Anti-Corruption Revolutions: When Civil Society Steps In

This working paper explores the question of whether an empowered civil society with access to public information, can make a difference in the fight against corruption, using India and the recent rise of an anti-corruption party as a case study. Through a mixed methodology that combines quantitative and qualitative research tools, the authors find evidence that the availability of channels for accessing information has a positive effect on control of corruption, provided that civil society is engaged and able to actively participate in matters of public concern. In addition, this paper seeks to understand if and how collective action problems are overcome by civil society and determine whether the so-called anti-corruption revolutions are manifestations of this process.

The quantitative model builds upon previous work that has found separate effects for both factors (access to information and civil society) on control of corruption, and introduces an interaction term between the two of them. Additionally, the quantitative analysis explores the effects of perceived levels of corruption in a given period in subsequently controlling corruption.

The qualitative model, in turn, inquires more deeply into the interaction of these two variables using India as case study. Here, access to information legislation has been in place for almost a decade and civil society has shown itself outstandingly active. This case is particularly interesting given that the mobilization against corruption initiated in 2011 managed to achieve the introduction of a federal law creating an ombudsman. Altogether, this paper aims to shed light on the factors and processes shaping a sustained demand for accountability.

International Anti-corruption Normative Framework: the State of the Art

This paper looks into the main debates in International Relations on norm compliance. It looks at the three causal factors that help us explain the origins of norms in relation to anti-corruption introduced by McCoy and Heckel (2001): (1) post-Cold War era; (2) social process, i.e. interaction among actors and diffusion of information; and (3) internal process where ‘cognitive and motivational processes of individuals’ may contribute to the generation of norms. Using the model developed by Finnemore and Sikkink (1998) on the life cycle of a norm, it shows how international anti-corruption norms took root by tracing the development of various regional and international legal instruments. Finally, the UNCAC is analysed in more detail, as it has been recognised as a reference framework for the fight against corruption, due to which many countries formally adopted ethical universalism as a norm. The paper argues that international actors must put in place such a monitoring mechanism; otherwise implementation of UNCAC could become an end in itself. However, it is not possible to have significant progress without domestic demand for new rules of the game and public participation in a sustainable mechanism which would prevent the eternal reproduction of privilege.

Democratization and corruption: the state of the art

This paper critically discusses the main contributions of the literature on the relationship between democratization and corruption, focusing on the perspective of how the former is expected to affect the latter and highlighting the different hypotheses and empirical findings presented by the most relevant and recent scholarly work in this line of research. Additionally, the discussion introduced here refers to a number of conceptual issues that remain obscure in the existing literature, with regards to the concept of both corruption and democratization, but at the same time stressing the gaps related to the latter, as to complement other contributions of the report that more thoroughly explore different conceptual approaches to corruption.

Background report on international and European law against corruption

This report sets the background and the methodology design for the WP10 of the ANTICORRP project. WP10 seeks to explore whether and the extent to which, EU states comply with international anti-corruption norms, as well as their domestic implementation and enforcement. It has four main research objectives: a) to measure state compliance and implementation of international anti-corruption norms in Europe; b) to explore whether international law has an independent causal influence over the anti-corruption laws, policies and practices adopted by EU states; c) to identify patterns of variation of state compliance and implementation, whether cross-national, or across sectors and issue areas; and d) to explore the factors that account for significant variation across sectors or states.This report provides the empirical and analytical groundwork for pursuing the above research objectives and for defining the appropriate methodology to do so. It is divided into five main parts. In the first part, the authors briefly present the origins of how the fight against corruption became an issue of interest for the international community and for European and international organisations from the 1970s onwards, but especially since the 1990s. They then define corruption and its various aspects and forms, they discuss the difficulties in arriving at a commonly agreed definition and review some of the criticisms levelled against the legal approach to fighting corruption, as well as in regard to the domestic influence and effectiveness of international and EU law in this area more broadly. In the last part of this background section, the authors give an overview of the state of corruption in the EU28 on the basis of various indices and assessments compiled by international organisations and non-governmental organisations (NGOs).The second part of this report provides an overview of European and international legal norms and instruments against corruption, which are directly relevant for EU member states. The authors review both soft and hard law, describing their origins and how they emerged, the peer-review and monitoring mechanisms that they put in place, and how they work. The third part of the report is conceptual: it defines and analyses the concepts of compliance with, as well as implementation and effectiveness of international law. Most importantly, it conceptualises their relevance and applicability in regard to anti-corruption norms and conventions, and defines a way of measuring state compliance and implementation in this area. The fourth part of this report delineates four sectors or issue areas, which have been targeted by international and European norms against corruption: international economic transactions, conflict of interest, free speech and whistle-blowers’ protection and political party funding. The final part of the report defines the appropriate research methodology of the group of studies to be conducted within WP10, and identifies the sources of primary and secondary information and documentation to draw from in pursuing the aforementioned objectives.

