fig. 2 Contact with services high in every continent

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 defciencies 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 infuence 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 offcials 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 offcials were expected to meet bureaucratic standards long before they began

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 frst 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 offcials were superior to state offcials (Jowitt 1992). They were not bureaucrats administering policies impartially but offcials 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 offcials. 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

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 beneftting 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 offce 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.