities who shamelessly assess behaviour by how much publicity it attracts. Even if an action does not break a law, if it violates a normative standard of behaviour it can be labelled corrupt in the court of public opinion. In combination, legal and normative standards offer four different ways of categorizing activities of governance. In the ideal-type system of good governance, public services are delivered in keeping with bureaucratic standards set out in rules and procedures that stipulate under what conditions individuals are or are not entitled to receive a social benefit or obligated to comply with regulations. Bureaucratic officeholders are impartial in their dealings with citizens, treating people in like circumstances in the same way. Equally important, there is a public consensus that these procedures are the right way to deliver services. When these two criteria are met, the outcome meets both standards of good governance. At the other extreme, a system of governance is doubly corrupt if officeholders violate laws for their own advantage and their behaviour is inconsistent with the normative values of a society (Table 1). Labelling activities as corrupt is problematic when legal and normative definitions produce conflicting assessments. Behaviour that is illegal can be tolerated in the court of public opinion if legal standards are inconsistent with informal practices of a society. For example, laws that define speeding at a level below the speed that motorists think is safe and reasonable are regularly violated. Traffic police are expected to tolerate

1 SETTING STANDARDS FOR GOOD AND BAD GOVERNANCE

speeding as long as it does not create the danger of an accident because the road is empty. The violation of a law can also be informally tolerated if it is regarded as a relic of out-of-date standards of public morality, for example, a law that makes the possession or sale of marijuana an offence. In a country, in which an authoritarian government represses critics, exposing corruption on the internet may be illegal but tolerated as an acceptable weapon of subjects whose legal resources for opposition are weak (Scott 1972). Even though an action is legal, it can still be wrong by the informal normative standards about how public officeholders ought to behave. A governing party may legally accept a substantial sum of money from a business contribution if it is done in keeping with laws it has enacted about party finance. By definition this action is legal. However, if the government adds a special clause in a tax law that favours its financial donors, this will appear corrupt by the informal standards of public opinion. Likewise, politicians can be described as behaving shamefully if they proclaim standards in public and violate them in private, for example, British politicians who promote the principle of equality in education while sending their children to privileged private schools. Disputed standards. Although standards conventionally applied in assessing corruption are expressed in universalistic terms, because corruption is a political issue, standards are often objects of political dispute. Politicians have the rhetorical skills to argue that accusations against them for corruption are false facts made up by their partisan opponents. Lawyers have professional skills to get a court to rule that there is nothing illegal in the way a politician has violated informal standards of behaviour by taking money from a big business in exchange for favours. Even if evidence of breaking informal standards is acknowledged, if this does not lead to a conviction in a court of law, a politician can argue that a formal investigation has cleared him or her of blame. National differences in history and culture can be used to challenge applying the label of corruption to practices that appear corrupt by universalistic standards but appropriate in the national context in which they are found (cf. March and Olsen 2006; Tanzler et al. 2012). Such standards are rejected as social constructions of modern Western governments that are alien to traditional norms about the relationship of governors and governed in developing societies. Governments in former colonies can add that they are political relicts of imperialism. This political argument tends to be supported by studies of anthropologists who closely

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observe how public services are allocated in a traditional village and use this to construct an idealised model of customary practices that fit into a village’s way of life. A description of what is normal in the sense of being customary can be linked to a normative judgment that this is how villagers ought to behave in ‘a moral economy of corruption’ (de Sardan 1999). However, anti-corruption organizations dispute these views as undermining good governance and the political and economic development and wellbeing of people in low-income countries. The introduction of bureaucratic institutions meant to deliver services impartially challenges customary ways of doing so by particularistic standards in which who you are and who you know is important to get things done. Mungiu-Pippidi (2015: 24) describes particularism as acceptable behaviour in societies in which people expect officials with whom they share an identity to favour their own kind. In the words of an Indian anthropologist (Gupta 1995: 397), ‘a highly placed official who fails to help a close relative or fellow villager obtain a government position is often roundly criticised by people for not fulfilling his obligations to his kinsmen and village brothers’. Although favouritism involves officials abusing their power, it is not done in exchange for money but as an expression of solidarity ties with those whom they favour. Whereas favouritism tends to link people with particular given characteristics, clientelism involves politicians selectively distributing benefits of public services in exchange for votes or political support (Eisenstadt and Ronger 1984). The result of this exchange is a “win–win” outcome in which each participant gets a personal benefit, while the public sector bears the cost. Political patronage refers to the award of jobs on the public payroll to clients who may or may not have the merit-based qualifications for holding a job; they owe their appointment to who they know rather than what they know. The evaluation of how individuals and businesses minimize their taxes is a familiar example of disputed standards. Tax evasion involves hiding income that should be legally declared and taxed. In a modern economy, opportunities for tax evasion are limited, since employers are legally required to deduct income tax and social security taxes before paying wages net. Large corporations must keep computerized accounts in order to monitor whether they are making or losing money. Cash payments are easier to hide from tax collectors. However, in a modern economy, there are a limited number of occupations where most income is in cash. Waiters and taxi drivers paid or tipped in cash may understate

1 SETTING STANDARDS FOR GOOD AND BAD GOVERNANCE

their income but they cannot tell the tax authorities that they are working for nothing. Self-employed electricians can do a few hours of work for cash in hand but a real estate developer has such a big cash flow that it becomes difficult to operate on a cash-only basis. In developing countries, payments in cash tend to be the norm for peasants, street traders and casual workers. In developing countries, the evasion of taxes in the shadow economy can account for up to two-fifths of national economic activity and in modern economies up to an eighth or more (Schneider and Enste 2002). Everywhere estimates of shadow economy earnings outside the tax system are substantial. Tax avoidance involves organizing economic activities within the law in ways that reduce tax liabilities, for example, dividing the profits of a family firm among members of a family paying different rates of taxes. By definition, tax avoidance is legal, as an English judge has explained. Every man is entitled if he can to arrange his affairs so that the tax attaching under the appropriate Acts is less than it would otherwise be. If he succeeds in ordering them so as to secure that result then, however unappreciative the Commissioners of Inland Revenue or his fellow taxpayers may be of his ingenuity, he cannot be compelled to pay an increased tax. (Quoted in Rose and Karran 1987: 203)

Entrepreneurs such as Donald Trump not only endorse these words but also put them into practice. Accountants make their living by advising people how to look after their self-interest by minimizing their liability to tax, and large corporations practice tax avoidance on behalf of their shareholders and highly paid executives. Multinational corporations such as Google and Starbucks have arranged their cash flows so that expenses are highest in countries where national taxes are high. Profits are booked in countries such as Luxembourg or Ireland, where taxes on businesses are low. Even though tax avoidance is by definition legal, public opinion tends to see it as wrong. In a British survey about paying taxes, 61%, said it was never acceptable to avoid tax legally and an additional third thought it was usually not justifiable (Shah 2016: Fig. 2). A majority see tax avoidance as unfair to people who pay their full share of taxes. More than a quarter see tax avoidance as shirking a public responsibility to help pay for public services, and a similar proportion describe it as immoral. Yet, as long as the sums involved are not on the scale of corporate profits,

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many people are prepared to collaborate in tax avoidance or evasion by making generous claims for expenses or getting a discount for paying a restaurant bill in cash rather than by a credit card. Indefinitely stretching the meaning of corruption. The association of corruption with bad governance encourages stretching the term to label as corrupt anything that people think is wrong with their political system. Carried to the extreme, political practices can be labelled as corrupt by reasoning backwards from the norms of a political commentator (cf. Warren 2015: 48ff). However, as more and more activities are labelled corrupt, the umbrella term becomes a circus tent in which the word loses any specific meaning. For example, when the US Supreme Court accepted as legal the election result that gave George W. Bush the presidency in 2000, a liberal Harvard Law School professor, Alan Dershowitz, declared ‘The decision in the Florida election case may be ranked as the single most corrupt decision in Supreme Court history’ (2001: 174). Bad governance is not restricted to the corrupt violation of formal and informal standards. Political blunders that waste large sums of money in failing to achieve their stated objective can reflect ignorance, arrogance, carelessness or stupidity among decision-makers rather than bribery. Public officials who are lazy or incompetent in performing their duties cause damage to governance. However, the contribution they make to bad governance is not the result of receiving bribes but due to their personal faults. The idea of the public interest is a powerful political symbol; the term is associated with good governance and anything said to go against the public interest may promote bad governance. The public interest is assumed to be so self-evidently desirable that little attention is given to specifying a precise definition (cf. Beetham 2015: 42ff). Since politics is about the expression of conflicting views, there is little consensus about what constitutes the public interest. Political parties competing for votes can avoid making clear but potentially controversial programmes by claiming that they can be trusted to make policies in the public interest. This was a favourite rhetorical trick of Britain’s Tony Blair.

2 Countries Mix Good and Bad Governance Autocracies of all kinds have governed for thousands of years without having modern bureaucracies in the Weberian sense; their legitimacy rested on traditional acceptance of how rulers acted, subject to

1 SETTING STANDARDS FOR GOOD AND BAD GOVERNANCE

intermittent challenge by disruptive charismatic personalities or external forces (Rubinstein and von Maravic 2010). Their durability required the development of administrative institutions capable of enforcing important decrees of the ruler, extracting money from subjects and protecting their boundaries against internal and external armed forces. The Byzantine Empire, which gave its name to a form of governance that is complex and opaque, lasted for almost one thousand years. Its successor, the sprawling Ottoman Empire, a failed state by today’s standards, ruled for more than 450 years, because pashas were allowed to exploit their regional power as they wished as long as the overarching priorities of the Ottoman Sultan were met. To describe such systems of governance as corrupt imposes twenty-first century standards on governance in the past millennium. Today, virtually every national system of governance has many formal attributes of a modern state, such as a military equipped with expensive weapons and public institutions offering secure employment and a pension. These attributes are found not only in pioneering modern states of Europe but also in developing countries with very different histories. To receive grants for development from foreign aid agencies such as the World Bank, a national government must have officials who can produce on paper an acceptable response to the demand of these agencies that as a condition of receiving aid it adopts formal bureaucratic standards. Governors can adapt modern institutions to promote their own political power or by default since they have become the only game in town. However, the introduction of modern institutions and laws in the national capital of a developing country does not ensure their effective implementation at the grass roots. At this level, governance is also influenced by informal standards and norms that pre-date a country’s exposure to the contemporary idea of good governance. Even though the mixture of modern bureaucratic standards and informal practices differs between countries, it everywhere means that it is impossible for any system of governance to be perfectly corrupt or perfectly corruption-free. This is illustrated by the Corruption Perceptions Index (CPI) of Transparency International, which assesses countries on a scale ranging from 0, totally corrupt, to 100, the ideal for integrity. No country scores above 90 and no country scores below 10 in its 2016 ranking. Moreover, high ratings are not confined to Western governments. Among 176 countries, Singapore ranks seventh and Hong Kong is placed above the United States too. Such differences have important

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implications for anti-corruption policies: to be effective they must take into account specific features of political systems rather than rely on onesize-fits-all recommendations for reform based on a universalistic theory of good governance. Globally, there is a substantial statistical correlation between the achievement of modern standards of good governance and a low level of corruption. However, the People’s Republic of China is a conspicuous example of a country achieving a high rate of economic growth notwithstanding a high level of corruption (Wedeman 2012). It has developed institutions capable of managing an economy that is successful in world markets; created a powerful military force; and administers a population of more than 1.2 billion people spread over a land area greater than the United States. Even though estimated income per person in China is only one-quarter the average of the most modern European societies, Chinese life expectancy is similar to European and American levels. The one-party Communist party-state has achieved successes by creating a system of governance practicing ‘corruption by design’ (Manion 2004). This has given opportunities to Communist Party cadres to promote national economic development by using their political power to help enterprises circumvent regulations that had a negative effect. Concurrently, cadres may use their political power to enrich themselves by a variety of means that are corrupt by international standards. At the grass roots, the distribution of social services is affected by the traditional Chinese practice of guanchi, informal connections (Munro 2012). It offers individuals the alternatives of getting what they want by pulling strings or following rules. If neither is effective, paying a bribe is an often-invoked third alternative. The power of Communist cadres to control the extent of corruption creates a system of bounded corruption (cf. Manion 2016). This places China just above the median in the CPI. By comparison, the undisciplined practice of corruption in Russia places it in the bottom quarter of the CPI rating. However, the large rewards of corruption for party cadres and their allies results in income inequality in Communist China being twice as high as in Western European countries that are judged by the CPI as being relatively low in corruption (Han et al. 2016). In India, the British Crown introduced an Imperial Civil Service in 1858 to serve the Viceroy responsible for governing the country. It was staffed by able Oxford and Cambridge graduates selected through competitive examinations and trained in practices that were supporting the

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modernization of Britain. However, the number of British administrators was minuscule in relation to the country’s hundreds of millions of peoples and territory. Governance at the grass roots was in the hands of a variety of local rulers who were expected to support Imperial rule in return for the right to exercise local power as they wished. At the time of independence in 1947, the Indian subcontinent had more than 600 princely states. Although India since 1947 has chosen its government by democratic elections and had a legacy of able civil servants at the apex of government, corruption in India is high by global standards. Government imposes many regulations on businesses that create opportunities for public officials to collect ‘rents’ (that is, bribes) from enterprises wanting prompt approval of legal requests or the non-enforcement of laws. Entrepreneurs who profit from corruption by breaking laws can turn to politics to win offices that may give them immunity from prosecution as well as opportunities to influence public legislation to their private advantage (Das 2001; Sanchez 2015). Prime Minister Narendra Modi has sought to flush out corrupt profiteering by abruptly replacing rupee denominations commonly used to pay bribes with freshly designed notes. At the grass roots, ethnic and caste divisions encourage favouritism in allocating public services and bribery is three times the level of China. The Gross Domestic Product (GDP) per capita of India is less than half that of China while its Gini Index of Inequality is just as high. Among African countries, the state of Nigeria is distinctive in having enormous oil wealth that gives it a GDP per capita above the average for sub-Saharan African states. Since independence from Britain in 1960, political control has alternated between generals, elected presidents and autocrats. Its institutions of governance have been fragmented between three main ethnic groups that engaged in a bitter civil war in the late 1960s. Symptoms of a failed state are persisting. Nigeria is in the lowest quarter of countries ranked in the CPI, far below India as well as China. One explanation for Nigerian corruption is that it suffers the curse of natural resources; this creates a large flow of foreign money into a country whose rulers can corruptly appropriate it to their own advantage. Since exploiting natural resources requires capital-intensive equipment, its exploitation produces large benefits shared among a small number of policymakers and heads of enterprises dealing in natural resources. Up to 20% of oil produced is estimated to disappear into opaque enterprises. The so-called curse of big oil revenues is insufficient to explain Nigerian

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corruption, since this form of bad governance is also found in countries such as Kenya, which lacks oil revenue and has virtually the same rating as Nigeria on the CPI index of national corruption. At the grass roots, the Afrobarometer finds that in each country 32% have paid a bribe to obtain public services during the past year. Modern Western political systems have not abolished informal relations in administering bureaucratic standards. For example, officials in local offices of government can offer advice to people about how to fill out bureaucratic forms required to claim a service to which they are entitled. In the most modern European and Anglo-American states, there is little bribery in the grass-roots delivery of services that account for the bulk of public expenditure. In Europe today, the cost of financing democratic politics is held down by the prohibition of political advertising on television and radio and the public budget providing an annual grant to political parties subject to conditions limiting what they do with their money and the publication of accounts (cf. McMenamin 2013). However, authors of a book entitled Unmasked: Corruption in the West argue that a more broad-ranging definition is needed in order to cover corruption in modern states. Their definition is stretched to include everything from legal tax avoidance to bribes paid to FIFA officials who decide where to hold international football competitions (Cockcroft and Wegener 2017). In the United States, the early twentieth-century progressive movement secured the modernization of public administration at the federal level. However, the decentralization of law enforcement and public expenditure to the state and municipal level results in major variations in governance between and within American states (see www.publicintergrity.org). States can be rated on the basis of their anti-corruption laws, the number of officials indicted or convicted on formal charges of corruption and the perceptions of groups such as political reporters. Johnston (2014: Chapter 7) distinguishes between legal and illegal corruption, a distinction similar to our definition of corruption as the violation of formal or informal standards of governance. In the United States, the cost of election campaigning and the absence of major restrictions on how much money can be spent makes political finance a prime example of legal corruption. The use of attack strategies to win elections results in inflated claims of corruption. In the 2016 American presidential race, Donald Trump was accused by his opponents of corrupting the language of politics by voicing false facts, while Hillary Clinton’s opponents

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accused her of taking fat fees from financial corporations wanting to influence government policy. By the standards of a particular national culture, the delivery of public services by methods that are customary and legal but inconsistent with modern bureaucratic rules can be described as normal (cf. Riggs 1964). Evaluating governance by the standards of a country’s culture confuses the clinical analysis of how a country is governed with a normative evaluation that may be self-interested when made by national politicians. It is also inconsistent with the social science practice of using generally applicable standards to compare and contrast national political systems by universalistic standards.

3 Evidence of Corrupt Governance Endless debates about the definition of corruption are academic in the pejorative sense when the conclusion is that its many connotations make the term meaningless. The everyday experience of millions of people around the world shows this is not the case. The challenge is to adopt a definition that can be used to produce reliable and valid evidence of corruption. The delivery of grass-roots public services directly to individuals is an activity very suitable for analysis by that familiar social science tool, surveys that interview a representative sample of the population. Because surveys report evidence about the mass of the population, they differ from media stories about national politicians taking big sums of money in exchange for making decisions that bring big bucks benefits to businesses and wealthy individuals. Anthropological accounts of behaviour in a village offer detailed and colourful accounts of what people do to get public services. It is unsatisfactory to project conclusions drawn from the ethnographic study of a few villages onto the whole of a country; even less are they suitable for projection onto a whole continent (Torsello 2015). Experimental studies test hypotheses derived from abstract models of when bribes may be paid. However, experiments with students in the artificial setting of a laboratory on a university campus cannot be reliably generalized to the conditions facing ordinary people in their encounters with real public officials (Serra and Wantchekon 2012). The surveys analysed here have been selected by the twin criteria of substantive relevance and methodological quality. To be of substantive use for understanding how corruption relates to bad governance, a

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survey must systematically ask a battery of questions about whether individuals have had contact with a variety of public services before asking whether they have paid a bribe as a result of their contact.1 Most surveys do not do so; they follow the CPI practice of using perceptions of national corruption as an indirect indicator of bad governance. Since few people deal with important national political institutions, perceptions of corruption are often devoid of the first-hand experience. Mass perceptions can reflect hearsay, partisan biases or media stories of capital-intensive scandals. Our evidence comes from a unique global survey database co-ordinated by Transparency International in cooperation with established institutes that asked the same key questions about the contacts people had with their system of governance and whether bribery was involved (Table 2). Collectively, the surveys cited in tables in this book covered 128 countries on every continent except Antarctica, and 150,215 people were interviewed. The countries range from those with very good reputations for governance, such as Denmark and Singapore, and those with very bad reputations, such as Nigeria and Venezuela. This empirical data is used to test theories of what influences whether an individual will experience good governance or corruption: differences in national context, individual attitudes and socio-economic characteristics; and differences between public services. We only report nationwide sample surveys that publicly document their sampling methods and representativeness is confirmed by cross-checks with census data about a country’s distribution of population by gender, age and rural residence. Altogether the Barometer surveys report the experience of governance of more than five-sixths of the world’s population. This extraordinary coverage is possible because for the first time the Global Corruption Barometer was able to conduct nationwide surveys in the world’s two most populous countries, the People’s Republic of China and the Republic of India. Comparing survey results from so large and varied a range of countries and peoples provides evidence showing whether behaviour found in one country is similar to that in other countries or even other continents. For example, on a global basis far more people are at risk of paying a bribe for health care than to the courts. This is not because health workers are more corrupt but because more people 1 For a detailed guide to questions that should be asked in order to understand under what circumstances bribery occurs, see Rose and Peiffer (2015).

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Table 2 Corruption surveys analyzed in this book Africa

Asia

EBRD

Western Europe

Latin America

MENA (Middle East & North Africa)

Global Corruption Barometer

31 sub-Saharan countries surveyed by Afrobarometer, 2014–2016 (www.afrobarometer.org). Benin, Botswana, Burkina Faso, Burundi, Cameroon, Cape Verde, Cote d’Ivoire, Gabon, Ghana, Guinea, Kenya, Lesotho, Liberia, Madagascar, Malawi, Mali, Mauritius, Mozambique, Namibia, Niger, Nigeria, Sao Tome and Principe, Senegal, Sierra Leone, South Africa, Swaziland, Tanzania, Togo, Uganda, Zambia and Zimbabwe. Total interviews: 47,937 15 countries in Transparency International Asia Pacific Global Corruption Barometer, 2015–2016 (www.transparency.org/ research/gcb/). Australia, Cambodia, China, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, Myanmar, Pakistan, Sri Lanka, Taiwan, Thailand and Vietnam. Total interviews: 20,361 28 formerly Communist countries of Europe and Eurasia from the Life in Transition survey of the European Bank for Reconstruction & Development, 2016 (http://www.ebrd.com/what-we-do/ economic-research-and-data/data/lits.html). Albania, Armenia, Azerbaijan, Belarus, Bosnia and Herzegovina, Bulgaria, Croatia, Czech Republic, Estonia, FYR Macedonia, Georgia, Hungary, Kazakhstan, Kosovo, Kyrgyz Republic, Latvia, Lithuania, Moldova, Montenegro, Poland, Romania, Russia, Serbia, Slovak Republic, Slovenia, Tajikistan, Ukraine and Uzbekistan. Total interviews: 42,202 15 older EU member states in Eurobarometer 2013 Special Survey 397: Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain, Sweden and United Kingdom. Total interviews: 15,681 (https://data.europa.eu/) 26 South and Central America countries of the Latin American Public Opinion Project (LAPOP: www.vanderbilt.edu/lapop) 2014–2015. Argentina, Bahamas, Barbados, Belize, Bolivia, Brazil, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, El Salvador, Guatemala, Guyana, Haiti, Honduras, Jamaica, Mexico, Nicaragua, Panama, Paraguay, Peru, Suriname, Trinidad and Tobago, Uruguay and Venezuela. Total interviews: 50,439 10 countries: Afrobarometer VI, 2014–2016: Algeria, Egypt, Morocco, Sudan and Tunisia, plus Transparency International: Jordan, Lebanon, Palestine, Yemen and Turkey. Total interviews: 12,297 (http://www.transparency.org/research/gcb/ gcb_2015_16) 107 countries in Transparency International’s ninth round 2015–2016 survey. Total interviews: 149,906 (https://www. transparency.org/research/gcb/overview). An additional 12 countries were not included because data was lacking about bribery or related topics.

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make more use of health care than have recourse to judicial institutions. Cross-national data show whether the incidence of bribery in a country is relatively high, average or low by comparison with other countries in the same and other continents. The evidence demonstrates that an essential feature of good governance in Western countries—public services are delivered without bribery—is atypical in the world as it is today.

References Anderson, Eugene N., and Pauline R. Anderson. 1967. Political Institutions and Social Change in Continental Europe in the Nineteenth Century. Berkeley: University of California Press. Beetham, David. 2015. Moving Beyond a Narrow Definition of Corruption. In How Corrupt Is Britain?, ed. David Whyte, 41–46. London: Pluto Press. Cockcroft, Laurence, and Anne-Christine, Wegener. 2017. Unmasked: Corruption in the West, London: I.B. Tauris. Dabla-Norris, E. 2002. A Game Theoretic Analysis of Corruption. In Governance, Corruption and Economic Performance, ed. G.T. Abed and S. Gupta, 111–134. Washington, DC: International Monetary Fund. Das, S.K. 2001. Public Office, Private Interest, Bureaucracy and Corruption in India. New Delhi: Oxford University Press. Dershowitz, Alan. 2001. Supreme Injustice: How the High Court Hijacked Election 2000. Oxford: Oxford University Press. Olivier de Sardan, J. P. 1999. A Moral Economy of Corruption in Africa? The Journal of Modern African Studies, 37 (1): 25-52. Eisenstadt, S.N., and L. Ronger. 1984. Patrons, Clients and Friends. Cambridge: Cambridge University Press. Finer, S.E. 1997. The History of Government, 3 vols. Oxford: Oxford University Press. Gupta, Akhil. 1995. Blurred Boundaries: The Discourse of Corruption, the Culture of Politics, and the Imagined State. American Ethnologist 22 (1): 375–402. Han, Jin, Qingxia Zhao, and Mengnan Zhang. 2016. China’s Income Inequality in the Global Context. Perspectives in Science 7: 24–29. Heidenheimer, A., and M. Johnston. 2002. Political Corruption. New Brunswick, NJ: Transaction Publishers. Johnston, Michael. 2014. Corruption, Contention and Reform. New York: Cambridge University Press. Kurer, Oskar. 2015. Definitions of Corruption. In Routledge Handbook of Political Corruption, ed. Paul M. Heywood, 30–41. London: Routledge.

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Manion, Melanie. 2004. Corruption by Design. Cambridge, MA: Harvard University Press. Manion, Melanie. 2016. Taking China’s Anti-corruption Campaign Seriously. Economic and Political Studies 4 (1): 3–18. March, James G., and Johan P. Olsen. 2006. The Logic of Appropriateness. In The Oxford Handbook of Public Policy, ed. M. Moran, M. Rein, and R.E. Goodin, 689–708. Oxford: Oxford University Press. McMenamin, Iain. 2013. If Money Talks, What Does It Say? Corruption and Business Finance of Political Parties. Oxford: Oxford University Press. Mungiu-Pippidi, Alina. 2015. The Quest for Good Governance: How Societies Develop Control of Corruption. Cambridge: Cambridge University Press. Munro, Neil. 2012. Connections, Paperwork or Passivity: Strategies of Popular Engagement with the Chinese Bureaucracy. The China Journal 68: 147–175. Oxford English Dictionary. 1936. Shorter Oxford English Dictionary, 2nd ed. Oxford: Clarendon Press. Peters, B.Guy, and John Pierre. 2004. Multi-level Governance and Democracy: A Faustian Bargain? In Multi-Level Governance, ed. Ian Bache and Matthew Flinders, 78–89. Oxford: Oxford University Press. Riggs, Fred W. 1964. Administration in Developing Countries: The Theory of Prismatic Society. Boston: Houghton, Mifflin Company. Rose, Richard. 2009. Understanding Post-Communist Transformation: A Bottom Up Approach. London and New York: Routledge. Rose, Richard, and Terence Karran. 1987. Taxation by Political Inertia. London: Allen & Unwin. Rose, Richard, and Peiffer, Caryn. 2015. Paying Bribes for Public Services: A Global Guide to Grass-Roots Corruption. Basingstoke: Palgrave Macmillan. Rubinstein, W.D., and Patrick von Maravic. 2010. Max Weber, Bureaucracy and Corruption. In The Good Cause, ed. G. de Graaf, P. von Maravic, and P. Wagenaar, 21–35. Opladen: Barbara Budrich. Rubinstein, W.L. 1983. The End of Old Corruption in Britain, 1780–1860. Past and Present 101 (1): 55–86. Sajo, Andras. 2002. Clientelism and Extortion: Corruption in Transition. In Political Corruption in Transition: A Sceptic’s Handbook, ed. S. Klotkin and A. Sajo. Budapest: Central European University Press. Sanchez, Andrew. 2015. Criminal Entrepreneurship: A Political Economy of Corruption and Organised Crime in India. In Routledge Handbook of Political Corruption, ed. Paul M. Heywood, 67–76. London: Routledge. Schneider, Friedrich, and Dominik Enste. 2002. Hiding in the Shadows. Economic Issues No. 30. Washington, DC: International Monetary Fund. Scott, James C. 1972. Comparative Political Corruption. Englewood Cliffs, NJ: Prentice-Hall.

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Serra, D., and L. Wantchekon, (eds.). 2012. New Advances in Experimental Research on Corruption. Bingley, Yorks: Emerald Books. Shah, Preena. 2016. Exploring Public Attitudes to Tax Avoidance in 2015. HM Revenue and Customs Research Report 401, London. Solnick, Steven L. 1998. Stealing the State: Control and Collapse in Soviet Institutions. Cambridge, MA: Harvard University Press. Tänzler, K., K. Mara, and A. Giannakopoulos (eds.). 2012. The Social Construction of Corruption in Europe. Aldershot: Ashgate. Torsello, Davide. 2015. The Ethnographic Study of Corruption. In Routledge Handbook of Political Corruption, ed. Paul M. Heywood, 183–196. London: Routledge. Varraich, Aiysha. 2014. Corruption: An Umbrella Concept. Working Paper Series 2014:04, Quality of Government, Gothenburg. Warren, Mark E. 2015. The Meaning of Corruption in Democracies. In Routledge Handbook of Political Corruption, ed. Paul M. Heywood, 42–55. London: Routledge. Weber, M. 1947. The Theory of Social and Economic Organization, trans. A.M. Henderson and Talcott Parsons. Glencoe, IL: The Free Press. Wedeman, A. 2012. Double Paradox: Rapid Growth and Rising Corruption in China. Ithaca: Cornell University Press.

CHAPTER 2

Getting What You Want from Governance

In the ideal-type bureaucratic state governance operates by the book. Statute books contain laws stating the conditions for supplying a specific service and public agencies have teachers, nurses or civil engineers with the expert knowledge and skills to deliver it by the book. But what do people do when the state in which they live is not staffed by bureaucratic automatons behaving strictly by the book? This challenge is of immediate relevance in most countries in the world today, where public officials do not conform to the strict Weberian ideal of the modern bureaucrat. Few officials operate with the unpredictable arbitrariness of a despot or with the commitment of a Communist or Nazi ideologue. Instead, the practice of governance offers people a choice of how they get the service they want. These choices are ignored in many studies of governance. For example, the 983-page Oxford Handbook of Public Policy has no index reference to bribery, favouritism or corruption (Moran et al. 2008). Bureaucracy is not the only way of getting things done. Getting services by the hook means using informal means to go around the rules that control bureaucratic behaviour. For example, a person may find a friend or a friend of a friend who will contact a hospital official who can arrange for an individual to jump the queue for medical treatment. It may also mean exploiting the gaps that arise when rules in the book do not give a public official clear guidance about what to do when faced

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with a circumstance that routine guidelines do not cover. Relying on informal practices to deliver a service is not a symptom of bad governance as long as what is done does not explicitly violate a bureaucratic rule. Using crooked means to deliver a service takes rules into account in the sense that they are knowingly violated and public officials acts for their own gain. From the normative point of view of a citizen who has been brought up to respect the standards of good governance, getting what is wanted by hook or crook can be considered wrong. However, it can also be deemed preferable to doing without a public service that a person needs or wants. We start this chapter by describing how people can get what they want from public officials by relying on a portfolio of strategies using bureaucratic procedures, crooked means or informal hooks that fall between the alternatives of good governance and corrupt practices. However, the mixture of standards is not the same in every country.

1 Satisficing by the Book, by Hook or by Crook When people approach a public official for a service, they want a satisfactory outcome. To get what they want, they can adopt a satisficing strategy of following a trial-and-error sequence of methods until one is successful (Simon 1978). The starting point can be going by the book, following bureaucratic procedures to request such things as a permit or a medical appointment. If a request is delivered without an undue delay, good governance procedures work. However, if there are difficulties and delays in getting what is wanted, informal personal contacts may be used to hook up with a friend of a friend who can see that the service is delivered as a favour. If neither means works, then a person may pay a bribe as a third-best means of getting satisfaction. Governing by the book. Formal laws and rules govern the process of delivering public policies in a system of good governance. Rules provide the impartial criteria for officials to apply when deciding whether individuals receive a public service that they have claimed. When a law authorizes a service that is delivered nationwide, the application of rules is not done by those who made the rules in the national capital, but by delegation to locally based public employees, such as teachers or refuse collectors, who are in direct contact with affected claimants in their community. Officials are not meant to provide the service just to favoured

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friends, members of their ethnic group or clients of the governing party; they are meant to act impartially, treating people with similar characteristics similarly. Instead of being influenced by personal factors, they should apply rules and regulations in the books or on the computer terminal on their desk (in French, their bureau); that is what makes them bureaucrats. The rights of individuals to receive a service and obligations to comply with an official regulation are set out in bureaucratic rules. Laws about public education can specify that it is provided free of charge from a given age to all children living in the country and parents are obligated to send their school-age children to school. Rules often specify what examination qualifications applicants must have to be admitted to a university. Laws also set out obligations, such as the need for a motorist to have a driving license that can be obtained by meeting such conditions as passing a driving test. In a system of good governance, all that individuals need to do to get a service is to show that they are entitled to receive it. If they are not entitled, then a public official should not provide it. A purely bureaucratic service would operate like a vending machine, following pre-programmed rules. An individual would enter the information required to claim a service, make a payment if necessary, and the machine would produce whatever was requested. The payment of pensions is a paradigm example of how a policy can operate by the book. To qualify for a pension an individual must show proof of their date of birth and of having contributed to a pension fund during years of employment. These criteria are matters of fact that can be retrieved from public records. Relevant facts about the circumstances of a pension claimant can be fed into a computer that applies impersonal rules to calculate the value of a monthly pension. The money need not be put in the hands of a local official to deliver. A computer can write an instruction transferring the money to a pensioner’s bank account. An annual adjustment in the value of a pension can be made by a computerized mathematical formula that calculates changes in keeping with inflation and/or economic growth. The new pension rate is then implemented electronically. There is no opportunity for a bribe to be paid since these steps are done by the ultimate in impersonal impartiality, an unseen computer in a remote office. However, there are a limited number of public services that can be delivered by a computer without any involvement by a public employee.

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Bureaucratic procedures can be criticized for imposing red tape, such as time-consuming delays in giving a response to a request for a service when a person wants it promptly or refusing to deliver what is wanted because a person fails to qualify to receive it. However, criticisms of the formal rules that cause delays and refusals are missing the point. Bureaucratic procedures are not about obliging people by giving them what they want but about fairness, that is, applying the same rules to everyone. Insofar as this happens, good governance is normal in both the behavioural and ethical senses. Going beyond bureaucratic rules. Much of governance is a social relationship between people, a public employee who delivers a service and a person wanting it. Social relations give people a hook that they can use to get things done when they deal with public officials who have a lesser or greater degree of discretion in how they deal with individuals. A doctor has scope to decide what treatment to give an ailing patient and a policeman has discretion in deciding whether to stop or detain an individual who appears to be acting suspiciously. Large bureaucratic organizations operate by a combination of formal and informal practices (North 1990; Coleman 1990). When a person rings a large organization in search of help, an electronic voice will ask for bureaucratic information and recommend going to a website before offering to connect the caller with an individual official. The longer the wait to talk to a person, the stronger the nudge for an individual to go to an organization’s web site to find out how to make a claim for a service. Pressures to limit costs are an incentive for public agencies to emulate airlines and push people to claim services by filling out electronic forms online. Out of irritation from waiting in a queue or ignorance of bureaucratic procedures, people may rely on informal methods to get a public service by hook rather than by the book. In doing so they can make use of their social capital, that is, networks of people whom they know (cf. Putnam 2000). Social capital can take the form of membership in a community organization, a church or a trade union, or a network of friends and neighbours. Given the pervasiveness of governance, most networks are likely to include one or more people who have personal connections with public officials who can be hooked into providing satisfaction. This can be done from a diffuse sense of favouritism toward people with whom the official has a long-standing connection. Those dispensing favours for what they control build up a stock of credit with others in their network to whom they can turn to get favourable treatment when they want a service that they do not control.

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Informal networks are especially important in developing countries in which a traditional reliance on personal relations is as strong as relatively recently introduced bureaucratic procedures (Portes 1998; Rose 1999). The Global Corruption Barometer finds that 61% think that personal relations with public officials are important or very important in getting public services. An additional quarter thinks that personal contacts can sometimes be important and only one in twelve think they are of no importance (Rose and Peiffer 2015: 17f). Moreover, informal networks of social capital are widely distributed. Two-fifths of Afrobarometer respondents are members of a voluntary association, one-third have political contacts and almost one-quarter have turned to a religious leader for help in the past year. In the Latin American Public Opinion Project survey, two-thirds belong to some sort of formal organization and three in ten have had an informal contact with a public officeholder or politician in the past year. Where corruption is part of the system of governance, getting what you want by crooked means is an alternative. Many Western social scientists theorize that if bribery becomes relatively common in a political system it creates a behavioural norm that paying a bribe is a necessary condition of getting a service. Social capital can facilitate corruption if someone in a network offers to act as a go-between to get a corrupt official to deliver a service in exchange for a bribe Doing so then becomes acceptable on the grounds that ‘the system made me do it’, the title of a book by Rasma Karklins about getting public services in countries that have been Communist (2005). In societies in which standards of governance fall short of the good governance ideal, individuals have a choice of getting a public service by the book, by hook or by crook. Barometer surveys in Russia, the Czech Republic and the Republic of Korea have asked people to choose from several alternatives the best way to get four different types of services. In all three countries, the majority would not rely just on bureaucratic procedures. Less than one in five Russians thought bureaucratic procedures would deliver prompt treatment for a painful disease or avoid delays in the issuance of a government permit. In the Czech Republic from a fifth to less than half thought bureaucracy would do what they wanted, and only a minority of Koreans had faith in their bureaucracy working as automatically as a vending machine (Table 1). In countries, where public services do not have the reputation of operating by the bureaucratic book, few people feel helpless when public services do not

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deliver what they are expected to deliver. The passive response—nothing can be done—is on average given by only one-sixth of Czechs, less than one-quarter of Russians, and one-third of Koreans. When the state is a monopoly provider of a service and public officials do not deliver what is wanted, most people are ready to bend or break rules by using informal connections or paying a bribe. A majority of Russians regard getting a permit by hook or by crook as a standard operating procedure. This is a legacy of the Soviet era, when a person with a network of party-related connections could use these to get what they wanted (Ledeneva 2008). In the Czech Republic, almost half believe that if they invoke social capital or push officials by writing a letter they

Table 1 Getting things done by hook or by crook

Strategy Corrupt Bureau Market Passive 1. Action if an official delays issuing a government permit Russia 62 18 n.a. 20 Czech Republic 35 46 n.a. 19 Korea 21 45 n.a. 34 2. Actions to get a better flat when not entitled to publicly subsidized housing Russia 44 n.a. 30 27 Czech Republic 14 23 48 15 Korea 22 n.a. 64 15 3. Getting into university without good enough grades Russia 38 n.a. 36 26 Czech Republic 12 n.a. 71 17 Korea 5 n.a. 37 57 4. Getting treatment for a painful disease when hospital says one must wait for months Russia 57 13 11 19 Czech Republic 24 31 31 14 Korea (not applicable; no government health service) Sources Corrupt option: Offer bribe, use connections, make up a story. Bureaucratic: Write a letter of complaint, push officials to act. Market: Buy what you want legally; education: pay a tutor. Passive: Nothing can be done. New Korea Barometer 1997 (N: 1117); Czech Republic: New Democracies Barometer V 1998 (N: 1017); New Russia Barometer VII 1998 (N: 1908)

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will get what they want without having to wait too long. In the Republic of Korea, where Communist-style control of the state has not existed, few feel they have the connections needed to push civil servants to do what they want. Where there is a choice for a service, the market offers a legal alternative for satisficing. Among Koreans and Czechs, this is most evident in the readiness to buy a house in the private sector or to pay a tutor to help their child to qualify for a university place. If Russians have the choice between spending money to get a public service by paying cash or using their social capital network, they are inclined to make use of Soviet-style social capital to escape from a corrupt public service. Nonetheless, even if people are prepared to pay a bribe to get a public service, this does not mean that they think it is the right thing to do (Fig. 1). On every continent, there is a consensus that it is wrong for officeholders to profit by claiming bribes. Whatever the level of bribery in a country, questions about the acceptability of bribery find overwhelming

EBRD

86%

GCB

85%

Eurobarometer

82%

LAPOP

81%

Afrobarometer

77% 0%

20%

40%

60%

80%

100%

Percent saying public officials behaving wrongly Fig. 1 Global consensus bribery is wrong (Sources Here and subsequently sources are as given in Table 2 in Chapter 1 unless otherwise noted)

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majorities do not excuse corrupt payments as even occasionally acceptable. When people in formerly Communist countries are asked what they think of a public official asking for a favour or gift in return for services, almost seven-eighths say it is unacceptable, a higher level even than in Europe. When Latin Americans are asked—Do you think the way things are sometimes paying a bribe is justified?—more than four-fifths say it is unacceptable. When Africans are asked about bribery, 77% describe it as wrong and say that the official collecting the bribe should be punished. Individuals who think that bribery is wrong are nonetheless vulnerable to being asked to pay a bribe by a corrupt public official. When this happens, they may resolve the conflict between their ethical and behavioural norms by deciding that paying a bribe is a lesser evil than going without a valuable service for themselves, their child or a parent needing health care. The extent to which this happens means that most bribes are paid by people who think it is wrong to do so. People pay bribes because they are afraid that if they do not they will not get what they want. Very few citizens offer bribes because they see this as an acceptable way of obtaining public services.

2 The Health of the Body Politic An underlying assumption of models of good governance is that public services are delivered by people who act like robots, who respond automatically to requests according to formal bureaucratic rules that are programmed into their electronic control system. Because of this, robots lack discretion and autonomy. However, the body politic is better understood by analogy with the empirical and normative approaches that doctors use in handling patients (cf. Etzioni 1985). Medical textbooks set out a model of the anatomy and physiology of the human body in a state of perfect health. However, doctors do not assume that everyone they see is in a state of perfect health. The textbook model of perfect health is used as a standard for identifying bad health. Many textbooks of public administration concentrate on describing the practice of a system of good governance in perfect health. People get what they want if they are entitled to do so and do not get what they should not have. A realistic model needs to take into account symptoms of bad health in the anatomy and physiology of governance. Corruption provides many symptoms of governance in bad health.