The Anticorruption Report. Volume 2: The Anticorruption Frontline

From Turkey to Egypt, Bulgaria to Ukraine, and Brazil to India, we witness the rise of an angry urban middle class protesting against what they see as fundamental corruption of their politicalregimes, perceived as predatory and inefficient. Corruption is near the top of all global protesters’ list of grievances – from the Occupy movement to the Arab Spring. There is increasing demand for good governance resulting in quality education and health systems, and denunciation of sheer bread and circus populism. Volume 2 of the ANTICORRP Anticorruption Report tackles these issues across key cases and developments.

Print and e-book version of the report can be purchased here.

Natural Resource Revenues, Corruption and Expropriation

This paper develops a formal model that looks at the mutually endogenous determination of foreign direct investments in natural resource-rich countries, the decision of host governments to expropriate these investments, and the level of corruption. Higher resource production makes expropriation more attractive from the perspective of national governments. A low expropriation risk is in turn an important determinant of international investments and is therefore associated with high levels of production. Moreover, resource production leads to high levels of corruption. Theoretical results are confirmed by estimations of a simultaneous equation model for 50 resource-rich countries in which the authors endogenize expropriation risk, corruption, and resource production.

Quantitative report on causes of performance and stagnation in the global fight against corruption

Why do some societies manage to establish control of corruption and others not? Control of corruption is defined in this report as the capacity of a society to constrain individual corrupt behavior (defined as particular distribution of public goods leading to undue private profit) in order to enforce the norm of individual integrity in public service and politics as well as to uphold a state that is free from capture by particular interest.This report sought to answer this main research question from an interdisciplinary perspective and by a large-N comparison method. For the dependent variables, the report uses: the aggregated Control of Corruption Index (CoC) from World Bank, the Corruption Risk Index from the International Country Risk Guide (ICRG), the experience with bribe and perception of official’s corruption from Global Corruption Barometer 2013, the experience with bribe and perception of favoritism from ANTICORRP’s own QOG 2013 European survey, the expert perception of diversion of public funds from World Economic Forum Global Competitiveness Survey and the tolerance towards corrupt practices from World Values Survey 2008.

A Comparative Assessment of Regional Trends and Aspects Related to Control of Corruption in the Middle East and North Africa, Asia and the Pacific, Sub-Saharan Africa, Latin America and the Caribbean, and the Former Soviet Union

