9 REDUCING CORRUPTION
181
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