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Institutions constitute the anatomy of governance. In the classic model of a unitary body politic, institutions are linked hierarchically from head to toe. At the head is a single authority, whether a monarch, a dictator, a cabal, a president or prime minister. In an era of big government, the headship includes political principals who give direction to the departments and agencies that collectively constitute the body politic. The scale and variety of a department’s activities mean that political principals must rely on officials lower down in the department to act as agents carrying out the decisions that principals make. Military defence comes closest to meeting the ideal of hierarchical governance. At the top is a commander-in-chief who has the legitimate authority to issue commands to army, navy and air force institutions. Obedience to commands from above is a fundamental rule from privates up to generals. However, the military is an exceptional government institution. The French practice of technocracy places at the head people with the technical expertise to make decisions in collaboration with politicians with the skills to secure the popular compliance necessary to make decisions effective. The multiplicity of policies for which governors are responsible today results in the functional division of governance into many departments, each of which has a nominal head. To carry out its many functions each department is divided into bureaus dealing with particular services. For example, an Education Department will have separate bureaus for primary schools, secondary education, universities, teacher training and so forth. In addition, some major functions are usually hived off to other types of agencies, such as the central bank, a health authority or not-forprofit or profit-making institutions. When multiple institutions are jointly involved in a policy area, as is normally the case in a federal political system, this creates political and constitutional barriers to any principal controlling all that is done within the state (Piattoni 2010). Geography is a structural barrier to the ability of political principals to monitor how their local agents follow the rules that they lay down. Social services, such as education and health care, are delivered wherever citizens live and most citizens live a significant distance from their national capital. London is only one-eighth of the population of the United Kingdom and Beijing and New Delhi about one percent of their respective national populations. Local government is responsible for many services that must be delivered locally, such as refuse collection. Even if education is nominally under the control of a central government

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ministry, classrooms are far away. The traditional claim of a French minister that every teacher will drill pupils daily in accord with instructions from on high invites the sceptical response ‘Perhaps’ or ‘How would the minister know?’ Because of differences in the institutions delivering public policies, governance involves a population of political bodies rather than a single body politic. A politician nominally in charge of government is more like the president of a university than the commander-in-chief of a military force. He or she can proclaim standards and identify goals that must be broad enough to apply in many contexts, such as saving public money, while vague enough to leave a lot of discretion in the hands of their agents. A university lecturer can meet students in classes without ever meeting a university president and a president can announce a new strategy for teaching students without setting foot in a classroom. So too a minister for health will only see how doctors deal with patients when she or he is actually a patient, and doctors hear about what the minister wants them to do through the media or in bulletins from their professional association. The physiology of governance determines whether public services are delivered by the book or whether hooks are used to get around rules or bribes to break rules. Lower-level public officials are the lifeblood of implementing policies. Corruption at the grass roots is not due to the absence of bureaucratic rules stipulating the obligations of public employees but to limitations on the application of impersonal rules in a relationship between people. Officials on the ground can exploit their distance from nominal makers of policy to become principals deciding how they deal with ordinary people who are the recipients of public services. Even though public employees are expected to behave in accord with bureaucratic rules, most do not see themselves as bureaucrats, following formal rules without regard to the circumstances of the individuals they deal with. They see themselves as people whose job is to apply the professional and technical standards in which they have been trained. Radically different skills are required to teach children how to read, to collect taxes or to be a submarine captain. In a modern system of governance, individuals are appointed to a particular post because they have qualifications relevant to that service, for example a teaching diploma, an accountancy certificate or successful completion of training as a pilot. Public servants spend most of their working lives directly engaged in applying these skills as the employee of a local education authority, a government tax accountant or an air force pilot.

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Public employees differ in the extent to which they have contact with ordinary people who receive services and thus the opportunity to collect bribes from users. Hospital accountants handle money, but they do so in an office where contact is confined to other public employees met faceto-face or linked by computer. By contrast, a hospital pharmacist works behind a counter where patients come to get a drug they need. Public employees also differ in the extent to which they have discretion when applying rules. A post office clerk meets people over a counter but cannot guarantee that paying extra under the counter will result in a parcel being delivered promptly and safely. By contrast, a nurse on a ward makes decisions all the time about which patient to deal with next and what treatment to give them. Police on the beat are classic examples of a ‘street-level bureaucrat’ (Lipsky 2010). A police official has the discretion to decide whether an individual is behaving suspiciously or is breaking a law. In the United States, police use their discretion to shoot to kill. A central concern of principal-agent theories is the extent to which agents tend to use their discretion and distance from principals to act in their own self-interest (Bovens et al. 2014). In a political system in which corruption is widespread, there may be collusion between principals and agents, with unprincipled principals being most involved in taking bribes in return for allocating government contracts worth billions and agents taking money in exchange for delivering retail services at the grass roots (Persson et al. 2013). In countries in which the pay of grass-roots public employees is low in the absolute sense, they may turn to soliciting bribes to augment their income. Rational choice theory predicts that if the estimated risk of being caught and punished is less than the gain from obtaining a bribe, agents can take advantage of discretion and distance from nominal controllers to solicit bribes. When this happens, a public official is no longer a passive agent of good governance but an active promoter of corruption. The power relationship within governance is inverted. The lowlevel employee is a principal determining how a policy is delivered and the government minister responsible for a policy can become a bystander. The health of the body politic, like that of its citizens, is variable. Like its economic counterpart the perfect market, a model of perfect governance identifies what may be approached but not completely achieved. (Hood 1976). Just as the capacity of the human body has physical limits, the state’s capacity is limited too. This is most obvious in developing countries that lack money and skilled personnel as well as a long history

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of bureaucratization. Limits on governance exist in rich modern states too. Whenever an example of bad governance creates a public furore, the government minister nominally accountability for the policy can claim that he or she was not involved and launch an investigation into the activities of nominal subordinates.

3 Comparing Explanations of Corruption Because of the range of theoretical explanations of the causes of corruption, reviews of the existing literature tend to be lengthy. The path-breaking review of political corruption over time and space edited by Arnold Heidenheimer and Michael Johnston (2002) is 970 pages long. The two volumes on the economics of corruption edited by Susan Rose-Ackerman (2006) and Rose-Ackerman and Tina Soreide (2011) total 1202 pages. The European Commission funded a major programme about the challenges of corruption that involved 20 research groups in 15 countries (www.anticorrp.eu). A leading political science handbook of corruption edited by Paul Heywood (2015) has 24 chapters with more than 300,000 words. Given the many definitions of corruption, theories differ in what they try to explain. The majority offer explanations of why corruption, however defined, differs between countries. Many answers focus on attributes of countries as a whole, such as its history or its contemporary institutions. The presence or absence of corrupt behaviour may be explained as a consequence of cultural norms and values; this approach is particularly strong among anthropologists studying villages on non-Western continents. It can also be applied to regions, such as Southern Italy, or loosely applied to whole countries. Within a single country, variations in behaviour between individuals—some pay bribes and some do not—may be explained as reflecting differences in socio-economic characteristics and in individual attitudes. Although corruption is inherently an interdisciplinary problem, social scientists are divided into disciplines with different intellectual frameworks and methods. This results in a plurality of explanations that give priority to the assumptions of a single discipline rather than an integrated explanation. The following paragraphs review six different propositions about major causes of corrupt behaviour differing between countries and between individuals within a country. The need to treat each separately for purposes of exposition does not mean that they are mutually exclusive. From a broad interdisciplinary perspective, a multiplicity

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of explanations may be empirically significant; however, their impact on corruption can differ substantially in magnitude. The history of a country is a given, and for better or worse path-dependence institutionalizes informal as well as formal procedures that influence governance today. This makes it difficult for reforms to alter established routines of public officials by the adoption of new laws. When international aid agencies sought to reduce corruption in developing countries by introducing legal and bureaucratic institutions they met resistance from national political elites (LaPalombara 1963; Riggs 1964). Theories of path-dependence explain the persistence of both good and bad forms of governance (Pierson 2004; Perez-Linan and Mainwaring 2013). The persistence of a low level of corruption in Northern Europe is explained as a consequence of a nineteenth-century history in which structural changes in traditional methods of administration were replaced by bureaucratic institutions. What Alina MungiuPippidi (2013) has called ‘becoming Denmark’, that is, achieving a high standard of governance, was a very lengthy process. Countries that began socializing public officials into bureaucratic practices long before mass welfare state services were introduced should, therefore, be low in corruption. By contrast, if major social benefits were introduced while traditional customs such as clientelism were still practiced, this can account for a government being deemed corrupt today. Historical differences can thus result in a stable equilibrium that maintains good governance in Scandinavia and corrupt governance in places such as the successor states of the Soviet Union (cf. Hellman 1998). Theories of political culture explain the presence of good or bad governance as a consequence of the collective norms of a political culture. Each new generation is socialized into a common understanding about how government works and the standards that adults ought to apply in their relations with public officials. Insofar as this happens, people regard the way in which government works as normal in both the behavioural and normative senses. Since cultural norms develop in a particular national and historical context, what is regarded as normal in South Africa can be different from what is regarded as normal in Sweden. In a country with relatively good governance, people are prepared to wait patiently in a queue for a service or to accept a refusal to provide it as fair, and cases of corruption are seen as exceptions to the rule. By contrast, in a culture where favouritism and bribery are regarded as a fact of life, behaviour that appears corrupt by universalistic standards appears normal (cf. Persson et al. 2013; Manzetti and Wilson 2007).

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Institutional theorists reject the idea of classic philosophers that the absence of individual virtue is the primary cause of corruption. When drafting the American Constitution, James Madison assumed that men were not angels and that their tendencies to bad governance should be curbed by a political system of checks and balances. Any tendency of politicians or their agents to practice corruption needs to be checked by institutions such as an independent audit office and an independent office for prosecuting those who break formal standards and courts with the power to enforce laws about what public officials ought and ought not to do. Theories of democratic institutions explain the absence of corruption as due to free elections giving voters the power to decide who governs. If the principals of a democratic government tolerate corruption, voters have an opportunity to vote them out of office. In anticipation of the threat of losing office, governors will resist on pragmatic as well as ethical grounds the opportunities to abuse their powers for personal gain (cf. Potter and Tavits 2011). Sociological theories turn attention from institutions to social status. Who you are and how you are perceived by others affects the way in which you are treated by public officials. Class differences in individual income and education may result in people of higher social status being more likely to experience good governance and those lower down the social ladder being bullied to pay bribes. People can protect themselves from the effect of corruption in a particular public service by having no contact with it. Individuals without children are not at risk of corruption in education because they have no children in school. However, older people are vulnerable to corruption in the health service because they cannot do without health care. Social psychologists stress the importance of the expectation that people have about how they will be treated when seeking a public service. Expectations about how government ought to work and perceptions of how public officials actually behave can cue people to respond in opposing ways. People would like to experience good governance but may perceive political institutions as corrupt. Insofar as this is the case, then they will be readier to catch cues from public officials asking for bribes as a condition of giving them what they want. It is an axiom of political economy that economic conditions affect how a country is governed (see e.g. Rose-Ackerman and Soreide 2011). However, this leaves open what specific features of an economy are important. A high correlation between a country’s Gross Domestic

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Product (GDP) per capita and its rating on the Corruption Perceptions’ Index(CPI) (r: − 0.70) is often interpreted to mean that the more prosperous a country is, the lower its level of corruption. However, when GDP per capita is included in a multivariate statistical analysis testing potential determinants of national level corruption, along with various political influences, it fails to achieve statistical significance (Rose and Peiffer 2015: Table 6.2). Moreover, there are good theoretical reasons for interpreting economic prosperity as a consequence rather than a cause of a low level of corruption (cf. Lambsdorff 2007: 72ff). Freedom from corruption can boost economic growth by offering businesses the best conditions for investing because they are not harassed by public officials administering economic regulations in ways that are inefficient and arbitrary and can only be got around by wasting time and money. Because of the theoretical ambiguity about the relationship between GDP and corruption, we test other economic measures, such as the effects on corruption of a wealth of natural resources or a high level of foreign aid. Rational-choice economic theories disregard normative assumptions in postulating that individuals are self-interested actors ready to pay for what they want. Where there is a choice between providers, people do not have to wait indefinitely in a queue or pay a bribe to receive what may be an inferior service. Instead, they may turn to an alternative provider, whether not-for-profit or a profit-making enterprise, if they can afford to do so. Since public services are often monopolies, in a system of bad governance the only choice that individuals may have is that of paying a bribe, or going without a service they want. In such circumstances, a simple cost-benefit calculation can determine whether a bribe is paid. Although there are lots of theories offering explanations of corruption, there is limited statistical testing of the extent to which their hypotheses are supported by empirical analysis (see Treisman 2015). One reason is that many do not specify clear testable links between cause and effect. Relatedly, many forms of corruption are portrayed as part of a complex syndrome of bad governance (Johnston 2014). Case studies of villages by anthropologists and of corrupt behaviour by elites can be insightfully drawn from first-hand observation. However, narrowly focused case studies are often not fitted into a broader theoretical framework. In the chapters that follow we offer robust empirical tests of broad explanations of corruption by combining evidence about the influence of national history and institutions and of individual characteristics. In Chapter 3, the focus is on explaining cross-national variations

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in Transparency International’s measure of corruption at the national level. However, national generalizations cannot explain within-country variations between individuals. Subsequent chapters combine evidence from sample surveys of more than 175,000 individual respondents and national context in more than 125 countries. After reviewing empirical differences in contact with services and bribery in Chapter 4, Chapter 5 uses multilevel statistical analysis to test hypotheses about the influence of national contexts and individual characteristics on paying bribes for a variety of public services. Chapter 6 turns attention to the behaviour of West European politicians that may not be illegal but is judged corrupt by the court of public opinion.

References Bovens, Mark, Robert E. Goodin, and Thomas Schillemans (eds.). 2014. The Oxford Handbook of Public Accountability. Oxford: Oxford University Press. Coleman, James S. 1990. Foundations of Social Theory. Cambridge, MA: Harvard University Press. Etzioni, Amitai. 1985. Making Policy for Complex Systems: A Medical Model for Economics. Journal of Public Analysis and Management 4 (3): 383–395. Heidenheimer, Arnold J., and Michael Johnston (eds.). 2002. Political Corruption: Concepts and Contexts, 3rd ed. New Brunswick, NJ: Transaction Publishers. Hellman, Joel S. 1998. Winners Take All: The Politics of Partial Reform in Postcommunist Transitions. World Politics 50: 203–234. Heywood, Paul M. 2015. Routledge Handbook of Political Corruption. London: Routledge. Hood, Christopher C. 1976. The Limits of Administration. London: Wiley. Johnston, M. 2014. Corruption, Contention and Reform: The Power of Deep Democratization. New York: Cambridge University Press. Karklins, Rasma. 2005. The System Made Me Do It: Corruption in PostCommunist Societies. Armonk, NY: M. E. Sharpe. Lambsdorff, Johann Graf. 2007. The Institutional Economics of Corruption and Reform. Cambridge: Cambridge University Press. LaPalombara, J. 1963. Bureaucracy and Political Development. Princeton, NJ: Princeton University Press. Ledeneva, Alena. 2008. Blat and Guanxi: Informal Practices in Russia and China. Comparative Studies in Society and History 50 (1): 118–144. Lipsky, Michael. 2010. Street-Level Bureaucracy: Dilemmas of the Individual in Public Services, 2nd ed. New York: Russell Sage.

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Manzetti, Luigi, and Carole J. Wilson. 2007. Why do Cor-rupt Governments Maintain Public Support? Comparative Political Studies 40 (8): 949–970. Moran, Michael, M. Rein, and R.E. Goodin (eds.). 2008. The Oxford Handbook of Public Policy. Oxford: Oxford University Press. Mungiu-Pippidi, Alina. 2013. Becoming Denmark: Historical Designs of Corruption Control. Social Research 80 (4): 1259–1286. North, Douglass C. 1990. Institutions, Institutional Change and Economic Performance. New York: Cambridge University Press. Perez-Linan, Aniba, and Scott Mainwaring. 2013. Regime Legacies and Levels of Democracy: Evidence from Latin America. Journal of Comparative Politics 45: 4. Persson, A., B. Rothstein, and J. Teorell. 2013. Why Anticorruption Reforms Fail: Systemic Corruption as a Collective Action Problem. Governance 26 (3): 449–471. Piattoni, Simona. 2010. The Theory of Multi-level Governance: Conceptual, Empirical and Normative Challenges. Oxford: Oxford University Press. Pierson, P. 2004. Politics in Time: History, Institutions and Social Analysis. Princeton: Princeton University Press. Portes, A. 1998. Social Capital: Its Origins and Applications in Modern Sociology. Annual Review of Sociology 24: 1–24. Potter, J., and M. Tavits. 2011. Curbing Corruption with Political Institutions. In International Handbook on the Economics of Corruption, ed. S. RoseAckerman and T. Soreide, 52–80. Cheltenham: Edward Elgar. Putnam, Robert D. 2000. Bowling Alone: The Collapse and Revival of American Community. New York: Simon & Schuster. Riggs, Fred W. 1964. Administration in Developing Countries: The Theory of Prismatic Society. Boston and Houghton: Mifflin Company. Rose, Richard. 1999. Getting Things Done in an Anti-modern Society: Social Capital Networks in Russia. In Social Capital: A Multi-faceted Perspective, ed. Partha Dasgupta and Ismail Serageldin, 147–171. Washington, DC: The World Bank. Rose, Richard, and Caryn Peiffer. 2015. Paying Bribes for Public Services: A Global Guide to Grass-Roots Corruption. Basingstoke: Palgrave Macmillan. Rose-Ackerman, S. (ed.). 2006. International Handbook on the Economics of Corruption. Cheltenham: Edward Elgar. Rose-Ackerman, S., and T. Soreide (eds.). 2011. International Handbook on the Economics of Corruption, vol. 2. Cheltenham: Edward Elgar. Simon, Herbert A. 1978. Rationality as Process and as Product of Thought. American Economic Review 68 (2): 1–16. Treisman, Daniel. 2015. What Does Cross-national Empirical Research Reveal About the Causes of Corruption? In Routledge Handbook of Political Corruption, ed. Paul M. Heywood, 95–109. Abingdon: Routledge.

CHAPTER 3

Exploiting National Government

The best-known measures of political corruption are in the style of macroeconomic statistics: they are indexes that characterize national governments as a whole. The primary concern is the extent to which high-ranking policymakers in the national capital make decisions that produce big-bucks benefits for a small number of people. The primary information used to create corruption indexes consists of expert perceptions of how politicians behave when handling public money and deskbased research evaluating government institutions. The reforms that are advocated to deal with big-bucks corruption are directed at national institutions. National governments have the authority to take big decisions that involve spending large sums of money to provide the infrastructure of a modern state, such as roads, hospitals and airports. Decisions must be concentrated at the top level of central government because they are lumpy, that is a large sum of money must be invested in a single project. Big infrastructure projects involve one-off commitments by central government to a single contractor or consortium that has the knowledge and capital-intensive technical resources needed to build a dam or manufacture military aircraft. Given this scale, the value of such contracts to those who win them runs into the tens or hundreds of millions or more. Even if public expenditure on health services or education in total is similar to spending on infrastructure projects, the cost of giving education or health care to a single individual is small. Moreover, these services are © The Author(s) 2019 R. Rose and C. Peiffer, Bad Governance and Corruption, Political Corruption and Governance, https://doi.org/10.1007/978-3-319-92846-3_3

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delivered at the grass roots by hundreds or thousands of institutions. By contrast, the benefits of contracts for capital-intensive infrastructure projects are concentrated in a few enterprises. Getting a contract with a national government is capital-intensive, because a company must invest substantial amounts of money, time and effort to obtain a contract and produce what the contract specifies. Before any question of bribery arises, a firm must have invested substantial capital in order to be able to design and cost a complex public project. It must also invest a significant amount of time and money to compete for the award of a contract by impersonal bureaucratic procedures. If decisions are made by hook or by crook, more effort is required to find out who to influence and how, and how much money should be paid on the side in consultancy fees and bribes in order to get a big contract. Hundreds of millions or billions of capital are needed to manufacture aircraft, build an airport or drill for oil. Because most big contracts involve activities spread over several years or longer, a company must have sufficient capital to deal with delays by a government that is habitually late in making payments and, if necessary to expedite payment by paying bribes to officials whose signature is required to release payments due. The amount of capital required to exploit a national government is far beyond the petty bribes that corrupt local officials may demand to deliver services to ordinary citizens. If the procurement process for a capital-intensive infrastructure contract follows impersonal bureaucratic standards, its award will be in accord with the formal standards of good governance. However, these standards are often violated. Transparency International (2014: 8) estimates that up to $2 trillion annually is diverted from procurement budgets to benefit public- and private-sector elites rather than invested to improve the infrastructures that are needed for economic development.

1 Corruption at the Top The size of a country’s gross domestic product (GDP) is a major determinant of public expenditure on capital-intensive projects. Because this reflects a country’s population as well as its economy, countries where individual income is low such as India and Brazil have a higher GDP than Sweden and Denmark, where individual income is much higher but the population is much less.

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A country’s tax effort is a second major influence on the money that a government has to spend bureaucratically or corruptly. Tax effort, the percentage of GDP that it collects in tax revenue, tends to be high where the bureaucratic capacity to collect revenue is high; these are also countries that are rated as low in corruption by the Corruption Perceptions Index (CPI). This can be explained by theories of political economy that postulate that the predictability that effective bureaucracy offers promotes economic growth and that citizens will only pay high taxes if the government uses its substantial revenue to deliver social benefits honestly. Foreign aid is a significant source of money for national governments in low-income and developing countries, since high-income countries and the World Bank provide tens of billions each year to create or modernize capital-intensive economic infrastructure. More than two dozen countries in Africa, the Middle East and Asia each received more than 1 billion dollars in bilateral and multilateral aid in 2014 and Afghanistan, Vietnam and Syria received more than $4bn in foreign aid (https://data. worldbank.org/products/wdi). The economic and political criteria that qualify a country to receive foreign aid rarely give priority to the capacity of the recipient to spend it free of corruption. Often aid is given to countries where there is visible evidence of poor governance patterns, in the hope that aid money may help promote good governance. If a country has natural resources it can issue licenses that authorize private enterprises to invest their money to exploit its profitable oil, gas or mineral reserves. The licenses can be awarded after a transparent bidding process or by an opaque process in which decision-makers receive bribes. The privatization of state-owned enterprises can similarly be in accord with public legislation and regulations, as happened in Britain under Margaret Thatcher, or through private networks that make those who are well connected rich. In the words of Petr Aven, who was initially part of Boris Yeltsin’s Russian government and has since become a billionaire: To become a millionaire in our country it is not at all necessary to have a good head or specialised knowledge. Often, it is enough to have active support in the government, the parliament, local power structures and law enforcement agencies. One fine day your insignificant bank is authorised to, for instance, conduct operations with budgetary funds or quotas are generously allotted for the export of oil and gas. In other words, you are appointed a millionaire. (Reddaway and Glinski 2001: 603)

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In high-income countries, social services tend to consume the largest share of public expenditure. By contrast, in low-and middle-income countries, both revenue constraints and economic logic make public spending on capital-intensive goods relatively more important; roads, hospitals and new universities are built to provide the infrastructure needed for economic growth. In strife-torn countries, such as Afghanistan and Pakistan, where the government gives a high priority to national security, foreign aid can pay for the import of expensive military equipment and boost spending on internal security services staffed by armed supporters of the government. In a system with good governance, the public procurement of capital-intensive goods operates transparently in accord with impersonal bureaucratic rules at every stage of a lengthy process. Procedures are designed to encourage competition between bidders for a contract on the assumption that competition will keep prices down and encourage bidders to monitor the actions of public officials and competitors so that rules are not violated (Transparency International 2014). However, the more complex the project is, the harder it is for opposition politicians, journalists and activists to understand whether a capital-intensive contract represents public value for public money. While watchdogs have a good idea of what it should cost to prepare hospital meals, they lack the technical knowledge to know what is a reasonable cost to build a multi-purpose dam. If high-tech military equipment must be imported, evaluations are even harder to make. Often, the people who can best evaluate whether a winning bid represents value for money are those who benefit from the contract. The complexity of awarding large capital-intensive contracts creates many opportunities for corruption to occur by hook or by crook (see e.g. Lambsdorff 2007: Chapter 3). Potential bidders can lobby for the inclusion of technical specifications that favour them and employ a go-between with political connections to include biased specifications. If foreign aid finances a contract, the donor country may require conditions favouring firms based in their country while the recipient may favour domestic firms in which politicians have a private interest. In a political system characterized by bad governance, public decisions giving benefits to businesses are vulnerable to corruption, because it is economically rational for a firm to spend millions in order to gain a benefit that is worth hundreds of millions. A bribe paid in return for a

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contract promises a certain return, whereas an equivalent donation to a political party or candidate’s election expenses will secure access to politicians but not guarantee the delivery of what the donor wants. The size of a bribe offered to a public official can be ten years or more of their salary. If bribes are spread among officials, this reduces the risk of accepting money illegally insofar as some of the recipients are of sufficiently high rank to prevent investigation and punishment of recipients (RoseAckerman 1999: Chapter 3). The decision about the award of a capital-intensive contract is often in multiple hands. In the first instance, an evaluation will be made of the technical and financial capability of bidding firms. In developing countries, this often puts less experienced domestic suppliers at a disadvantage in competition with large multinational firms. For example, even if domestic firms can provide many ancillary services relevant to oil exploration, multinational companies are likely to have the experience and capital equipment needed to find and exploit potential oil reserves. Domestic firms, however, are much more knowledgeable about the politics and practices appropriate to influence their government. They may, therefore, combine with a multinational in which their role is to win a contract while the foreign firm is responsible for delivering what the contract requires. European countries that are home to large multinational corporations may avoid corruption in the delivery of public services to their citizens, but tolerate it among national firms that pay capital-intensive bribes to win big contracts from governments where corruption is widespread, in breach of the OECD Anti-Bribery Convention that they have signed (www.oecd.org/corruption/anti-bribery). Once a decision in principle is made, the drafting of a contract offers further opportunities for the recipients to exploit the public purse by including clauses that will increase what they are paid substantially above their bid price. Costs may be adjusted due to unexpected problems in construction, or changes in the design requested by government officials. The more complex the contract, for example, building a new airport, the more likely the supplier is to be able to raise charges and profits and the more difficult it will be for public officials to evaluate whether the charges are justified. Where goods are supplied at a fixed price, such as road construction or housing, suppliers may reduce costs by substituting inferior cheaper products and, if their work is monitored on the ground, bribing inspectors to ignore violations (Fazekas and Toth 2014).

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The corrupt exploitation of government often involves collusion between public officials and private-sector actors. The allocation of government funds and contracts is in the hands of public officials, whether elected politicians, short-term appointees to public posts or career civil servants. They are the immediate recipients of material benefits to bend or break laws. The payers of bribes are the managers of private-sector corporations that will reap the benefits of a corrupt decision. In countries where corruption is widespread, these enterprises are unlikely to be long-established organizations with employees trained to follow bureaucratic rules. Instead of having a conflict of interest with public policymakers, their heads are more likely to know many politicians and may share a common partisan or ethnic identification. The informal knowledge that political and economic elites have of each other reflects structural conditions that face both national politicians and business leaders in a globalizing world. Many prosperous countries manage interdependence without corruptly exploiting national assets. However, where national income is lower and bureaucratic and democratic constraints far weaker, public spending is vulnerable to kleptocracy, that is rule by thieves. Business leaders may use their financial and political capital to capture control of government agencies awarding big-bucks contracts (Hellman et al. 2003; Charap and Harm 2002). Material benefits are then secured by hook or crook through collusion among political and economic elites who share in the profits.

2 Measuring National Corruption Assessing the scale of national corruption is a challenge, since its illegal nature means that the validity of any measure can be questioned (Donchev and Ujhelyi 2014). The demand of policymakers for quantitative political measures has stimulated the creation of many measures of qualities of governance (see www.qog.pol.gu.se). Measures with global reach are produced by international organizations such as the World Bank and United Nations agencies; by non-governmental organizations independent of the political pressures that affect intergovernmental agencies; and by social scientists for whom quantitative measures are deemed necessary for scientific research. They are accepted as useful tools because the numbers produced are comparable across nations and continents. Reliability, that is a high degree of statistical agreement between indexes created by different methods, is the standard criterion

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for assessing an index. However, a consensus among evaluators is not proof of validity; this would require independent evidence of corruption. Credibility provides an alternative criterion for evaluation. An index labelling Scandinavian countries as having much less corruption than Russia and Nigeria is more credible than armchair critics saying we don’t know enough to estimate how the scale of corruption differs between countries. A variety of corruption measures are now in circulation (see Heywood 2015). The CPI of Transparency International and the World Bank’s Control of Corruption Index (CCI) have global coverage, thereby permitting comparisons between high-income and low-income countries across cultures and continents. The most widely used measure of corruption is the Transparency International Index. A Google search shows the CPI has three times the results of the World Bank Index. The Corruption Perceptions Index. Transparency International launched the CPI in 1995 to assess corruption in national governments around the world. It was based on the research of a young econometrician then at the University of Göttingen, Dr. Johann Graf Lambsdorff (2007: 20–26, 236–255). While the CPI assigns a single numerical score to a country, in recognition of uncertainties about the reliability and validity of any single source of evidence, the CPI uses multiple sources with different ways of making up its composite rating of a country. It combines up to a dozen quantitative assessments of corruption from a multiplicity of sources that cover many countries. These include the African Development Bank, the Bertelsmann Foundation, the Economist Intelligence Unit, Freedom House, the Political and Economic Risk Consultancy, the World Bank and the World Economic Forum. Transparency International publishes details of the sources it draws upon and the methods it uses to create its index (www.transparency.org/cpi). The assessments that CPI sources make are based on the perceptions of corruption held by people who have knowledge and sometimes experience of how a national government deals with capital-intensive projects. They include a mixture of national citizens and expatriates working on national projects potentially vulnerable to demands for bribes by public officials. To complement any potential bias this group may have, the Index also receives inputs from non-resident experts who tend to favour universalistic standards. Notwithstanding differences in perspectives, the assessments of domestic and foreign experts tend to correlate highly with each other (Lambsdorff 2007: 23). To avoid conflating the views of experts with the mass public, Transparency International does not

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include the results of mass opinion surveys in its CPI ratings. Since the experts on whom it relies for input are best able to judge the behaviour of national elites responsible for large procurement contracts, the CPI is an assessment of capital-intensive grand corruption. While all the sources incorporated in the CPI are concerned with corruption in some form, in the absence of an agreed definition and methods they differ in the evidence and criteria used in making national assessments. Therefore, Transparency International requires a minimum of three sources before it will rate a country. The underlying assumption of using multiple sources employing different definitions is that inconsistencies between them will tend to cancel each other out. However, they may also reflect categoric differences that make them incommensurable. The technical report accompanying the annual CPI rating includes the statistical standard error and confidence intervals for each country’s score. The CPI places each country on a scale ranging from 0 to 100; this permits a far greater degree of differentiation than sorting countries into two categories, corrupt and high in integrity. Of the 176 countries assessed in the 2016 CPI, Denmark and New Zealand have the highest rating, 90, while Somalia is lowest, 10. There is a tendency for bad governance to be more common; the median country has a CPI rating of 38, significantly closer to the most corrupt country than to the highest-rated country. Global comparison shows that generalizing about corruption in countries grouped according to geography or culture is misleading (Fig. 1). Variations in national context within continents are greater than differences between the mean rating of continents. In Asia, there is a spread of 74 points between Singapore and North Korea. This shows that so-called Asian values are neither conducive to corruption nor to high levels of integrity (cf. Zakaria 1994; Fukuyama 2001). African ratings likewise reject generalizations about continent-wide African cultural values (Ekeh 1975), because there is a range of 50 points between the CPI ratings of Botswana and Somalia. The range between countries in Latin America, the Middle East and North Africa is likewise large. The successor states of the Soviet Union and their Central Asian neighbours show the least variation. This homogeneity reflects the common experience of generations of having been governed in accord with the Marxist–Leninist principles rather than bureaucratic procedures.

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Corruption Perception Index 100

Europe 90 Denmark

Asia

Latin America

MENA

84 Singapore

Africa

MEAN 71 Uruguay

66 UAE

41 Bulgaria

60 Botswana

57 Georgia

42 31

12 N Korea

Ex-Soviet

17 Venezuela

13 Syria Yemen

21 Uzbekistan 10 Somalia

Fig. 1 Big variations in corruption within every continent (Source Transparency International Corruption Perceptions Index for 176 countries, 2016. AngloAmerican countries: New Zealand, 90; Canada, 82; Australia, 79 and the United States, 74)

High CPI ratings are not confined exclusively to countries with European values and culture. Among European Union countries, there is a spread of 49 points between the highest-ranking country, Denmark, and Bulgaria, and 46 points between Denmark and Greece. Singapore has a better CPI rating than 24 member states of the European Union. Of the 68 countries that have a better rating than the lowest EU member states, 32 are developing or newly developed countries from outside Europe and the Anglo-American world. The CCI of the World Bank is one of the six components of its Worldwide Governance Indicators (www.worldbank.org/governance/ wdi) programme created to focus on the effect of governance on economic development. Since launching in 1995, the CCI has achieved coverage of 215 states and territories. Its ratings are a composite of assessments made

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by a variety of intergovernmental organizations, international non-government agencies, academic institutions, and profit-making consultancies. Consistent with the idea that corruption is part of a syndrome of characteristics of governance (Johnston 2014), the CCI combines indicators of capital-intensive corruption and surveys of the payment of bribes by individuals and small enterprises. The indicators are reduced statistically to a single rating that tends to reflect the performance of national governments relative to each other rather than their absolute degree of corruption (Kaufmann et al. 2010). The CCI ratings are redundant; it correlates 0.98 with the CPI. No short-term change. Neo-institutional theories of reducing corruption predict that changes in political institutions ought to change the behaviour of officials. Foreign donors give money to corrupt governments to support institutional reforms intended to reduce corruption. In an era, in which quantified ratings are regarded as hard, objective evidence, foreign aid agencies would like an Index to show a prompt, positive change to justify the spending of billions of dollars annually aiding governments that are more or less corrupt. Governments receiving foreign aid are very ready to publicize Index changes that show an improved rating from one year to the next, while domestic critics are ready to call attention to a fall in the country’s CPI rating. Since more attention is given to national rankings than scores, it is possible for a country’s governance score to improve while its ranking falls, if other countries show more improvement or if the number of countries ranked increases. In order to evaluate whether anti-corruption efforts have had a positive impact, policymakers want evidence of a quick fix, that is a year-onyear reduction in corruption. The demand for annual evidence implies a belief that governance can be altered within 12 months by a single policy intervention, a change in a country’s leadership or the creation of an institution recommended by international advisers. The CPI provides quantitative evidence of change for the period since 2012. Since then, national ratings have tended to be stable. The yearon-year correlation between country scores in 2015 and 2016 correlate 0.990 and between 2012 and 2016 they correlate at the extremely high level of 0.976. From year to year ratings persist, whether of good or bad governance. This suggests that once a country has achieved a high standard of governance, the norms of public officials and mass expectations keep corruption low. In a complementary manner, a country with a high degree of corruption tends to remain in a low-level equilibrium trap.

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Limitations of national corruption indexes. Corruption indexes are constructs created by professional experts who specify criteria for data that can be aggregated into a single quantitative score. In principle, this is no different than statistics about GDP, which is a construct created by aggregating many different economic indicators into a single score. No one has ever seen the billions or trillions of dollars reported as GDP. Whereas people can have the first-hand experience of corruption at the grass roots, no one can directly observe corruption in the political system as a whole. At the national level, it is a social construct. To compensate for numerical indexes having no intrinsic meaning, Transparency International publishes its annual index in a league table that ranks countries from the highest in integrity to most corrupt. A bold headline asks: ‘176 Countries. 176 Scores. How Does Your Country Measure Up?’ A consequence of league-table rankings is that 175 countries cannot be top. Thus, American journalists can headline that the United States only ranks 18th rather than first in the world even though its score places it in the top 11% of countries. A headline rise or fall of a few places in the ranking of a country is a verifiable ‘fact’, but a generous allowance needs to be made for fluctuations due to deficiencies in measures. Moreover, there is a tendency for countries to cluster together in their ratings; in 2015 there were 16 countries with ratings between 30 and 32. Thus, a statistically insignificant random fluctuation of a few points could see a country’s ranking rise or fall more than a dozen places. A variety of alternative measures have been developed as proxies for corruption. A single case of grand corruption publicized in the media and confirmed by a judicial finding is factual evidence that corruption has occurred. However, it is impossible to know whether a single case represents widespread corruption or is newsworthy because it is an exception to normal public administration. Official data about the extent of corruption-related crimes in a country is sometimes used as evidence of corruption (see e.g. Glaeser and Saks 2006). However, by definition, this excludes unrecorded cases of corruption. In a country in which there is a relatively high level of corruption, legal authorities are likely to be subject to political pressures to ignore situations where there are wellfounded grounds for prosecution, for example public officials enjoying a standard of living far above what their official salary could support. Given the multiplicity of corruption measures now in circulation, the United Nations Development Programme has published a user’s guide to aid policymakers in evaluating alternatives. It recommends

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using multiple sources of quantitative data, qualitative narrative analysis and real-life case studies to arrive at a picture of corruption within a county (UNDP 2008: 8). This is the approach typically used by diplomats and aid workers engaged with problems of governance within a single country. However, it is unsuitable for use by policymaking superiors concerned with allocating funds among countries within and across continents. Nor is it acceptable to social scientists who want to test statistically theories that offer competing explanations about why national governments differ in the extent of their corruption. It is academic in the pejorative sense to conclude from deficiencies of measures that nothing can be said about whether corruption is widespread in a country. Nor should critics ignore the demand from policymakers for measures of corruption that offer an alternative to the self-interested dismissal of corruption by leaders of badly governed countries. In the words of John Tukey (1962: 13), a mathematician who pioneered exploratory data analysis, ‘Far better an approximate answer to the right question, which is often vague, than an exact answer to the wrong question, which can always be made precise’.

3 Explaining National Differences in Corruption Since the CPI shows great variations between countries (see Fig. 1), it is logical to test explanations that attribute these variations to the national context. Many theories of the causes of corruption concentrate exclusively on the influence of national institutions, and proposals to reduce corruption often conclude with prescriptions for the reform of national institutions. Because national institutions are normally uniform within a country, comparison across national boundaries is necessary to test hypotheses about the causes of variations in national corruption. Every state needs some form of public administration to exercise its authority but a big majority of United Nations member states lack a long history of governance by public officials trained to conform to the Weberian ideal of a bureaucracy impartially administering public services. European states are distinctive in beginning bureaucratization in the nineteenth century. States such as Prussia and Napoleonic France institutionalized bureaucratic procedures for national security and economic development long before the upheavals of the First World War (Anderson and Anderson 1967; Finer 1997). Thus, public officials were expected to meet bureaucratic standards long before they began

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the nationwide delivery of the social services of the contemporary welfare state. Given this historical context, a state could introduce a pension system in which older people could become entitled to receive a regular income in accord with impartially administered rules rather than as a favour from a political patron. Our first hypothesis is: The legacy of early bureaucratization reduces national corruption. The creation of the Soviet Union after the First World War replaced a Tsarist regime that was not governing bureaucratically by a Leninist system of administration in which Communist Party institutions and officials were superior to state officials (Jowitt 1992). They were not bureaucrats administering policies impartially but officials of a party-state that operated by a system of Socialist legality that was, from a Weberian perspective, anti-modern (Shlapentokh 1989; Rose 2009). When Communist authority was disrupted in the Soviet Union, party apparatchiks in its republics from Belarus to Uzbekistan declared national independence and seized control of Soviet assets in a process described as ‘stealing the state’ (Solnick 1998). In Russia, there was a ‘wild privatization’ of valuable capital-intensive industries that created billionaires who shared their proceeds with state officials. After the collapse of the Soviet Union in 1991, the Communist legacy of corruption based on the Communist Party power was replaced by a corrupt system of cronies exploiting the state’s power and wealth (Ledeneva 2006). By contrast, most countries of Eastern and Central Europe had a history of early bureaucratization as part of the Prussian or Austro-Hungarian empires prior to the First World War before Communist regimes were imposed after 1945. When the fall of the Berlin Wall in 1989 undermined Communist regimes these countries could attempt to revive older Rechtsstaat practices. The hypothesis—The legacy of Communist governance increases national corruption—has an important corollary—The legacy of early bureaucratization reduces the effect of the legacy of Communist governance. Colonial political systems were for up to a century or more a distinctive form of governance: 74 countries in the CPI were colonial territories that did not gain national independence until decades after the Second World War. In many colonies basic social and economic conditions for institutionalizing bureaucracy were absent. Since bureaucrats were few, imperial authorities often relied on the indigenous leaders and patrimonial institutions to deliver services in accord with national traditions (Mamdani 1996). Such ‘light touch’ bureaucratization was also a means

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of securing support from traditional rulers. Many nationalists resisted bureaucratization as an alien innovation inconsistent with national traditions and their own ambitions to hold power themselves. Hence, bureaucratization tended to be introduced much later and much less thoroughly than in the home countries of European rulers (Bleich 2005). After independence, new rulers, whether democratic or undemocratic, have presided over regimes that have delivered public services through a mixture of traditional and bureaucratic procedures (Acemoglu et al. 2001). The hypothesis that follows is: The legacy of colonialism increases corruption. The legacy of history can create an equilibrium of good or bad governance. Early bureaucratization free of a Communist or colonial legacy can institutionalize the delivery of public services free without corruption before a government begins the nationwide distribution of welfare state services to the mass of the population free of the favouritism and inequalities resulting from traditional practices. In countries without a legacy of early bureaucratization, there is a vicious circle: Insiders benefitting from corruption have a strong interest in maintaining the authoritarian institutions that free them from accountability to their citizens. The third wave of democratization after the fall of the Berlin Wall in 1989 led to the abrupt and rapid transformation of political institutions. The belief that this marked the end of history implied that a legacy of corruption could be overcome promptly by introducing democratic institutions that would hold governors accountable. Since freedom of speech is a necessary condition for holding democratic elections, a free press and social media offer means for citizens to voice formal and informal demands for governors to do something about corruption. Since free elections give citizens the power to eject from office politicians who tolerate capital-intensive and retail bribery this created a mechanism that might result in mass public services being delivered by the book. From an institutionalist perspective, introducing democratic institutions may compensate for the absence of early bureaucratization, and if popular pressure is maintained, this may create a new equilibrium of good governance. We therefore hypothesize: Democratic institutions reduce corruption. Capital-intensive corruption involves the use of political means to allocate large resources in violation of the law. For this to happen, a country must have money to divert from the public to private hands. Poor countries can receive money from foreign aid agencies and from multinational corporations exploiting their mineral and energy resources.