This report analyses the status and dynamics of the control of corruption in five world regions: the Middle East and North Africa, Asia and the Pacific, Sub-Saharan Africa, Latin America and the Caribbean, and the Former Soviet Union. The diverse nature of corruption across the globe is shown by the huge variance within each single region; this variety of corruption is not only related to degrees of corruption but also to the peculiarities and effects of opportunities and constraints for corruption and the trajectories control of corruption or the lack thereof. In the MENA region material resources are abundant, while constraints are weak. Corruption prevails as a persistent social practice and a political strategy. Apart from few but notable exceptions, most countries in Asia and the Pacific as well as in Sub-Saharan Africa perform very poorly on control of corruption. Many of the small Caribbean island states have curbed corruption effectively, but the control of corruption in Latin American region shows little progress otherwise. The Former Soviet Union shows the lowest degree of the control of corruption worldwide. Existing evidence from regional achievers provide multiple insights into the dynamics for the control of corruption. Across these five regions two different pathways stand out: first, authoritarian regimes, with the strong willingness to reduce opportunities and strengthen (nondemocratic) restraints, and, second, democratic regimes with a strong and independent anti-corruption legislation, which is backed up by an independent judiciary have been able to successfully fight corruption. The report draws on the model of control of corruption as a balance between resources and constraints (Mungiu-Pippidi et al. 2011) to review in more detail the contributing factors. These continental comparisons complement the background reports of ‘achiever countries’.

Background paper on Poland

There are many grounds for believing that Poland is close to the threshold of good governance. Accession to the European Union required many changes to be made to the organization of the state and this provided an important drive for modernization. After EU accession, modernization processes clearly lost impetus, for political elites seemed to lack incentives to engage in broader reforms that could significantly improve quality of governance. Local government is over-politicized and the citizenry shows considerable passivity and tolerance towards corruption. While the model of governance in Poland has become more rationalistic and universalistic during transition, recent slowdown of reforms should be a matter of public concern.

Background paper on Rwanda

In recent years, Rwanda has been praised by a large number of donors and development experts for its recovery from the 1994 genocide, sustained economic growth and improvement of many socioeconomic indicators, partly achieved thanks to massive aid flows. A key feature of Rwanda’s progress is often considered to be governance and particularly anti-corruption: the country is generally regarded as one of the least corrupt in Africa and a success story in reducing corruption. This paper aims to analyze the state of corruption and the wider governance context in Rwanda, attempting to evaluate whether the country’s governance regime is an open access order characterized by ethical universalism, a limited access order dominated by particularism, or a hybrid.  After providing an overview of the country’s anti-corruption framework, the paper analyses a number of governance aspects and assesses the incidence of different forms of petty and grand corruption in a bid to ascertain to which extent claims of Rwanda as an anti-corruption success story are well-founded .

Background paper on South Korea

Korea is a developed OECD country and a young democracy with a relatively effective governance structure. It is often described as a very successful case of state-led economic development and praised for the successful transition from an authoritarian “developmental state” to a consolidated democracy since the 1980s. The Asian financial crisis that hit Korea in 1997 and the election of the first president coming from the opposition in the same year have been another critical juncture. Since then substantial institutional reforms have consolidated democracy, strengthened civil rights and improved the quality of governance. The country has a well-trained, meritocratic bureaucracy and a largely independent judiciary. Despite the substantial improvements in transparency, democratic accountability and prevention of corruption, many problems remain. Democratic behavior is still not deeply rooted in Korean society and is often undermined by entrenched hierarchical and authoritarian thinking. Korean society is divided into competing networks in which personal trust derives from regional origin and high school/university networks. These personal networks are grouped around powerful individuals and compete for influence, power, jobs and public resources. Democratic changes in governments have ensured that not a single group was able to completely monopolize power, but the competition of networks has prevented the emergence of a universalistic attitude oriented towards the common good. In sum, the distribution of resources is on the border between competitive particularism and ethical universalism with a general positive tendency since the beginning of democratization.