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Foreign aid is a significant source of government revenue where the World Bank and national aid agencies give developing countries billions to spend on capital-intensive projects for improving infrastructure, health and education facilities. The economic criteria that qualify countries to receive foreign aid do not include good governance. In countries rich in natural resources, such as oil, gas and minerals, there is a demand from large multinational corporations for government licenses to extract and sell these resources in world markets. National governors with the political power to grant licenses may do so in exchange for payments that put money that looks big in their foreign bank account but is very small by comparison with the profit a multinational corporation can make. Contrary to the intention of governments providing foreign aid, the hypothesis that follows is: The greater the importance of foreign money to a national economy, the higher the level of national corruption. Theories of inequality postulate that the greater the inequality in a society, the more political power will be concentrated rather than distributed equally. Ethnic identification based on the race, tribe or language is a categoric form of differentiation that can create political inequality between ethnic groups that are in control of government and ethnic groups that are outsiders (Posner 2004). Insofar as public officials favour claimants who belong to the governing ethnic group, public resources are not delivered by the book. Members of the ethnic group in power can get what they want by using ethnicity as a hook to get around rules, while outsiders have to pay bribes to get what they want. It follows that: The greater the extent of ethnic inequality in a country, the higher its level of corruption. Many theories of economic inequality assume that those with the most money will be able to translate their wealth into political power and use this power to benefit themselves. However, the implication of this assumption for national corruption is problematic. In economically developed societies people who benefit most from national prosperity may favour governance by the rule of law in order to protect what they enjoy, such as favourable tax policies and the properties and lifestyles of the wealthy. In developing countries offering limited resources for accumulating income and wealth in the private sector, economic inequality can be a consequence of those in high office using their power to exploit the state’s income and resources. The absence of an unambiguous theoretical hypothesis leaves open to empirical testing what effect, if any, a higher level of national income inequality has on corruption.

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Political history and institutions have most impact. The CPI is especially suitable for testing empirically which of the foregoing hypotheses has statistical support, because it covers 152 countries with different political histories and institutions, levels of economic development and dependence on foreign money, and varying in the extent of their ethnic and economic inequality. The hypotheses are tested with an ordinary least squares multi-variate regression that includes eight independent variables. Altogether, the multi-variate regression analysis accounts for 68% of the total variation in the CPI. Four influences are statistically significant and four are not (Table 1). The first hypothesis is strongly supported. The impact of introducing bureaucracy before 1914 is associated with an increase in a country’s CPI score by 25 percentage points net of all other influences. This indicates that the practice of governance at the grass roots was altered much less than boundaries of states following the collapse of multinational empires at the end of the First World War. The importance of early bureaucratization is underscored by the way in which it has moderated the impact of its antithesis, the anti-modern Communist system of governance (Rose 2009: Chapter 2). Once Communist regimes collapsed after the Berlin Wall fell, countries that had experienced Prussian or Habsburg early bureaucratization were not trying to create from scratch a bureaucracy that governed by the book. Instead, they were engaged in Table 1 Contextual influences on national corruption (dependent variable: National Corruption Perceptions’ Index ordinary least squares regression)

Early bureaucracy Post-Communist Early bur’y * Post-Communist Colony post-1945 Extent democratic Foreign aid Resource rents Ethnic differences R squared Constant F-test

Beta

P-value

Change in CPI

25.00 −0.46 −17.1 −1.95 3.65 −0.31 0.00 −2.91 68.0% 25.6 38.01

0.000 0.879 0.007 0.411 0.000 0.064 0.999 0.514

25 Not sig. −17 Not sig. 22 −14 Not sig. Not sig.

0.000 0.000

Note and Source Change in CPI: Estimated change in 100-point CPI if associated independent variable moves from its lowest to its highest value. Analysis of 152 countries with measures available for all independent variables

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rebuilding political institutions that had been perverted by the dictates of Communist commissars. By contrast, the successor states of the Soviet Union had only the foundations of the Tsar’s personalistic regime and of a regime governed by Marxist-Leninist dictates rather than an impersonal bureaucracy. Differences in bureaucratization among post-Communist regimes— eight had an experience of early bureaucratization and 20 did not— means that when the 28 are lumped together as a single influence in the regression analysis, their collective influence is not significant. However, when an interaction term is introduced that differentiates the two sets of states, the impact is significant. Countries combining early bureaucratization and Communist rule have their CPI rating lowered, but it is still higher than countries lacking the former benefit. The majority of states in the world today could not introduce early bureaucratization because they were colonies or did not exist as states prior to the end of the Second World War in 1945 and then gained independence in the 1950s and 1960s. Imperial rulers tended to tolerate the maintenance of customary forms of grass-roots administration in their colonies in order to co-opt local elites, while introducing a veneer of institutions of modern governance. Contrary to many theoretical hypotheses, colonialism as a form of prior rule does not register a statistically significant effect on corruption (Table 1). The experience of countries during colonization is mixed. Even though many of the former colonies covered here, such as Nigeria and Kenya, are near the bottom of the CPI projecting their poor performance onto the mass of former colonies is not justified. Former British colonies in the Caribbean such as Jamaica and Trinidad are in the top half of the CPI ranking. They began bureaucratization while they were still colonies under British rule. By contrast, early bureaucratization did happen in Latin American states that became independent in the early nineteenth century, a period before their Imperial rulers had themselves begun bureaucratizing their own systems of national administration (Rose and Peiffer 2016). The introduction of democratic institutions is intended to counteract the negative effect on governance of the legacy of the past. Freedom House, an international non-governmental organization, measures the democratic credentials of contemporary states by the extent to which they enjoy civil liberties and political rights. Civil liberties give political activists and the press the capacity to publicize corrupt activities of public officials. Political rights give citizens the power to vote out of

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office a government that abuses its powers by hook and by crook and install a new government in the hope that it will reduce corruption. The results indicate that democratic institutions may have a substantial and significant impact on corruption. Net of past legacies, going from undemocratic to fully democratic is associated with an improvement in a country’s rating on the CPI by 22 percentage points. However, in a global context, national governments that fully respect civil liberties and political rights are in the minority; the median group consists of countries that are only partly democratic. Low-income countries tend to be most favoured as recipients of foreign aid because their economic and social development requires capital-intensive resources that they cannot finance themselves. The percentage of Gross National Income received as aid ranges from below one-tenth of 1% in countries such as Mexico to above 5% in more than a dozen countries scattered from Cambodia to Togo and Jordan. Although aid contracts normally include clauses imposing bureaucratic procedures intended to prevent corruption, national officials are much better placed than foreign auditors to get around these procedures to benefit themselves. As hypothesized, foreign aid is significantly associated with national corruption, but not in the direction that donors would like. In countries where aid bulks largest in its national economy because domestic economic resources are in short supply, aid may be important for public officials wanting to benefit from the capital-intensive corruption that it can finance. The CPI index is likely to be 14 percentage points lower in countries that receive the most aid than in countries that receive no aid. Natural resources are not distributed evenly within developing countries or globally. The World Bank measure of government income from natural resources as a percentage of GDP reckons dozens of countries have virtually no such income. Since natural resource income has only a low correlation with foreign aid, 0.13, its effect on corruption can be tested without any risk of statistical contamination. Although natural resource revenue increases national income, governments receiving a substantial income from natural resources are not significantly more corrupt, after taking other influences into account. This suggests that oilrich countries such as Russia and Nigeria are high in corruption because of a lack of early bureaucratization and democracy, while Norway and Australia receive large natural resource income without a corrupt impact because they bureaucratized early and are democracies.

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The measure of ethnic diversity used is the index of ethnic fragmentation created by Alberto Alesina and colleagues (2003); it calculates the probability that two randomly selected people will belong to the same ethnic group. The mean value of 0.46 on a 0 to 1.0 scale emphasizes that ethnic differences are relevant in most countries included in the CPI analysis. There is also a wide range between countries where fragmentation is extremely high, such as the Democratic Republic of the Congo and Uganda, and those where it is virtually non-existent, such as the Republic of Korea. Ethnic fragmentation is not significantly associated with national corruption (Table 1). This may be due to the fact that where fragmentation is greatest no ethnic group has the political power to exploit the state to its benefit, and where fragmentation is lowest there is no substantial minority forced to rely on corruption to get what it wants. The Gini Index is a standard social science measure of economic inequality in a society. It assesses national inequality on a scale that ranges from 0, no inequality, to 100, total inequality. Because the calculation of the Index requires good national statistics of income little affected by shadow economy income, it is only available for 99 countries that we analyse. Among the countries covered, the Gini Inequality Index ranges from the most unequal, South Africa 63, to the least, Denmark and Japan, 25. When it is included as an independent variable along with contextual influences highlighted in Table 1, the result is clear. Contrary to theories of the pervasive influence of inequality, it fails to have any significant association with national corruption (p 0.585). The combined effect of statistically significant influences is substantial. For the 29 countries, introducing bureaucratic institutions more than a century ago and having governors today accountable through democratic institutions, the CPI rating will be 47 points more favourable than if these conditions are lacking. While these countries provide the paradigm example of good governance today, globally, they are less than one-fifth of the world’s political systems. More numerous are countries where foreign aid is associated with a depressed CPI, thus creating a gap of 61 points between this relatively badly governed group and the best-governed countries (Table 1). Evidence that political history and institutions have a significant impact is consistent with social science theories of capital-intensive corruption at the national level. However, it is not evidence of corruption at the grass roots, where low-level officials are responsible for the retail delivery of services to masses of ordinary people. Nor can generalizations about national corruption based on the national indexes explain why some citizens of a country pay bribes for some public services while others do not.

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References Acemoglu, D., S. Johnson, and J. Robinson. 2001. Colonial Origins of Comparative Development: An Empirical Investigation. The American Economic Review 91 (5): 1369–1401. Alesina, A., A. Devleeschauwer, W. Easterly, S. Kurlat, and R. Wacziarg. 2003. Fractionalization. Journal of Economic Growth 8 (June): 155–194. Anderson, Eugene N., and Pauline R. Anderson. 1967. Political Institutions and Social Change in Continental Europe in the Nineteenth Century. Berkeley: University of California Press. Bleich, E. 2005. The Legacies of History. Theory and Society 3 (4): 171–195. Charap, Joshua, and Christian Harm. 2002. Institutionalized Corruption and the Kleptocratic State. In Governance, Corruption, and Economic Performance, ed. G. Abed and S. Gupta, 135–158. Washington, DC: International Monetary Fund. Donchev, D., and G. Ujhleyi. 2014. What Do Corruption Indices Measure? Economics and Politics 26 (2): 309–331. Ekeh, P. 1975. Colonialism and the Two Publics in Africa: A Theoretical Statement. Comparative Studies in Society and History 17 (1): 91–112. Fazekas, Mihaly, and Istvan Janos Toth. 2014. New Ways to Measure Institutionalised Grand Corruption in Public Procurement. Oslo: U4. Finer, S.E. 1997. The History of Government. Oxford: Oxford University Press, volumes. Fukuyama, Francis. 2001. Asian Values in the Wake of the Asian Crisis. In Democracy, Market Economics and Development, ed. Farrukh Iqbal and John-Il You, 149–168. Washington, DC: World Bank. Glaeser, Edward L., and Raven E. Saks. 2006. Corruption in America. Journal of Public Economics 90 (6–7): 1053–1072. Hellman, Joel, G. Jones, and D. Kaufmann. 2003. Seize the State, Seize the Day: State Capture and Influence in Transition Economies. Journal of Comparative Economics 31 (4): 751–773. Heywood, P. 2015. Routledge Handbook of Political Corruption. London: Routledge. Johnston, Michael. 2014. Corruption, Contention and Reform: The Power of Deep Democratization. New York: Cambridge University Press. Jowitt, Kenneth. 1992. New World Disorder: The Leninist Extinction. Berkeley: University of California Press. Kaufmann, D., A. Kraay, and M. Mastruzzi. 2010. The Worldwide Governance Indicators: Methodology and Analytical Issues. Policy Research Working Paper No. 5430, World Bank, Washington, DC.

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Lambsdorff, Johann Graf. 2007. The Institutional Economics of Corruption and Reform. Cambridge: Cambridge University Press. Ledenava, Alina. 2006. How Russia Really Works. Ithaca: Cornell University Press. Mamdani, M. 1996. Citizen and Subject. Princeton: Princeton University Press. Posner, D. 2004. Measuring Ethnic Fractionalization in Africa. American Journal of Political Science 48 (4): 849–863. Reddaway, Peter, and Dmitri Glinski. 2001. The Tragedy of Russia’s Reforms: Market Bolshevism Against Democracy. Washington, DC: United States Institute of Peace Press. Rose, Richard. 2009. Understanding Post-Communist Transformation: A Bottom Up Approach. London and New York: Routledge. Rose, Richard, and Caryn Peiffer. 2016. Integrating Institutional and Behavioural Measures of Bribery. European Journal of Criminal Policy and Research 22 (3): 525–542. Rose-Ackerman, Susan. 1999. Corruption and Government: Causes Consequences and Reform. New York: Cambridge University Press. Shlapentokh, Vladimir. 1989. Public and Private Life of the Soviet People. New York: Oxford University Press. Solnick, Steven L. 1998. Stealing the State: Control and Collapse in Soviet Institutions. Cambridge, MA: Harvard University Press. Transparency International. 2014. Corruption Perceptions Index 2014. Berlin: Transparency International. Tukey, John. 1962. The Future of Data Analysis. Annals of Mathematical Statistics 33 (1): 1–67. UNDP. 2008. Corruption and Development: A Primer. New York: United Nations Development Programme. Zakaria, Fareed. 1994. A Conversation with Lee Kwan Yew. Foreign Affairs 73: 109–127.

CHAPTER 4

Exploiting People at the Grass Roots

This chapter shifts attention from corruption at the top of government to corruption at the grass roots, where the great mass of citizens deal with public employees face-to-face. Whereas laws and rules are enacted in the national capital, this is a long way from where most people live, including the public employees nominally acting as their agents. Whatever the formal hierarchy linking institutions, at each level officials have a degree of informal discretion; this is especially true in federal political systems. Local institutions at the bottom of the pyramid of multilevel governance are responsible for the delivery of major public services and within each local authority there are further subdivisions. For example, an education authority has a multiplicity of schools and each school is divided into classrooms in which a teacher deals with children as individuals. Policing is devolved to the street level. The state’s activities are no longer confined to the provision of a few collective goods such as defence and diplomacy, which involve little firsthand contact with the great mass of the state’s subjects. Contemporary welfare states are now service states, bringing ordinary people into direct contact with public employees who deliver desirable social services (Kumlin 2004). A big majority of households contact at least one public service annually and over a few years virtually every household has a number of contacts. While the cost of social services for a single individual is far less than the cost of building a dam or buying a fighter aircraft, collectively public expenditure on social services such as health © The Author(s) 2019 R. Rose and C. Peiffer, Bad Governance and Corruption, Political Corruption and Governance, https://doi.org/10.1007/978-3-319-92846-3_4

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and education is greater than the amount spent on capital-intensive contracts. The scale and variety of public services gives special relevance to Max Weber’s (1948) dictum, ‘Power is in the administration of everyday things’. In a political system in which there is a risk of corruption, national policymakers face a challenge: How do you make sure that the services for which you are nominally responsible are delivered as intended at the grass roots? In many parts of the world the delivery of public services by the book cannot be taken for granted. Examining how services are actually delivered avoids the flawed assumption of national indexes of governance, which imply that governance is the same regardless of service. Our evidence shows that the outcome of encounters between ordinary citizens and public officials is variable. The extent of contact and bribery not only differs between countries but also between services within a country. Sometimes services are delivered in keeping with bureaucratic standards and sometimes they are not. Since most of the world’s population live in countries where corruption is relatively widespread, it directly affects an estimated 1.8 billion people each year.

1 How People See Public Institutions In principle the payment of a bribe to a low-level public official is an observable act. Likewise, the electronic transfer of a large bribe paid to a high-level policymaker’s secret offshore bank account is a matter of record. Because bribery is illegal, there are no official statistics about bribery. When Transparency International launched its Corruption Perceptions Index, it pooled indirect forms of evidence, including the views of lawyers, consultants, lobbyists and business people whose status as experts could be gained by first-hand involvement as brokers or payers of big-bucks bribes to policymakers. To get around the expected reluctance of people whose work involved paying or receiving bribes, it first of all asked informants to report their perceptions of corruption. This strategy was followed in Transparency International’s Global Corruption Barometer (GCB) survey. It began by asking people about their perceptions of corruption in a variety of political and social institutions. Its pioneering use of questions about popular perceptions of corruption has since been incorporated in a big majority of surveys about corruption (see Rose and Peiffer 2015: 51ff).

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Social psychological theories postulate that even though perceptions are subjective judgements, these views are real if people think they are real, since how people perceive others act can condition how they relate to others. For example, if an individuals perceive a public service as corrupt this may predispose them not to use it. However, not paying a bribe means the loss of health care or education or making a substantial payment to a private-sector hospital or school. When there is contact, a person who sees public officials as corrupt will be alert to signals from an official that a bribe would expedite action. The perception that ‘everybody is doing it’ provides a reason for people to engage in corruption as they assume others do and pay a bribe, even if doing so is regarded as wrong. The result of a widely shared perception of corruption can create a low-level equilibrium trap making it accepted as an unwelcome fact of life even if it is thought wrong. Popular perceptions of political institutions. The 2016 GCB measured popular perceptions of corruption by asking: How many of the following do you think are involved in corruption or haven’t you heard enough about them to say? The nine groups covered range from the leaders of the national government to local government officials and non-political figures such as heads of businesses and religious leaders. The extent of perceived corruption is rated on a scale ranging from none is corrupt to all are corrupt. The key representatives in a political system—Members of Parliament and the president or prime minister—are seen as among the most corrupt (Fig. 1). These responses cannot be explained away as a consequence of the GCB survey including a large number of partly democratic and undemocratic states. A Eurobarometer survey (2014: 26) in member states found that 55% thought most or all of their national politicians were corrupt and 59% held the same view of political parties. Although international experts regard Denmark and Sweden as being the world leaders in good governance, about one-third of Danes and the same proportion of Swedes thought most of their politicians and parties were corrupt (Eurobarometer 2014: 26). For each group, the median view was discriminating: some of their leaders are corrupt. The extent of perceived corruption among religious leaders is low: 25% think none is corrupt compared to 19% thinking most or all are corrupt. Previous GCB surveys have found that the military is less likely to be perceived as corrupt. Although the police also provide security

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Police

38%

MPs

37%

Gov't officials

36%

Business

35%

Local govt

34%

Tax

34%

Executive

32%

Judges

31%

Religious

19% 0%

20%

40%

60%

80%

100%

Fig. 1 Perceptions of corruption in institutions (Source Global Corruption Barometer 2016)

services for a community as a whole, they also deliver such private benefits as an exemption from a fine or arrest in exchange for a bribe (Rose and Peiffer 2015: 53). Asking about perceptions of many institutions assumes that people differentiate the extent to which corruption is specific to a particular institution. Alternatively, people may make diffuse judgements about the integrity of government and project their general opinion onto specific institutions. This perspective is implicit in governance indexes that generalize about corruption in government as pervasive. Factor analysis can test statistically whether the perceptions of the nine different groups reported in Fig. 1 reflect a single generalized attitude towards the prevalence of political corruption among national leaders. This is the case. A single factor with an eigenvalue of 5.12 accounts for 57% of the variance between institutions. The three groups most closely linked in government—MPs, national and local officials—are of most importance for general perceptions of corruption.

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The cross-national variation in popular perceptions of corruption is much less than the popular experience of paying a bribe. The GCB survey reports that on the four-point scale for measuring perceptions, the Russian mean rating is 1.6, double the rating that Germans give their institutions. While this is a significant difference, it is much less than the difference in the experience of bribery in the two countries. Russians are 13 times more likely to report that they have paid a bribe than are Germans (see Appendix Fig. A.1). One possible explanation for this discrepancy is that in countries in which bribery is relatively low, stories about politicians behaving badly are especially likely to colour popular perceptions of corruption. By contrast, where corruption is high, single events are not news and the government’s undemocratic control of the press limits the amount of media publicity given to capital-intensive corruption. The correlation between a country’s national CPI rating for capital-intensive corruption and the mean score for individual perceptions of corruption is statistically significant but weak, 0.30. One explanation for this is that individuals make assessments by mixing perceptions based on direct experience, such as dealings with local government officials and those with whom they have no contact, such as the national president.

2 How Public Services Differ The heterogeneous activities of the contemporary state differ greatly in the likelihood of ordinary people having contact with public officials. Collective goods and services such as military defence and the rate of inflation affect everyone in society without ordinary people having any direct contact with policymakers at the top of government. Since this is the case, the officials making collective goods decisions cannot make the payment of a bribe a condition of being affected or not. Since every citizen shares in the risks of modern war, the only way in which a person can avoid this is to leave the country. In the language of economics, collective goods are non-excludable, because everyone in the population is included in their impact (Samuelson 1954). Excludable goods and services differ between those that are capital-intensive, because they cost many millions to produce, and services that are retail in scale because they are relatively cheap to provide, such as birth certificates. Services also differ in who is involved. Capitalintensive activities such as building bridges or producing military aircraft

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involve a relatively small number of corporations that have the resources needed to produce such expensive high-tech goods. In countries where bureaucratic standards are weak, the prospect of big profits is an incentive for enterprises to offer big bribes for contracts and for groups of high-ranking politicians to accept them. Government negotiations of contracts for capital-intensive goods are handled over the heads of ordinary people. Ordinary people are directly involved in retail services delivered by public employees based in schools, clinics and other public agencies in their community. These services are excludable when public officials have the power to decide whether or not a person is entitled to receive a desired service or excused from meeting an obligation. Bureaucratic laws and regulations set out in detail the procedures that public officials ought to follow when deciding whether a person is entitled or obligated to receive a service. For example, the determination of entitlement for maternity-related benefits starts with a positive finding in a pregnancy test. It is followed up with a series of standard actions to which a pregnant woman is entitled until a specified point in the post-maternity process is reached. A decision about whether a patient has a mental illness that entitles a person to receive disability benefits in cash or kind cannot rely to the same extent on clinical evidence available for maternity care, and thus leaves officials with substantial discretion. To describe the people who deliver public services as bureaucrats is misleading. It reduces millions of people with all kinds of skills and roles to robots whose behaviour is determined by algorithms derived from laws and regulations. In fact, the great majority of public employees do not spend their working day sitting at a desk inputting data to a computer that controls the delivery of public services. Nor do they think of themselves as cogs in the machinery of public administration. Instead, they are people who spend their working day applying specific occupational skills necessary for the delivery of a particular public service, whether it is looking after patients in a hospital or maintaining its electrical services. If asked to describe their occupation, they will say they are a nurse or an electrician. To obtain their job, they have to learn skills through vocational education leading to a formal qualification. The fact that public employees must respect bureaucratic regulations no more makes them bureaucrats than being subject to university rules makes a professor see herself as a bureaucrat rather than an economist or engineer.

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In countries with good governance, the people who deliver grass-roots services see themselves as agents of their profession rather than as agents of a politician or political party. That is why this study refers to the people delivering services as public officials or employees rather than as bureaucrats. Officials may rely on bureaucratic rules to protect them from corrupt politicians who want to see their friends looked after favourably or in violation of rules. The majority of recruits to jobs in the public sector do not seek posts where the opportunity to collect bribes are greatest. If that were the case, no one would take a job where the opportunities for collecting a bribe are low, such as working in the back room of an office without any contact with people who seek services. People out for bribes would rather be a customs official, where there are many opportunities for collecting bribes from businesses wanting to speed up the delivery of perishable goods or smuggle high-tariff or illegal goods. Particular circumstances of a claimant for a service may create a conflict between the literal application of bureaucratic rules and what a qualified professional considers ought to be done. The logic of appropriateness takes into account the fact that formal rules meant to be applied equally to everybody are not necessarily suitable in all situations. For example, if a judge suspends a jail sentence on the grounds of the extenuating circumstances of a guilty person, this is not corrupt as long as the judge is not paid a bribe for doing so. Applying the abstract norm of appropriateness is easier said than done. Most public employees have a degree of discretion that they can exercise in delivering their service. The less the supervision, the more opportunities for exercising discretion. The need for technical knowledge insulates officials from having decisions audited by supervisors lacking their knowledge. The diagnosis of an illness requires a doctor to make a judgement about what treatment should be prescribed in the light of a physical examination and clinical data. The attention that a busy nurse pays to a patient experiencing discomfort is immediately determined by the nurse’s choice of priorities between ailing patients. Classroom teachers have substantial discretion in deciding which pupils they will give special assistance to and which are ignored. Professional standards offer guidance about when and how to exercise discretion rather than adhere strictly to rules. The two may combine in a positive way to deliver a service in keeping with both policy and professional objectives. This was illustrated in a classic study of American forest rangers, who worked in government-owned forests thousands of miles

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away from their headquarters in Washington, DC. They exercised discretion in making decisions affecting features of forest management on site and referred problems upward for decision only when they judged the rules required this. However, where standards and supervision are weak, public employees have much more discretion about how they conduct themselves (Wilson 1991). The greater the extent of discretion, the greater the opportunities for a service to be delivered by hook or by crook rather than by the book. Street-level bureaucrats such as the police have a substantial amount of discretion (Lipsky 2010; Goel et al. 2016). As long as police are not under camera surveillance, they can make decisions about how and whether they enforce minor and major laws or take a bribe rather than report that a law has been broken. In a service in which corruption is widespread, informal norms make receiving bribes and personal favours one of the benefits of a job. Policing has a particular problem, for police operate in small groups with a primary loyalty to their immediate colleagues rather than to an abstract police code or to remote officials to whom they are notionally accountable. Corruption can take the form of accepting bribes to allow illegal activities such as drug peddling or breaking rules against wiretapping for the ‘noble cause’ of securing evidence to sustain a conviction (Reiner 2010). When corrupt payments are shared between several police officers, reporting bribery breaks informal obligations to cover up activities of one’s friends and colleagues. Bureaucratic rules controlling what public officials should and should not do are intended to put limits on discretion. Yet bureaucratic rules can do no more than provide a framework within which public employees do their job with a greater or lesser degree of discretion. The more bureaucratic rules that exist to restrict the exercise of discretion, the greater the potential friction between the makers of rules and publicly employed professionals who are trained to exercise discretion in delivering their services. When rules and informed judgements are in conflict, this generates complaints about red tape and efforts to cut the tape by hook or by crook.

3 Contact Varies by Service Whether individuals contact a particular public service depends on characteristics of the service, such as whether it is a desirable good or an undesirable obligation. It also depends on characteristics of the individual, for example, whether they are ageing and in need of health care or young parents with school-age children. No one can be expected to

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contact every public service each year nor is it easy for a person to avoid all contact. To capture this variety, surveys should ask about those public services that bring many citizens into face-to-face contact with public employees at least once a year. Barometer surveys differ in the number of services that they ask about (Rose and Peiffer 2015: 28ff). The latest GCB and the Afrobarometer ask about six services and the EBRD survey of post-Communist countries asks about eight services. Even though bribing for services occurs least often in Europe, the latest Eurobarometer asked questions about contact with 15 different public and private-sector services and politicians. In order to achieve comparability between major surveys, our analysis concentrates on the five most used public services: health care, education, local officials issuing permits and documents, the police, and courts. During the year more citizens have contact with the output side of politics, public services, than with the input side, voting for MPs. On every continent almost three-quarters annually have contact with at least one major service (Fig. 2). Notwithstanding big differences in the

Any contact (%)

80%

Any contact 78%

76%

73%

Mean contacts

73%

4 70%

69%

60%

40%

1.9

1.7

1.2

Mean contacts

100%

1.2

20%

Asia

Africa

Latin W. MENA America Europe

EBRD

Fig. 2 Contact with services high in every continent (Source Global Corruption Barometer 2016. There is no contact data for the police in LAPOP)

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economic capacity of governments, the scale of contact differs very little across continents. The average ranges from 78% in Asia to 69% in formerly Communist EBRD countries. Within every country, individuals vary greatly in the number of different services that they contact. In the population as a whole, the mean number of contacts ranges between 1.2 in Western Europe and EBRD countries and 1.9 contacts in Asia. In three groups—Asia, Africa and the Middle East and North Africa—half or more of the population contacts at least two services annually. Since services such as health care can involve several visits, statistics about the use of different services understate the total number of times that an individual contacts public officials during a year. Going without any contact with public officials during a year is likely to be a phase in the life cycle rather than an aversion to government. For example, a healthy young person without any responsibilities for a family may have, for the moment, no need for health or education services. Another reason is that a person does not want it. Individuals would rather be in good health rather than claim hospital treatment, and couples do not need a marriage license to live together. A third reason for not using a service is having no entitlement; to use schools a person must have a school-age child. In addition, a person can have indirect contact when tasks are shared within a household. For example, only one person need obtain the license for a family automobile. There are big differences within every country in the percentage of people contacting particular services (Table 1). In each Barometer survey, more than half report seeing a doctor or going to a clinic or hospital during the year. By contrast, less than one-sixth get involved with courts. The gap between the most and least used service is 56 percentage points in Western Europe and 52% in Africa. Contact with education Table 1 Contact varies by public service Africa (%) Asia (%) Latin EBRD (%) W. Europe (%) MENA (%) America (%) Health Education Permits Police Courts

62 42 44 20 10

58 38 47 35 15

Source Global Corruption Barometer 2016

51 40 18 n.a. 10

57 21 22 20 3

62 25 6 18 6

54 33 47 21 15

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services is twice as great in Africa, where birth rates are high, as it is in post-Communist EBRD countries, where birth rates are relatively low. Many public services have less contact with citizens than do some major private-sector institutions. The Eurobarometer found that 50% of citizens contacted banks and related institutions annually, a higher rate than that for four of five major services provide by their government.

4 Experience of Bribery Varies Too The 100-point Corruption Perceptions Index implies that in every country corruption is a matter of degree; it avoids dividing countries into two categories, those with good and those with bad governance. Contact with public services is also a matter of degree: some services are used more than others and some people make more use of services. The likelihood of an individual having to pay a bribe for a public service is also a matter of degree. In a representative sample of 1000 citizens, some will have paid a bribe and some will not. In countries where corruption is higher, the experience of paying a bribe for a grass-roots service is more likely to be the subject of conversations that ordinary people have with family, friends and neighbours. Surveys that ask about bribery are not dealing with a sensitive issue but with a subject that is common knowledge. To broach the subject, the GCB first asks respondents their opinion of overall corruption in government and then about their perception of corruption in particular public institutions. This is followed by questions about contact with services; for each service where there is contact, it asks whether a bribe was paid (for more discussion about questionnaire design, see Rose and Peiffer 2015: 35ff). Although questions asked in different languages and different continents cannot be literally the same, as long as they are conceptually comparable they can be good indicators of generic concepts. In multinational surveys the master questionnaire is normally in English and must be translated into a dozen or more languages. The challenge of translation is reduced insofar as corruption surveys concentrate on familiar and visible services such as schools and hospitals rather than asking about abstract ideas such as the market. Most Barometer questionnaires use the word bribe. The EBRD refers to an unofficial payment or gift, an activity distinct from trying to get services by the use of connections. The Afrobarometer refers to gifts and favours as well as paying money as a bribe; this recognizes that if money is scarce in a household, payments in kind can be given.

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Percentage paying a bribe 100%

Western Europe

EBRD

Latin America

65% Haiti

MEAN

Africa

56% Liberia

Asia

MENA

61% India Vietnam

50%

44% Morocco 27% Tajikistan

7% Greece 0

2% 0.1% Sweden, Finland

14%

2% Slovenia

14% 2% Barbados

17%

1% Botswana

21%

0.2% Japan

23%

3% Jordan

Fig. 3 Bribery varies between and within continents (Source Global Corruption Barometer 2016)

Payment of a bribe. Aggregate indicators of national corruption imply that in countries labelled corrupt everyone who has contact with public services pays a bribe or at the very least a big majority of people do so. However, this is not the case (Fig. 3). The payment of bribes is confined to a limited minority of Barometer respondents. In West European countries an average of only 2% reported paying a bribe in the past year. At an average level of 23% paying a bribe annually, the Middle East and North Africa (MENA) is highest with Asia close behind at 21%. Yet even where bribery is high, it is the annual experience of less than half the population. Among the 73 countries surveyed in the continents of Asia, Africa and Lain America, there were only four—Haiti, India, Vietnam and Liberia—where a majority of respondents reported paying a bribe in the past year. On average, the GCB finds that bribery affects 18% of a country’s population each year.

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Conventional geographical categories group together countries with very different levels of grass-roots bribery. The gap is greatest in Asia, a difference of almost 61 percentage points between India and Vietnam and Japan. It is least among the 15 old member states of the European Union, where the range is just under 7% between Greece and two Nordic states, Sweden and Finland. In the new EU member states, the legacy of Communism increases bribery, rising to 22% in Lithuania but as low as 2% in Slovenia. The size of a household increases the likelihood of paying a bribe; but there is no one-to-one relationship between an increase in household size and the payment of bribes. EBRD data shows that in a single-person household, 16% report paying a bribe. When household size doubles, the percentage reporting the payment of a bribe rises by only 5%. With six persons in a household, the proportion paying a bribe is only twice that of a single-person household (Rose and Peiffer 2015: 37ff). In larger households, an individual may be indirectly involved in bribery if another person makes a side-payment to get a service. In a 2010 survey undertaken by the United Nations Office of Drugs and Crime (UNODC) in seven strife-torn states in the Western Balkans,1 73% said they had paid a bribe themselves while 27% reported another household member had done so. All the Barometer questionnaires restrict the span of time covered to 12 months. Doing so avoids the risk that people will be unable to remember accurately whether they have ever paid a bribe. It also results in replies reflecting current conditions in the political system, an important consideration in countries where there have been one or more changes of regimes in the lifetime of most respondents. Moreover, placing responsibility for corruption on the government of the day gives ammunition to advocacy groups that want their government to take action to reduce corruption. While restricting questions to the past year minimizes the problem of recall, it also underestimates the proportion of people who have paid a bribe in the past. Exceptionally, the 2013 GCB asked people whether they had ever paid a bribe. As expected, measuring lifetime experience increases the proportion exposed to bribery. However, asking the percentage of people ever paying a bribe added only four points to the total 1 A total of 28,066 persons were interviewed in Albania, Bosnia & Herzegovina, Croatia, Kosovo, Montenegro, Serbia and the former Yugoslav Republic of Macedonia.

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Table 2 Bribery for services after controlling for contact No contact (%) Health Education Permits Police Courts

42 64 61 75 87

Contact, no bribe (%) 49 31 32 19 10

Contact, bribe (%) 9 5 7 6 3

Bribe % contact 16 14 18 24 23

Source Global Corruption Barometer 2016; 98 countries. Dominican Republic and Nicaragua excluded because of inadequate contact data

reporting having paid a bribe in the past year. This may reflect that longterm recall is low and so any experience of bribery years ago is unlikely to affect current attitudes. Bribes vary by service. Generalizations about corruption in public services imply that bribery is much the same for every service. This is not the case. The 2016 GCB found that bribes are most often paid for the health service and for permits (Table 2). By contrast, the fewest people pay bribes for court services. The chief reason for this is that far fewer people have, or want to have, contact with the courts than with health and education. Controlling for contact gives a different rank order. Among people who contact the service, almost one-quarter pay bribes to the courts and to the police. The apparent high level of bribery for health and education is because these are much needed and used services. After controlling for contact, the percentage of users paying a bribe for health care or education is significantly lower than that of people paying bribes to law enforcement officials. The more contacts people have with public services, the more likely they are to pay at least one bribe, but the increase is not proportional (Fig. 4). Among GCB respondents using one service, 14% pay a bribe. However, when the number of services contacted doubles, the proportion paying a bribe increases by only one-quarter and when it quadruples, the proportion paying bribes just doubles. Among heavy users of public services, the median respondent paid a bribe for only one service (see Rose and Peiffer 2015: Fig. 4). When bribery happens. The use of an abstraction such as bureaucracy is dehumanizing in the literal sense, since it says nothing about the people whose behaviour immediately determines what the system does. The critical stage in the process of service delivery occurs when a person comes

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Consistent payers

Contacts

One

Mixed experience

14%

No bribe

86%

Two

Three

Four

31%

Five

34%

12%

80%

21%

73%

20%

61%

58% 40%

60%

80%

100%

Fig. 4 Consistent payers of bribes the exception (Source Global Corruption Barometer 2016: 100 countries for which all data available)

face-to-face with the official responsible for delivering it. For a bribe to be paid, the two parties must come to an understanding that a payment must be made if a claimant is to get what he or she wants. The exchange is like buying something in a street market where a person pays in cash and the trader pockets the money without any evidence on paper of a transaction having taken place. Since soliciting a bribe is illegal, public officials do not display prices as a shopkeeper would. The UNODC survey in the West Balkans found that only one in five bribe-payers were quoted a price or were told by a go-between acting as a fixer how much had to be paid. Corrupt officials use a variety of means to cue claimants of the need to ‘volunteer’ a payment in order to get what they want. The more widespread the public perception of corruption, the more likely an individual is to interpret remarks as a prompt to offer a payment. To test the extent to which people understand indirect requests for payment under the table, the 2009 GCB survey asked for comments on the following scenario:

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A public official looks at the application for a business license and describes how complicated it can be to get a license. He complains about his work load and how much paperwork it takes to provide the license. Your friend, the shopkeeper, is worried his application for a business license may be rejected. He offers a payment, roughly equal to five times the price of a good restaurant meal. The public official takes the money and issues the license.

More than nine-tenths of respondents picked up the cue that the official was asking for money and 81% described the official’s action as soliciting a bribe. In a follow-up question, the official is described as giving the license to the shopkeeper along with the information that many of his clients show their thanks by placing something in a box for tips on display in his office. Again, nine-tenths have no difficulty in understanding this cue as a request for a bribe. Even though people can understand implicit requests for a bribe, more than three-quarters think it is unacceptable for public officials to solicit ‘tips’. People may pay a bribe if the benefit is proportionate to the cost. A person who applies for a passport in January for use on a summer holiday can wait three months for slow-moving officials to issue it, while a business person needing a passport to make a trip the following week may be prepared to offer money on the side to secure its prompt delivery. Public officials can exploit the reputation of bureaucracy for being slow by holding up action on a permit or service to which an individual is entitled. In the UNODC survey, two in five report paying bribes because they value their time and want to speed up the delivery of a service. When a bribe is the only way to get a service, for example, a permit or a passport, one-quarter are prepared to pay a bribe. One in six says their payment was made as a gift, a means of showing gratitude in return for what an official does, whether it is simply being helpful in interpreting or bending rules or breaking them. Since the public purse rather than corrupt officials pays the cost of providing public services, any amount an official receives as a bribe is profit in hand. To accommodate poorer users of public services, a corrupt official can set the cost on an ‘ability to pay’ basis or allow the person wanting a service to decide. Cash is the conventional way of paying for a service, whether the transaction is legal or illegal. In the West Balkans three-quarters paying a bribe give cash or valuable goods; this is consistent with the idea of bribery as an economic nexus (UNODC 2010).

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In households where cash is in short supply, other benefits may be offered. One in five reports that they have given food or drink to an official who has delivered a service, an action consistent with non-bureaucratic norms of reciprocity. Only 3% report that a service is obtained in exchange for what they give an official. Giving something to a public official who has provided a service is sometimes described as an expression of gratitude customary in a society in which personal relations are much more important than the impersonal bureaucratic standards of a modern society. A gift made after a service is received can reflect the expectation that the recipient will favour the gift- giver in the future. However, the UNODC survey provides slight support for the theory that what is given is a free expression of gratitude. More than three-quarters of those paying a bribe report that they are expected to do so before they receive a service and, whatever their resources, to make their payment in cash (UNODC 2010: 22). Because a bribe usually involves paying cash, some surveys have asked questions about how much money was paid. The Eurobarometer (2014: 83f) survey did ask about the cost, but bribery in European Union countries is so low that there were only three services for which as many as 100 respondents among tens of thousands said how much money they paid. The smallest sums recorded, between 1 and 50 euros, tended to be paid to the police, while bribes for health care tended to fall between 100 and 200 euros. In 2009 the GCB requested respondents to indicate on a five-point scale the amount paid in their national currency. To make replies comparable cross-nationally, they were converted into a single currency, US dollars. Given very different levels of national incomes, the GCB followed up by asking bribe-payers to relate the sum paid to their household income. Replies showed wide variations in answers and onefifth said that they did not know what was paid. The questions have not been repeated in subsequent GCB surveys, because of problems of making national currencies commensurable and interpreting their significance in low as against high-income countries. It is easier to guesstimate a total national cost of bribery than to analyse sums paid by individuals. The total expenditure on retail bribes may be estimated by grossing up the amount of money reportedly paid by a small number of individual respondents. An alternative method favoured by macroeconomists is to impute the opportunity cost to the economy of the inefficiencies caused by bribery diverting resources. Because of the large number of assumptions used to produce statements about the monetary cost of corruption, the figures are notional as well as national, and we avoid such speculations.

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Credibility checks. Because survey evidence of bribery does not conform to familiar characterizations of whole societies, critics challenge its validity on the assumption that citizens are unwilling to tell the truth to interviewers about engaging in an act that is both wrong and illegal. However, the idea that there is something wrong with paying money on the side for a public service is a socially constructed norm originating in Western bureaucratic societies (see Tänzler et al. 2012). Ethnographic studies in Africa interpret material gifts to public officials as reflecting cultural norms of reciprocity (see e.g. Smith 2007). An African official speaking to a Swedish academic reflected cross-cultural differences in norms by claiming that in Kenya there is a ‘stigma attached to honest behaviour’ (quoted in Persson et al. 2013: 461). Insofar as national cultures do label paying bribes as wrong, this could encourage people who do so to avoid a social stigma by hiding what they have done. This theory can be tested in three different ways with Barometer data. A simple way for a person to conceal payment of a bribe when asked is to reply don’t know or refuse to give any answer. However, the proportion doing so in reply to questions about bribery is very low. An average of less than 1% of respondents to the GCB, Afrobarometer, and LAPOP surveys give no answer. In formerly Communist countries, where there is a legacy of corruption, the percentage of respondents giving evasive answers, 1.3%, is trivial and not significantly different from the eight-tenths of 1% saying don’t know in older EU member states. By comparison, people giving no answer to questions about corruption are much fewer than the proportion who do not say what their income is when asked. In the 2012 round of the European Social Survey, which sets the gold standard for methodological rigour, 11% refused to reply to question about income and an additional 10% said they did not know. In short, ordinary people have no inhibition about discussing with an unfamiliar interviewer what happens when they encounter public officials. If respondents think paying a bribe is wrong, reports of paying a bribe should be much lower among those who think that bribery is wrong than among those who find it understandable. However, this is hardly the case. Fourth-round Afrobarometer respondents who think bribery is wrong are only five percentage points less likely to report paying a bribe than the minority who do not think so. Among EBRD respondents, there is no significant difference between the 25% paying

4 EXPLOITING PEOPLE AT THE GRASS ROOTS

a bribe and who do not think that bribery is wrong and the 23% who have paid a bribe even though they think it wrong to do so. Since those thinking bribery wrong are a big majority, the upshot is that more than three-quarters of those who report paying a bribe also think it is wrong to do so. In Western nations, there is some evidence that education encourages the under-reporting of socially undesirable activities. Insofar as more-educated people are more aware of what is socially acceptable, they are expected to be ‘most likely to misrepresent their true beliefs, attitudes or practices’ when asked about unacceptable behaviour (Karp and Brockington 2005: 826). This implies that more-educated people will be less likely to report paying bribes. However, this is not the case. Among Eurobarometer respondents, who ought to be most likely to regard bribery as socially undesirable, 2% who left school before the age of 16 replied don’t know to questions about bribery. Among those with more education, the same percentage likewise said don’t know. The inherent limitation of sample survey results is that they are estimates of the behaviour of the population from which the sample is drawn. However, in a properly conducted nationwide sample, the statistical margin of error is only a few percentage points. In countries in which reported bribery is only a few percent (see Appendix Fig. A.1), even a small margin of error cautions against drawing conclusions about trends that may only reflect sampling error. However, in a continental or global survey in which up to one-fifth or more report paying a bribe, such cautions do not apply. Instead, the far greater risk would be to rely on generalizations drawn from a few anecdotes or assertions about mass behaviour rather than making use of reliable social science evidence. Corrupt governance contingent not pervasive. To divide citizens into those who do and those who do not pay bribes implies that individual characteristics tend to determine bribe-paying. If this is correct, then individuals should pay a bribe for every public service that they use. This assumption can be tested by examining the behaviour of people having contacts with two or more public services. When this is the case, individuals may pay a bribe for one service but not another. Insofar as an individual’s behaviour is contingent rather than consistent, this implies that the payment of a bribe is influenced more by characteristics of particular public services than by characteristics of people who use these services.

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Those who pay a bribe are only a minority of all users of public services, and those who consistently pay a bribe for every service they contact are a minority of this minority (Fig. 4). Among people having contacted two services, those who pay bribes for both services are outnumbered almost two to one by people having mixed experiences, receiving one service by the book and one in return for a bribe. Among those using three services, consistent bribe-payers are only one-fifth of the total and among those using four or more services, consistent bribe-payers are outnumbered by more than ten to one by people who get most but not all of their services free of bribery. In short, there is not a division between individuals paying a bribe to all public officials they come in contact with and those who never do so. Instead of thinking in terms of some people being bribe-payers while others resist doing so, we should think in terms of particular services offering greater or fewer opportunities to collect bribes. When grass-roots corruption is high, it also tends to be high at the top level of governance. The simple bivariate correlation between the percentage of a country’s citizens reporting the payment of a retail bribe and the CPI of capital-intensive bribery is significant, 0.69. In other words, political elites who are complicit in bribery at the top of government tend to tolerate the collection of bribes by low-level employees nominally accountable to them. However, this statistical correlation of two aggregate measures is not sufficiently strong to make one measure a satisfactory substitute for the other, since it leaves most of the variance between them unexplained. Whereas the CPI’s rating of national governments shows that most are closer to the extreme of bad governance than good governance, surveys of their citizens show the opposite. Substantial majorities having contact with a public service receive the service in keeping with bureaucratic standards rather than by paying a bribe. Even though the level of corruption varies between countries, most people most of the time receive services without having to make payments on the side. Every national population divides into three groups: those who do not have contact with a service; those having contact without paying a bribe; and bribe-payers.

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References Eurobarometer. 2014. Corruption: Special Eurobarometer 397. Brussels: European Commission. Goel, R.K., U. Mazhar, and M. Nelson. 2016. Corruption Across Government Occupations: Cross-National Survey Evidence. Journal of International Development 28 (8): 1220–1234. Karp, J.A., and D. Brockington. 2005. Social Desirability and Response Validity. Journal of Politics 67 (3): 825–840. Kumlin, Staffan. 2004. The Personal and the Political: How Personal Welfare State Experiences Affect Political Trust and Ideology. New York: Palgrave Macmillan. Lipsky, Michael. 2010. Street-Level Bureaucracy: Dilemmas of the Individual in Public Services. New York: Russell Sage 30th Anniversary Expanded Edition. Persson, A., B. Rothstein, and J. Teorell. 2013. Why Anticorruption Reforms Fail: Systemic Corruption as a Collective Action Problem. Governance 26 (3): 449–471. Reiner, Robert. 2010. The Politics of the Police. Oxford: Oxford University Press. Rose, Richard, and Caryn Peiffer. 2015. Paying Bribes for Public Services: A Global Guide to Grass-Roots Corruption. Basingstoke: Palgrave Macmillan. Samuelson, P. 1954. The Pure Theory of Public Expenditure. The Review of Economics and Statistics 36 (4): 387–389. Smith, D. 2007. A Culture of Corruption: Everyday Deception and Popular Discontent in Nigeria. Princeton: Princeton University Press. Tänzler, K., K. Mara, and A. Giannakopoulos (eds.). 2012. The Social Construction of Corruption in Europe. Aldershot: Ashgate. UNODC (United Nations Office on Drugs and Crime). 2010. Corruption in the Western Balkans. Vienna: UNODC. Weber, Max. 1948. From Max Weber, ed. H. H. Gerth and C. Wright Mills. London: Routledge. Wilson, James Q. 1991. Bureaucracy. New York: Basic Books.

CHAPTER 5

Explaining Who Pays Grass-Roots Bribes

Explanations of corruption are methodologically determined. Studies at the national levels usually concentrate on capital-intensive corruption, but understanding the experience of individuals at the grass roots requires a different approach. To infer the behaviour of individual citizens from national characteristics implies that individual behaviour is determined by the incentives and constraints imposed by their country’s institutions. If that were the case, then almost everyone living in a county with a negative rating on the Corruption of Perceptions Index would pay a bribe and nobody would do so in countries placed at the top of the Index. However, this is not the case. To understand why individuals living in the same country differ in their experience of public services requires information about individuals as well as their national context. A sample survey of a nation’s citizens provides appropriate data for testing why some people pay bribes while others do not. However, studying people within a single country cannot take into account differences between national contexts in how public services are delivered. In default of comparative survey data, explanations must be limited to inferences or speculations. It is an ecological fallacy to project onto everyone in a society conclusions drawn from the analysis of national institutions (cf. Robinson 1950). In a complementary way, it is an individualist fallacy to explain the behaviour of individuals solely in terms of their personal characteristics and disregard how political institutions influence what happens to individuals in the process of governance (Scheuch 1966). © The Author(s) 2019 R. Rose and C. Peiffer, Bad Governance and Corruption, Political Corruption and Governance, https://doi.org/10.1007/978-3-319-92846-3_5

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The experience that individuals have when contacting grass-roots officials reflects differences between people, between national contexts and between specific public services. The need to contact public services such as education differs with stages in an individual’s life cycle. The institutions that deliver these services differ in their national history and contemporary context. In this chapter, the first section sets out theoretical hypotheses about which individual differences cause some individuals to pay a bribe while others do not. Controlling for variations in national context, the hypotheses are then tested in the second section. The third section goes further: it tests how differences between public services such as health care and policing affect whether an individual pays a bribe for one service but not another.

1 Theories of Who Pays Bribes The Global Corruption Barometer (GCB) shows that the probability of an individual paying a bribe varies greatly between individuals within countries where bribery is relatively common and where it is infrequent. It also provides data that can be used to test four theoretical explanations about whether an individual pays a bribe. This is likely to vary according to an individual’s contacts with services, perceptions of institutions, political efficacy and socio-economic status. Individual differences. Contact with public officials is a necessary condition of an individual being asked to pay a bribe. Annually, the great majority of citizens contact a public service and the proportion doing so varies little between continents. Since public services differ in how they are delivered and operate independently of each other, the fact that an individual receives one service by the book still leaves her or him vulnerable in encounters with other services. Because of variations in bribery between services, the number of times an individual contacts a single service is less important than the number of different services contacted. The more public services that an individual contacts, the more likely an individual is to pay a bribe. When individuals contact public officials, they have expectations influenced by their perceptions of whether they operate by the book or by crook and this will increase their sensitivity to hints by officials that a bribe is needed to get what they want when it is wanted. If there is a widespread perception that officials behave corruptly, people will think it is normal

5 EXPLAINING WHO PAYS GRASS-ROOTS BRIBES

to do so. As Gunnar Myrdal (1968: 409) put it, ‘If everybody seems corrupt, why shouldn’t I be corrupt?’ The more an individual perceives public officials as corrupt, the more likely an individual is to pay a bribe. In a system of good governance, individuals do not need to know how to make an effective claim, because public officials are trained to ask claimants the questions relevant to determine whether they are entitled to receive a benefit. However, in a system in which an official may hint at the need to pay a bribe, individuals themselves need a sufficient sense of political efficacy to demand that an official give them what they are entitled to without a bribe. If an official is unwilling to do so, people who are more politically confident may turn to someone they know for help in pulling a hook to get what they want. People who have a low sense of political efficacy are more likely to pay a bribe if a public official wants it, because they lack the confidence to resist the demand. The hypothesis that follows is: The greater an individual’s sense of political efficacy, the less likely an individual is to pay a bribe. In every society, there are multiple inequalities in the socio-economic resources of individuals and in their theoretical implications for whether people pay bribes. Theories of social status postulate that inequalities in resources have a major influence on how individuals are treated by others in society. In a developing country, public officials tend to have a higher status than the people they deal with because they have more education and job security. If some may use their higher status to extract bribes from lower-status people, this is in keeping with Hunt‘s theory (2007): ‘Corruption hits people when they are down’. Reciprocally, grass-roots officials may hesitate to ask higher-status people for a bribe because the latter will be knowledgeable about their rights. The hypothesis is: The lower an individual’s social status, the more likely an individual is to pay a bribe. Microeconomic theories postulate that socio-economic status has the opposite effect. Profit-maximizing public officials are expected to be more likely to extract bribes from people with higher incomes because they can pay more (Becker 1968). Moreover, higher-income people should be more willing to pay a bribe since its relative cost is much less than for a poor person and the higher value of their time makes it rational to pay to jump a queue for hospital treatment or to get a permit promptly. From a rational-choice perspective: The higher an individual’s economic status, the more likely an individual is to pay a bribe.

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In feminist theory, gender can influence whether an individual is exposed to bribery (Wängnerud 2015). Especially in developing countries, social status tends to be male-dominated and men are more likely to be public officials. Insofar as women are more likely to perform caring roles within the family, they are also more likely to be in contact with heavily used social services. Insofar as women have a lower status in a society this predicts: Women are more likely than men to pay a bribe. Individuals in context. Of the contextual influences on corruption tested in Chapter 3, four were statistically significant. In this chapter, we test the robustness of their effect by seeing whether they remain significant after controlling for within-country individual differences. The impact of historical context on individuals is ignored by most theories of individual behaviour. Individuals cannot choose the country in which they are born; it is given. People are socialized from a very early age to become part of their society, whether it is governed honestly or corruptly. If you grow up in a country in which bureaucratic institutions have long been established, you do not expect public officials to demand bribes for their services, whereas socialization in a country where bribery is part of everyday life can have the opposite effect. The hypothesized effect is: If an individual has been socialized in a country that bureaucratized early, an individual is less likely to pay a bribe. Communist regimes represent the other extreme from commitment to the Weberian idea of bureaucracy. Marxist–Leninist doctrines give overriding authority to the Communist party to decide how services are administered. The result is: If an individual has been socialized in a country that has been under Communist rule, an individual is more likely to pay a bribe. In other words, governance is corrupt by the standards of a rule-of-law modern state. Where Communist rule was introduced after early bureaucratization, the interaction of these two opposing influences should reduce individual payment of bribes. Legacies favouring corruption are receding into the past, and the socialization effect of old regimes is especially weak for younger generations. In no longer Communist regimes, a steadily increasing proportion of adults have been born or socialized into the use of public services after the fall of the Berlin Wall. Democratic institutions are the only institutions that they know. In theory, these institutions make it possible for individuals to hold accountable at the ballot box politicians who are responsible for corruption. The hypothesis is: If governors can be held accountable through democratic institutions, individuals are less likely to pay a bribe.

5 EXPLAINING WHO PAYS GRASS-ROOTS BRIBES

Foreign aid is significantly associated with capital-intensive corruption in low-income countries where it is a disproportionate amount of national income. Because foreign aid is paid to the national government, high-ranking politicians and officials may be the first to benefit from its corrupt management. The effect of high-level corruption may then trickle down to the grass roots. Aid projects that finance building roads, hospitals and schools can distribute contracts and jobs to regional and local officials who can take a percentage of what is spent for their private benefit without regard to rules governing the procurement of these services. These behaviours can encourage a tolerance of grass-roots officials demanding bribes from individuals who have directly or indirectly benefitted financially from the trickle-down effects of aid. The more important foreign aid is in a national economy, the more likely an individual is to pay a bribe.

2 Both Levels Matter Our basic model of who pays bribes is: f(bribery) = Individual differences + National context. Logically, the combined effect of individual and contextual hypotheses can have opposing effects, with one set increasing bribery and the other reducing it. Alternatively, taking individual attitudes and behaviour into account could reduce the size of the effect of national context to insignificance. Third, their effects may be additive, with each significantly exerting influence after controlling for the effect of the other. Insofar as integrating individual and contextual influences shows that each is significant, this provides a fuller explanation of who pays bribes than models relying exclusively on studies of individual effects within a single country or cross-national studies that cannot account for within-nation differences of individuals. Multivariate statistical analyses take into account the independent effect of each hypothesized influence after controlling for the effect of all other variables (Table 1). As we are testing what divides people who have and have not paid a bribe, we use logistic regression and treat countries as cluster variables (Rabe-Hesketh and Skrondal 2012). Since our sample of countries is far smaller than that of individuals, we consider contextual-level variables significant if they have a p-value below 0.10. At the individual level, we consider variables significant if they have a p-value below 0.001. The substantive effect of significant variables is shown in the column reporting shifts in predicted probabilities. Shifts estimate the change in the likelihood of paying a bribe when an independent variable changes

R. ROSE AND C. PEIFFER

Table 1 Combined individual and institutional influences on bribery Effect on paying bribe Individual characteristics Number of contacts Perceived corruption Education Female High political efficacy Low political efficacy

P-value

0.45 0.10 0.01 −0.01 −0.01 0.01

0.000 0.000 0.669 0.000 0.241 0.132

−0.11 0.02 0.18 −0.20 0.18

0.000 0.333 0.018 0.000 0.001

Institutional context Early bureaucracy Post-communist Early bur’y * Post-communist Extent democratic Foreign aid Pseudo R2 Wald’s chi2 Log pseudolikelihood

17.0% 451.07 −38413

Source The effect on paying a bribe is the predicted probability of doing so due to a shift in an independent variable from its lowest to its highest value. Multivariate multi-level logistic regression of Global Corruption Barometer 2016 survey, using 97 countries for which all data are available. Probability chi: 0.000

from its minimum to its maximum value and the effect of all other variables is held constant. Appendix Table A.1 gives details of each variable. Contact most important for individuals. Services differ in how they are delivered and the opportunities offered for bribery. It is, therefore, appropriate to test whether contacting more services increases the likelihood of an individual paying at least one bribe. This is the case. After controlling for all other influences, the 14% who contact four or five major services during the year have a 45% greater chance of paying a bribe than those with no contact. The median group contacts three services annually. Of this group, one in four is likely to pay a bribe but they are not inveterate payers of bribes. Instead, their experiences are mixed: Contact sometimes leads to a service being provided by the bureaucratic book and sometimes money changes hands. The GCB measures the perception of corruption in nine different major institutions (see Fig. 1 in Chapter 4). In total 37% think most or all MPs are corrupt and 36% think that most or all government officials are corrupt. Our measure combines perceptions of government officials,

5 EXPLAINING WHO PAYS GRASS-ROOTS BRIBES

who are responsible for delivering public services, and of MPs, who are expected to represent the interests of people receiving services. The more that individuals see public officials as corrupt, the more likely this belief will become a self-fulfilling prophecy. When confronted by an official demanding a bribe, those who think all officials are corrupt are 10% more likely to pay a bribe than those who think that none want cash in hand. Although the tendency is significant, most people who perceive officials as corrupt do not pay a bribe because officials do not make this a condition of getting their service. This disjunction challenges relying on perceptions of corruption as proxy evidence of the actual payment of bribes (see Rose and Peiffer 2015: Table 5.3). If people think bribery is wrong and public institutions tend to be corrupt, this is an incentive to avoid contact with services in order to escape the risk of having to pay a bribe because they lack the political efficacy required to make public officials give them what they are entitled to. To assess political efficacy, people were asked whether they agreed or disagreed with the statement: Ordinary people can make a difference in the fight against corruption. One in five believed actions of people like themselves could make a difference, one-third explicitly disagreed with this belief and almost half had no opinion. Notwithstanding the theoretical logic about how political efficacy ought to affect how people deal with public services, the hypothesis associated with political efficacy receives no significant statistical support (Table 1). Those who think that ordinary people can make a difference in fighting corruption are just as likely to surrender to demands from corrupt officials as people who feel helpless. Major inequalities in status are measured in a multiplicity of ways. Occupational class is inappropriate for characterizing GCB respondents, since a majority live in developing countries in which many people do not have a steady occupation. Income is inappropriate, because of the lack of a single currency that can be used for international comparisons. Moreover, many GCB respondents avoid poverty by eking out their irregular cash earnings by producing much of what they consume. Education is a major source of status in every country and inequalities are particularly marked in developing countries. Countries differ in the number of years of free education offered, and within every country younger people have more opportunities for education than their elders. The GCB survey identifies three levels: no education or only an elementary level; secondary schooling; and higher education.

R. ROSE AND C. PEIFFER

Education makes no difference for the payment of bribes. Educated people not only know what services they are entitled to but also know from experience that an official demanding a bribe has no more respect for their status than for his or her bureaucratic obligation to deliver services by the book. The lack of influence of socio-economic status is confirmed by analysis of the 2013 GCB survey, which included a subjective measure of income: whether people view their household income as average, below average or above the average in their society. When this income measure was included in a multilevel statistical analysis, it had no significant effect on the likelihood of paying a bribe (Rose and Peiffer 2015: 68ff). Gender does have a statistically significant influence on bribery: Women are less likely to pay a bribe than men. However, the impact is insubstantial. After controlling for other influences, the likelihood of a woman paying a bribe is only one percentage point less than for a man. A preliminary analysis also tested the effect of age; the result is not reported here since it had no significant effect on whether any bribe was paid. Context matters too. The multilevel analysis confirms the independent effect of national context on bribery. After controlling for the effect of within-country individual differences, all four contextual influences that significantly affected a country’s national Corruption Perceptions Index (CPI) rating influence individual behaviour too. Moreover, the impact of context on individual behaviour is similar in size to the impact on a country’s national CPI rating (cf. Table 1, Fig. 1 and Table 1 in Chapter 3). The significance of national context is strikingly illustrated by legacies from a country’s political past having a strong effect on individuals born when their country had a different political system. The impact of a country beginning to bureaucratize before 1914 is significant because it started a path-dependent process that has led to good governance today. After controlling for individual differences, bureaucratization begun more than a century ago reduces the likelihood of paying a bribe by 11%. The impact of a Communist legacy is contingent. When all countries experiencing a Communist regime are grouped together, it has no significant effect on bribery. This is because countries that are no longer Communist do not share similar histories. Successor states of the Soviet Union, for example had no experience of early bureaucratization before becoming subject to governance in accord with Marxist–Leninist principles that relied on political favouritism rather than bureaucratic

5 EXPLAINING WHO PAYS GRASS-ROOTS BRIBES

impartiality. By contrast, a majority of Central and East European countries experienced early bureaucratization as part of the German or Austro-Hungarian empires. Even though no GCB respondents had been born when bureaucratization was introduced before 1914, they nonetheless experience its path-dependent effects today. The interaction between being bureaucratized early and then being subject to Communist rule cuts two ways. On the one hand, dealing with officials in a political system that had been bureaucratized early reduces the likelihood of having to pay a bribe by 11 percentage points. However, if the political system was subsequently turned into a Communist regime after the end of the Second World War, the interaction of this negative experience and the positive pre-1914 legacy raises the chance of paying a bribe by 18 points. The greater strength of the Communism legacy reflects the thoroughness with which so-called Socialist legality was imposed in the wake of the Second World War. Communist commissars purged senior officials who had been trained to administer services by the book; they were replaced by officials whose first loyalty was to follow the twists and turns of the Communist party line. Since the Freedom House democracy index does not discriminate between old and new democracies, its impact shows that recent changes in institutions can have a significant effect independent of historical legacies. Compared to countries with the lowest rating for democracy, citizens in countries that have the highest rating for democracy are 20% less likely to pay a bribe. This calls into question the argument of many democratic theorists that it takes generations for new democratic institutions to influence the way in which public officials behave and how ordinary citizens respond. A second contemporary influence, the proportion of a country’s national income coming from foreign aid, has a big trickle-down effect on individuals using services that aid helps finance. Even though the intention of aid is to improve the quality of public services and governance, in countries where aid is most important the likelihood of an individual having to pay a bribe is 20% higher than where national governments receive no foreign aid. The combined effect. Multilevel statistical analysis confirms that where you live is as important for paying a bribe as who you are. How individuals react to the experience of contacting public officials cannot be fully understood by relying exclusively on measures of individual attitudes and socio-economic characteristics. Four characteristics of national context

R. ROSE AND C. PEIFFER

Likelihood of paying bribe

Number contacts 0.45

0.50 0.40

Early bur* Comm legacy Foreign aid 0.18 Perceived 0.18 corruption 0.10

0.30 0.20 0.10 0.00 –0.01 Female

–0.10

–0.20

–0.11 Early bureauc.

–0.20 Extent 0.30 democratic

–0.40 –0.50

Fig. 1 Impact of significant influences on paying bribe (Sources Predicted probabilities of impact of multi-level logit analysis reported in Table 1 significance level: characteristics < 0.001. Institutional level: < 0.05)

are significant. While necessary, contextual influences are not sufficient to account for who pays bribes. Three measures of individual differences also have a significant impact on the payment of bribes (Table 1). From an anti-corruption perspective, the ideal system of good governance would be found in a country that began bureaucratization early, that is fully democratic today, receives no foreign aid and has never been subject to Communist rule. This combination makes the delivery of public services by the book normal. However, there are only seven countries in our GCB database that combine all four characteristics conducive to good governance. This small number reflects its under-representation of countries where bribery is very low (see Appendix Fig. A.1). It is due to many of Transparency International’s national chapters in Western Europe convincing TI’s Berlin headquarters not to bother asking about bribery in their countries when at most only a dozen or two respondents among the thousand persons interviewed will have paid a bribe.

5 EXPLAINING WHO PAYS GRASS-ROOTS BRIBES

In most member states of the United Nations, the national political context falls far short of what is required for good governance. More than three-quarters started bureaucratization late. Fewer than half the countries evaluated by Freedom House are rated as fully democratic. Moreover, among developing countries, foreign aid is often more than 1% of their national income. When tax revenue is relatively low and difficult to collect, foreign aid constitutes a substantially larger proportion of the revenue controlled by the country’s central government. Political leaders in countries lacking a legacy of early bureaucratization cannot be blamed for what happened long before they were born. Nor can contemporary corruption be blamed on a colonial legacy, since statistical analysis shows that it has no significant influence on bribery in countries that have been independent for half a century or more. Two significant influences on corruption are contemporary conditions for which today’s governors are responsible: the refusal of governors to be democratically accountable and the diversion to their private benefit of foreign aid money meant to finance the country’s postcolonial development.

3 Differences Between Services The public services that low-level public officials deliver at the grass roots differ from each other in what is delivered, how it is delivered and who benefits. For example, policing is different from health care in the laws police enforce, their authority to tell people what they must do, and, by contrast with the reliance on doctors for treatment, many people do not want to have contact with the police. There are also substantial differences in the extent to which people have contact with different services: Individuals are four more times as likely to contact health services during a year as the courts and half again as likely to contact schools as the police. There are also differences in the likelihood that being in contact makes a person vulnerable to paying a bribe. Even though police services are much less used than social services, the likelihood of having to pay a bribe to the police, once contact is made, is much greater than for social services (see Table 2 in Chapter 4). The delivery of grass-roots services is a two-step process. Individuals must first make contact with a service. This divides people into two groups: those who are not at risk of paying a bribe because they have no contact and those who face a risk, whether small or large, by being

R. ROSE AND C. PEIFFER

in contact with public officials. With the exception of health, in the year before being interviewed a majority of GCB respondents had no contact with the courts, the police, officials issuing permits and schools. They thus were not at risk of paying a bribe. For those who do contact a service, the second step is getting what you want by the book, by hook or by crook. Individuals in contact with public services divide into two groups: the majority who do not pay a bribe to get what they want and a minority who pay a bribe at least once. Service-specific hypotheses. For each service, the likelihood of an individual making contact or paying a bribe may be influenced by service-specific features, such as the supply of hospital places, as well as by pervasive features of national context. Laws set out the specific conditions that entitle or obligate individuals to make contact with a public service. Education is doubly affected; laws not only entitle children to receive a free education but also obligate parents to see that their children attend school. Laws about the health service do not compel individuals to have periodic check-ups or follow a healthy daily routine; they specify the conditions that entitle people to receive health care financed in whole or part by public funds. Contacting local officials to secure a permit or license depends on what people want to do. If an individual wants to secure a passport for foreign travel, contact is obligatory, but foreign travel is a matter of choice. Contact with the police is contingent on individual characteristics and behaviour, and on informal as well as formal standards of police behaviour. Social roles arising from age and gender may influence the likelihood of individuals contacting a service. Contact with education services follows from adults being parents of school-age children. This is most likely to be the case when people are in the age range between the mid-20s and the early 50s. Social roles are different for health. Even if the whole of a country’s population is eligible for publicly funded health care, people over 65 are much more likely to need health care. Gender can also affect contact with health care, since women are a disproportionately large part of the older population. Since crime rates are higher among youths, age can influence the extent to which young people unwillingly come into contact with the police. Gender can affect the likelihood of men and women contacting specific services. During the life cycle, women are more likely to need health care because they live longer in old age, when health needs are greatest, and because of needing maternity services when younger. In many

5 EXPLAINING WHO PAYS GRASS-ROOTS BRIBES

societies, women are more likely to have the role of a carer for other members of their family. Looking after a child’s education and health will bring women into contact with two public services and looking after the care of ageing parents or relatives can add to contact with health services. In more traditional societies, dealing with local government officials may be considered a man’s role. Engagement with the police can be gender-biased towards men rather than women (Kevane 2004). (Hypothesis 1 Social role.) If an individual’s social role is relevant to a specific service, she or he will be more likely to contact it. A corollary of this hypothesis is that, after controlling for contact, differences in age and gender will have no effect on the payment of bribes. The supply of public services in sufficient quantity to meet all needs is taken for granted in societies with a high gross domestic product (GDP) per capita. However, in many developing countries, governments may find it easier to enact laws entitling people to education and health care than to find the money to supply the school places and health facilities needed to meet the demand they have created. The percentage of youths of secondary school age who are actually receiving a secondary education in countries covered by the GCB is as low as 21% in Niger compared to 100% in most developed countries. A good measure of the current supply of health care is the percentage of childbirths in which the mother is attended by a trained provider of healthcare services. While this is invariably the case in high-income countries, the proportion of births with a medical professional present drops to 35% in Nigeria. When the supply of a service in demand is scarce, a standard bureaucratic practice is to introduce queuing. It can also stimulate some people to want to jump the queue. Making people queue for months for treatment for a painful illness imposes pain or worse. Raising the examination score required to enter university appears fair, but it also increases the number of applicants who cannot get a university place. Long delays can encourage people to find the money to pay a bribe to jump the queue for health care or to pay an education official to admit a youth to university whose examination marks are not high enough to qualify for a place (Aidt 2003). While scarcity in the supply of a service implies that fewer people will make contact, it also implies that bribes are more likely to be paid by those who do have contact. (Hypothesis 2 Supply of social services.) If a social service is in scarce supply, individuals are less likely to have contact but more likely to pay to pay a bribe.

R. ROSE AND C. PEIFFER

In every society administering laws is not confined to the police and the courts. Regulations requiring official documents such as permits and licenses are an integral part of public services too. Regulations require individuals to register births, license their car if they have one and get a permit to build a house. A surplus of regulations encourages bribery; the more signatures of public officials that are required before a document is issued, the more costly it is in time and effort to obtain them and the more opportunities there are for corrupt officials to collect ‘rents’ (i.e. bribes) as a condition of expediting the delivery of documents. Bribes can also be paid for issuing a permit in contravention of official rules or ignoring the enforcement of a regulation. Since businesses are specially subject to regulations, we measure the extent of regulation with the Regulatory Quality measure from the World Bank’s World Governance Indicators. Venezuela and Zimbabwe are ranked as having the poorest quality of regulations while Hong Kong and Australia are credited with being the countries with the highest quality of regulations. The efficiency of high-quality regulations is likely to reduce the need for those affected to have lots of contacts as well as the likelihood of paying a bribe. Conversely, poor quality regulations are likely to create more burdensome red tape requirements and more need to contact public officials for approval. (Hypothesis 3 Supply of regulations.) The greater the burden of regulations in a country, the more likely individuals are to contact regulatory services and to pay a bribe. Public services differ in whether the state is a monopoly supplier or private sector and not-for-profit institutions offer an alternative. In virtually every country there is a choice between alternative suppliers of social services, such as public and private schools or public and private hospitals and doctors (Rosling et al. 2018). In principle, choice offers individuals the opportunity to avoid contact with corrupt public officials by going to a non-state alternative. By contrast, if a service is a monopoly of the state, such as policing or the issuing of permits, individuals have no choice but to deal with the state when engaging with monopoly services. However, this also means that in a system of bad governance engagement with a monopoly service is at the risk of paying a bribe (cf. Hirschman 1970; Klitgaard 1988). The theoretical rationale for making alternative services available is economic: If there is a choice between public-and private-sector institutions, the service will be more efficient. The political objection is that making alternative services more available increases social inequality,

5 EXPLAINING WHO PAYS GRASS-ROOTS BRIBES

because only those with more resources will have an effective choice between the two types of services. Even in a high-income country, the cost of using private schools and hospitals is beyond the resources of many people. In a developing country where inequalities of income and education are much greater, very few have the resources to choose between public and private social services. Those with fewer resources are more likely to have to use a public service. In a system of bad governance, the choice is likely to be between finding the money to pay a bribe for using a social service or doing without. By contrast, those with more resources are more likely to want permits for their personal and business affairs, and thus more likely to have contact with regulators. If they cannot deal with them by invoking their higher status, the marginal cost of escaping from monopoly obligations by paying a bribe is less than for people with fewer obligations. (Hypothesis 4 Alternative services or Monopoly.) If individuals have more resources, they are less likely to contact a public service when there is an alternative but more likely to contact and pay a bribe for monopoly services. Testing service-specific influences. The logic of separately examining contact and bribery at the service level is that hypothesized influences are contingent rather than uniform. An influence can be significant for contacting public services but not for paying a bribe, or vice versa. In addition, the indicators appropriate for independent variables can differ from one service to another. For example, the stage in the life cycle for contacting a public service differs between education and health care. There are also categoric differences for measuring the supply of different services. To take account of contingencies, we test separately the influence of social roles, the supply of services and institutional alternatives on four different services: health care, education, permits and the police. In doing so, we control for the effect of differences in national context. To test our two-stage model statistically, we employ a Heckman (1979) logistic regression model, which estimates the impact of the hypothesized effects on contact, and by accounting for those influences on contact, the model also identifies the independent influences of hypothesized effects on the payment of a bribe (Table 2). The first criterion for testing a hypothesis is whether it has a statistically significant effect on contact with particular services and/or paying a bribe. The second criterion is whether a significant influence also has a substantial influence, that is whether the estimated size of its effect is

Bribe

Cont

Permits

n.s. n.a. n.s. n.a. n.s. n.a. −0.19 −0.21 0.20 n.s. n.s.

Supply Social services Regulation

Alternative providers available Choice: Yes Monopoly: No

Controls: Individual Perceptions N contacts

Controls: Context Early bureaucracy Post-communist Bur’y * P-communist Extent democratic Foreign aid n.s. n.s. n.s. −0.11 0.24

−0.09 n.s.

n.s. n.a.

n.s. n.s. n.s.

n.s. −0.12 0.20 n.s. 0.13

n.s. n.a.

n.s. 0.05 n.s.

−0.06 n.s. 0.10 −0.07 0.11

−0.06 −0.06

n.s. n.a.

n.s. n.s. n.s.

−0.18 −0.24 0.27 n.s. n.s.

n.s. n.a.

n.a. n.s.

−0.20 −0.04 n.s.

−0.04 −0.04 0.11 −0.05 n.s.

−0.03 −0.03

n.a. n.s.

n.a. −0.06

−0.05 −0.01 n.s.

Bribe

−0.12 −0.10 0.18 n.s. n.s.

0.08 n.a.

n.a. n.s.

0.02 −0.06 n.s.

Cont

Police

−0.16 n.s. n.s. −0.23 0.32

−0.13 n.s.

n.a. n.s.

n.a. −0.18

0.07 n.s. n.s.

Bribe

Individual level variables significant: p-value < 0.001; context: p-value < 0.10 Note and Source For alternatives available education is used as a proxy for income. The impact coefficient is the predicted probability of a shift from the lowest to the highest value of an independent variable. Heckman logit analysis of Global Corruption Survey 2016. For full details, see Table 3

0.09 n.s. n.s.

Social roles Life cycle Gender Education

(Impact of significant influences on contact and bribery)

Cont

Bribe

Health

Education

Table 2 Comparing influences on contact and bribery by service

98 R. ROSE AND C. PEIFFER

5 EXPLAINING WHO PAYS GRASS-ROOTS BRIBES

relatively large or small. Third, we compare whether an influence is consistently significant and strong across most services analysed. Given the volume of statistics generated by testing the Heckman model, Table 2 presents results only for significant influences on each service. The full regression statistics are given in Table 3. The importance of social roles related to gender and to age are each contingently significant. For education, middle-aged persons are more likely to have children, and therefore are nine percentage points more likely to have contact with education officials compared to young people who have not yet started a family and compared to older adults whose children have completed their education. Gender is significantly associated with contact with health services while being older has no influence. Whatever their age, women are 5% more likely to contact health services than men. The absence of an age effect is likely to be due to the fact that women are likely to have need of health services at both ends of the life cycle: When women are young maternity services are needed for themselves and for their children and when women are older, health services are needed to deal with conditions of old age. Since many permits involve once-for-all concerns arising in earlier stages of the life cycle, the impact of age on contact is very strong, 20 percentage points. The police are significantly more likely to be in contact with young people but the margin is slight. Once the impact of age on contact is accounted for, life cycle differences have no significant relationship with paying a bribe for social services and young people are only 3% more likely to pay a bribe to the police. Differences in contact and bribery due to a person’s position in the life cycle are significant but temporary. In the course of the life cycle an individual’s need for contact is likely to change, being biased towards education when younger and health care when older. The social role of women has a significant influence on contact too. Women are more likely to have contact with social services than men, although the impact of being a woman increases the likelihood of contact with health services by no more than five percentage points. Being female is associated with a slight increase in the likelihood of contacting education officials but the effect falls short of significance (Table 3). Gender also has a predicted impact on contacting obligatory services. Women are 4% less likely to seek permits and 6% less likely to be in contact with the police. After accounting for the impact of gender on contact, there is no significant impact of gender on bribery except for permits, for which men are only 1% more likely to pay bribes than women.

−0.06 0.00 0.01

BRIBERY Social roles Life cycle Gender Education 0.09

−0.19 −0.21 0.20 0.06 0.05

Early bureaucracy Post-Communist Bureaucracy Post-C Extent democratic Foreign aid

Supply Social Services Regulation

0.03

−0.09

0.09 0.01 0.05

Controls: Individual Perceptions Controls: Context

Supply Social services Regulation

Social roles Life cycle Gender Education

CONTACT

0.128

0.517 0.918 0.770

0.004 0.000 0.023 0.196 0.523

0.440

0.208

0.000 0.013 0.198

0.00

0.00 0.01 −0.00

−0.05 −0.12 0.20 0.03 0.13

−0.01

0.08

0.03 0.05 0.01

PP shift

P-value

Health

Education

0.813

0.922 0.012 0.781

0.404 0.001 0.008 0.642 0.010

0.577

0.176

0.012 0.000 0.659

P-value

Table 3 Heckman analysis of influences on contact and bribery

−0.06

−0.05 −0.01 0.00

−0.18 −0.24 0.27 −0.01 0.01

−0.02

0.00

−0.20 −0.04 0.04

PP shift

Permits

0.043

0.000 0.000 0.271

0.039 0.000 0.010 0.919 0.940

0.347

0.987

0.000 0.000 0.131

P-value

−0.18

0.03 −0.02 0.01

−0.12 −0.10 0.18 −0.02 0.03

0.08

0.14

0.02 −0.06 0.04

PP shift

Police

continued

0.081

0.002 0.084 0.456

0.044 0.006 0.027 0.748 0.853

0.000

0.305

0.002 0.000 0.077

P-value

100 R. ROSE AND C. PEIFFER

−0.16 −0.05 0.16 −0.11 0.24

0.09 0.08

180.50 −70,507 126,459

0.140 0.661 0.378 0.053 0.009

0.000 0.020 −0.06 0.01 0.10 −0.07 0.11

0.06 0.06

PP shift

P-value

Health

Education

225.30 −87,604 133,670

0.002 0.479 0.025 0.022 0.039

0.000 0.000

P-value

−0.04 −0.04 0.11 −0.05 0.05

0.03 0.03

PP shift

Permits

555.40 −79,368 134,870

0.000 0.000 0.003 0.046 0.119

0.000 0.000

P-value

−0.16 −0.02 0.07 −0.23 0.32

0.13 −0.07

PP shift

Police

562.10 −65,501 134,870

0.000 0.697 0.339 0.011 0.000

0.000 0.042

P-value

Source Global Corruption Barometer surveys, 2016 the number of countries varies with availability of full data: Education, 90 countries, Health 96, Permits and Police 97. Each of the four logits has a probability chi2 of 0.000. Supply of service uses three indicators: % of births attended by skilled health staff; gross % of secondary school age youths enrolled; and the regulatory quality score from the World Governance Indicators Relevant age in life cycle: Health, over 65; Education: most likely to have children in school, 26–55; Police: younger than 35. Permits: grouped categories for age in years ranging from 1 (18–25) to 8 (86 or older)

Wald’s chi2 Log P-likelihood N

Early bur’y Post-comm Bur * Post-C Democratic Foreign aid

Controls: Individual Perceptions N of contacts Controls: Context

Table 3 continued

5 EXPLAINING WHO PAYS GRASS-ROOTS BRIBES

101

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More educated people ought to be better at understanding bureaucratic rules and feel more confident in asking assistance from well-educated doctors and teachers. Having a better understanding of their entitlements may encourage educated people to ignore signals from officials about paying a bribe. By contrast, people with a minimum of education may be intimidated and feel they must pay bribes to get what they want. This generalization can be applied to the use of obligatory services such as the need for permits as well as desirable social services. Although the inequality between high and low education is clear, it does not lead to a significant difference in the use of public services. Less educated people are just as likely as more educated people to have contact with each of the four services. However, equality in vulnerability to corrupt officials has a cost in countries where corruption is relatively high, since it means that officials are prepared to exploit the great majority of their subjects, regardless of their social or economic status. Contrary to the importance of supply and demand in economic theory, whether there is a sufficient supply of social services or they are scarce has no significant influence on whether people make contact with social services. A shortage of school places may mobilize parents to badger education officials in hopes that persistence may secure a scarce place, people seeking medical treatment in short supply may resort to methods to get what they want by using hooks rather than bribery. The quality of regulations has no impact on contact with permits offices or the police, however, it does have an influential association with bribery. In an environment of weak regulations, people are more likely to pay a bribe to get what they want, such as the non-enforcement of a law by the police. The theory that choice and monopoly services will differentiate users according to their resources is not supported by statistical analysis (Table 2). Whereas income can be a suitable indicator of resources in a fully monetized society, the GCB includes many countries in which people may rely on getting what they want by being in the know politically. Since more educated people ought to know better how to work their political system, we use it as our measure of resourcefulness as well as of having a social role. Table 2 shows that having more education does not result in significantly opting out of contact with public services. Instead, it may enable people to remain in the public sector by getting preferential treatment without being more likely to pay a bribe. Nor do educated people more often use monopoly services. If they do, their knowledge does not make them less likely to be subject to paying a bribe than people without their resources.

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Contrary to theoretical expectations, the extent to which people perceive political institutions as corrupt has no significant effect on contact with three services (Table 2). The exception is the police: people with a negative view of the police are eight percentage points more likely to be in contact. In other words, experience counts as well as second-hand accounts from television or other media. Because of the overlap in the independent and dependent variables, the number of services an individual contacts cannot be applied to individual services. Individual controls consistently influence the payment of bribes for specific services. The effect of perceptions on bribery is as high as 13 percentage points for police, even after controlling for the effect of perceptions on contact. Perceptions also have a significant impact on the other three services. The number of services contacted also has a significant effect on the payment of bribes for health care and for permits. Applying contextual controls to specific services produces a better understanding of the legacy of Communist regimes (Table 2). In countries with this anti-bureaucratic legacy, people are consistently less likely to contact services. The impact of living in a post-Communist country reduces the likelihood of people seeking permits by 24 percentage points. People prefer to evade requirements for documents rather than risk having to pay a bribe to comply with the law. A similar aversion is shown towards the police. Not contacting schools is a reflection of less need to do so because of the drop in birth rates after the fall of the Berlin Wall. Bribery becomes significant when there is an interaction of the legacy of early bureaucratization in Habsburg and Wilhelmine German lands and a Communist legacy. This consistently increases contact with all four services; however, this can be an ambiguous benefit. The interaction results in an increase of 11 percentage points in the likelihood of paying a bribe to get permits rather than evade this requirement and an increase of 10 points in the likelihood of paying a bribe for health services. The extent of democratization has no significant effect on contact with particular services, a reminder that the provision of public services is consistent with ‘welfare state authoritarianism’ as well as the satisfaction of popular demands that can be registered in a democratic political system. Consistent with theories associating democracy and good governance, having fully democratic institutions substantially reduces the likelihood of paying bribes for all four services. The impact is greatest for policing; those living in a fully democratic regime are 23% less likely to pay a bribe to the police and 11% less likely to pay a bribe for education.

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Although a significant amount of foreign aid is meant to be invested in promoting human capital through improved education and health care, aid levels have no significant effect on contact with education, but a high level of foreign aid is associated with greater use of health care. Citizens living in highly aid-dependent countries are 11% more likely to pay a bribe for health care, 24% for education services and 32% more likely to pay a bribe to the police. This finding is consistent with foreign aid being more likely to be given to countries that the CPI characterizes as having the most corruption (Table 1 in Chapter 3) Grass-roots public employees may then emulate their national politicians by demanding bribes for the delivery of retail services. The focus on specific services shows that people who contact several services may not always have to pay a bribe and that this variable is different across service types (see Fig. 4 in Chapter 4 ). Moreover, it offers evidence to policymakers about what influences people to make more or less use of particular services. The importance of contextual differences in both models emphasizes that a major source of the inequality in the payment of bribes for public services is not within a country but between countries.

References Aidt, Toke. 2003. Economic Analysis of Corruption: A Survey. The Economic Journal 113 (491): f632–f652. Becker, Gary. 1968. Crime and Punishment: An Economic Approach. Journal of Political Economy 76: 169–217. Heckman, J. 1979. Sample Selection Bias as a Specification Error. Econometrica 47 (1): 53–161. Hirschman, Albert O. 1970. Exit, Voice and Loyalty. Cambridge, MA: Harvard University Press. Hunt, J. 2007. How Corruption Hits People When They Are Down. Journal of Development Economics 84: 574–589. Kevane, M. 2004. Women and Development in Africa. Boulder, CO: Lynne Rienner Publishers. Klitgaard, Robert E. 1988. Controlling Corruption. Berkeley: University of California Press. Myrdal, Gunnar. 1968. Asian Drama: An Inquiry into the Poverty of Nations. New York: Pantheon. Rabe-Hesketh, Sophia, and Skrondal, Anders, 2012. Multilevel and Longitudinal Modelling Using Stata, 3rd ed. College Station, TX: Stata Press.

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Robinson, William S. 1950. Ecological Correlations and the Behaviour of Individuals. American Sociological Review 15: 350–357. Rose, Richard, and Caryn Peiffer. 2015. Paying Bribes for Public Services: A Global Guide to Grass-Roots Corruption. Basingstoke: Palgrave Macmillan. Rosling, Hans, Ola Rosling, Rosling Ronnlund, and Anna. 2018. Factfulness. London: Sceptre. Scheuch, Erwin K. 1966. Cross-National Comparisons Using Aggregate Data: Some Substantive and Methodological Problems. In Comparing Nations, ed. Richard L. Merritt and Stein Rokkan, 131–168. New Haven: Yale University Press. Wängnerud, Lena. 2015. Gender and Corruption. In Routledge Handbook of Political Corruption, ed. Paul M. Heywood, 288–299. London: Routledge.

CHAPTER 6

Politicians Behaving Badly

Corruption studies evaluate behaviour by a combination of legal and normative standards. The two are mutually re-enforcing; when a public official takes a bribe, it is both illegal and wrong to do so. When social scientists write about political behaviour it is characterized in ethically neutral terms; for example, it is assumed that winning an election is better than losing an election. By contrast, ordinary people are ready to describe the behaviour of politicians as normatively good or bad. Thus, even though critics of Donald Trump accept that he was successful in winning the White House, they regard him as a politician who exhibits bad behaviour in dealing with facts, with women and with Members of Congress. In social psychological terms, informal standards are expectations that people hold in their mind about how public officials ought to behave. These expectations are more wide-ranging and less clear-cut than formal standards set out in legal statutes. Norms of how people ought to behave can be common to both private and public behaviour, such as not telling lies. They can be confined to private behaviour of no concern to the law, such as not cheating in a game of cards or golf. Some forms of behaviour are entirely legal but normatively unacceptable. The distinction is particularly clear in the contrast between tax avoidance and tax evasion. The former involves using legal loopholes to avoid the payment of millions in taxes, while tax evasion involves the violation of tax laws. © The Author(s) 2019 R. Rose and C. Peiffer, Bad Governance and Corruption, Political Corruption and Governance, https://doi.org/10.1007/978-3-319-92846-3_6

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Bureaucratic standards consist of impersonal rules devoid of normative language. Impersonal rules are deemed necessary in order to ensure that bureaucratic agents carry out the directions of their political principals. The implicit assumption is that public officials ought to comply with the choices of their legitimate superiors. Insofar as impersonal rules ensure that everyone is treated the same then bureaucratic impersonality is ethically desirable because it promotes fairness in the treatment of citizens wanting to use a public service. Informal norms can be derived from personal relationships. The belief that you ought to stand by a friend in trouble is shared by politicians. When a friend’s political behaviour is challenged, at first political leaders usually stand by their friend and dismiss charges as partisan motivated. However, if political pressures are re-enforced by evidence, a leader is likely to accept impersonal standards of good behaviour and tell the friend to resign. Given a choice, citizens can apply partisan standards that dismiss charges against a politician in their own party while vilifying similar actions by a partisan opponent. A social democrat can regard legal contributions that businesses make to their opponents as a sign of corruption, while supporters of a pro-market party can regard trade union contributions to their opponents as a way of buying social benefits for their members financed by taxpayers’ money. Whatever the evidence of corruption, on election day both groups may follow the maxim: My party, right or wrong. Voters without a strong party identification may judge both types of fund-raising as violating informal standards of good governance. In polarized political systems, voters can regard corruption in the governing party as a lesser evil to the alternative at hand. In Italy during the Cold War, the Christian Democratic Party was regularly re-elected, because more voters preferred a party of democratic bad governance as a lesser evil than a Communist Party threatening undemocratic governance. Public officials are particularly vulnerable to being held to higher informal standards of behaviour than ordinary people. If the media reveal that a politician has behaved inconsistent with public norms, for example, being publicly drunk while travelling abroad to an official meeting, it brings a public office into disrepute. By contrast, if a private person gets drunk or misbehaves on holiday, this is a private matter known only to a small number of people. Business people who use tax loopholes to avoid high taxes may be admired for their cleverness, whereas a politician who does so can be regarded as shirking their duty to pay taxes according to the laws that they enact.

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Punishments differ between types of bad behaviour. Laws specify the punishments to which a public official is subject if found guilty of taking a bribe. They can range from a fine to a jail sentence. Politicians who behave badly but do not break a law are subject to judgment by the court of public opinion. This metaphorical court is not a formal institution but a virtual body in which opinions can be expressed by MPs, parties, established and social media, and measured by public opinion polls. A politician who is judged to have behaved badly is expected at the least to make a public apology and at the most to lose office and serve a jail sentence.

1 Tolerated and Shameful Behaviour The judgment of behaviour by informal standards can be inconsistent with legal judgments in two contrasting ways. If the law broken carries no moral stigma, for example, smoking marihuana in youth or driving faster than the speed limit, it is usually judged tolerantly in the court of public opinion. Alternatively, acquittal in a court of law is not sufficient to make an action normatively acceptable. Actions that are legal can nonetheless be deemed bad because they violate informal normative standards, for example, the use of politically incorrect language. If this verdict is applied to a politician’s behaviour, then he or she is expected to demonstrate a sense of shame by apologizing. If shameful behaviour is deemed serious, voluntary or forced resignation may be required to satisfy the judgment of the court of public opinion. The standards used to label behaviour are socially constructed and this is true of formal legal statutes as well as of informal social norms. When norms are enacted as laws, they can readily be identified by reference to the statute book. In youth, individuals learn informal norms about the right way to behave in their relationships with other people. Conformity to widely shared standards is evident in everyday relationships, but these standards are unwritten codes. More than that, some norms are contested. Norms about what is politically correct are particularly open to dispute because politics is about the articulation of competing values. In the absence of recourse to a court of law, disputes about informal norms are resolved in the court of public opinion. Informal standards vary. The broadest standard is that public officials should act in the public interest to benefit the whole of society rather than in their self-interest. This norm is complementary to the Transparency International definition of corruption as the abuse of

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entrusted power for private gain. The vagueness of the term public interest means that it can be invoked by any politician seeking rhetorical support for their actions and opponents can be denounced as acting in their self-interest. The protean character of its meaning leaves open to debate how the public interest is defined (Ho 2011). Conflict of interest laws specify a formal standard of what is not in the public interest. A conflict of interest exists when a public official participates in making a decision in which his or her multiple interests, political or financial, create the risk that a public decision will not be made on its merits but to benefit the private interest of the policymaker. Unlike anti-bribery laws, which are intended to punish bad behaviour after the fact or discourage it for fear of punishment, conflict of interest laws are intended to prevent bad behaviour. This can be done by disqualifying from participating in a decision anyone whose private interests could create suspicion that their self-interest influenced their behaviour. This guards both the decision process and the public official from any suspicion of violating standards. A weaker law requires a policymaker to declare any material interest that they have in an issue that they are reviewing. Bad behaviour occurs if an official fails to declare a potential conflict of interest, for example, a local councillor not disclosing that a plot of ground his family owns would increase substantially in value if the council grants planning permission. Many parliaments now require MPs to declare their family’s financial assets and income and benefits in kind that they receive to prevent politicians from using other members of their household as a shield so that they can deny having personally received money or other benefits. However, this is not an effective barrier, as demonstrated by the American tax reform act of 2017, which concentrated billions of dollars of benefits on less than 1% of the population, multimillionaires and billionaires supporting the Republican Party. Members of Parliament have ex officio conflicts of interests when they make laws that affect themselves. Elected politicians are particularly concerned with laws that determine who can vote, how votes can be cast and counted, and how this affects their personal re-election and their party’s success. When population changes require redrawing electoral boundaries, the party in power can gerrymander constituency boundaries to give itself the maximum of seats with the minimum of votes. As insiders, elected politicians have a collective interest in maintaining the laws that

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make it difficult for new parties to win seats. In the United Kingdom, insiders defend an electoral system that manufactures a majority of seats from a minority of votes by claiming that any change would make weak coalition or minority governments inevitable. The choice of how to allocate seats proportionately has enabled politicians from Spain to Ireland to make their system of proportional representation more disproportional. The distinction between public laws and informal normative standards is also acute for the remuneration of elected officials. Legislators feel a normative obligation to limit their formal salary to a sum acceptable to voters, while being ready to apply informal standards when making rules about claiming expenses and hiring staff paid from public funds. For decades British MPs accepted a relatively low salary by private-sector standards because, as a Labour Party chief whip told them, they could ‘pig it on expenses’, that is, augment their public salary by claiming generous expenses (see Hine and Peele 2016). Parliamentary rules allowed Conservative MPs to claim for such expenses as having the moat around their country house cleaned and for sacks of manure to spread on their garden. Young Labour MPs demonstrated their entrepreneurial skills by buying a London home aided by public money, and renovating it to sell after a few years at a large profit. When leaks to the media and court orders revealed expense claims to public scrutiny, 389 MPs were so shamed by what was revealed that they repaid thousands of pounds that they had legally received, and dozens of MPs chose not to stand for re-election (vanHeerde-Hudson 2014). Theories of interest group politics challenge the idea of the public interest. In place of widely held common interests, society is seen as divided into conflicting interests, for example, low-paid versus high-paid workers, and old people receiving pensions financed in part by contributions of younger people. In democratic theory, politicians should represent the interests of the bloc of the electorate that give them their votes, whether these interests are economic, social or cultural. From this perspective, charges that MPs ‘buy’ votes by enacting laws that benefit their voters represent an abuse of rhetoric. Cutting taxes on businesses or raising the minimum wage is what Conservative and Labour supporters expect their party to do. MPs can justify their actions by saying they are promoting the interests of those who vote for them. From this perspective, bad behaviour would be to renege or ignore the interests of people they are meant to represent.

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Normative standards contested. Black-letter laws facilitate agreement about what constitutes legal and illegal behaviour in public office, and courts can apply and enforce legal standards. However, because informal standards are not authorized in public documents this facilitates disagreement about whether or not actions of politicians are shameful. Because norms are informal, they cannot be contested in a court of law. In a free society, this is left to politicians and the media, and public opinion polls and elections give ordinary citizens a chance to act as a jury and register their views. The need for international agreement about normative standards is particularly important today as the spread of global trade and foreign aid involves the movement of large amounts of money between developed and developing countries to finance capital-intensive projects. The rhetoric of international organizations goes further; its treaties endorse a commitment to universal standards of behaviour, such as delivering public services in accord with bureaucratic standards of fairness and not abusing public office for private gain. Leaders of countries corrupt by internationally proclaimed standards reject the assumption that these standards are, or ought to be universal. In countries that were once colonies, anti-corruption standards of good governance may be charged with reflecting the cultural imperialism of Western countries that ignore cross-cultural differences in political norms about how a country ought to be governed. The allocation of valuable European Union-funded contracts to cronies of Hungary’s governors is deemed corrupt by EU standards. Prime Minister Viktor Orban has dismissed this judgment as a reflection of liberal democratic values inconsistent with Hungary’s illiberal democracy. Claims that national values about corruption differ are rejected by survey evidence. The Global Corruption Barometer shows that in countries in which corruption is high, such as Russia, citizens have the same evaluation of corruption as in countries where it is low. Theories of national political culture postulate that the maintenance of a political system requires an agreement on a minimum of political values and beliefs that are part of the informal rules of the game. However, even if there is agreement in the abstract about a cultural norm, partisan loyalties create differences of opinion about whether a particular action constitutes bad behaviour. When President Richard Nixon was under investigation for his part in the Watergate break in, his senior spokesman Pat Buchanan dismissed the charges as an attempt by Democrats to

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reject the will of the American electorate, which had given Nixon 62% of the vote. When President Bill Clinton was charged with engaging in inappropriate sexual activities in the Oval Office, Democrats dismissed his impeachment as a partisan act by the Republican-controlled House of Representatives. Decisions about behaviour also vary between personalities within a party. Although the British Labour Party has always denounced great inequalities of wealth as morally unacceptable, Peter Mandelson, the chief strategist of Labour leader Tony Blair, declared, that he was intensely relaxed about people getting ‘filthy rich’. Once Tony Blair left Downing Street, he followed this dictum, making millions by advising financial institutions in Wall Street and governments in countries such as Kazakhstan, Rwanda, Kuwait and Abu Dhabi. Blair described these money-making activities as ‘a series of deep business and government connections around the world that do both business and philanthropy’ (quoted in Ungoed-Thomas 2015). Labour politicians have felt differently. Before the 2015 British general election Blair gave £1000 to each of 100 Labour parliamentary candidates. Blair’s money was refused by a number of candidates because they regarded its source as tainted. The assumptions on which social science theories of corruption rest tend to have a strong normative element. This is particularly true of microeconomics which replaces norms of good governance and the Rechtsstaat (Rule of law state) with the norm of self-interest. Calculations of individual costs and benefits replace regard for standards of right and wrong. From this perspective, it is not the law that motivates behaviour but the instrumental utility of conforming to a law. Officeholders will bend or break formal laws if the benefits of doing so— the cash value of a bribe and the satisfaction gained by obliging friends and political superiors—is greater than the risk of legal sanctions (cf. Becker 1997; Rose 1992). Private enterprises put the material interests of shareholders and senior managers first; the public benefits of private enterprise are, as Adam Smith noted, a by-product of the spirit of capitalism. A business-oriented cost-benefit analysis in countries where laws are fairly enforced with bureaucratic predictability can endorse the reputational value of good governance. However, in societies in which this is not the case, a cost-benefit calculation can show that paying a bribe to obtain a capital-intensive contract is money well spent because the resulting profit is much greater than the cost of the bribe. Moreover, the risk of doing so

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may be less than the risk of having property confiscated if a corrupt official is not given a bribe. Likewise, it makes business sense to pay an official money on the side to act immediately rather than being dilatory in delivering a permit to which an enterprise is legally entitled. However, by standards of good governance, this mutually beneficial exchange is corrupt.

2 The Extent of Bad Behaviour Standards can specify how politicians ought to behave but they cannot describe how they actually behave. Politicians who engage in bad behaviour would rather keep such activities private than have them publicized in the media. However, names make news and, because they are public persons, politicians are newsworthy. For television personalities and pop music stars, almost any form of publicity is welcome, including stories that show they have the money and the brazenness to violate conventional standards of behaviour. By contrast, politicians are expected to avoid behaving in ways that would bring their office into disrepute. Nonetheless, like the people they represent, politicians have human failings, and public office provides opportunities for politicians to enjoy a very important person (VIP) style of life that is not available to the great majority of citizens. The freedom of the media to publicize bad behaviour varies enormously between countries. In some, laws give the media broad freedom to publish whatever they want, while in others censorship is strict and governors harass or even imprison media critics. The political interests of owners of print media can affect what it considered fit or unsuitable to print and judgments vary between media outlets. Broadcasting authorities have historically been most subject to the influence of governments that control their licenses. Political journalists have likes and dislikes among the politicians they deal with on a regular basis and this can affect what they choose to expose and what is kept out of the paper. New electronic devices can catch politicians off guard and circulate their actions through social media that conventional media will also publicize to a politician’s embarrassment. Public perceptions of bad behaviour. The tendency for citizens of West European democracies to see their governors as affected by corruption to some degree suggests that even though few people pay bribes to get the public services that they want, they are likely to see their elected

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representatives as breaking informal norms as well as anti-corruption laws. To test the extent to which Europeans think this is the case, we designed and fielded a Politicians Behaving Badly (PBB) survey in Britain, France and Spain. While all three countries are democracies and prosperous by international standards, their political and bureaucratic histories differ significantly from each other (Della Porta and Meny 1997; Tänzler et al. 2012). They also differ in their rating on the 100-point Corruption Perception Index. The British rating of 81 places it in the top tenth of countries and France is rated 70. The lower rating of Spain, 58, nonetheless leaves it among the best rated quarter of countries in the Corruption Perceptions Index. In each country, the proportion of respondents paying a bribe in the past year is very low (Appendix Fig. A.1). National media in all three countries regularly publicize examples of bad behaviour. In addition to reporting embarrassing claims for expenses by MPs, the British press provides a steady drip of exposures of distinctive sexual liaisons of politicians and about the way Tony Blair misleadingly took the country to war with Iraq. In France, the sex life of the then President, Francois Hollande, was the object of media attention and ridicule. French concerns about how politicians use public office has been underlined by revelations of public payments to the wife of a leading presidential candidate, Francois Fillon, and sleaze charges forcing the resignation of three ministers of President Emanuel Macron. At the time of the survey, Spain was going through a series of well-publicized corruption trials involving major politicians and parties in government at the national and regional levels and only 55% of voters and less than twofifths of the electorate voted for the two alternative parties of government, the Socialists and the Popular Party. Because bad behaviour can take a variety of forms, some illegal and others legal but shameful, the PBB survey asked people about their perceptions of five different activities. Two referred explicitly to public officials taking bribes, while another ambiguously referred to MPs taking money in exchange for favours. Two questions referred to behaviour by politicians that was not illegal but could be deemed shameful: over-indulging in drink, sex or drugs, or making misleading promises when seeking votes. For each activity, people were asked whether they saw all, most, some, or hardly any officials engaging in bad behaviour. The job security of civil servants is meant to strengthen their commitment to acting in accord with legal standards when making decisions about capital-intensive projects, because they have the knowledge

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Table 1 Popular perceptions of Politicians Behaving Badly Britain (%) France (%) Spain (%) Mean (%) All or most behave badly Politicians promise one thing, do another High-level officials take bribes MPs take money for favours Politicians over-indulge in private Hospital officials take bribes Average

27 29 28 11 (34)

35 35 24 9 (37)

41 36 17 12 (38)

34 33 23 11 (36)

Source Politicians Behaving Badly survey organised by the Centre for the Study of Public Policy and the Wissenschaftszentrum Berlin. Nationwide sample surveys in which Efficience3 interviewed 1004 people in Britain, 1003 in France and 1000 in Spain between 11 December 2015 and 22 January 2016

of the procedures that ought to be followed in awarding valuable contracts. PBB respondents were, therefore, asked: How many high-level government officials take big bribes to give a business a contract it should not have received? In all three countries, those seeing high-level officials taking big-money bribes from business are a minority. In Britain, where civil servants are expected to be non-partisan officials, 27% think most high-ranking officials are involved in bribery. The proportion rises to one-third in France and two-fifths in Spain, where civil servants can also have partisan ties (Table 1). Whereas high-ranking officials are by definition remote from ordinary people, local hospitals are not. To test popular perceptions about officials at a level where people may have first-hand knowledge, the PBB survey asked about hospital officials taking bribes to allow people to jump long queues to get an operation without a painful wait. The phrasing made clear that officials were behaving illegally, while the service provided, helping a sick person get an operation quickly, was desirable. In each country only one in ten thought most hospital administrators were taking money in order to let people jump queues. This compares with 1% of Britons and Spaniards reporting having paid a bribe for a health service in the past year and 5% of French (Eurobarometer 2014: 88). Members of Parliament are expected to be helpful to people they represent by responding to requests from constituents for assistance and regard doing favours for constituents as an electoral asset. Help can take the form

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of advising people how to get a service they are entitled to by following instructions posted on an official website. MPs also like to be helpful in securing collective benefits for their constituency, such as upgrading a road, attracting a private enterprise that brings jobs to their district or securing government action to prevent the closure of a local factory and loss of employment. They may also help a company by providing introductions to policymakers useful for their business in return for a fee. To take into account the ambiguity of MPs receiving money in exchange for helping individuals and enterprises get what they want, the PBB survey did not use the word bribe when asking about this practice. Immediately after asking about high-ranking officials taking bribes, it asked: How many Members of Parliament take money from people who want political favours? This phrasing left open whether the payment was for an MP doing something that violated laws. Two-thirds of respondents did not generalize to most politicians media exposure of individual politicians exploiting their office to make money. Notwithstanding significant differences in the way in which MPs are elected in Britain, France and Spain, there is little difference between countries in the perception of MPs taking money in exchange for favours. About one-third in each country thought most MPs did so (Table 1). In all societies, there is a distinction between public and private behaviour and a gray area in between. By seeking public office politicians place themselves in the public eye and the media can, if it chooses, headline private behaviour that is not treated as newsworthy when engaged in by ordinary people. It can publicize as scandalous a politician getting drunk, using drugs or is involved in embarrassing forms of sexual behaviour. The PBB survey asked: How many politicians in their private behaviour over-indulge in drink, sex or drugs? People see most politicians respecting informal social norms in their private behaviour. Just one-sixth of Spaniards saw over-indulgence widespread among politicians and one-quarter of Britons and French. The most widespread form of bad behaviour is political, misleading voters. To test whether people see their representatives as living up to their mandate from the electorate, the survey asked: How many politicians promise to do one thing if elected and then do the opposite after being elected? Almost three-quarters of Britons view most or all politicians as hypocritical vote-seekers. The proportion is higher still in France, fivesixths, and highest in Spain, where seven out of eight see most politicians

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as hypocrites saying one thing to get elected and then breaking their promises once in office (Table 1). This behaviour violates a key assumption of democratic theory: Citizens should be able to compare the policies that parties offer, vote for the party that comes closest to their own view, and have their representatives fulfil their promises if elected (Schumpeter 1952). If voters cannot rely on the great majority of politicians to do what they say, a change of government does not offer a remedy for corruption; it only results in a rotation of rascals. Popular perceptions of bad behaviour differ more between activities than between countries. In Britain, there is a difference of 62 percentage points in the perception of MPs misleading voters and hospital administrators taking bribes. The difference rises to 74% in Spain and 75% in France. The median respondent tends to see bad behaviour among some but not most officeholders. Only 11% see all or most officeholders performing badly on all five measures while only 5% think hardly any behave badly on all counts. Moreover, there is very little cross-national difference in the average perception of bad behaviour: It was 34% in Britain, 37% in France and 38% in Spain (Table 1). Partisan influences. Once established, an individual’s party identification can influence subsequent political judgments. People ought to trust the party they vote for and may distrust their opponents. However, its relevance for the assessment of the behaviour of politicians as a class is problematic. At any given point in time parties can be divided between those that are in government and those that are not. Insofar as the government of the day sets the tone for media reports of the activities of politicians, people who favour the governing party ought to view the behaviour of politicians more positively. At the time of the PBB survey, the governing parties were the Conservatives in Britain, the Socialists in France and the Popular Party in Spain. The chief opposition was Labour in Britain, a mixture of centre-right politicians in France and the Socialists in Spain. In all three countries, the party in government and the chief opposition party have been exchanging their positions with the swing of the electoral pendulum. When parties go in and out of office, their politicians are insiders and voters for insider parties are likely to be more favourable to judging the behaviour of politicians as a class. Because outsider parties have never been in government, they are free to protest not only against specific government policies but also to label parties and politicians that have been inside government as corrupt. In the past decade, a variety of protest parties have become electorally

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significant in most party systems in Europe. In Spain, Podemos and Ciudadanos won half the vote at the election held at the time of the PBB survey. In France, the National Front has the support of up to one-third of the electorate, and left-wing parties bring the total support for the protest category up to half. In Britain, the United Kingdom Independence Party won sufficient votes in its own name to create the conditions for a referendum majority leading to the country’s exit from the European Union. Non-voters are outsiders in a different way: They do not identify with any party, not even a protest party. At a national election, they are officially defined as the one-quarter to one-third of the electorate who do not turn out to vote. One explanation for non-voters is that they are so disgusted with the behaviour of politicians that they refuse to support either insider or outsider parties. Empirical evidence finds limited support for this view. Many people who do not vote at a particular election are not habitual non-voters, but are prevented from casting a ballot by illness, travel or other non-political reasons and may even identify with a political party. Other non-voters are people without any interest in politics or the education to understand party policies and may be indifferent to the behaviour of politicians rather than antagonistic. To a degree, partisanship has a significant influence on evaluations of the behaviour of politicians (Table 2). As hypothesized, people who support the governing party in their country are less likely to think politicians engage in bad behaviour and those who support protest parties or are non-voters are significantly more likely to be negative. There is a 25 percentage point gap between the two groups in the extent to which governing parties are seen as saying one thing to win votes and doing the opposite in office. In Spain the difference is highest: Nine-tenths of both non-voters and protest partisans view politicians as hypocrites. In Britain and France, overwhelming majorities of voters for protest parties are most likely to see politicians as hypocrites and non-voters are almost equally alienated. When the question is about how many politicians take money for favours, supporters of an insider party that is temporarily in opposition are closer to the governing party in evaluating politicians as a class. However, when it comes to politicians keeping promises, opposition supporters are closer to outsider parties in being negative about what politicians do when in office. Partisanship similarly influences the perception of politicians taking money to do favours for constituents. Being a supporter of an Insider party that is for the moment in opposition encourages people to be

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Table 2 Partisan influences on perceptions of politicians Britain (%)

France (%) Spain (%) Mean (%)

Partisanship Governing party Opposition No party Protest party Difference

Most promise one thing, do another 57 62 69 77 87 85 81 87 90 86 92 90 (29) (30) (21)

64 83 86 89 (25)

Partisanship Governing party Opposition No party Protest party Difference

Most MPs take money for favours 15 23 31 29 42 42 46 49 (31) (26)

19 28 41 47 (28)

20 23 39 45 (21)

Source Politicians Behaving Badly survey; see Table 1

closer to supporters of the insider party in government than to protest parties. Almost half of the supporters of protest parties think MPs use their office to receive money in exchange for favours as do two-fifths of non-voters (Table 2). Here too, within-country differences between partisans are greater than differences between countries. The proportion of British Tory voters seeing most MPs as taking money is one-third that of UKIP supporters and half that of Labour Party voters. In France and Spain, voters for the governing party are only half as likely as supporters of protest parties or non-voters to see most politicians taking money for favours. To confirm that the relation of partisanship to perceptions of politicians’ behaviour is not a spurious correlation, we undertook a logit regression analysis that controlled for the potential influence of such things as age, gender, education and income on political trust. In all three countries, the contrast between partisans of the governing party and protest parties remained significant and substantial (cf. Rose and Wessels 2018). Age was the only significant influence. On average, younger citizens, whatever their party preference or none, are more likely than older people to see politicians as behaving badly, after controlling for types of corruption and partisanship. In the pooled data analysis, younger citizens are 12% more likely than their elders to see politicians breaking promises.

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3 Punishment in the Court of Public Opinion A pragmatic political rule for avoiding punishment is: Don’t do anything in private that you would have to apologize for if exposed to public scrutiny. A cynical variation is the injunction: Whatever you do in private, don’t get caught. When politicians miscalculate and their private actions become open to public evaluation, they can accept or reject the verdict of the court of public opinion. This virtual court issues judgments in the form of media headlines, statements by good governance advocates, public opinion polls and election results. The court of public opinion complements judicial institutions that can only try officials for activities deemed illegal within the narrow confines of statute law. By contrast, the institutions that collectively constitute the court of public opinion employ standards that ordinary people are free to use when evaluating the behaviour of their representatives. Varied forms of punishment. The punishment that the public thinks appropriate for a particular behaviour indicates the importance that people attach to the standard that has been broken. Immediately after asking each question about how many politicians break a particular standard, the PBB survey asked what should happen to a politician who breaks it. Up to five alternatives were offered ranging from the harshest—going to jail or losing their job—to no punishment is needed. There were also intermediate categories, such as paying a fine or publicly apologizing. Since these punishments are not mutually exclusive people were allowed to endorse the imposition of multiple punishments. There is overwhelming public agreement that breaking informal standards of behaviour deserves punishment (Table 3). A majority would like to see an offending politician show a sense of shame by making a public apology for what they have done. Politicians differ in how and whether they apologize. They can show sincere signs of regret or wrap their apology in a request for sympathy or self-justification and standards have been changing. A half-century ago a British government minister, John Profumo, accepted his shame after he was exposed as having lied to the House of Commons about a sexual affair. Profumo not only apologized for doing so but also resigned as an MP and undertook a long career as a volunteer social worker among the poor of London. After Bill Clinton’s public admission of sexual misbehaviour with an intern in the White House Oval Office in the late 1990s, he concluded his nominal apology with an attack on the partisan motives of those who had exposed

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Table 3 Punishments for bad behaviour Punishment

Jail (%) Lose job (%) Fine (%) Apologise (%) Nothing (%)

Standard broken Bribe for big contract 62 76 Takes money for favours 54 83 Bribe to jump hospital 27 60 queue Over-indulgence 15 58 (Average of replies for Britain, France, Spain)

68 75 63

63 59 60

0.1 0.1 0.6

n.a.

Source Multiple answers allowed. Politicians Behaving Badly survey; see Table 1

his persistent lying about the issue. Even more striking was the behaviour of Donald Trump during the 2016 American presidential campaign. When his views and behaviour towards women were revealed, he point blank refused to apologise for his actions. Even though making an apology is considered necessary, it is not deemed sufficient to deal with the violation of public standards. Where money is involved, a fine is thought appropriate by up to three-quarters of the public. However, unlike the treatment of a motorist who has violated a speeding law, a fine is not thought enough of a punishment for politicians who offend against standards of public behaviour (Table 3). Up to three-quarters of Europeans think that high-ranking public officials who take a bribe should lose their job, and three-fifths think this punishment is also appropriate for hospital administrators. A majority also favour sending to jail officials who take big bribes from businesses. However, a different view is taken of hospital administrators: Only one-quarter think jail is appropriate. This suggests that most people see mitigating circumstances in a hospital official accepting a bribe to help a person get an operation sooner by jumping a queue. When an MP is exposed for taking money in exchange for favours, big majorities favour harsh punishment rather than the soft option of making a public apology in Parliament. Five-sixths think that such politicians ought to lose their position and a majority also favour a jail sentence. There is no substantial cross-national difference about being tough in punishing politicians who are using their public office for their private gain.

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The public moderates its tough judgments when assessing the behaviour of politicians revealed as over-indulging in sex, drink or drugs, activities they have in common with a significant fraction of their electorate. In France 51% said that those who did so had no need to apologize about their private affairs; by contrast, only one in five took this view in Spain and in Britain. Over-indulgence in private matters can nonetheless be judged as a disqualification from holding office because it shows bad judgment or, if such private behaviour becomes public, as bringing their public office into disrepute. Altogether, more than half think exposed politicians should lose their job. Punishing hypocritical politicians in theory and practice. The normative theory of democracy is that citizens can and should hold governors accountable at the ballot box for what they do. If governors do what they promise, they should be rewarded by being re-elected. If they do not, they should be punished by losing votes and office. Election campaigns give politicians incentives to make promises to win votes without regard to whether they can deliver what they promise. Moreover, as previous experience and knowledge of government become less important, many successful campaigners enter office with little knowledge of the obstacles to fulfilling their promises. For example, the first government office held by David Cameron and by Tony Blair was that of prime minister. Few are as cynical as Hungarian Socialist Prime Minister Ferenc Gyurcsany, who was secretly recorded explaining the government’s repudiation of its economic promises thus: ‘We have obviously lied throughout the past 18 to 24 months. It was perfectly clear that what we were saying was not true’. Many politicians are fooling themselves about the ease of reform, not least, the presumed ease of rooting out corruption. In Britain, France and Spain, substantial majorities think the government is doing a bad job in fighting corruption. When asked what they would do if a politician they voted for abandoned their promises after gaining office, PBB respondents talk tough. From almost two-thirds to four-fifths said that they would vote for someone else in order to punish a representative who had misrepresented what he or she would do. Less than one-fifth of British and French were inclined to continue to vote the same, and in Spain the proportion fell to one in twelve. A limited minority similarly said that

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Table 4 Punishments if politicians say one thing, do another Britain What respondent would do Vote for someone else Not bother to vote Would vote the same

France

Spain

(Percent endorsing option) 68 18 14

64 20 16

79 13 8

Source Politicians Behaving Badly survey; see Table 1. Don’t knows and don’t vote excluded; 10% of respondents

the experience of being deceived by a politician should turn them into non-voters (Table 4). The replies show that a majority of people endorse the civic norm that elections should reward and punish politicians. However, the replies are about hypothetical behaviour in a survey focussed on corruption. If people see corruption prevalent in all the major parties, they have two alternatives, not voting or casting their vote on other grounds. Perceptions of political corruption have little or no influence on whether people vote (see Table 1 in Chapter 7). For example, at the 2010 British general election, which followed in the wake of negative publicity for the expense claims of a majority of MPs, this did not produce a fall in turnout. It was at the average level of the past two decades. The vote for MPs whose expenses had been revealed fell by no more than 2% compared to other MPs in their party (Kavanagh and Cowley 2010: 311–313, 393ff). Studies of voting behaviour show that people are influenced by their issue preferences, party loyalties and socio-economic status (Fisher et al. 2018). In a system of good governance in which insider candidates meet public standards about how politicians ought to behave, corruption is not an issue. In the words of a staff campaigner for Bill Clinton, ‘It’s the economy, stupid’. However, in the 2016 American presidential election, voters were offered a choice between two candidates who repeatedly attacked each other for corrupt behaviour and more voters held negative rather than positive views of both Donald Trump and Hilary Clinton. A general election is not a ballot on a single issue. Even though corruption is a recognized problem, it is not the only problem that governments face. Managing the economy is a perennial problem and the

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quality of social services concerns many families. Immigration and threats to national identity can be important too. When asked to name the three most important problems facing the country, only 16% of Britons mention corruption and 23% of the French. Spain was exceptional because protest parties have made fighting corruption a major theme: 66% said it was a major problem there. When people cast their vote, they make a holistic judgment about the alternatives on the ballot before marking their preference for a party or candidate that they view positively or that they view as the lesser evil.

References Becker, Gary. 1997. The Economics of Life. New York: McGraw-Hill. della Porta, D., and Y. Meny (eds.). 1997. Democracy and Corruption in Europe. London: Pinter. Eurobarometer, 2014. Corruption: Special Eurobarometer 397. Brussels: European Commission. Fisher, J., E. Fieldhouse, M. Franklin, R. Gibson, M. Cantijoch, and C. Wlezien (eds.). 2018. The Routledge Handbook of Elections, Voting Behavior and Public Opinion. London: Routledge. Hine, D., and G. Peele. 2016. The Regulation of Standards in British Public Life: Doing the Right Thing? Manchester: Manchester University Press. Ho, L.K. 2011. Public Policy and the Public Interest. Abingdon: Routledge. Kavanagh, D., and P. Cowley. 2010. The British General Election of 2010. Basingstoke: Palgrave Macmillan. Rose, Richard. 1992. East Europe’s Need for a Civil Economy. In Finance and the International Economy 6, ed. Richard O’Brien, 5–16. Oxford: Oxford University Press. Rose, Richard, and Bernhard Wessels. 2018. Money, Sex and Broken Promises: Politicians’ Bad Behaviour Encourages Distrust. Parliamentary Affairs, in press. Schumpeter, J. 1952. Capitalism, Socialism and Democracy, 4th ed. London: Allen & Unwin. Tänzler, K., K. Mara, and A. Giannakopoulos (eds.). 2012. The Social Construction of Corruption in Europe. Aldershot: Ashgate. Ungoed-Thomas, J. 2015. Tony’s Here to Help—At a Price. Sunday Times, March 8. vanHeerde-Hudson, J. (ed.). 2014. The Political Costs of the 2009 British MPs’ Expenses Scandal. London: Palgrave.

CHAPTER 7

The Impact of Corruption on Citizens

Although corruption is a problem of governance, development economists have been the leaders in research on the impact of corruption, because it is seen as having a substantial negative effect on economic growth. Corrupt politicians who control national resources and foreign aid may abuse their political power to make sure that they take what they want for themselves. At worst, corrupt rulers have been ‘stationary bandits’, enforcing an undemocratic repressive order to maintain a flow of personal riches from the exploitation of their country’s people and resources (cf. Olson 2000). Macroeconomists have used the Corruption Perceptions Index to produce quantitative estimates of the loss of the full benefit of development expenditure due to the inefficiencies and ineffectiveness that national corruption may have on economic growth. Whatever methods are used, the cost of corruption is estimated to be billions of dollars annually and cumulatively tens of billions (Rose-Ackerman and Soreide 2011). By contrast with what has preceded, this chapter is about the impact of corrupt governance on the political behaviour and attitudes of citizens. When corruption is seen as significant, this is likely to discourage the political engagement of individuals (cf. Easton 1965; Dahl 1989). Instead of participating in elections and trusting political institutions, individuals can show incivisme, a French term for individual attitudes and activities that reject the idea that people ought to engage in politics. © The Author(s) 2019 R. Rose and C. Peiffer, Bad Governance and Corruption, Political Corruption and Governance, https://doi.org/10.1007/978-3-319-92846-3_7

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Voting is the one form of political activity in which a majority of citizens are engaged (Blais 2010). Non-voting can be caused by people being indifferent to what distant governors do or because they are alienated by politicians abandoning their election pledges once in office. Whereas voting against the governing party or for a protest party registers dissatisfaction with representatives, not voting registers disengagement from politics or even rejection of the political system as a whole. Because the names and appeals of parties differ with national contexts, non-voting is more suited to comparative analysis than party identification. Elections also differ cross-nationally: Some are free and some are not. In the latter context, not voting can be a means of protesting against undemocratic regimes. Political trust is integral to theories of good governance, because it reflects confidence that public officials will perform their duties by the book rather than by hook or crook. However, empirical studies often find that distrust is widespread. When officials break formal and informal standards of good governance, it is rational for individuals to distrust their political institutions (Rose and Mishler 2011). Given that political trust is variable, a variety of reasons may explain why some people trust their political institutions while others do not (Zmerli and van der Meer 2017; Uslaner 2018: Part VIII). Willingness to vote and readiness to trust governors reflect two complementary forms of political engagement. Voting is an input that citizens can make to give direction to governors, while trust is about how people react to the outputs of government (Rose 1989; Kumlin 2004). If these outputs are delivered free of corruption, this should encourage trust in political institutions, but if popular standards of good governance are not met, this should stimulate distrust. To test the impact of corruption on political engagement requires survey data that not only records the experience of individuals with corruption but also their political attitudes and behaviour. As an anti-corruption agency, Transparency International’s Global Corruption Barometer questionnaire concentrates intensively on different forms of corruption and excludes other questions about political behaviour. The 2013 Eurobarometer survey that asked many questions about corruption similarly did not include questions about voting and political trust. Democracy surveys that collect a great deal of data about political attitudes tend to give little or no attention to political corruption.

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To provide data for this chapter, we analyse three continental surveys that have measures of voting turnout and of political trust as well as corruption measures that are part of the Global Corruption Barometer. A total of 77 countries meet both requirements in the sub-Saharan Afrobarometer survey, the Latin American Public Opinion Project (LAPOP) and countries with a Communist legacy included in the European Bank for Reconstruction and Development (EBRD) survey. Since breaking informal standards rather than bribery is the chief form of corruption in democratic countries of Western Europe, we test the impact of breaking informal standards on political trust with data from the Politicians Behaving Badly survey analysed in Chapter 6.

1 Theories of the Impact of Corruption Theories of the impact of corruption on individuals assume that its effects are negative for all forms of political activities. Hence, our generic model postulates that corruption will have the same effect on two different forms of political engagement, voting and trust in political institutions. To avoid the reductionism of simple correlations between a single measure of corruption, it employs multiple measures to test which particular aspects of corruption may be significant. To avoid spurious associations, the model introduces controls for the established effect of individual socio-economic resources on voting, and for national context, which consistently has an impact on corruption. Political Engagement (f) Corruption, Resources, National Context. The continental Barometer surveys provide four indicators suitable for testing the influence of corruption on voting and trust in government. The payment of a bribe directly exposes an individual to bad governance; insofar as corruption is important, it should have a significant major effect on the two dependent variables. Among sub-Saharan Afrobarometer respondents, 17% reported that they had paid at least one bribe in the past year, and the figure was 14% in Latin America and in formerly Communist countries. The experience of bribery increases by more than one-quarter if one controls for the minority of respondents who have had no contact with any public service in the past year. Vulnerability to bribery increases when people have contact with more than one service during the year. Among Afrobarometer respondents, 54% have contact with two or more services; 39% do so in Latin America; and 39% have multiple contacts in EBRD countries.

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In the course of a few years, there is a cumulative increase in the proportion of people who have had to pay a bribe at least once. This can create a long-term effect that is reflected in their perception of corruption. Among Afrobarometer respondents, 26% perceived most or all public officials as corrupt; in formerly Communist countries 31% did so; and in Latin America the percentage perceiving most or all officials as corrupt was high, 81%. Even if an individual is not caught up in bribery every year, a long-term perception of corruption can reduce the likelihood of voting and increase distrust of government. By definition, corruption is a problem in badly governed countries, but such countries have many problems competing for their attention, such as dealing with an economy that leaves many people poor, and domestic and cross-border challenges to national security that leave many citizens feeling insecure. If turnout at elections is low and distrust in political institutions high, the cause may not be corruption but the government’s ineffectiveness in dealing with other problems to which citizens give a high priority. Given competition between multiple problems, corruption is rated as one of the top problems of their country by 36% in formerly Communist countries, 12% of Africans and 8% of Latin Americans. Another way in which perceptions may affect political engagement negatively is if people see corruption as increasing. When corruption gets worse, politicians appear unable to maintain corruption at even a steady level. The resulting uncertainty can discourage people from voting and increase distrust. At the time of the continental surveys, many African respondents and people in formerly Communist countries thought that corruption was increasing and very few thought it was decreasing. Controlling for an individual’s resources is necessary, since theories of voting behaviour make these resources ‘the essential core’ of explanations of whether people decide to vote (Plutzer 2018: 690). Education should make voting more likely since it gives individuals a better understanding of electoral procedures and issues and helps identify the party that comes closest to their own views. However, more educated people are more likely to follow political news and thus be aware of media accounts of politicians engaging in bad behaviour, and therefore less likely to trust their political institutions. The effect of income on the likelihood of voting is problematic. The cost of taking the time to vote will be higher in absolute terms for a person with higher earnings, but for the working poor taking time off work may have a higher relative cost. The influence of income on political trust is ambiguous. Insofar as being

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better off confers a status on individuals that secure better treatment by public officials, its effects on political engagement should be positive. However, better-off people may be exploited for bribes because they can afford to pay them, thereby reducing their trust in political institutions. Age is a resource that consistently influences voting in Western nations because it increases the experience that people have of governance. Older people are more likely to vote because they tend to have more time to do so, they have learned about elections from experience, and repeated exposure is likely to make voting a habit. Insofar as contemporary political systems in Africa, Latin America and ex-Communist countries are viewed as improvements on past regimes, older people ought to be more trusting than young people, who may take an improved governance environment for granted. However, insofar as youthful socialization into an undemocratic regime creates a long-term predisposition to distrust governors, then older people will be less trustful of their contemporary institutions. Whereas citizens have the chance to vote only once in every few years, people have continuing opportunities to engage with the outputs of political institutions. Independent of age and education, frequency of contact with the state builds up experience of how public services are delivered. Most people contact more than one public service during a year and, however many services are contacted, a majority do not pay any bribe (Fig. 4 in Chapter 4). As long as service outputs are delivered by the book, people should be readier to engage with the input side of governance, voting. However, contact with a greater number of services also increases the risk of having to pay a bribe, particularly in countries where corruption is widespread (see Table 1 in Chapter 5). In such circumstances, more frequent contacts could increase distrust in political institutions. Involvement in networks of informal face-to-face relationships gives people social capital, that is, a resource that people can use when they want to get things done. Most people with social capital are in networks that are not directly engaged in politics and Putnam (2000) has theorized that being socially engaged ought to spill over into political engagement. When an election is held, people with social capital should be more likely to go along to vote as others in their network do. People with social capital should also be more likely to have in their network at least one person who can help in dealing with public services to get what they want and therefore be more inclined to trust political institutions.

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Among many features of national context, the most important for voting is whether an election is free and fair or rigged to make the outcome a foregone conclusion. Individuals should be more likely to vote in competitive elections where their collective choices could make a difference. Freedom House evaluates how free and fair elections are on a scale ranging from 0 to 12. Two-thirds of Latin American countries are at the top end of the scale with a rating of 10 or higher. Fewer than half of formerly Communist countries and one-third of sub-Saharan African countries are rated as holding free elections, and the median country in these continents holds partly free elections. If an election is not free and the outcome appears predetermined, it is rational for an individual not to bother casting a vote that has no value. Abstention from voting can be a silent but visible way of registering distrust in governors. Given differences between voting, a form of political behaviour, and trust, a subjective attitude, corruption may affect citizens differently. For example, the perception of government as corrupt may affect trust but not voting, while the experience of seeing corruption as increasing may influence whether an individual votes. Therefore, we test the effects of corruption separately for voting and for trust.

2 Corruption Has Little Impact on Voting Theories that are based on the assumption that corruption has an important effect on political behaviour imply: H1. T he more that individuals are affected by corruption, the less likely they are to vote. Whether democratic or not, all the countries analysed here hold elections that give their citizens the opportunity to engage with their political system. At the national election preceding the surveys, officially reported turnout was 62% in Afrobarometer countries, 67% in Latin American countries and 63% in formerly Communist EBRD countries. These figures are as high as turnout in British elections and significantly higher than in American elections. In Western democracies there is a tendency for some non-voters falsely to report that they voted, making survey results for turnout 10–20 percentage points higher than the official record. The three Barometer surveys showed less tendency

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to exaggerate turnout. The self-reported turnout of Afrobarometer respondents was eight percentage points above official figures; in LAPOP countries, six points, and in the EBRD countries surveyed, self-reported turnout was 3% higher than in the official record. While all three continental surveys collect comparable indicators, the classification of replies is not identical. This makes it unsuitable to pool the surveys in a single file for analysis. Instead, we apply the same statistical techniques in three parallel multilevel logit regressions testing the effect of hypothesized influences on voting. When a given variable is significant in two or three independently conducted surveys on different continents, this provides robust support for conclusions. The strongest form of statistical significance is a p-value lower than 0.001, and a p-value of 0.01 or lower is also strong. Since significant influences vary greatly in their impact, Table 1 reports shifts in predicted probabilities too. They estimate the size of the impact of standardized independent variables on the likelihood on an individual voting. Table 1 Corruption has little impact on going to vote Afro

LAPOP

EBRD

(Maximum shift probability of voting) Corruption Paid bribe Perception corruption Important problem Increasing or decreasing Resources Age Education Income Social capital Number services contacted Context Free, fair elections Pseudo R squared

Not sig −0.09** Not sig Not sig

Not sig Not sig Not sig Not avail

Not sig Not sig 0.05*** Not sig

0.56*** Not sig Not sig 0.07*** 0.09**

0.46*** 0.15*** Not sig 0.04** 0.18***

0.32*** 0.17*** 0.12** 0.08** 0.23**

Not sig 7.3%

Not sig 10.5%

0.28** 5.6%

***Significant p-value < 0.001. **p-value < 0.01. Source Multi-level logit regression. Shift: Change in the predicted probability of voting if an independent variable moves from its minimum to maximum value. F test for each model: p-value 0.000.The EBRD regression included a variable for whether a country was a Soviet successor state; it was not significant

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Corruption consistently has little impact on an individual casting a vote. Even though the payment of a bribe may be expected to make people want to disengage from government, in all three surveys it is not significantly associated with whether a person votes. Similarly, the perception of political institutions as corrupt has no significant effect for whether people vote, except in Africa, where it is associated with a nine percentage point lower likelihood of voting. An alternative interpretation, favoured by campaigning organizations such as Transparency International, is that people who think corruption is an important problem should become politically engaged in order to rid their government of corruption. However, in Africa and Latin America the small minority who see corruption as a big problem are not significantly more likely to vote than those who see other problems as most important. Only in EBRD countries does regarding corruption as a big problem give a significant albeit limited boost of five percentage points to the likelihood of voting. The slight effect of corruption on the readiness of people to vote is confirmed by other studies. A host of competing influences, such as party loyalty, ideology and party system characteristics, restrict the effect of corruption on whether citizens vote (Charron and Bagenholm 2016; Dahlberg and Solevid 2016). An individual’s resources have by far the biggest impact on voting (Table 1). Age is the most important resource. Older Africans are 56% more likely to vote than young people; the impact is almost as great in Latin America, 46%. Older citizens who were socialized under Communism are 32% more likely to vote than young EBRD respondents who did not have this experience. The importance of age reflects learning during the life cycle. While young people have little knowledge or experience of voting, by middle age people have been exposed to up to half a dozen elections, and casting a ballot has become habitual. Even though men are much more likely than women to be successful candidates, since statistical analysis found no significant substantial gender effect on voting or trust, this variable is not included in the tables in this chapter. Education gives stronger encouragement to voting than does income. It boosts the likelihood of voting by 17% in EBRD countries, five percentage points more than the effect of income. In Latin America education increases the likelihood of voting by 15%, while income has no statistical significance. Africa appears to be an outlier: Voting is not significantly increased if people have more education or a higher income. This may be due to African politicians making more effort to mobilize

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the poor, uneducated voters, who are numerous enough to decide their political fate. The mobilization of the uneducated is supported by the influence of age, since older Africans are the most likely to have had little or no basic education. Notwithstanding the extent to which bribery is present in these continents, the more frequent use of public services gives a significant boost to turnout. People with the most contacts with public services rather than no contact are 23 percentage points more likely to vote in EBRD countries, 18% more likely in Latin America and nine points more likely to vote in Africa. This association suggests that going to vote and making use of public services may both be part of a syndrome of activities involving engagement in society. This interpretation is consistent with participation in a social capital network also having a significant effect on voting. Having social capital gives a boost of eight percentage points to voting in EBRD countries, 7% in Africa and four points in Latin America. Unlike most corruption indicators, the effect of social capital is consistently significant, but the impact is much less than age, which relies on individual experience. When elections are not free and fair, this should discourage people from casting a ballot because their vote can have no effect on the outcome and may be fraudulently counted. Moreover, a low level of participation challenges the claim of an undemocratic government to represent all the people. Notwithstanding this theoretical logic, the quality of an election has no significant effect on whether Africans or Latin Americans vote, perhaps because past traditions have made people accept their national practices as normal. By contrast, respondents in Central and East European countries can compare free elections since the fall of the Berlin Wall with Communist-held elections that decided nothing. Thus, in EBRD countries the likelihood of people voting is 28 percentage points higher where free elections are held than where they are not. Paradoxically, including multiple measures of corruption in the cross-continental analysis confirms the major importance of individual resources as the chief determinant of why people vote in developing countries as well as in established Western democracies (Table 1). All five indicators of resources are significant in formerly Communist countries, four are significant in Latin America and three in Africa. By contrast, neither paying a bribe nor viewing corruption as increasing is significant in any of the three surveys. In two, seeing most politicians as corrupt and viewing corruption as important likewise fails to achieve significance.

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3 Corruption Gives a Big Boost to Distrust Although corruption is not present in the majority of contacts that individuals have with public services, when the proportion of people paying a bribe rises above the trivial level and the proportion seeing most officials corrupt is higher, this creates a ripple effect as more and more people realize that they are vulnerable to being asked to pay a bribe to get a service to which they are entitled. When vulnerable citizens are not confident that public officials will perform their duties as they ought, the resulting uncertainty should encourage distrust. H2. T he more that individuals are affected by corruption, the less likely they are to trust political institutions Because trust is a generic social science concept, its radius depends on the objects of trust (Zmerli and van der Meer 2017; Uslaner 2018). Psychologists and social psychologists focus on interpersonal trust involving face-to-face relations with family, friends and work mates. Political psychologists go further; they postulate that if individuals have positive trust in face-to-face relations, this trust will be projected to people they have never met. National policymakers are remote from the first-hand experience of individuals. Exposure to politicians on television is a oneway process; it may influence perceptions of politicians but not engage with the masses of citizens personally. Corruption and trust in developing countries. Governance is about how institutions relate to citizens; in developing countries the extent to which institutions are fully bureaucratized is problematic. Barometer surveys normally ask about trust in institutions or about categories of people in charge of institutions, such as politicians or religious leaders. The Afrobarometer is distinctive; in keeping with late bureaucratization in the continent, it asks about people such as Members of Parliament rather than about Parliament. Since trust can vary between institutions, the three surveys ask for evaluations of a variety of institutions on a scale ranging from the most to the least trusted. Political institutions tend to be among the least trusted. Factor analysis was used to identify four institutions that reflect a common attitude towards political institutions: trust in parliament, the government executive, local government and political parties. We have combined evaluations of these institutions in a standardized scale in which 1.00 stands for maximum trust and 0.00 for maximum distrust.

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Because theories of political trust are developed in countries where good governance is the norm, it is conventional to give a positive label to a scale. However, survey results show that it could just as accurately be described as distrust. The mean is near the scale’s mid-point. In the Afrobarometer, the mean is 0.53; among EBRD respondents, 0.54; and in Latin American countries it is 0.44. The mean position is thus almost equally far from complete trust or distrust; it shows scepticism about whether political institutions are or are not to be trusted (cf. Mishler and Rose 1997). The second hypothesis is confirmed: Corruption in all its forms significantly reduces the trust of citizens in their political institutions. Moreover, corruption indicators are much more likely to be significant than indicators of resources. They thus contribute most to the high level of variance in individual attitudes accounted for in the regression analysis: almost 27% in the Afrobarometer and 18% in the EBRD study and 17% in Latin America (Table 2). Table 2 Corruption increases distrust in government Afro

LAPOP

EBRD

Round 6

2014

2016

(Maximum shift probability of trust) Corruption Perception corruption Increasing or decreasing Paid bribe Important problem Resources Age Social capital Education Income Number services contacted Context Free, fair elections OLS adjusted R2 (%)

−0.43*** −0.16*** −0.05*** Not sig

−0.11*** Not avail −0.04** Not sig

−0.29*** −0.23*** Not sig −0.02***

0.05*** 0.02** −0.11*** −0.10*** 0.06**

Not sig 0.02* Not sig Not sig Not sig

Not sig Not sig Not sig 0.08** Not sig

Not sig 26.7

Not sig 17.1

−0.16** 17.6

*** Significant p-value < 0.001. ** p-value < 0.01. *p-value < 0.05 Source See Table 1. Estimated change in trust (0–1 scale) associated with a minimum to maximum shift in the independent variable. The LAPOP regression included an additional variable: perceptions of the courts’ fairness; it was significant, (Trust shift: 0.29, p-value: 0.000). F tests for all models: p-value < 0.000. The EBRD regression included a variable for whether a country was a Soviet successor state; it was not significant

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The perception of corruption in political institutions has the strongest and most consistent effect. In Africa, people who see institutions as very corrupt are less trusting than people who see institutions as having integrity; the effect is large, lowering trust by 43 percentage points. The perception of corruption lowers trust by 29 percentage points in formerly Communist countries and by 11% in Latin America. The effect of perceptions is underscored by the fact that the actual experience of paying a bribe has no significant effect on trust in formerly Communist countries and comparatively limited effect among Afrobarometer and Latin American respondents. The dynamics of corruption also has a substantial impact. If people see corruption increasing, this boosts distrust. Among Africans, those who see corruption as increasing a lot are 16% less likely to trust their political institutions than those who see corruption as decreasing a lot. In EBRD countries, those who see a big increase in corruption are 23 percentage points less likely to trust government. By contrast, regarding corruption as an important problem had no significant effect on trust among Afrobarometer and LAPOP respondents. In formerly Communist countries, where 36% see corruption as one of the biggest problems, it lowers trust by only two percentage points. This suggests that where corruption is relatively widespread people no longer see it as a problem that must be solved but accept it as a chronic condition that they must put up with. However, if a regime is not even able to prevent corruption growing, a loss of trust will result. Whereas resources have the most influence on whether people vote, they have virtually no impact on trust in government in Latin America and in formerly Communist countries. In both continents, neither age nor education, the two major influences on voting, has a statistically significant influence on trust. The lack of any effect of education suggests that, in countries where corruption is high, efforts to inculcate a positive view of government in school has less effect than what people learn in the streets. Having contact with more public services likewise has no significant effect on trust. Governors may hope to gain electoral advantage by providing more people social benefits, but they do not gain more trust if their institutions are perceived as corrupt. The one resource significant in post-Communist countries, having a higher income, boosts trust in political institutions by eight percentage points. In Latin America having social capital has a significant association with trust, but the size of the boost is slight, two percentage points.

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In Africa, by contrast, where differences in resources are particularly great, all five indicators have a significant effect on trust. Education reduces trust in political institutions by 11 percentage points. This implies that more educated Africans have tended to accept universalistic standards of good governance, standards by which their governors fall short. The negative effect of income on trust may be due to better-off people being more anxious to protect the advantages they have against bad governance that may threaten their wealth and well-being. Older Africans are five percentage points more likely to trust their political institutions than younger people. This implies that older Africans are more likely to have a traditional faith in whoever holds political power rather than question powerholders as younger and more educated Africans may do. Africans who contact more services are six p ercentage points more likely to trust their political institutions. This positive response may reflect the relative recency of widespread social service provision in Africa. In the abstract, free elections ought to encourage political trust because they enable citizens to hold their governors accountable and encourage governors to deliver what their voters want. Among Latin Americans and Africans, free and fair elections do not have any significant direct effect on political trust. In other words, fair procedures in choosing governors do not begin to offset the negative effect on trust resulting from corrupt practices by those who win control of political institutions. The views of citizens in formerly Communist countries are significantly affected by free elections, but the effect is negative: a reduction in trust of 16 percentage points. This may be due to the tendency of politicians as a class being influenced by a legacy of manipulative skills that politicians used in Communist times to gain and hold on to power. Breaking informal standards in Western Europe. Although corruption in the form of bribery is low in Western Europe by comparison with developing countries (Fig. 3 in Chapter 4), there is much less difference between continents in the perception of corruption and in distrust of political institutions. Among West Europeans interviewed in the Politicians Behaving Badly (PBB) survey reported in Chapter 6, a total of 15% of Britons and 23% of French named corruption as one of the country’s three most important problems. In Spain, where leading government ministers have been convicted for taking large bribes, 66% see corruption as a big problem. This level of concern is similar to that in developing countries. Moreover, distrust in political parties is as low

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or lower in Western Europe than in Africa, Latin America or Eastern Europe and post-Soviet countries. On the PBB scale in which 10 represents complete trust and 0 no trust, the mean score is closer to the distrust end of the scale: It is 4.2 in Britain, 3.7 in France and 3.0 in Spain. The combination of low corruption by legal standards and a high level of distrust suggest that actions by politicians that break informal standards can have a substantial negative impact on trust. For clarity in presentation, we present a regression analysis for the three-nation pooled data set, and to provide a fine-grained test for cross-national similarities in the causes of distrust separate regression analyses for Britain, France and Spain (Table 3). Given sample sizes of one thousand, we use p-value of less than 0.05 for statistical significance in the three national analyses and p-value of less than 0.01 for statistical significance in the larger pooled database. We calculate shifts in predicted probabilities for the effect on trust of standardized independent variables (for full details, see Rose and Wessels 2018). Breaking informal standards of how politicians should behave has a strong impact on political trust. In each of the three regression analyses, the three indicators of the informal violation of standards increase distrust in political parties. Altogether, our parsimonious model accounts for more than 25% of high levels of distrust in political parties and 27.9% in the pooled three-country analysis. Informal corruption has just as much influence on trust in Western European countries as conventional measures of corruption used to test the effect of corruption on trust in our three-continent analysis (cf. Tables 2 and 3). Notwithstanding many differences between Britain, France and Spain, all three ways of breaking informal standards consistently reduce trust by similar amounts in all three countries. The behaviour that generates the most distrust in political parties is central to the theory of representative government: elected representatives misleading voters by failing to keep promises that they make when seeking votes. In the pooled data analysis there is a fall of 2.6 points on the 11-point trust scale among people who see politicians saying one thing to win votes and doing the opposite once in office. The effect is biggest in Spain; dishonesty in political promises lowers trust by 3.6 points. The effect of politicians being seen as taking money for favours is second highest in impact; it lowers trust by 1.5 points in the pooled data analysis and by just over two points in Britain. If citizens think most of their politicians overindulge in their private lives, this has a significant effect on trust too, but it is substantially less than that of misleading voters and taking money for favours.

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Table 3 Breaking informal standards in Western Europe Trust in Parties (Maximum effect on 0–10 scale)

Types of corruption Mislead voters Takes money Over-indulgence Seriousness of violation Strict punishment Corruption important problem Partisanship Supports governing party Supports official opposition Resources Higher education Low education Gender female OLS adjusted R2(%)

Britain

France

Spain

All

−2.149** −2.065** −0.632

−2.179** −1.035** −0.797**

−3.635** −1.48** −0.988**

−2.622** −1.479** −0.677**

−0.653* −0.430

0.071 −0.099

−0.184 −0.107

−0.377* −0.317**

1.570** 0.796**

1.721** 0.914**

1.083** 0.692**

1.533** 0.826**

0.254 0.198 0.184 27.4

0.129 0.360* −0.414** 26.2

−0.017 −0.041 0.208 25.3

0.182 0.156 0.001 27.9

*Significant p-value < 0.05. **Significant p < 0.01 Source Politicians Behaving Badly survey organised by the Centre for the Study of Public Policy and the Wissenschaftszentrum Berlin. Nationwide sample surveys in which Efficience 3 interviewed 1004 people in Britain, 1003 in France and 1000 in Spain between 11 December 2015 and 22 January 2016. Note Regression coefficients show the maximum effect on the 11-point scale for trust of an independent variable moving from its lowest to its highest value. F test for each model p-value 0.000. All independent variables have been recoded to a range of 0–1

The seriousness of the standard broken is of limited importance. West Europeans who see corruption as important are not significantly more likely to distrust politicians in any of the three countries, and the effect in the pooled data set is the least of any significant influence. People who think politicians who break informal standards do not need to lose office or go to jail are just as likely to distrust political parties in France and Spain as those who endorse strict punishments. The effect in the pooled data set is the second smallest among significant influences (Table 3). Whether people support a party that is currently in government or a party that is currently in opposition but has alternated in and out of government has a significant but secondary influence on political trust. Supporting the party currently in government increases trust in parties generally. At the time of the survey, the parties in government differed in their orientation to the left or right: the Conservatives in Britain, the

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Socialists in France and the Popular Party in Spain. However, the impact of partisan support is far less than the impact of the violation of informal standards (Table 3). Supporting a party that offers to form an alternative government reduces trust in the party system compared to supporting the party in government, but the effect is limited (Table 3). An important corollary is that non-voters and those who vote for protest parties are specially high in distrusting the party system. Collectively, the outsider winning parties are winning as many votes as are established parties in France and Spain. As is the case in the analysis of political trust in developing countries, demographic resources have little or no influence on trust in parties. Implications. The judgment of the American political scientist V. O. Key (1966) about his fellow citizens—ordinary people are not fools— appears applicable across continents. In the very different contexts of Africa, Latin America, and Eastern Europe and post-Soviet Eurasia, people make logical judgments. If they see their political system as corrupt and getting worse, they are likely to distrust their political institutions. If they perceive their institutions of governance as high in integrity and successfully keeping corruption down, they will be trusting (van der Meer and Dekker 2011). Analysing the consequences of corruption globally and in a West European context reaffirms how misleading it is to confine the analysis of the impact of corruption to inferences drawn from global indexes of national corruption. Doing so implies that all forms of corruption are absent in countries that the Corruption Perceptions Index rates as virtually free of capital-intensive bribery and the Global Corruption Barometer shows have very little retail-level bribery too. Since these countries tend to be democracies and to have a high standard of living, this misleading focus also encourages claims that if a country has a political system in which parties can compete in free and fair elections and a high level of Gross Domestic Product then it should be free of corruption in all its forms. The election of Donald Trump as the president of the United States has shown that this is not the case. It is much more accurate to say that corruption takes different forms in different types of countries. In countries with a high level of Gross Domestic Product, corruption can take the form of breaking informal standards about how public officeholders ought to behave. This can be done by behaving in private in ways that would be shameful if publicly revealed, enjoying a lavish lifestyle by receiving favours in kind or cash,

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and by winning free and fair elections by saying one thing to get votes and once in office making a U-turn that disavows a commitment. While there are similarities between this behaviour and that of autocratic leaders of undemocratic developing countries, the differences are critical. The money spent on politics in Western democracies has usually been acquired legally, whereas in many poorer countries the money can come from the public purse, foreign aid or bribes for capital-intensive contracts. In Western countries, the result of a lavishly funded competitive election is that one big spender loses, whereas in undemocratic countries those in power are immune from defeat. Paradoxically, free competitive elections may encourage informal corruption. In pursuit of votes, politicians have the incentive to promise the voters what they want to hear, and money buys high-tech research to find out what to market in the best way to convince voters. The weakening of party ideologies gives party leaders more freedom of manoeuvre in campaigning. There is an incentive to nominate candidates with little or no experience of national office so that they can appeal for votes on the grounds that their lack of experience makes them more trustworthy than politicians who have dealt with the constraints of office. However, this asset turns negative when an inexperienced politician wins office and finds that getting rid of corruption is easier said than done. If the dissociation of campaigning from governing is repeatedly demonstrated by whichever party wins office, this can create a low-level equilibrium trap of distrust in governance. The contrast between the strong impact of corruption on trust and its slight effect on voting is bad news for anti-corruption advocacy groups that would like to mobilize people who see government as corrupt to use their right to vote to register a protest against bad governance. However, this is not the only way in which political activists and advocacy groups may affect governance—provided that there are the means to make governance transparent.

References Blais, Andre. 2010. To Vote or Not to Vote: The Merits and Limits of Rational Choice Theory. Pittsburgh: University of Pittsburgh Press. Charron, Nicholas, and Andreas Bågenholm. 2016. Ideology, Party Systems and Corruption Voting in European Democracies. Electoral Studies 41: 35–49. Dahl, Robert A. 1989. Democracy and Its Critics. New Haven: Yale University Press.

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Dahlberg, Stefan, and Maria Solevid. 2016. Does Corruption Suppress Voter Turnout? Journal of Elections, Public Opinion and Parties 26 (4): 489–510. Easton, David. 1965. A Systems Analysis of Political Life. New York: Wiley. Key, V.O. 1966. The Responsible Electorate. Cambridge, MA: Harvard University Press. Kumlin, Staffan. 2004. The Personal and the Political: How National Welfare State Experiences Affect Political Trust and Ideology. Basingstoke: Palgrave Macmillan. Mishler, William, and Richard Rose. 1997. Trust, Distrust and Skepticism: Popular Evaluations of Civil and Political Institutions in Post-Communist Societies. Journal of Politics 39 (2): 418–451. Olson, Mancur. 2000. Power and Prosperity. New York: Basic Books. Plutzer, Eric. 2018. Demographics and the Social Bases of Voter Turnout. In The Routledge Handbook of Elections, Voting Behaviour and Public Opinion, ed. Justin Fisher et al., 69–82. Abingdon: Routledge. Putnam, Robert D. 2000. Bowling Alone: The Collapse and Revival of American Community. New York: Simon and Schuster. Rose, Richard. 1989. Ordinary People in Public Policy. London: Sage. Rose, Richard, and William Mishler. 2011. Political Trust and Distrust in Postauthoritarian Contexts. In Political Trust: Why Context Matters, ed. Marc Hooghe and Sonja Zmerli. Colchester: ECPR Press. Rose, Richard, and Bernhard Wessels. 2018. Money, Sex and Broken Promises: Politicians’ Bad Behaviour Encourages Distrust. Parliamentary Affairs, in press. Rose-Ackerman, S., and T. Soreide (eds.). 2011. International Handbook on the Economics of Corruption, vol. 2. Cheltenham: Edward Elgar. Uslaner, Eric. 2018. The Oxford Handbook of Social and Political Trust. Oxford: Oxford University Press. van der Meer, Tom, and Paul, Dekker. 2011. Trustworthy States, Trustworthy Citizens? In Political Trust: Why Context Matters, ed. S. Zmerli and M. Hooghe, 95–116. Colchester: ECPR Press. Zmerli, Sonja, and Tom van der Meer (eds.). 2017. Handbook of Political Trust. Cheltenham: Edward Elgar.

CHAPTER 8

Making Government Transparent

Transparency is intended to open up the process of governance to public scrutiny and accountability. It replaces the historical practice of political elites conducting public affairs in private. Doing so restricts information about what happens within the black box of government to a limited number of insiders. In such circumstances, outsiders lack the information needed to intervene effectively in what government does. Ordinary people, receiving public services at the grass roots, ‘know from their own experience how they are treated by public officials but they do not know how public officials make decisions affecting them when decisions are taken behind closed doors’ (Worthy and McLean 2015: 347). Open government gives ordinary citizens and civil society groups an opportunity to scrutinize how those in power are using their authority and to hold them accountable if they appear to be abusing it. By opening up the process of governance it reduces the inequality of political information that governors may use to the disadvantage of the governed. Transparency International describes opening up governance as the surest way of guarding against corruption and increasing trust in political institutions. Transparency is expected to achieve the complementary goals of exposing corrupt practices and, by the threat of exposure, preventing bad behaviour in the first place. Awareness of public scrutiny should encourage politicians to behave in ways consistent with public expectations of how they ought to behave and administer policies in accord with formal bureaucratic procedures rather than abusing their © The Author(s) 2019 R. Rose and C. Peiffer, Bad Governance and Corruption, Political Corruption and Governance, https://doi.org/10.1007/978-3-319-92846-3_8

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powers for personal gain. Insofar as opening up government shows that public officials are conducting their activities fairly, it should encourage citizens to trust their political institutions. However, if transparency confirms popular perceptions of widespread corruption, it can increase distrust. Like any concept that has positive associations, the meaning of transparency can be stretched to cover almost any feature of government. Because it is an abstraction, transparency or its absence has become an integral part of many syndromes of governance, good or bad (Johnston 2005). The definition by Bauhr and Grimes (2012: 5) is broad and general. Transparency is a condition in which both political outsiders and insiders can access information about public policy, evaluate it in terms of conformity to public standards and by the outcomes it produces, and publicize their judgments of how their governors act. The weakening of closed authoritarian regimes has led to a big increase in Freedom of Information (FOI) acts, a necessary requirement for making governance transparent. In 1990 there were only 15 countries with such laws. The number more than doubled in the following decade, and doubled again by 2010. A total of 93 countries around the globe now have FOI acts (Mungiu-Pippidi 2015: 103ff). The demand to make the process of governance more transparent reflects a multiplicity of political pressures. The introduction of democratic institutions such as competing parties and free media encourages civic groups to claim the right to know how they are governed and hold their governors accountable. The exposure of individual policymakers breaking standards in well governed as well as badly governed countries has created pressures for more transparency. Public agencies giving aid to poor countries where capital-intensive corruption is widespread are applying pressure on recipients to be more transparent about where the money goes (Darch and Underwood 2010). The growth of social services has made citizens stakeholders in the delivery of public services, with a claim to know how services are provided. In countries where major media are hesitant to expose government shortcomings, social media create the possibility that news of bad behaviour made available by open governance can rapidly go viral. This puts pressure on prosecutors to open up to scrutiny by public opinion many files that had been closed and, if there is evidence of unlawful behaviour, to take legal action too.

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1 Conditions for Transparency The impact of transparency on governance depends on laws and institutions that determine what types of information become publicly accessible and what are not. It also depends on the extent to which procedures make it easy or difficult for those outside government to obtain information about what goes on within government. Holding politicians publicly accountable for what would otherwise be kept private requires independent institutions to prosecute those in power in courts of law and in the court of public opinion. The numerous conditions that must be met to institutionalize public scrutiny of governance makes the effectiveness of transparency problematic (see Norad 2011; DfID 2015). Political choices in legislating transparency. To institutionalize transparency, the first step is the adoption of a FOI act that sets out the conditions influencing the extent to which governance is open or closed. Since the intent of adopting such an act is to alter the way in which established officeholders make decisions and distribute the benefits of office, there is inevitably political resistance to proposals by reformers to adopt what international agencies promote as best practice laws. The drafting of an act involves setting out legal conditions about what information is to be made more available and the procedures for gaining access. The Index of Public Integrity at the Hertie School in Berlin identifies 48 conditions that legislation on transparency ought to cover. These range from deciding principles of coverage in the abstract to detailing specific rights of access and how those refused information may appeal an official decision (cf. www.index-integrity.org; Fiorini 2007; Vargas and Schlutz 2016). To detect both capital-intensive and grass-roots bribery a FOI law ought to cover all public institutions making policy and delivering public services. These include central government leaders and ministries; parliament; the courts and their equivalent institutions at regional and local levels. Many big decisions affecting capital expenditure are in the hands of state-owned industries managed outside this framework; they manage everything from energy resources to public transport. Health services can be administered by functional institutions spending money outside the framework of government ministries, including charitable and profit-making hospitals and clinics. Since capital-intensive corruption often involves private-sector enterprises paying bribes, their actions may be subject to FOI regulations too.

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Access to documents differs between institutions making and those delivering policies. Because the adoption of a new law confers costs and benefits on those affected, people with the power to make decisions are subject to public and private lobbying by those who expect to be positively or negatively affected. Lobbying laws can set conditions about the relationship between the authors of a law and those whose interests it will effect. Enforcing these laws requires information about who talks to whom and what is exchanged. Decisions about big bucks capital-intensive projects require laws setting out procedures that must be met by suppliers bidding for a contract and by public officials deciding which enterprise gets the contract. The delivery of public services at the grass roots is covered by bureaucratic legislation setting conditions for the use of a service. In many political systems the grounds on which officials make decisions about what to do are kept confidential. If individuals have a problem in obtaining a service, FOI legislation can give individuals the right to access information about how a decision they want to challenge was made. The statutory enumeration of activities that a FOI act opens to public scrutiny is critical, because everything that is not listed remains closed. The protection of national security is the reason most often given for keeping information private. For example, lives of police investigators or informers to counterterrorism agencies could be put at risk if their work was public knowledge. The definition of national security can be extended very widely to include how private enterprises get capital-intensive contracts from corrupt governments. An investigation of the methods used by British firms selling tens of billions of dollars of military equipment to Saudi Arabia was silenced by the British Labour government on the grounds that national security came before FOI. BAE Systems made a plea bargain with an American court, paying $400 million to avoid having to name in open court high-ranking Saudi Arabian politicians who had received big bribes in exchange for big contracts. The principle of opening up public records in the public interest can be challenged by another principle: the right of individuals to privacy. Privacy may be invoked to keep from public scrutiny details of an individual’s biological parents, previous convictions for crime or treatment for mental instability. Countries differ in the extent to which tax returns of public officials and citizens are open to public scrutiny. In Sweden everyone’s income tax return is open, while in Britain and the United States this is not the case. Politicians campaigning for office may choose to publish their tax returns or refuse to do so when challenged, as has

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been the case with President Donald Trump. Business firms must publish information about their income and expenditure but these documents do not give details of every payment made. Firms want to use the cloak of commercial confidentiality to cover up much information about how they secure capital-intensive contracts or encourage doctors to prescribe their proprietary pharmaceuticals. FOI acts specify who is eligible to receive information from public records and how access may be obtained. National laws differ in the extent to which individuals are allowed to access comments public officials make about them in internal government documents. Estonia is at one extreme: Citizens can access official files about themselves electronically. In most countries, requests for information must be made in writing and often involve the payment of a fee, and there can be restrictions on the number of requests that an individual may make. There can be a legal requirement for the government to respond to a request within a limited number of days too. An individual who feels that a decision affecting him or her has been improperly made can seek after-the-fact information from official institutions charged with preventing bad governance in all its forms. More than 90 countries from Albania to Zambia have an ombudsman office, an institution named after its origins in Scandinavia more than a century ago (www.theioi.org). An ombudsman’s office can investigate a complaint by accessing and evaluating documents in government files that would otherwise be closed. The conditions controlling whether complaints can be investigated and files opened up are limited by law. The slow tempo of investigations means that any after-the-fact disclosure of an unjustified decision comes later and may even be too late to help a victim of medical malpractice. Practical obstacles. FOI does not mean that it is free of cost for the government to provide. It takes time for public officials to locate documents relevant to the subject of a request, especially when more than one government department or agency is involved. In an era of big data, the more information that is open to public scrutiny, the more time it takes to sift through tens of thousands of records. Computer algorithms searching through haystacks of data are prone to retrieving hundreds or thousands of documents before finding a few that can point to the existence of formal or informal corruption. Once retrieved, documents are checked internally to ensure that they are relevant to the request and to remove information to protect individual privacy and national security.

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Since time is money, to prevent frivolous or vexatious requests, a government may impose a charge. Legal fees vary between countries as does the amount of work needed to answer a request. The British government calculates the cost of each valid request but does not charge for the cost of retrieving a document or series of documents if doing so does not cost the government more than £600. The existence of public records cannot be assumed. In countries that have been late to replace traditional practices involving personal contact and oral discussion and decision-making, what is done may not be recorded in a written document. Globally, many states are younger than their older citizens. This is true not only for ex-colonies but also in Eastern Europe, where the collapse of Communism and the break-up of the Soviet Union created more than a dozen new states and incentives for outgoing officials to burn files, as Vladimir Putin did at that time. Military defeat and internal violence has put public records at risk of destruction from bombs, fires or other forms of disorder. This has affected early bureaucracies such as Germany and developing countries such as Nigeria. Even a state that began bureaucratization early with little disruption to its territory has a legacy problem of linking older and newer records. The challenges go well beyond the shift from recording information in pen and ink to doing so on a computer. There is a huge backlog of documents that are not archived for electronic retrieval because they were created before contemporary practices were adopted for retrieving documents by some form of electronic tag. For example, the names of political parties were not printed on British ballots until 1969, resulting in independent experts being responsible for calculating the national election result. In addition, responsibilities for dealing with a particular policy are subject to being reshuffled between offices in one of the recurrent reorganizations of government functions and boundaries that occur due to political pressures or in accord with changing expert views of how public policies should be managed. The territorial and functional fragmentation of institutional responsibilities is increased when both central and local authorities or a mixture of elected and non-elected public agencies are involved. In the nominally unitary United Kingdom, census and demographic data are separately recorded in four national registries. Within England major data about education is in the hands of schools, separately organized examination boards and local authorities. Over the decades all three have been

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subject to substantial reorganizations. Changes are greater still among hospitals and doctors’ offices providing services to people under a nominally national health service. The libertarian opposition of Britons to the assignment of a national identity card to every person, as is normal in continental Europe, is a major obstacle to linking information about an individual held in different public institutions and places. In a federal system such as the United States, the fragmentation of policy responsibilities and political power is much greater between Cabinet-level departments in Washington and the grass roots, where formal requirements to keep records may be ignored. Even if police patrolling the streets are required to wear a video camera, they may ‘forget’ to wear a camera or install dud batteries. Developments in electronic technology have altered the way in which policies are decided and administered, and the records that have been left behind. The traditional bureaucratic practice of confining communication to registered written documents easy to trace was eroded by the spread of telephone communications that left no written trace. The development of email has tilted the balance back. Moreover, the informal nature of email results in many officials writing as they would talk. This disregard of what third parties would make of their remarks has resulted in evidence of informal and formal corruption when email exchanges are opened up to public scrutiny by disclosure legislation.

2 Stakeholders in Open Data For transparency to have an impact on corruption, there must be a demand for open data as well as a supply. The demand comes from officials, civil society institutions and individuals with a stake in reducing the violation of formal and informal standards. More than this, institutions must have the resources of time, money and skilled people to sift through large masses of materials to find evidence in the gigabytes of information that public institutions generate each day. If efforts invested in the scrutiny of open data are to have an impact, those taking the lead in evaluating behaviour must also have the means of pursuing officials whose questionable actions are exposed by transparency. A study of requests filed under the UK FOI act found that requests came from four different categories of users. More than half the demands for central government information and more than one-third for local government information came from people who appeared to be members

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of the general public, acting in their own name without any visible institutional resources. Most individual queries are about retail services that directly affect a household and are delivered locally. Researchers, who are second in importance for central government, tend to be concerned with broader issues of governance that are more likely to have political importance. Whether attached to a university or a think tank, they will know what standards public officials ought to meet. National journalists seek information less frequently from central government because they are interested only in information about activities that they hope could be headline news. For local reporters, local information is more likely to be newsworthy, whatever its content, simply because it is local. Businesses make enquiries only when they are dissatisfied with what they learn from their direct and interest group contacts (Worthy and Hazell 2016). Official institutions. To hold politicians accountable, anti-corruption institutions within government require independence of the chief holders of power. This is a necessary condition in order to take effective legal action on information that is made public by FOI demands. Where anti-corruption institutions are independent, corruption is likely to be low. However, where corruption is high, official institutions are less likely to have the legal powers, staff and financial resources needed to monitor corruption effectively. In the worst case, they may be complicit in corruption. For a legal action to be taken against an official who appears to be violating a law, there must be an office of public prosecution that is satisfied that there is sufficient evidence to justify a formal indictment. Law enforcement agencies are subject to procedures laid down in statute books. Actions made public by open data must appear to violate legal criteria for corruption. Many activities that prompt accusations of corruption do not do so. For example, a law on campaign finance can require that all donations to parties and candidates be made public without any limitation being placed on the amount of a contribution. Thus, reports of contributions to elected officeholders by large enterprises and multi-millionaires can prompt headline charges of policies being for sale, even though the law imposes no legal limit on how much money can be contributed. Evidence that journalists obtain through wiretapping is usually not admissible in court. An email in which one person reports hearing stories that an official has accepted money is hearsay, inadmissible in a court of law in most countries. In cases of capital-intensive corruption involving a

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transaction between a sophisticated payer of a bribe and equally sophisticated recipients, anything put on paper may be phrased vaguely and a bribe may take the form of a payment in response to invoices for services that are themselves legal. In a court trial, conviction can be avoided if lawyers are able to use legal technicalities to get a case dismissed without having to disprove evidence of corruption. The standard of evidence required to achieve a guilty verdict in a court of law is much higher and narrower than that required to raise the suspicion of corruption in a speech in parliament or a newspaper headline. When laws are written to go easy on corruption by inhibiting enforcement, anti-corruption campaigners may turn to the court of public opinion, where public officials must defend themselves for actions that they had expected to be kept private. Government auditors verify after the fact whether public money has been spent in keeping with bureaucratic procedures. In a political system in which bureaucratic standards are effective, the chief concern of the auditor is that public spending has produced value for money. This may be judged solely by price—the cheapest goods or services have been bought—or on grounds of efficiency and effectiveness—the best services have been provided consistent with the funds available. Comparing costs from year to year within an agency and between different suppliers are standard methods for auditing. For recurrent purchases of standard goods and services such as office supplies, comparisons can be made between what public agencies and private sector firms spend. When auditing local or regional government, spending for the same service can be compared across different local authorities to identify outliers requiring more detailed investigation (see Golden and Picci 2006). When central government is the sole contractor for capital-intensive goods, the only comparative evidence is problematic, since it must be made across national boundaries with different cost structures and currencies. When goods required are not produced nationally, such as military aircraft, this limits the capacity of national auditors to investigative suspicions of foreign companies making payments to opaque foreign bank accounts in return for big bucks contracts. The good government theory of democracy is that parliament is the representative of the people holding government to account for the delivery of public services. Within most parliaments there are formal and informal groups of MPs who do not hold government office and are prepared to raise questions about questionable behaviour of governors

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revealed in open data. Parliamentary committees can investigate bad governance to see whether it is due to incompetence, sloppiness, disdain for procedures, some form of corruption or a combination of these faults. However, because MPs sit as representatives of competing parties, when judgments come to be made, partisanship matters. Politicians in opposition parties have a structural incentive to make the most of anything that could damage the reputation of the government. The underlying evidence need not be substantial for an opposition party to insinuate that the behaviour of governors has not come up to public standards or even violates laws against corruption. This tactic was used by both Donald Trump and Hillary Clinton in the 2016 American presidential campaign. Trump demanded that Hillary Clinton release thousands of emails and Clinton that Trump publish his detailed tax returns. The governing party has a collective interest in minimizing the extent to which open governance makes all their activities public. If information is publicized about questionable behaviour, such as a large financial donation to their party, its members are likely to stand together, initially at least, to reject allegations made against a colleague. As and when evidence threatens a negative verdict in the court of public opinion or a law court, the governing party can cut its loss by dropping a politician whose behaviour has become a liability. Intra-party rivalries can lead politicians to make corruption charges against threats to their power. This practice is frequently invoked in one-party states such as the People’s Republic of China. Capital-intensive contracts for public expenditure give private enterprises a stake in policymaking that may favour opaque procedures if they think that they can win contracts by hook or crook, a belief that corrupt public officials will encourage. To guard against this, good governance laws and regulations prescribe detailed procedures that firms are expected to follow when bidding for a contract and that officials should follow when making a decision. Because of the technical nature of most capital-intensive contracts, the procedures are often difficult to understand and evaluate. Prospective bidders can engage lobbyists to offer arguments and incentives to officials who prepare the bids to specify conditions that may favour their client’s bid. In countries where public officials are perceived as open to taking money on the side for themselves or for their political party, money can change hands to influence the decision. If the regulations are written so that little information need be given to justify a decision, this creates suspicion. In countries where

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bidders are competitive, losers have an interest in open access to information about the procurement practice. The winner has an interest in keeping the same information confidential. The globalization of politics and economics has created international agencies that annually disburse billions in aid to national governments. This gives them a direct interest in finding out how their funds are spent. To do so requires more transparency than is normal in the governance process of many recipient countries. The confederal nature of the European Union means that it delegates to member states the responsibility for managing EU grants. While the EU has a Court of Auditors, its scrutiny is limited and politics makes it difficult to impose fines or terminate grants to member states. The World Bank provides foreign aid to developing country governments that allocate money through institutions that operate in their national language and by informal standards that are difficult for foreign institutions to monitor. Moreover, countries suspected of misusing funds are members of the World Bank and some have seats or allies on the Bank’s governing board. By contrast, the International Monetary Fund normally provides funds subject to conditions for changes in policies by the recipient government, such as raising interest rates. These are changes that the IMF can monitor and, if its conditions are not met, it can threaten to withhold money that the recipient government needs to remain solvent. Civil society organizations. In the abstract, civil society organizations are neither part of the state nor single individuals. They are formal institutions that represent their members’ interest in a variety of activities involved in governance. These interests may be economic concerns of profit-making companies or trade union members; social rights affected by abortion laws or broad but vague values such as the public interest. Whereas public officeholders prefer to hold information close to themselves, civil society organizations want to open up access to information relevant to their particular interests. Many documents opened up to public scrutiny are entirely consistent with the law, even if disputed on political grounds. If information gives grounds for suspicion of wrongdoing or shameful behaviour, civil society institutions can challenge what governors are doing. Although civil society institutions lack the standing to bring charges in a court of law, they can arraign public officials in the court of public opinion. To distinguish their complaint from the everyday political conflicts of interest between economic groups, the charge will be that actions by public officials are shameful, wrong or not in the public interest.

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Transparency International (TI) is the best known civil society organization dedicated to fighting corruption on a global basis (www. transparency.org). It was founded in 1993 as a German not-for-profit organization by people with substantial experience of working in developing countries where corruption in governance was a major obstacle to social and economic development as well as being wrong by universalistic standards of good governance. At its headquarters in Berlin, it creates research tools for evaluating national corruption comparatively; it lobbies intergovernmental organizations to adopt measures to reduce corruption nationally and across national borders; and it disseminates information to national chapters. TI supports national anti-corruption efforts by more than 100 affiliated national chapters. Each national chapter tends to have a limited staff and funds because its mission precludes dependence on government funds. Nonetheless, because they are national they can provide knowledge and contacts that put pressure on elites to curb abuses of public office for private gain. The extent to which civil society organizations are free to act independently of the state varies greatly between countries where laws guaranteeing freedom of association and speech are respected and those where they are not. Within free societies these organizations differ in the extent to which their interests and activities are funded by the government since they share common purposes, for example, providing education and health services. Insofar as these organizations become dependent on public funding they may become more discreet in publicizing government faults that they learn about. In a partly free authoritarian regime, civil society organizations are allowed freedom of expression within limits designed to protect the interests of those in power. For example, partly free post-Communist regimes may tolerate or even support competing political parties as long as they divide opposition to the party of power. Thus, in the 2018 Russian presidential election, there were seven opposition parties on the ballot to divide the votes of the 30% who rejected Vladimir Putin. The Russian Prosecutor’s Office has classified the Open Society Foundations, funded by George Soros, as an ‘undesirable’ organization because it finances activities consistent with its name: the promotion of an open society with institutions independent of government free to criticize it. Large corporations claim that they operate in the public interest, employing large numbers of people and paying sales taxes, social security taxes and profits taxes. Enterprises normally prefer to keep out of politics

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in the electoral sense, but when issues arise that affect their interests negatively, they want to have their voice heard and present their views to politicians and the public as is done by not-for-profit civil society institutions. Moreover, they also claim the right to give money to candidates and parties. The American Supreme Court has ruled that big businesses have the same rights to spend money to advance their views as do individuals. Even when laws place some restrictions on political spending, American multimillionaires and billionaires can usually find ways to spend large sums in efforts to influence public policy in their private interest. The media have both the incentive and the resources to hold officials to account in the court of public opinion. Journalists have a professional interest in open data that meets their standards of newsworthiness, including indications of corruption. Much information that transparency makes accessible to journalists is about humdrum processes of governance that are not newsworthy and much that is newsworthy has little relation to governance, for example, stories about the overindulgences of television personalities. Investigative journalists with the patience and resources to sift through massive files can produce headline stories about ‘who spoke to whom’ about decisions concerning capital-intensive contracts. In the absence of documentary evidence of what was done, their stories can raise suspicions of corruption but cannot stand up as evidence in a court of law. Studies of the extent of press regulation have found that corruption tends to be lower in countries where the media has greater freedom from regulation (DfID 2015: 72). Government can make it difficult for the media to publicize shameful or corrupt activities by maintaining strict libel laws and making it a severely punishable offence to leak official documents to the media. A government can abuse its legal powers to intimidate the owners of critical media, shut them down or to take the offending media into state ownership. In Russia, President Vladimir Putin has used all three methods. Historically, ‘Dog don’t eat dog’ conventions have inhibited the publication of unfavourable stories about political associates of publishers seeking political status and influence. Changes in media competition have encouraged commercially oriented publishers to seek readers by exposing cases of political corruption (Blankenburg 2002). Audiences can also be sought by narrowcasting, that is, slanting political coverage with stories that re-enforce the political values and perceptions of their audience. In countries where corruption is high, ‘brown envelope journalism’ offers material benefits to media that suppress stories of corruption in return for bribes (Eke 2014).

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Free of many constraints on conventional civil society media, social media have created a multiplicity of fresh channels to report allegations of corruption and bad behaviour by policymakers. In countries where there are FOI laws, independent social media can initially circulate stories that established media regard as too hot to handle or lacking adequate evidence. If a posting on social media arouses interest, it will then be picked up by conventional media. In political systems that seek to control freedom of speech, even if one social media site responsible for a disclosure is shut down, by the time this happens its evidence is likely to have gone viral. Electronic media in foreign countries can continue to disseminate charges and state censorship can stimulate public curiosity to view stories because the government wants to keep them private. However, social media lack the resources often needed to uncover capital-intensive corruption. Modern technology can enable a single public employee, if he or she chooses, to become a whistleblower making evidence of bad governance public (Lipman 2012). If the evidence is on paper it can be photocopied, massive electronic files can be downloaded onto disks, and face-to-face conversations can be secretly recorded. Whistle-blowers are usually individuals working for a government agency or a private enterprise involved in awarding a capital-intensive contract, because the complexity of such contracts requires committing many activities to documents circulated to dozens or even hundreds of employees. Any one employee may then leak their copy of an embarrassing document in hopes of stimulating a protest against what appears to be wrongdoing. In an era of globalization, networking across national and continental boundaries can open up private files of public interest. A spectacular example is the disclosure of the papers of a law firm in Panama that advised multinational clients about avoiding taxation. The leaked files contained more than 11.5 million records covering 3,000 individuals or organizations and some 200,000 shell companies set up by the law firm to minimize taxes by whatever means possible. The documents were originally leaked electronically to a German journalist. They were then scrutinized in detail by a network of 107 different media organizations in 80 countries with the assistance of the International Consortium of Investigative Journalists. The documents named 2 national leaders and many public figures in countries ranging from Iceland to African states with diamond mines. It was sufficiently shameful to lead to the resignation of Iceland’s prime minister. British Prime Minister David Cameron

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had to explain to the House of Commons that his father’s use of offshore trusts to reduce taxation was a perfectly legal action consistent with the obligation to look after the interests of the family’s private trust. Citizens at large. Differentiating retail bribery from capital-intensive corruption focuses on a problem of direct interest to ordinary people. The mass of citizens has little understanding or even awareness of the ins and outs of the public procurement process, whether it is conducted with or without bribery. Even though there is a significant public perception of business corruption, the great majority of individuals lack the resources and incentives to engage in protest. By contrast, billions of people are directly or indirectly affected by retail corruption and have first-hand knowledge of the payment of bribes in their community. Transparency International encourages its national chapters to organize grass-roots anti-corruption efforts. Its 2013 Global Corruption Barometer asked a battery of questions about the willingness of people to protest against corruption. The activities proposed ranged from signing a petition to paying more to buy products that were produced free of corruption. A total of 84% said they would support at least one anti-corruption activity and the median person was ready to endorse three activities. Majorities expressing a favourable attitude towards protest were high in every continent, and independent of the extent of corruption in a country. There is, however, a large disconnect between what people say they would do and what they actually do. Whereas 46% say they would be willing to join an anti-corruption organization, only a minuscule number do so (see Rose and Peiffer 2015: 55f). Collective action at the community level is often advocated as a means to give victims of bribery the confidence to think that exposing their personal experience will be supported by local groups whose protests cannot be ignored by local holders of power (Persson et al. 2013; Mungiu-Pippidi 2015: Chapter 4). The Partnership for Transparency Fund has piloted projects that have been effective in achieving this. The Partnership draws on the expertise and support of international anti-corruption professionals, many of whom are recently retired World Bank officials. However, each project is extremely time and labour-intensive and, because projects are community-oriented, they can directly address only a few places in a country where corruption is nationwide. This limits the prospect for institutionalizing community action by citizens. Moreover, there are weak or non-existent links between local protesters and national and international policymakers setting policies.

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As losers in a system of bad governance, people who pay bribes have an incentive to take actions to punish officials who have taken advantage of them. However, to report an incident of corruption requires what Germans call civil courage, that is, a willingness to risk getting into trouble by informing against a public official. Even in Europe, where people have many protections against intimidation, most people only give lip service to taking action. Among Eurobarometer respondents who said they had paid a bribe, only one in ten had reported this to a public authority. In EU member states that had been Communist-controlled for decades, respondents were even less likely to tell a public authority that an official had demanded a bribe. Europeans give a multiplicity of reasons for not wanting to report paying a bribe (Fig. 1). Three-fifths are resigned to accepting bribery as a persisting condition of their political system and think it is not worth the effort to do anything because no one is punished. A similar proportion shows sufficient awareness of legal procedures to realize that their personal experience of bribery would not necessarily be enough to secure the conviction of an official who denied soliciting a bribe. There is also a widespread fear of getting into trouble because of the lack of protection from retaliation against people who report bribery. The unwillingness of individuals to protest about being victimized by retail-level corruption creates a ‘vicious equilibrium’ (Vargas and Schlutz 2016: 448ff). The effect of increased transparency. In common with other reforms advanced by good governance advocates, the case for opening government to public inspection is promoted as having multiple benefits. These include greater accountability of governors to the governed; greater engagement of citizens in the process of governance and an increase in trust as a result of letting sunlight into activities that were formerly kept in the dark. Opponents of transparency cannot expect public support for protecting their interest in keeping activities secret. They oppose opening up their work by claiming an FOI law will impose onerous red tape and legal procedures; add to the cost of government and result in sloppy decisions being made through informal oral discussions rather than by formal and thorough confidential procedures. The impact of introducing transparency is greatest when the collapse of an opaque dictatorship leads to its successor discrediting the former regime by opening up records of leaders who enriched themselves.

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Black bars show any choice of items under the italicised caption 59%

Resignation e.g.

Pointless: no one punished

36%

Everyone knows

21%

It's not worth the effort

19% 58%

Legal e.g. Difficult to prove anything

48%

Don't know where to report

21% 57%

Fear e.g. No protection

31%

Get into trouble

22%

Not betray anyone

17%

Don't know, other

6% 0%

20%

40%

60%

80%

100%

Fig. 1 Why corruption not reported (Source Question B14 from European Barometer Special Survey 397, 2013. N: 26,789)

After the kleptocratic dictator Emmanuel Marcos was deposed in the Philippines in 1986, the new governors opened the shoe cupboards of the dictator’s wife, Imelda Marcos. This revealed 800 pairs of shoes that she accumulated as part of her extravagant lifestyle. In such a context, greater transparency is a consequence rather than a cause of regime change. An insidious effect occurs when a regime responds to pressures by introducing a FOI act that nominally meets international standards but in practice contains loopholes that allow the powers that be to keep out of sight activities that would be judged wrong in the court of public opinion or illegal in a court of law. The promotion of transparency rules tends to follow best practice in countries where good governance is already established. In such contexts, reformers press their cause by arguing that greater transparency would produce better governance. This was the rationale for adopting a

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FOI Act in the United Kingdom in 2003, where governance traditionally did not have a reputation for formal or informal corruption, but it also had a tradition of official secrecy (Hine and Peele 2016). The effect of a FOI Act depends upon who uses it and how. In Britain, tens of thousands of requests for information are annually filed with central government and upwards of 200,000 with local government offices. The chief users are individual members of the public. However, individual requests for information are usually not driven by a civic concern with promoting good governance but by a specific personal interest in finding out more about actions that directly affect themselves, for example, local government action on permission to build a house. The volume of requests looks big but that is due to the size of the British population; it is the equivalent of one person in one thousand making a request. Since bureaucratic procedures make it costly in time and money to answer even a seemingly minor request, the system would be threatened with collapse if usage increased greatly. As Worthy and Hazell (2016) conclude, ‘FOI only works if almost nobody uses it’. The instances in which FOI requests or unauthorized leaks by public officials cause a political furore are very much the exception. The effect of disclosures is also contingent. In the open American context, the information leaked by Deep Throat to Washington Post journalists led to the resignation of President Richard Nixon. By contrast, in Britain, the outcome was different of an inquiry into British involvement in the Iraq War. It was authorized by Tony Blair’s successor as prime minister, Gordon Brown with the power to uncover documents and cross-examine those involved. The Commission, led by a retired senior civil servant, Sir John Chilcot, rejected Brown’s proposal to hold hearings in private. It accumulated tens of millions of words of evidence. After two general elections had passed and the Iraq War was political history, its 2.6 million word report was full of damning criticisms of how Tony Blair and his political advisers took the United Kingdom to war by misrepresenting and ignoring evidence and were ill prepared for the consequences. Tony Blair offered no apology and declared that he had acted in good faith in doing what he believed necessary to protect the public interest of the world’s citizens. The next of kin of Britons killed in Iraq were offered a free copy of the 12-volume £767 official report.

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Opening up records of past policymaking makes it possible to identify who is to blame when things go wrong. Many British civil servants have welcomed the opening up to public inspection of official records of how politically controversial issues are handled. Doing so shows the cautions that they have voiced before bad decisions were made. A ‘Yes, Minister’ civil servant can tactfully ask a determined politician to state for the record the grounds for a decision, and a prudent politician may respond by modifying what he or she would not want to say in public. Opening records can show when politicians take the lead in making decisions that went wrong. British politicians remain ambivalent about FOI. After experiencing its effects as prime minister, Tony Blair took a different view of the principle of transparency than he had advocated in opposition and authorized in an Act of Parliament. He described information as a political weapon. ‘The truth is that the FOI act isn’t used, for the most part, by “the people”. It’s used by journalists. For political leaders, it’s like saying to someone who is hitting you over the head with a stick, “Hey, try this instead”, and handing them a mallet’ (Blair 2010). Because names make news, it is far easier for politicians and journalists to exploit evidence of individuals making decisions without careful thought and of actions taken by politicians that they did not expect to be opened up to public view by transparency laws. Even if their actions are perfectly legal, actions that break informal standards of behaviour and governance have a damaging effect on the careers of people caught in the spotlight provided by a FOI act. The object of exposing bad behaviour is prevention as well as punishment. Insofar as disclosures of individual misconduct have a demonstration effect on other officials inclined to operate by hook or by crook, the result will be a reduction in bad governance. However, demonstration effects tend to be limited in their scope and may be dismissed by officials confident that what happens to others can’t happen to themselves. The surest way for transparency laws to secure a long-term reduction in corruption is if the individual cases they help expose trigger political pressures that change the laws that allow bad governance to persist.

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References Bauhr, Monika, and Grimes, Marcia. 2012. What is Government Transparency? Quality of Government Institute Working Paper 2012:16. Gothenburg: Gothenburg University. Blair, Tony. 2010. Tony Blair: A Journey. London: Hutchinson. Blankenburg, Erhard. 2002. From Political Clientelism to Outright Corrupting– The Rise of the Scandal Industry. In Political Corruption in Transition, ed. S. Kotkin and A. Sajo, 149–166. Budapest: CEU Press. Darch, C., and C. Underwood. 2010. Freedom of Information and the Developing World. Oxford: Chandos. DfID, 2015. Why Corruption Matters: Understanding Causes, Effects and How to Address Them. London: Department for International Development Evidence Paper. Eke, Ikechukwu Williams. 2014. Brown Envelope Syndrome and the Future of Journalism in Nigeria. International Interdisciplinary Journal of Scientific Research 1 (1): 148–156. Fiorini, A. (ed.). 2007. The Right to Know: Transparency for an Open World. New York: Columbia University Press. Golden, Miriam, and Lucio Picci. 2006. Corruption and the Management of Public Works in Italy. In International Handbook on the Economics of Corruption, ed. S. Rose-Ackerman, 457–483. Cheltenham: Edward Elgar. Hine, David, and Gillian Peele. 2016. The Regulation of Standards in British Public Life: Doing the Right Thing? Manchester: Manchester University Press. Index of Public Integrity. 2018. http://www.index-integrity.org. Berlin: Hertie School of Governance. Accessed 21 March 2018. Johnston, M. 2005. Syndromes of Corruption. New York: Cambridge University Press. Landell-Mills, Pierre. 2013. Citizens Against Corruption. Washington, DC: Partnership for Transparency Fund. Lipman, Frederick D. 2012. Whistleblowers: Incentives, Disincentives, and Protection Strategies. New York: Wiley. Mungiu-Pippidi, Alina. 2015. The Quest for Good Governance: How Societies Develop Control of Corruption. Cambridge: Cambridge University Press. Norad. 2011. Joint Evaluation of Support to Anti-Corruption Efforts, 2002–2009. Oslo: Norwegian Agency for Development Cooperation Report 6. Persson, A., B. Rothstein, and J. Teorell. 2013. Why Anti-Corruption Reforms Fail: Systemic Corruption as a Collective Action Problem. Governance 26 (3): 449–471. Rose, Richard, and Caryn Peiffer. 2015. Paying Bribes for Public Services: A Global Guide to Grass-Roots Corruption. Basingstoke: Palgrave Macmillan.

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Vargas, Gustavo A., and David Schlutz. 2016. Opening Public Officials’ Coffers. European Journal of Criminal Policy and Research 22: 439–475. Worthy, Ben. 2017. The Politics of Freedom of Information: How and Why Governments Pass Laws that Threaten Their Power. Manchester: Manchester University Press. Worthy, Ben, and Robert Hazell. 2016. Disruptive, Dynamic and Democratic? Ten Years of Freedom of Information in the UK. Parliamentary Affairs 70 (1): 22–42. Worthy, Ben, and Tom McLean. 2015. Freedom of Information and Corruption. In Routledge Handbook of Political Corruption, ed. Paul M. Heywood, 347–358. London: Routledge.

CHAPTER 9

Reducing Corruption

Politicians made exuberant by winning control of government with a promise to get rid of corruption are tempted to believe that their victory removes all the obstacles that are a legacy from their predecessors. Thus, when the Berlin Wall fell, well-intentioned theorists of the end of history saw no need to worry about corruption because democratic institutions would be a corrective mechanism for the legacy of bad governance from Communist times. If governors engaged in corrupt practices, voters could use the ballot box to throw misbehaving rascals out of office (Schumpeter 1952; cf. Rose 2009). However, in much of the world corrupt governance is stronger than the capacity of electoral institutions to get rid of it. In more than three-quarters of countries in which competitive elections are held, corruption plays a significant part in the process of governance (Mungiu-Pippidi 2015: 48). As Max Weber (1948) noted, ‘Public policy is the strong and slow boring of hard boards’. Overcoming obstacles to the reform of bad governance requires patience. However, patience is in short supply in a world of 24/7 media and international financial markets. Reflecting on the experience of being the minister of finance in Nigeria, where corruption is widespread, Ngozi Okonjo-Iweala (2013) concluded: A common approach to tackling corruption in developing countries has been for officials to target high-profile cases, publishing the arrest of offenders often as a deterrent to others. Such stories tend to generate big © The Author(s) 2019 R. Rose and C. Peiffer, Bad Governance and Corruption, Political Corruption and Governance, https://doi.org/10.1007/978-3-319-92846-3_9

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headlines. Yet after a few weeks interest fades and corruption may still continue unabated. To change this cycle requires that such high-profile approaches be firmly coupled with relentless action to put in place the rules and processes that enshrine transparency and limit discretion and subjectivity.

The logic of making prescriptions is that diagnosis of the causes of bad governance comes first. The second step is to identify causes that in principle can be directly affected by government action, for example, laws defining corrupt practices and penalties for their violation. The results of such actions will show the extent to which they may reduce bad governance and the extent to which success is limited by such factors as public officials not having been socialized to behave as bureaucrats. Many anti-corruption prescriptions reflect the law of the hammer: If you give children a hammer, they will want to hammer everything they see. The belief in a single prescription having a pervasive effect ignores differences in the causes of corruption in capital-intensive contracts and delivering public services retail. The approach of social scientists tends to be limited by a priori assumptions of their own discipline. This violates the Titanic rule: What you leave out will sink you every time. Thus, in response to the collapse of Communist regimes, economists advised promoting the market economy by privatizing major state-owned firms with capital assets. In the triumphalist words of the World Bank’s chief economist at the time, Larry Summers (1991), this prescription would succeed because ‘The laws of economics are like the laws of engineering. One set of laws works everywhere.’ The result of the privatization of valuable public assets was that people who knew how to get things done in their country by hook or by crook gained capital-intensive fortunes. Given the extent of corruption in many Commonwealth countries receiving British aid, in 2016 Prime Minister David Cameron called an action-oriented high-level Anti-Corruption Summit attended by representatives of Commonwealth governments and civil society institutions. There was agreement at the rhetorical level that corruption was a major problem in countries that were once under the British crown, such as India and Nigeria. The proposals in the Leaders’ Anti-Corruption Manifesto were long on general exhortation, moderate in specific details, and subsequently have been short of evidence of success. A government headed by politicians who benefit from corruption may accept prescriptions for institutional reforms without swallowing the medicine prescribed. This creates a dilemma for governments funding

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foreign aid for political, economic and humanitarian ends. National aid agencies can proclaim, as the British minister for foreign aid has done, that the UK government’s policy is ‘zero tolerance for overseas bribery and corruption’ (DfID 2015). However, where corrupt officials control the national institutions receiving foreign aid, the British government is hesitant to impose the “cold turkey” solution of cutting off aid to countries that it wants to support. Diagnoses and prescriptions that inveigh against corruption are of little help in reducing bad governance. It makes about as much sense as having a health policy that simply calls for ‘fighting disease’ (Heywood 2016: 11). Like disease, corruption in the body politic is a phenomenon that can take many forms. In order to reduce it, each form requires a diagnosis that identifies its distinctive characteristics, which part of the body politic it affects, and what its specific causes are. Without doing so, any prescription will tend to fall back on generalized prescriptions that have no specific application to the corrupt delivery of public services.

1 Changing Institutions The political institutions that deliver public services are established by national laws that specify bureaucratic rules about how they ought to be administered. However, public officials may abuse these laws for their private gain. Many explanations of the maintenance of corruption stress the importance of path-dependence. Those in power can reject foreign criticisms of corrupt behaviour by arguing with some historical justification that delivering services by hook or by crook is the traditionally accepted way of getting things done in their society. If threatened with reforms that would remove their benefits, they may mobilize political resources strong enough to maintain a stable equilibrium of bad governance (Persson et al. 2013). When bad governance is path-dependent, it is logical to conclude that corruption can be reduced only by a ‘big bang’ approach that creates a disequilibrium that disrupts the institutions benefiting corrupt officials (Mungiu-Pippidi 2015: 129). The word disrupt emphasizes that the change required is more than an adjustment in the name of increased efficiency or piling more rules on top of those that are being successfully evaded. Instead, disruption involves structural changes sufficient to undermine the power of those who have been benefiting from bad governance. Although civil society and grass-roots public opinion can demand fundamental changes, the power to do so is in the hands of national leaders.

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Introduce new institutions and laws. Most forms of corruption involve the absence or non-enforcement of anti-corruption laws and institutions. A prescription that follows from this is to introduce new and stronger anti-corruption laws and institutions. Since 1990 there has been a dramatic increase in the number of good governance laws and institutions. By 2008 the number of anti-corruption agencies concerned primarily with capital-intensive corruption rose from 12 to 98. In the first five years following the adoption of the UN Convention Against Corruption, 125 countries ratified it (Norad 2011: 49). The conventional advice for reducing corruption is the adoption of best practice laws and institutions. The practices are those associated with countries in which corruption appears low. Foreign aid agencies can make the adoption of such practices a condition of a country receiving a grant. Best practice recommendations are also part of intergovernmental agreements such as the UN Convention Against Corruption. However, the national context of badly governed countries is by definition very different from countries that are often the source of best practices and it is unwise to assume that lessons drawn from that latter can be successfully planted in very different soil (cf. Rose 2005). To tell policymakers that want to reform a badly governed state to emulate the best practice of Denmark does not tell reformers how to do so (Mungiu-Pippidi 2013). The advice most immediately required is how to make changes that will start the lengthy process of becoming better governed by getting rid of its worst current features. The large number of countries introducing new institutions and laws provides the basis for a statistical evaluation of the extent to which introducing an anti-corruption agency or an ombudsman or adopting the UN Convention Against Corruption has had a positive effect. The results of an analysis commissioned by the Norwegian Agency for Development Cooperation are very consistent. In seven different statistical tests, none of the measures intended to reduce corruption consistently showed a significant impact on a country’s governance (Norad 2011: Table 13). While case studies can identify successful reforms (DfID 2015: Chapter 5), they tend to be exceptional. The most common outcome is that governors go through the motions of adopting new measures while withholding ‘the political commitment and tools they need to complete the job’ (Joutsen 2011: 317). Spend more money. From an economic perspective, scarcity in the supply of services in high demand such as education and health care should encourage people to offer bribes to get what they want and public

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officials expect bribes. This logically implies that bribery would fall if public spending was increased enough to provide enough school and hospital places for everyone. This policy is consistent with the views of those who regard social welfare as a basic right and with statistical analyses of the positive correlation between public spending on social services and the state of the national economy. Contrary to expectations, increasing the supply of social services has no significant effect on people having contact with a service or paying a bribe to get it (Table 2 in Chapter 5). It is not the quantity of public services that affects corruption but the informal standards that public officials apply when the service is delivered. An alternative way to spend money to reduce corruption would be to boost the low pay of public employees who have the opportunity to collect bribes in countries where bribery is widespread, such as India. Since the possibility of collecting bribes varies greatly between public-sector occupations, to be most efficient increases in pay should be targeted at front-line public employees who are in daily contact with people wanting to use public services and not on back-room staff who do not have such contacts (cf. Reiner 2010; Goel et al. 2016). This approach is consistent with the correlation between low levels of bribery in high-income countries and a high level of bribery in low-income countries. Superficially, this correlation would appear to support the prescription that paying public officials more would reduce the incidence of bribery. However, there is little evidence to support this proposition. In low-income countries, a salary boost that lifted grass-roots officials just above the poverty line would still leave them poor. Among high-level officials allocating capital-intensive benefits, any salary increase would be far below what would be paid as a bribe by a multinational corporation wanting a contract. Free-market economists theorize that increasing the amount of money the government spends on public services will also increase the number of people who pay bribes, since this will increase contact with corrupt public officials (Becker 1968). The evidence in preceding chapters shows that increased public expenditure does not necessarily increase corruption. Notwithstanding uncertainties about the direction of causation, there is a strong correlation between a high level of national income and a low level of corruption (Treisman 2015: Table 7.1). Nor are countries receiving large royalties from enterprises exploiting valuable natural resources significantly more likely to be corrupt than governments that lack such an economic boon (Table 1 in Chapter 3).

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An influx of money to government through foreign aid is associated with corruption when aid money is a significant portion of the revenue of a low-income country (Table 1 in Chapter 3). In such a context, foreign assistance is spent not only on public benefits such as dams, roads and hospital buildings but also to the private benefit of officials controlling aid money. Many countries whose population has big needs also have high levels of corruption. National governments high on the list of recipients of British aid money include places characterized by internal strife, such as Afghanistan, 169th among 176 countries on the Corruption Perceptions Index and the Democratic Republic of the Congo, 150th on the Index. They also include countries such as Bangladesh (145th), where many subjects live in poverty and a small proportion profit from corruption (National Audit Office 2015: 17). Make trade-offs. Reformers make getting rid of corruption an unconditional goal. However, like all public policies, anti-corruption measures must compete with other priorities. These include public spending on capital-intensive projects such as roads and hospitals that benefit many ordinary people as well as the firms that supply them and the public officials who authorize the contracts. Under some conditions, governments are prepared to trade off fighting corruption for other goals. Trade-offs are particularly stark in the field of national security. National governments can give money to foreign governments for political ends. For example, in 2006 the British government quashed an investigation of BAE Systems paying large bribes to Saudi Arabians, holding that it would be ‘against the wider national interest’ to enforce laws involving a country with which Britain wanted to maintain strong security and trade ties. The principle—my enemy’s enemy is my friend—is used to justify the provision of expensive military equipment and money with little concern with how the money is handled. During the Cold War, the United States provided more money to corrupt governments that took its side than the Soviet Union did because it had more money to give. Today, countries in the Middle and Near East take money from foreign governments with an interest in influencing the outcome of strife in the region. Advocates of giving foreign aid justify fighting global poverty in terms of absolute humanitarian values. The World Bank estimates that globally more than 750 million people live in extreme poverty, defined as having an average daily income with a purchasing power of less than $1.90 a day. This is just over 10% of the world’s total population, but it is

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very unevenly distributed globally. Half of this total live in sub-Saharan Africa and another third live in the Indian subcontinent and other countries of South Asia. Aid can also be justified on security grounds—global society is less subject to trouble if extreme poverty is lower—and on economic grounds—people with rising incomes are more likely to spend more money buying goods in international markets. Aid given in immediate response to natural disasters is especially justified by universalistic humanitarian standards. The participation of international charities such as the Red Cross gives national politicians a chance to claim credit for doing good free of political controversy. The effects of natural disasters are distributed more or less randomly but they are exacerbated by a disaster striking where bad governance has weakened defences against disaster. The providers of financial aid to poor countries face a dilemma. If they are to provide financial support to countries where this is palpably needed, they are likely to sustain existing levels of corruption or see them rise. More than one-third of the population of the poor countries of South Asia is likely to pay a bribe each year and in sub-Saharan Africa one in six do so. When Haiti was hit by a hurricane, it was already among the most corrupt countries in the world, and the payment of bribes in Thailand is half again the global average (see Appendix Fig. A.1). Reducing funding will reduce the funds available for diversion to private benefits of well-connected politicians, but it will also reduce the benefits that are achieved by aid funds that do reach their intended beneficiaries. To reduce funding of programmes where much money is diverted is consistent with impersonal theories of good governance, but doing so also cuts the funding of government aid ministries and the not-for-profit charities and private consultants to whom they make grants. The result is summed up by the verdict of the UK’s Independent Commission for Aid Impact on the work of the UK’s Department for International Development: ‘DFID’s anti-corruption activities have demonstrated certain achievements but have had little success in reducing the effects of corruption, especially as directly experienced by the poor’ (ICAI 2014: 1). The dilemma of accepting corruption or doing without a benefit is not confined to developing countries. Early in his American political career, Harry Truman was put in charge of the budget of his home county in Missouri as a ‘good government’ front for a notoriously corrupt machine politician. In order to get paved roads built in the rural part of the county, the contracts for the work had to be given as political payoffs to

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cronies. Truman, whose motto as President was ‘the buck stops here’, had no hesitancy in making a decision. He traded off his official obligation to award contracts through value-for-money procedures in order to help people in his district get the paved roads that they needed (https:// www.nps.gov/nr/twhp/wwwlps/lessons/103truman/103facts2.htm). The challenge of making trade-offs between respect for anti-corruption laws and getting things done is not confined to government departments. Multinational firms engaged in capital-intensive activities in countries with corrupt governance can face demands from public officials for bribes as a condition of doing business there. Enterprises that have invested large sums in developing economic resources, such as oil and mining companies, have historically traded off the cost of a bribe for the mutual benefit of their first-world shareholders and corrupt third-world officials. Within countries where good governance is lacking, individuals face a dilemma. Even if they think services ought to be delivered by the book, if the consequence is to deprive themselves or a family member of prompt hospital treatment, they are prepared to set aside their normative values to get what they want by hook or by crook.

2 Targeting Vulnerable Services The diagnosis of corruption usually focuses on characteristics that are pervasive throughout the body politic as a whole. This approach is encouraged by the indexes of Transparency International and the World Bank rating countries as a whole. Macroeconomists concerned with the effects of corruption on the national economy and professors of public administration who focus on the administration of national government reinforce this tendency. In consequence, prescriptions for reducing corruption normally do not take into account differences between public services. When individuals and corporations pay bribes they are not paid for public services as a whole; financing government in general is done through the payment of taxes. Bribes are paid to obtain a specific public service and services differ in what is delivered and how their delivery may be vulnerable to corruption. Public services delivered to individuals at the grass roots are vulnerable to bribes being paid far out of sight of policymakers in the national capital. By contrast, capital-intensive services are delivered by decisions about contracts made by high-level policymakers.

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Because a bribe is paid for the delivery of a specific service, it is logical to target anti-corruption measures at those public services that are specially vulnerable to corruption and to change by national government officials. The imposition of anti-corruption measures is high priority for public officials whose job situation offers most opportunities to collect bribes. Whether these services are vulnerable to reform by national government is another matter. Vulnerability of capital-intensive and retail services. Capital-intensive and retail public services differ in fundamental ways. The most obvious is that they differ in scale. Capital-intensive goods such as airports and electricity generating stations are lumpy not only in physical terms but also economically: A large chunk of money is required to construct them. By contrast, retail public services such as a driving licence or passport are literally pocket-sized and cheap to produce. The scale of capital-intensive projects makes it difficult for outsiders to evaluate whether paying a hundred million or a billion is a fair price or has been inflated to cover the cost of bribes that can be hidden behind opaque entries in a lengthy and complex budget. By contrast, the cost of providing labour-intensive retail services can readily be evaluated by auditors making comparisons with private-sector costs or what different public agencies pay for the same services and products. Costs that deviate most from the mean often do so because of corruption (Picci 2011). The parties engaged in the supply of and demand for retail services are readily identified individuals. By contrast, capital-intensive contracts are signed by officials of government organizations and private-sector corporations that have the capacity to produce a bribe if required to win a contract. In the payment of a bribe for a retail service, the claimant bears the cost and the public officials reap the benefits. By contrast, the individuals who make the decisions that commit their government to pay millions to a private enterprise do not bear the cost. It is met from tax revenue and borrowing from private-sector sources. In developing countries foreign aid can also bear a portion of the cost. The institutions that award capital-intensive contracts are normally central government departments concerned with such services as transportation, energy and defence. Centralization makes their spending subject to control through the government’s annual budget and the lumpiness of capital-intensive projects makes many visible politically.

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The delivery of retail services is in the hands of decentralized authorities acting as agents of the national government, because they must be delivered at the grass roots. The delivery of health care and education is further decentralized to schools and clinics where public employees and claimants of services meet face-to-face and often in private. This facilitates the payment of bribes and obstructs scrutiny by distant policymakers nominally responsible for what is done. The consequences of capital-intensive and retail corruption differ too. The former affects sums of money running into the billions, whereas retail corruption affects numbers of people running into the billions. When a private enterprise pays a public employee a bribe for a profitable contract, this creates a ‘win-win’ situation. The enterprise makes a profit that more than covers the cost of the bribe, and corrupt public employees receive cash that more than covers the risk of being punished. The effects of shoddy or overpriced infrastructure projects are not always immediately obvious nor are the names and faces of those responsible. By contrast, retail services doubly affect behaviour: An individual must find the money to pay a bribe and if politicians promise to improve these services and then renege on their promises, this can reduce trust in politicians and political institutions. The supply of many capital-intensive goods is globalized, because of the amount of capital and technical skills required to produce such goods as military aircraft or complex computer systems. By contrast, governments can rely on their national population to deliver public services by the book, by hook, or by crook. When capital-intensive corruption is transnational, this makes it difficult for a single national government to prevent it. Western governments may adopt laws making it illegal for multinational corporations based in their jurisdiction to pay bribes to foreign government officials. Corporations determined to win contracts if need be by hook or by crook can pay bribes to foreign bank accounts of consultancy firms or family members acting as agents of corrupt policymakers in other countries. Intergovernmental organizations such as the OECD or the UN promote codes of conduct that stigmatize transnational corruption. But such codes normally lack legal sanctions and any notional reputation loss an enterprise incurs for shadowy dealings is more than offset by the profits from getting big-bucks contracts.

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3 Changing Services at the Grass Roots The most effective way to reduce corruption at the grass roots is not by local protests but by national policymakers using their formal powers to disrupt laws and institutions that give corrupt officials opportunities to use their public office for private gain. We set out below nine principles for reducing corruption. Given differences between services, some will apply to multiple services, and some services will be vulnerable to attack in more than one way. Repeal laws that facilitate the collection of bribes. The quantity and quality of laws and regulations affecting the delivery of public services are variable. The greater the number of steps that must be taken to deliver a benefit, the more officials are involved and the greater the opportunity for a single official or a group of corrupt officials to impose delays in giving a positive response to people seeking a service to which they are entitled. This sends the not so subtle signal to impatient claimants that if they want their claim acted upon they should pay a bribe for removing the delays that officials have created. This tactic is specially relevant in dealing with businesses that import perishable goods or builders for whom delays are costly because of the money they have tied up in land and equipment. It also affects people waiting for medical treatment for a painful condition. Reducing the number of regulations and official signatures required to deliver a service can be effective in reducing bribery, because people will not pay a bribe for a signature that is no longer needed. It also increases efficiency, for people do not need to spend hours queuing in a government office to get an official document. Repealing laws that define some forms of behaviour as illegal can reduce the opportunity for the police to collect bribes for not enforcing the law, for example, from sellers of soft drugs such as marijuana. As long as its sale is illegal, the police can collect bribes as an informal and illegal way of licensing drug vendors to operate in their jurisdiction. Increase the use of objective criteria for deciding eligibility for receiving a service. Each public service has criteria that are meant to determine under what circumstances a person is entitled or obligated to use it. The bureaucratic ideal of impartiality, treating people with the same needs the same, is best achieved when the criteria are objective.

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If this is the case, individuals can be treated impartially, because objective measures provide reliable criteria that different officials will apply in the same way. Objective rules are applied all the time by postal clerks deciding the cost of mailing a heavy parcel and by social security officials calculating how much a retired person should receive as a pension. The extent to which services are suited to the application of objective criteria is contingent. Objectivity is highest when pupils are given computerized tests in which questions must be answered by making choices between alternative replies that can then be scored the same for all the pupils taking an examination. This method is specially suitable for mathematics tests or in an examination confined to basic historical and institutional facts, such as rules for calculating an election winner or the name of a national president in a given year. The evaluation of written essays is less objective, for teachers can differ in their judgments when grading a student’s interpretation of a poem or novel. The most subjective criteria are used by teachers about the classroom behaviour of individual pupils. In countries where corruption does not affect the education system, it is taken for granted that achievements can be fairly evaluated by a mixture of objective and subjective methods. Where corruption in education occurs with some frequency (Table 2 in Chapter 4), maximizing the use of objective criteria in assessing pupils can reduce opportunities for bribes to be paid by anxious parents. Use computers to reduce contact with public officials. Because bribery is illegal, the normal method of paying retail bribes is a hand-to-hand transfer of money. This not only requires money to pay a bribe but also a face-to-face meeting between the individual wanting a service and a public official who can deliver it at a price. Computerization removes a necessary condition of bribery, personal contact between a citizen and a dishonest public employee. Making a service such as obtaining a licence for an automobile or making an appointment with a doctor available online eliminates the risk of bribery while maintaining the service. Since websites are accessible at any time, a web-based service is also more convenient for users and is less costly to maintain. Computerization requires the use of impersonal objective criteria for delivering a service. It also standardizes the criteria nationwide through the use of the same computer programmes in all local offices or, as a further check against local corruption, administering a service at a distant regional or national office. That it also requires people to have access to the internet is no longer a handicap, since more than half the world’s population

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are now internet users. Moreover, among the five countries with the most internet users, four are developing countries: China, India, Brazil and Indonesia. Moreover, the proportion of their citizens who pay bribes to use public services is well above the global average (see Appendix Fig. A.1). Monitor the delivery of services electronically. Corruption and fraud often go together. For example, public officials who collect bribes are also more likely to defraud their agency by not being in their office for all the hours that they are meant to be at work. A teacher may be at home providing privately paid tuition for select pupils while most of the class loses lessons because of the teacher’s absenteeism. Traditional methods of time-keeping, such as signing a time sheet or punching a time clock, can be done by friends of an absent employee. Where attendance is slack, a public agency can install online biometric monitors in public offices. Instead of signing in manually, employees must then be physically present to register their biometric data for verification by checking with computerized data at the agency’s headquarters. Corruption in India is exacerbated by large-scale illiteracy and a lack of basic records for identification; individuals can make multiple claims for benefits and officials pocket payments in the name of beneficiaries who do not exist. To deal with these problems the Indian government has enrolled a billion people in Aadhaar, a unique system of biometric identification based on computerized evidence of an individual’s fingerprints and eye scans. The data is being used to authorize payments of cash benefits and to monitor whether public employees show up for work (Nilekani and Shah 2016; Muralidharan et al. 2016). Give citizens access to public records about themselves. The great majority of ordinary citizens are not interested in gaining access to information about how their government makes decisions about capital-intensive contracts remote from their lives. However, they do have an interest in gaining access to public records about how public officials go about delivering retail services that they want. Public officials routinely create computer files about requests they receive from individuals and the action that has or has not been taken. Opening up access to personal files can enable people to learn what is happening while they are kept waiting in a long queue or denied a permit to build a house. If the record indicates that sloth is the cause, then an aggrieved person may issue a wake-up call to prompt action by a dilatory public servant. If there is a strong suspicion that bribery was the cause, then a person faces the choice between accepting rejection or paying a bribe.

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Estonia has pioneered measures that give individuals access to their personal records held in government files. Each Estonian is assigned a unique identity number at birth and all residents over the age of 15 have electronic identity cards. The cards can be used to obtain public services such as health care or to pay for riding on a public bus. In addition, an individual can use their card to examine files about themselves in public offices. The Estonian system is thus not only about preventing favouritism and corruption, which is low by the standards of ex-Communist states. It is also about securing the efficient and fair delivery of retail services to citizens. Match the supply of services to entitlements and obligations. The logic of bureaucratic administration is that laws determine who is entitled to receive public services, and the government provides the resources to ensure an adequate supply of teachers, nurses and other public services. Insofar as this happens, then problems of scarcity do not arise. Even if there is competition for admission to the best schools, everyone entitled to further education can be given a university place. However, if there is a gap between the demand from all entitled and the supply of a service, the resulting scarcity undermines the principle of bureaucratic allocation. Queuing is an impartial way to allocate services when demand exceeds supply. It is used in bus queues at rush hour and in retail shops. Because people needing health care or education want the government to provide these services, there is an incentive for politicians to promise that all demands will be met. The consequences can be acute in developing countries that create universal entitlements to social benefits without being able to provide an adequate supply. Contrary to theoretical expectations, statistical analysis in Chapter 5 found no statistically significant evidence of a shortage in the supply of education and health care reducing contact with these services or increasing bribery to get them (Table 2 in Chapter 5). This implies that overpromising reduces the quality of the affected service. Class sizes can be doubled but there is not an adequate supply of desks, books and online facilities for every pupil. Doctors can reduce the time they spend examining patients, thereby increasing the proportion of inadequate diagnoses, and overburdened nurses can make patients wait for hours for attention. While such activities do not violate formal standards of corruption, they violate informal standards. The quality of the service is corrupted and the politicians responsible have corrupted their reputation for trustworthiness in pursuit of votes by promising an expansion of social services. In especially

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corrupt systems, money that could be used to upgrade social services is instead spent on capital-intensive goods, such as military equipment that not only defends the hold that governors have on power but also may lead to capital-intensive bribes for their private benefit. Expand choice. Government has a monopoly of a limited number of services, such as the authorization of official documents and law enforcement. The public services that citizens make most use of, such as health care, education and pensions, can also be supplied by not-for-profit civil society institutions and by private-sector enterprises. Egalitarians oppose giving individuals a choice of institutions in the belief that the monopoly supply of social benefits promotes social cohesion and keeps standards up by making those with more income and education engage with rather than exit public services (cf. Hirschman 1970; Rose and Peiffer 2016). Public-sector unions oppose privatization for reasons that public-choice economists characterize as self-interest (Buchanan and Tullock 1962). Most contemporary welfare states, including social democratic Sweden and social market Germany, fund multiple providers of education and health care; some providers are public institutions and some are not. Freedom of choice is both a political and an economic principle. Proponents of the market argue that giving individuals a choice of suppliers of a given service, whether it is a hospital or a restaurant, provides a better match between individual preferences and what they get, than allowing a monopoly supplier to determine what everyone will have. Where there is a significant degree of corruption in a public-sector institution, a choice of alternatives offers individuals a chance to avoid the risk of bribery by going elsewhere for what they want. However, the number of people who can afford to do so is limited by income, since alternative sources must make charges to recover their costs. Opportunities for choice are also determined by public policies that decide whether public finance only goes to publicly operated institutions or is also made available to not-for-profit and profit-making institutions that meet appropriate standards. One reaction of Anglo-American governments concerned with falling educational standards in state schools has been to charter and help fund schools that are organized outside the conventional state structure. To enable lower-income people to make choices, public finance can be shifted from the school to the parent by issuing vouchers that can be used to purchase education or health services of the recipient’s choice (Cave 2001). Legislation can obligate individuals to have a minimum of health

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insurance while leaving it up to an individual or their employer to choose between a public, not-for-profit or profit-making supplier of health care. Bridge International Academies offers a radical alternative: fee-paying education at a low price that African families may be able to pay (www. bridgeinternationalacademies.com). After evaluating criticisms by African governments of this alternative, an expert recommended that the more desirable response to dissatisfaction with public schools would be to improve public provision to ‘ensure that every child receives a better education than Bridge can offer–and drive it out of business’ (Pilling 2017). Legalize some payments for public services. When proponents defend public services as free of charge to all citizens, they assume that if a service is free in law it will be delivered without public officials collecting a charge on the side. As long as this assumption holds, the debate about charges can concentrate on political values. If bribes are paid to expedite the delivery of services to which individuals are entitled, this illegal charge can be legalized by adopting the principle of discount airlines: Charge for better treatment, as airlines do for wider seats or drinks in a plane that carries all passengers to the same destination at the same time. Charges are selectively made for public services on grounds that are not always normatively clear. Swimming is good for health and reading library books is good for education yet charges are made for the use of swimming pools but not for libraries. To renew a passport quickly rather than wait in a queue Britons do not pay a bribe: They pay a fee to get their passport quickly. Align public laws and informal standards. By definition, bureaucratic rules governing how public officials ought to deliver public services are legal; however, they are not necessarily fair by informal standards of public opinion. When loopholes in tax laws allow rich individuals and enterprises to avoid the payment of large sums in taxes, such activities are not corrupt in law, but public opinion can regard tax avoidance as corrupt because it exploits public laws for private advantage. Standards are also misaligned when behaviour that is acceptable by private standards is labelled as an unlawful corruption of public morality. In Ireland and Italy for decades after 1945, the Roman Catholic Church had the political power to secure legislation imposing its standards of public morality on the whole population. This misalignment of standards did not prevent women getting an illegal abortion or partners living together without being legally married.

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The government of the day has the authority to end misalignments between public laws and public opinion. The Europe-wide fall in church attendance has encouraged politicians to repeal restrictive laws adopted in the name of public morality and allow people to make choices in keeping with their private norms. Repealing laws making soft drugs illegal has the incidental advantage of reducing corruption, since sellers of cannabis no longer need to pay bribes to the police to carry on their business. Instead, like a pharmacist or a pub keeper, they can pay for a licence to conduct a business that is both legal and publicly acceptable. Aligning informal standards with the law is problematic when the standard is the object of political disputes, for example, the scope of anti-discrimination legislation and the definition of minorities that should be protected by such laws. It is also problematic when there is an imbalance between public opinion and political power. Tax laws remain on the books allowing multinational corporations and billionaires to get by with paying trivial amounts on their earnings. These laws are protected by the political influence that beneficiaries have over governors. The influence may be exercised legally but judged corrupt by informal standards and at times it may even be doubly corrupt.

4 Implications for Better Governance Most principles for reducing corruption are also likely to make them more efficient and more user-friendly, for example, by reducing unnecessary paperwork and offering services online. They are not only relevant in countries where bribery is high but also in countries where it is not. Even if bribery is not a problem, governments everywhere are trying to contain the cost of delivering services. Democratic governments are particularly under pressure to do so in ways that satisfy their citizens. Doing more of the same maintains inefficiencies and opportunities for breaking standards at their current level. Applying principles that result in doing things differently can provide a double boost to good governance. By contrast with proposals to change national cultures or retrain officials accustomed to taking bribes, the foregoing principles emphasize structural changes within the power of government to enact, such as repealing laws that create opportunities for public officials to collect bribes. Doing so gives citizens the choice about whether they deal with government online or with public officials face-to-face. Increasing

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alternative sources of supplying a service gives citizens the choice of getting it from a governmental or non-governmental institution, a particularly important point in countries where bad governance is the norm. These actions are within the power of citizens to enforce. People will not go to a municipal office for a permit that is no longer required, nor will they pay a bribe to an official who wants one if they have an effective alternative. Broadening choice by giving citizens vouchers to use when making choices between non-governmental and public suppliers puts power in the hands of citizens rather than public officials. Given the many differences between public services, it follows that broad-brush one-size-fits-all reforms are unlikely to have a significant impact on reducing corruption, especially changes that concentrate their impact on how central government is organized. These are unlikely to have much impact on the delivery of retail services at the grass roots, where public officials have substantial discretion about how or whether to follow central government directives. To be effective, a reform must change the weakest link in the chain of steps required to deliver the service to its end users. Attempts by intergovernmental organizations to introduce systemic reforms based on best practices in Western societies can be irrelevant if they do not take into account the extent to which practices of bad government have been institutionalized. Opposition to reforms may be expressed by refusing to adopt anti-corruption policies. More insidiously, it can be expressed by formally adopting anti-corruption measures in order to continue a flow of foreign funds but not enforcing new rules. If they so choose, intergovernmental organizations can exert influence by suspending payments of capital-intensive grants that national governors value as a source of corrupt income. If a recipient government argues that suspending payments would be interference in their national affairs, so too is foreign aid. Political obstacles to change are inevitable, because what appears to be bad governance by informal national standards or by the universalistic standards of international evaluators is a good thing for high-level politicians who enjoy political power and the benefits of corruption that goes with it. However, low-level public officials who collect retail bribes have less political power than ministers benefitting from capital-intensive bribes. Nor can corrupt local officials easily organize mass protests against making services available more efficiently and honestly. A national leader effective in reducing the extent to which ordinary people are subject to bribery may thereby gain political support.

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Breaking the low-level equilibrium trap that maintains a national economy at a subsistence level requires disruptive action to start a progressive journey of improvements (Hirschman 1963). Unbalanced growth can be promoted by such positive measures as raising national education levels above what is needed for a national economy not yet adapted to contemporary economic opportunities. Disruption can also come from a natural disaster or from military defeat. A strategy to disrupt corruption requires policymakers to make a visible and substantial change that can establish a political momentum leading to more changes. A bonfire of unpopular regulations that public officials may use to extract bribes can stimulate public support and weaken opponents. Introducing online services that people can access using free apps on their mobile phones cuts out public officials entirely. To be effective, disruptive changes must be targeted at particular services. Doing so will not bring about across-the-board abolition of corruption in all services in a world in which bribery is the price that 1.8 billion people pay each year for access to public services. Nonetheless, removing the burden of bribery from little more than 5% of this group will benefit 100 million people. In sum, any measure that reduces bribery and increases access and quality is better than no progress.

References Becker, Gary. 1968. Crime and Punishment: An Economic Approach. Journal of Political Economy 76: 169–217. Buchanan, James M., and Gordon Tullock. 1962. The Calculus of Consent. Ann Arbor: University of Michigan Press. Cave, Martin. 2001. Voucher Programmes and Their Role in Distributing Public Services. OECD Journal on Budgeting 1 (1): 59–88. DfID. 2015. Why Corruption Matters: Understanding Causes, Effects and How to Address Them. London: Department for International Development Evidence Paper. Goel, R.K., U. Mazhar, and M. Nelson. 2016. Corruption Across Government Occupations: Cross-National Survey Evidence. Journal of International Development 28 (8): 1220–1234. Heywood, Paul. 2016. Anti-Corruption: Bridging the Gap Between Research and Policy-making. British Academy Review, November: 9–12. Hirschman, Albert. 1963. Journeys Toward Progress. New York: Twentieth Century Fund. Hirschman, Albert. 1970. Exit, Voice and Loyalty. Cambridge, MA: Harvard University Press.

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Appendix

See Fig. A.1 and Tables A.1, A.2, A.3, A.4, A.5 and A.6.

© The Editor(s) (if applicable) and The Author(s), under exclusive licence to Springer International Publishing AG, part of Springer Nature 2019 R. Rose and C. Peiffer, Bad Governance and Corruption, Political Corruption and Governance, https://doi.org/10.1007/978-3-319-92846-3

187

188 Appendix

Liberia Cameroon Uganda Nigeria Kenya Sierra Leone Mozambique Gabon Guinea Cote d'Ivoire Tanzania Ghana Sao Tome Benin Zimbabwe Togo Zambia Mali Malawi Madagascar Burundi Burkina Faso Swaziland Niger Namibia Senegal South Africa Lesotho Mauritius Cape Verde Botswana India Vietnam Cambodia Thailand Myanmar Indonesia Malaysia China Pakistan Sri Lanka Taiwan Australia Korea Hong Kong Japan

AFRICA: Individuals paying bribes 56% 40% 33% 32% 32% 28% 27% 26% 23% 21% 19% 19% 18% 18% 17% 16% 13% 13% 11% 11% 11% 8% 7% 7% 6% 5% 4% 3% 1% 1% 0.7% ASIA: Individuals paying bribes 61% 61% 37% 33% 31% 22% 22% 21% 19% 10% 4% 3% 2% 0.9% 0.2%

Appendix

189

LATIN AMERICA: Individuals paying bribes

Haiti Dominica Mexico Panama Peru Honduras Colombia Ecuador Nicaragua Bolivia El Salvador Venezuela Costa Rica Belize Guatemala Paraguay Uruguay Chile Bahamas Guyana Jamaica Argentina Brazil Suriname Trinidad Barbados Tajikistan Russia Kyrgyzstan Albania Lithuania Moldova Ukraine Armenia Bosnia Romania Kazakhstan Hungary Belarus Serbia Latvia Azerbaijan Bulgaria Uzbekistan Montenegro Slovak Rep. Kosovo Croatia Czech Rep. Macedonia Poland Estonia Georgia Slovenia

30% 29% 25% 24% 23% 23% 22% 22% 22% 20% 18% 18% 18% 18% 17% 14% 14% 14% 12%

43% 42%

65%

8% 5% 4% 2% FORMERLY COMMUNIST COUNTRIES: Individuals paying bribes 27% 26% 23% 23% 22% 22% 21% 19% 19% 17% 16% 15% 14% 14% 13% 11% 11% 11% 10% 9% 8% 7% 7% 7% 6% 5% 3% 2%

Fig. A.1 continued

190 Appendix Greece Italy Austria Germany Portugal Spain Belgium France Ireland Luxembourg Netherlands Denmark UK Sweden Finland Morocco Egypt Sudan Yemen Algeria Lebanon Palestine Tunisia Turkey Jordan

WESTERN EUROPE: Individuals paying bribes 7% 4% 2% 2% 2% 2% 1% 1% 1% 0.8% 0.7% 0.5% 0.3% 0.1% 0.1% MIDDLE EAST & NORTH AFRICA: Individuals paying bribes 44% 40% 38% 34% 12% 12% 10% 8% 6% 3% 0%

20%

40%

60%

80%

100%

Fig. A.1 Percentage paying bribe by country (Sources As in Table 2 in Chapter 1 plus: GCB 2013 surveys: United States, 5% paid bribes; Canada 2%. GCB 2016 survey: Cyprus, 2%. Percentage calculated as paying a bribe for any of five services: health, education, permits, police or courts)

Appendix

191

Table A.1 Chapters 3, 5 and 7: Aggregate measures of national context Variable

Source

Description

CPI

TI (2016)

Transparency International Corruption Perception Index: range 0–100 1 if bureaucratized early, 0 if not 1 if decades of Communist rule, 0 if not 1 if colony in 1946, 0 if not Average of FH’s political rights and civil liberties scores inverted; range: 1–7 Net aid as % of Gross National Income. Range: 0–44% Natural resources rents as % of GDP range: 0–54.5 Probability that two randomly selected people will differ in ethnicity: range: 0–0.93 % of births attended by skilled health staff; range: 35–100 Gross % secondary school enrolment; range: 21–138 World Governance Indicator: Range: 1.9–2.2. minus 1.9 top plus 2.2 Index of free and fair elections; range: 2–14

Early bureaucracy CSPP Post-Communist CSPP Colony post-1945 CSPP Extent democratic Freedom House (2016) Foreign aid WB, WDI (2014) Resource rents WB, WDI (2014) Ethnic differences Alesina et al. (2003) Births attended

UNICEF

Secondary enrolment Regulatory quality

UNESCO WGI (2015)

Free, fair elections Freedom House (2016)

Mean 42.6

Std Dev. 19.5

0.17 0.20

0.38 0.40

0.44 4.4

0.50 2.0

3.3

6.2

9.1

11.4

0.4

0.3

86.2

18.3

80.0

27.0

−0.1

0.8

7.6

3.2

Sources UNICEF and UNESCO data most recent year available after 2005. Regulatory quality extracted from World Bank’s World Development Indicators (https://data.worldbank.org/data-catalog/worlddevelopment-indicators). Other sources: CPI: https://www.transparency.org/research/cpi; Freedom House: https://freedomhouse.org; Alesina, Alberto, Arnaud Devleeschauwer, William Easterly, Sergio Kurlat and Romain Wacziarg. 2003. Fractionalization. Journal of Economic Growth 8: 155–194

192 Appendix Table A.2 Chapter 5: Individual measures Variable

Coding and range

Any bribe

1: paid bribe for health, education, police, courts, or permit services; 0: not Bribe—health 1: paid bribe for health; 0: not Bribe—education 1: paid bribe for education; 0: not Bribe—permit 1: paid bribe for permits; 0: not Bribe—police 1: paid a bribe for police; 0: not Contact—health 1: contact with health; 0: not Contact—education 1: contact with education; 0: not Contact—permit 1: contact with permits; 0: not Contact—police 1: contact with police; 0: not Female 1: female; 0: male Number of contacts Health, education, police, courts and permits. Range: 0: contacted no service; 4: contacted 4 or 5 services Educational status 1: minimum; 2: secondary; 3: highera Perceived corruption Perception of gov’t officials and MPs. Average of 0: None involved; 1: some; 2: most; 3: alla High political efficacy 1: agree that ordinary people can fight corruption by refusing to pay bribes; 0: otherwise Low political efficacy 1: if disagree with ‘ordinary people can make a difference in fight against corruption’; 0: otherwise Age 1: 18–25; 2: 26–35; 3: 36–45;4: 46–55; 5: 56–65 6: 66–75; 7: 76–85; 8: 86+ Age family 1: 26–55 years; 0: not Age young 1: 35 or younger; 0: not Age older 1: 56 or older; 0: not aMissing

values are coded to the country mean

Mean

Std Dev.

0.18

0.38

0.10 0.05 0.07 0.06 0.59 0.34 0.37 0.23 0.52 1.58

0.30 0.22 0.25 0.23 0.49 0.47 0.48 0.42 0.50 1.34

1.91 1.47

0.97 0.73

0.20

0.40

0.32

0.46

3.20

1.68

0.59 0.41 0.24

0.49 0.43 0.49

Appendix

193

Table A.3 Chapter 7: Afrobarometer variables Variable Trust

Coding and range

Mean trust in executive, Parliament, electoral commission, and local council; 0 not at all to 3 a lot; standardized to 0–1 Voted 1: voted in recent national election; 0: all other responses Paid bribe 1: paid a bribe for permits, water, health, police, & education; 0: not Services contacted Number of services; range from 0 to 5 Perceived corruption Mean perceived corruption in executive, parliament, officials, local government; 1: none are corrupt to 4 all are corrupt Important problem 1: mentioned corruption as being top three problems; 0: not Increased or decreased 1: corruption decreased a lot to 5: corruption increased a lot Age Age in years; 81+ recoded to 80 Education 0: no formal; 1: completed primary; 2: primary; 3: secondary; 4: post-secondary Income Regularly going without five basic goods: standardized factor score Social capital 1: active member or official leader of community group; 0: not

Mean

Std Dev.

0.53

0.30

0.68

0.47

0.18

0.39

1.81 2.38

1.43 0.72

.12

.33

3.8

1.3

37.33 1.88

14.7 1.27

0.00

1.00

0.24

0.43

194 Appendix Table A.4 Chapter 7: LAPOP variables Variable

Coding and range

Trusta

Mean trust in national legislature, executive, local government political parties; 1: not at all to 7: a lot; standardized to 0 to 1 1: voted in last presidential election; 0: not 1: paid a bribe for police, government employee, permit, courts, healthcare, & education; 0: not Number of services had contact with; range: 0–4 Corruption of public officials; 1: uncommon to 4: very common 1: Corruption is one of the most important problems; 0: not Age in years; +80 recoded to 80 0: none; 1: primary; 2: secondary; 3: post-secondary 0: no cash income to 10: highest national level 1: attends local meetings, tries to solve problems; 0: not

Voted Paid bribe

Number of contacts Perceived corruptiona Important problem Age Educationa Incomea Social capital aMissing

coded to country mean

Mean

Std Dev.

0.44

0.25

0.73 0.17

0.45 0.38

1.13

0.98

3.17

0.81

0.08

0.27

40.51 1.97

15.96 0.73

7.00 0.79

2.81 0.41

Appendix

195

Table A.5 Chapter 7: EBRD variables Variable

Coding and range

Trusta

0.55 Mean trust in President, government, local government, Parliament, political parties; 1: complete distrust to 5 complete trust; standardized to 0–1 1: voted in last Parliamentary election; 0: not 0.62 1: paid a bribe for police, permits, courts, edu- 0.14 cation, medical, unemployment, other social security benefits; 0: not Number of services had contact with; range 1.31 0–8 2.43 Mean perceived corruption in executive, parliament, officials, local government. 1: none are corrupt to 4: all are corrupt 1: mentioned corruption as being top three 0.38 problems; 0: not 1: strongly agree to 5 strongly disagree with 3.48 there is less corruption now than 4 years ago Age in years; 81+ recoded to 80 48.5 0: none; 1: primary; 2: secondary; 3: post-sec- 2.42 ondary/some university; 4: university degree Self-assessed household wealth; 1: poorest 4.50 10% of country to 10: richest 10% 2: Active member of any of 10 social groups; 0.40 1: inactive member; 0: not a member

Voted Paid bribe

Number of contacts Perceived corruptiona Important problem Increased or decreased Age Education Incomea Social Capital aMissing

coded to country mean

Mean

Std Dev. 0.23

0.49 0.35

1.26 0.73

0.48 1.11 17.2 0.89 1.67 0.71

196 Appendix Table A.6 Conventions in reporting data 1. Missing data for an individual is normally dealt with by substituting the country’s mean value 2. Countries are list-wise deleted from analyses when country-level variables are not available. However, in Chapters 5 and 7 we imputed missing education values for Portugal and Spain using Italy’s mean education score; Australia, with Germany’s mean education score; and Hong Kong with China’s mean education score 3. All multi-national statistics are reported with each country’s number of respondents weighted equally 4. Since all survey responses are estimates, answers are rounded to the nearest whole number, with 0.5 rounded up

Index

Note: Bold page numbers indicate figures; italics indicate tables.

A access to information costs of, 149–50 eligibility for, 149 Acton, Lord John, 4 Afrobarometer variables, 17, 193 age and bribe payment, 94, 99 and citizen behaviour, 131 and trust, 138, 139 Alesina, A., 57 anti-corruption efforts, evaluation, 48 anti-corruption institutions, independence, 152 Anti-Corruption Manifesto, 168 Anti-Corruption Summit, 168 apologies, 121–2 aristocracy, protection of power, 3 arms sales, 148, 172 autocracies, 10–11 Aven, P., 41

B bad behaviour, 114–20 BAE Systems, 148, 172 Bauhr, M., 146 Behaviour standards, 5ff, 107ff benefits in kind, 77 best practice, 170 Blair, T., 113, 115, 123, 162, 163 blame, and transparency, 163 bribe payment age effect, 94, 99 basic model, 87 bureaucratization effect, 91–3 Communist legacy hypothesis, 86, 90–1, 103 contact effects, 88, 129–30 contact hypothesis, 84 context and overview, 83–4 democratic institutions hypothesis, 86, 91–3, 103

197

198 Index early bureaucratization hypothesis, 86, 103 economic status hypothesis, 85 education effects, 90, 102 foreign money hypothesis, 87, 91–3, 104 gender hypothesis, 86, 90, 94–5, 99 Heckman analysis, 97ff, 100–1 impact of significant influences, 92 individual differences, 84–7 influences by service, 98 monopoly/choice hypothesis, 96–7, 102 national context effect, 90 payers, 44, 71–80, 87–8 percentage paying, by country, 188–90 perception of corruption hypothesis, 84–9, 103 political efficacy hypothesis, 85, 89 public services differences, 93–104 regulatory burden hypothesis, 96 service scarcity hypothesis, 95, 102 service-specific hypotheses, 94–104 social role hypothesis, 94–5, 99 social status hypothesis, 85, 90 and socio-economic status, 90 under-reporting, 78–79, 160, 161 value of bribes, 77. See also bribery; grass-roots corruption bribery, 25 attitudes to, 27–8, 27 by hook or by crook, 21–2, 24–8, 26, 44, 68 consistent payers, 75 contingency, 79–80 cost-benefit calculation, 35 credibility of evidence, 78–9 cultural norms, 78 individual and institutional influences, 88 opportunities for, 31

payment, variation in and between continents, 72 and speed of service, 76 timing, 74–7 use of cues, 75–6. See also bribe payment; grass-roots corruption Britain, Politicians Behaving Badly (PBB) survey, 115ff brown envelope journalism, 157 Buchanan, P., 112–13 bureaucracy alternatives to, 21–2 by the book governance, 22–8 in public services, 66 Weberian view, 5–6 bureaucratic standards, 108 bureaucratization, 50–1, 108 effect on bribe payment, 91–3 C Cameron, D., 123, 168 capital, infrastructure projects, 40 capital-intensive services, 65–6 consequences of corruption, 176 corruption reduction, 175–6 China, 12, 13 choice services, 96–97 corruption reduction, 167–84 citizen behaviour corruption and trust in developing countries, 136–9 impact of corruption on voting, 127ff, 132–5, 133 and income, 130–1, 138 perceptions of corruption, 130 political engagement, 129 and political party support, 141–2 and social capital, 131–2, 135, 138 willingness to protest, 159 citizens, as stakeholders, 146 civil servants, job security, 115–16

Index

civil society organizations, 155–7 clientelism, 8 Clinton, B., 113, 121 Clinton, H., 14–15, 124, 154 collusion, public—private, 44 colonial legacy hypothesis, 51–2, 55 Commonwealth countries, 168 Communist legacy hypothesis, 50–1, 54–5, 86, 90–1, 103 computers, delivery of public services, 23, 178ff contact hypothesis, 84, 131, 135, 138, 139, 178–9 contracts, drafting and awarding, 42–3 Control of Corruption Index (CCI), 45, 47–8 corporations, public interest claims, 156–7 corruption, 14 definitions, 2–10 legal and informal standards, 4, 6, 14–5 legal definition, 4 socially constructed, 3 stretching meaning, 10 theories of, 32–6 Weberian modern state, 5 corruption indexes, 39, 49 Corruption Perceptions Index (CPI), 11–12, 45–7, 54–7, 62, 71ff, 83, 115, 127 and gross domestic product (GDP), 35, 41 corruption reduction access to records, 179–80 aligning laws and standards, 182–3 capital-intensive services, 175–6 choice expansion, 181–2 contact reduction, 178–9 electronic monitoring of service delivery, 179 grass-roots changes, 177–83

199

increasing spending, 170–2 legalization of payment, 182 matching supply to entitlements, 180 repeal of laws, 177 trade-offs, 172–4 credibility, of evidence of bribery, 78 cues for bribery, 75–6 cultural norms, 78 culture, 112–13 customary behaviour, 7–8 Czech Republic, 25–6 D data reporting conventions, 196 decentralization effects of, 14 service delivery, 176 democratic institutions hypothesis, 52, 55–6, 86, 91–3, 103, 153–54 discretion, in service delivery, 24 dismissal, for bad behaviour, 122 distrust effects of corruption, 136–43, 137 prevalence, 128 E early bureaucratization hypothesis, 50–1, 54, 86, 103 EBRD variables, 17, 69ff, 73, 129ff, 195 economic inequality hypothesis, 53, 57 economic status hypothesis, 85 education and citizen behaviour, 130, 134–5 effect on bribe payment, 90, 102 as measure of inequality, 89 and reporting of bribery, 78–9 responsibility for, 29–30 and trust, 138, 139

200 Index elections, and corruption, 135, 139, 167 electronic monitoring, service delivery, 151, 179 eligibility criteria, public services, 177–8 eligibility, for access to information, 149 Estonia, technology in, 180 ethnic inequality hypothesis, 53, 57 Eurobarometer, 17, 63, 69ff, 77, 128 Europe, political funding, 14 European Commission, corruption study, 32 expenses, elected officials, 111 F face-to-face relations, and trust, 136 false electoral promises, 117–18, 123–5, 124 favouritism, 8 Fillon, F., 115 fines, for bad behaviour, 122 foreign aid, 41, 48 conditionality, 170 and control of institutions, 168–9 hypothesis, 52–3, 56, 87, 91–3, 104, 172 forest rangers, 67–8 fragmentation, of responsibility, 150–1 France, Politicians Behaving Badly (PBB) survey, 115ff free-market perspective, 171 Freedom House, 132 Freedom of Information (FOI) acts, 16–63 effectiveness, 162 UK requests, 151–2. See also transparency

G gender hypothesis, 86, 90, 94–5, 99 geography, effects of, 29–30 Gini Index, 57 Global Corruption Barometer (GCB), 16, 25, 62, 63–4, 69ff, 71ff, 84, 89, 92, 128ff, 159 global poverty, and aid, 172–3 globalization capital-intensive services, 176 and transparency, 155, 158–9 governance by the book, hook or crook, 22–8 bureaucratic, 5–6 categorization, 6 changing practice, 3 culture-based evaluation, 15 defined, 2 ideal system, 28–31, 92–3 incompetent, 10 social relationship, 24 government audits, 153 grass-roots changes, 177ff grass-roots corruption benefits in kind, 77 bribe payment, 71–80, 72–4 bribe payment, controlling for contact, 74 bribe payment, variation within and between continents, 72 consistent payers of bribes, 75 contact variation by service, 65–71, 70 speed of service, 76 variation in public services, 65–8, 74. See also bribe payment Grimes, M., 146 gross domestic product (GDP), 40 and Corruption Perceptions Index (CPI), 35, 41 guanchi, 12

Index

Gupta, A., 8 Gyurcsany, F., 123 H health analogy with governance, 28–32 Heckman analysis, 97ff Heidenheimer, A., 32 Heywood, P., 32 hierarchy, institutions, 29, 61 history, and standards, 7–8 Hollande, F., 115 household size, and payment of bribes, 73 humanitarian perspective, 172–3 Hungary, 112 Hunt, J., 85 hypocrisy, 123–5 I impartiality, 22–3 incivisme, 127 income, 130–1, 138 Index of ethnic fragmentation, 57 Index of Public Integrity, 147 India, 12–13 individual-level variables, 192 inequalities, measurement of, 89 informal knowledge, 44 information as weapon, 163 infrastructure projects, 39–40 institutional corruption, perceptions of, 64 institutional theories, 34 institutions, 29 changing, 169–74 trust in, 136–43 intergovernmental organizations, 176 International Monetary Fund, 155 Iraq War Inquiry, 162

201

J job security, civil servants, 115–16 Johnston, M., 14, 32 K Karklins, R., 25 Kenya, 14 Key, V.O., 142 L Lambsdorff, J.G., 45 Latin American Public Opinion Project (LAPOP), 17, 25, 129ff, 194 law of the hammer, 168 laws aligning with standards, 2ff, 111, 182–3 introducing new, 170 libel laws and transparency, 157 repeal of, 177 league table, national corruption, 49 legal/illegal corruption, 6–7, 14–15, 152–3 legal standards and informal practice, 6–7 legislative choices, and transparency, 147–9 legitimacy, autocracies, 10–11 libel laws, and transparency, 157 local government, responsibilities, 29–30, 61 logic of appropriateness, 67 M Macron, E., 115 Mandelson, P., 113 McClean, T., 145 measures of corruption, 39

202 Index multiplicity, 49–50. See also Control of Corruption Index (CCI); Corruption Perceptions Index (CPI) media coverage of bad behaviour, 115 freedom, 114 and transparency, 157 military leaders, 29, 63–4 Modi, N., 13 monopoly/choice hypothesis, 96–7, 102 multi-national firms, trade-offs, 174 Mungiu-Pippidi, A., 8, 33 Myrdal, G., 85 N national context, effect on bribe payment, 90 national corruption colonial legacy hypothesis, 51–2, 55 Communist legacy hypothesis, 51, 54–5 context and overview, 39–41 contextual influences, 54 democratic institutions hypothesis, 52, 55–6 early bureaucratization hypothesis, 50–1, 54 economic inequality hypothesis, 53, 57 effect of natural resources, 56 ethnic inequality hypothesis, 53, 57 foreign money hypothesis, 52–3, 56 high-level corruption, 40–4 national differences, 50–7 political history and institutions hypothesis, 54, 57 national politicians, perceptions of, 63 national security trade-offs, 172–3

and transparency, 148 natural disasters, 173 natural resources licensing, 41 and national corruption, 56 Nigeria, 13–14 Nixon, R., 112–13 non-voters, 119 norms. See standards Norwegian Agency for Development Cooperation, 170 O OECD Anti-Bribery Convention, 43 officeholders, behaviour standards, 5–7 official data, use of, 49 Okonjo-Iweala, N., 167–8 Old Corruption, 3 open government. See transparency Open Society Foundations, 156 Orban, V., 112 overpromising, and service quality, 180–1 P Panama papers, 158–9 particularism, 8 partisanship, 118–20, 120 Partnership for Transparency Fund, 159 party-political interests, and transparency, 154 path dependence, 33, 169 patronage, 8 payment for services, legalization, 182 pensions, delivery of, 23 perception of corruption hypothesis, 84–5, 103 personal relationships, and informal norms, 108

Index

physiology of governance, 28–32 police perceptions of, 63–4 street-level bureaucracy, 31 policymakers’ guide (UNDP), 49–50 remuneration, 111 role of outsiders, 118–19 theories of interest group politics, 111 tolerated and shameful, 109–14 variation in informal standards, 109–10 and voting behaviour, 124–5 voting laws, 110–11. See also standards political economy theories, 34 political efficacy hypothesis, 85, 89 political history and institutions hypothesis, 54, 57 political inexperience, 123 political trust, 128ff Politicians Behaving Badly (PBB) survey, 115ff, 139–40 principal-agent theories, 31 privacy, and transparency, 148–9 private behaviour, 123 private enterprise priorities, 113–14 transparency, 154–5 privatization, 41 procurement, infrastructure projects, 40 Profumo, J., 121 protest parties, 118–19, 125 protest, willingness to, 159 public employees contact with public, 31 discretion, 67–8 pay, 31, 171 rules, 68 self-identification, 67 self-image, 30

203

standards, 67–8 public expenditure, social services, 42 public institutions, perceptions of, 62–5 public interest, 110 corporations’ claims of, 156–7 and good governance, 10 public services access to records, 179–80 benefits in kind, 77 bribe payment, 71–80, 72–4 capital-intensive vs. retail scale, 65–6 contact with, 65–71, 70 contingency of corruption, 79–80 differences between, 65–8, 93–104 eligibility, 66, 177–8 levels of contact, 93 matching supply to entitlements, 180–1 skills involved, 66 speed of service, 76 timing of bribes, 74–7. See also bribe payment; social services public spending, transparency, 153 publicity, 114 punishments, 109, 121–5, 122 dismissal, 122 fines, 122 for hypocrisy, 123–5 imprisonment, 122 private behaviour, 123 Putin, V., 156, 157 Putnam, R., 131–2 Q Quality of Government Institute, 2 R rational choice theories, 31, 35 regulatory burden hypothesis, 96

204 Index Regulatory Quality measure, 96 religious leaders, perceptions of, 63 Republic of Korea, 25–6 resource curse, 13–14 responsibility, fragmentation of, 150–1 retail-scale services, 65–6, 175–6 Rose-Ackerman, S., 32 Rules. See bureaucracy Russia, 12, 25–6, 41 S satisficing strategy, 22 service delivery. See public services short-term change, 48 social capital, 24–5, 132, 135, 138 social media, and transparency, 146, 158 social psychological theories, 34, 62 social relationships, in governance, 24 social roles hypothesis, 94–5, 99 social science, disciplinary divisions, 32–3 social services cost of, 61–2 share of public expenditure, 42. See also public services socio-economic status, 85, 90 sociological theories, 34 soliciting bribes, 75–6 Soreide, T., 32 Soviet Union, break up, 51 Spain, Politicians Behaving Badly (PBB) survey, 115ff stakeholders in open data, 151–63 standards aligning with laws, 182–3 behaviour evaluation, 107 bureaucratic, 108 and citizen behaviour, 139–41, 141 contested, 112 informal, 6, 107

international, 112 legal standards and informal practice, 6–7, 17, 111 officeholder behaviour, 5–7 partisan, 108 persistence, 48 personal, 108, 113 social construction, 109 state-owned enterprises, 26, 41 statistical testing, theories of corruption, 35–6 street-level bureaucracy, 31 Summers, L., 168 surveys, 15–16, 17, 71–3 T tax avoidance, 9–10, 107 tax effort, 41 tax evasion, 8–9, 107 technocracy, 29 theories of corruption, 36–8, 50ff, 84ff theories of impact of corruption, 129–32 trade-offs, 172–4 traditional norms, 7–8 transparency, 145–63 and blame, 163 citizens stakeholders, 159–60 conditions for, 147–51 costs of, 149–50 demand for, 146 effect of increased, 160–3 and electronic technology, 151 eligibility for access to information, 149 existence of public records, 150 and good governance, 153–4, 161–2 good government theory of democracy, 153–4

Index

linking records, 150–1 lobbying laws, 148 and national security, 148 political choices in legislation, 147–9 and privacy, 148–9 private enterprise interests, 154–5 reporting payment of a bribe, 160, 161 role of media, 157 and social media, 146, 158 stakeholders in open data, 151–63 UK FOI requests, 151–2 whistleblowing, 158. See also Freedom of Information (FOI) acts Transparency International, 4, 11–12, 16, 36, 40, 45–7, 49, 62, 92, 128, 134, 156, 159 Truman, H., 173–4 Trump, D., 14–15, 122, 124, 142, 154 trust, 128ff age effect, 138, 139 and contact with public services, 138 and education, 138, 139 face-to-face relations, 136 free and fair elections, 139 and income, 138 and maintenance of standards, 139–41, 141 and political party support, 141–2 and social capital, 138 Tukey, J., 50 U UK Department for International Development, 173 UK Independent Commission for Aid Impact, 173

205

under-reporting, payment of bribes, 160, 161 United Nations Convention Against Corruption, 170 United Nations Development Programme, 49–50 United Nations Office of Drugs and Crime (UNODC), 73, 75 United States, election campaigning, 14–15 Unmasked: Corruption in the West, 14 unrecorded corruption, 49 V validity, measures of corruption, 44–5 virtue, 34 voting behaviour and age, 131 contact with public services, 131, 135 and education, 110–11, 134–5 free and fair elections, 135 impact of corruption, 132–5, 133 implications of analyses, 142–3 and income, 130–1 and individual resources, 130, 134, 135 influences on, 124–5, 127ff and social capital, 131–2, 135 and trust, 130 vulnerability to corruption, 34, 42–3, 129, 175–6 W watchdogs, technical knowledge, 42 Watergate, 112–13, 162 Weber, M., 5–6, 62, 167 whistleblowing, 158 World Bank, 2, 45–48, 96 Worthy, B., 145

Bad Governance & Corruption

Articles inside

Table A.6 Conventions in reporting data

Table A.5 Chapter 7: EBRD variables

Table A.1 Chapters 3, 5 and 7: Aggregate measures of national context

Table A.2 Chapter 5: Individual measures

fig. 1 Why corruption not reported

Table A.3 Chapter 7: Afrobarometer variables

Table A.4 Chapter 7: LAPOP variables

fig. A.1 Percentage paying bribe by country

Table 3 Breaking informal standards in Western Europe

Table 2 Corruption increases distrust in government

fig. 1 Impact of signifcant infuences on paying bribe

fig. 1 Global consensus bribery is wrong

Table 1 Corruption has little impact on going to vote

fig. 1 Perceptions of corruption in institutions

fig. 3 Bribery varies between and within continents

fig. 4 Consistent payers of bribes the exception

fig. 1 Big variations in corruption within every continent

fig. 2 Contact with services high in every continent