Background paper on Taiwan

Corruption has been on the top of Taiwan’s political and social agenda since at least the early 1980s. In many opinion surveys over the years, people have named it the most pressing political issue. Taiwan’s democratization in 1992 did not improve the situation – some observers even argue that corruption has worsened because of the need to finance election campaigns, to win votes and to gain influence in the now-powerful legislature.Since the first change in ruling parties in 2000, the situation has gradually improved. The Democratic Progressive Party (DPP) initiated tough anti-corruption regulations, strengthened anti-corruption organizations and cracked down hard on corruption and organized crime. The Kuomintang (KMT), which came to power again in 2008, continued this policy. Several high-profile corruption scandals in the last years mask the fact that Taiwan’s governance has improved markedly in the last decade. Not only have anti-corruption regulations been passed and are rigorously enforced, but also anti-corruption units in the government were strengthened. However, cultural factors such as the importance of personal relations in Chinese society and the habit of giving gifts not only to friends, but also to strategically important persons like doctors, teachers or business partners make it difficult to completely root out corruption.

Background paper on Uruguay

This report describes and analyzes the transformation of Uruguayan governance institutions with particular regard to corruption and particularism. Uruguay substantively improved its levels of universalism in the last fifteen years. This improvement is due to a prolonged process of transformation in Uruguayan politics from competitive particularism to an open access regime. We claim that the change in the way that parties compete for votes – from clientelistic to programmatic strategy – since 1985 is the cause of this transformation. An economic and fiscal crisis during the sixties weakened the clientelistic strategy of the traditional parties and enabled the entrance of a new party that built their electoral support based on programmatic claims instead of the distribution of clientelism. In that context clientelism became neither fiscally sustainable nor electorally effective. The traditional parties –after an authoritarian period- had to adapt to programmatic competition and leave aside clientelism. Institutional transformations regarding corruption are in this context the effects rather than causes of universalism. Nevertheless, these new institutions are not irrelevant because they are functional to the new political equilibrium and help to maintain it. This document uses data from a variety of sources – ranging from official figures to public opinion and elite surveys or media reports – to provide descriptive evidence of the main features of this governance regime transformation, and proposes an analytic framework to explain it.

Background paper on Latvia

Latvia’s political system has been functioning in a relatively inclusive and democratic way for about the last two decades. However, corruption has been a continuous concern. In the allocation of public resources such as public procurement contracts, public jobs and social services, fairness and impartiality are observed but not uniformly adhered to. Public agencies differ in their perceived degree of capture v. impartiality. The separation between the public and private sphere is the adopted principle but deviations from it are frequent (even if nowadays often hidden). Hence, within the distinction between the limited access order and open access order, Latvia fits as a borderline case.However, along several parameters, Latvia has experienced gradual long-term improvements. Its anti-corruption legislation is well developed. Administrative corruption remains a problem but on a considerably lesser scale than in the end of the 1990’s when solid surveys began. Corruption-related investigations and prosecutions of influential people in power positions have shown that no group is entirely above the law. Occasional expressions of the public outrage against corrupt politics are strong enough to serve as at least a modest restraint on the political elites and the grip of captors of political decision-making eased in 2010-2013.Among the factors which hold back Latvia from becoming a governance regime of the open access order, seem to be the rigid ethic division in the political competition, widespread sense of relative personal economic deprivation and high level of informal economy, the deficit of general interpersonal trust and related difficulties to overcome collective-action problems. Moreover surveys reveal mixed public attitudes towards corruption with both condemnation and tolerance common.

Background paper on Costa Rica

In spite of the economic and social policy successes of Latin America’s longest surviving democracy, corruption has become a major problem shaking Costa Ricans’ confidence in appointed and elected public officials. In response to the apparent rise in corruption since the start of the new millennium, governments have introduced new laws and created new agencies to combat corruption at all levels of society, with an emphasis on combating particularism by elected and appointed public officials. This report evaluates the apparent increase in corruption, the efforts to limit, expose, and prosecute corrupt acts, and the factors that have facilitated the rise in corrupt actions on the part of state officials and private citizens. In short, acts of corruption that may have previously gone unnoticed (at least unproven) are now exposed by a more aggressive media and prosecuted by new and/or stronger state anti-corruption agencies and laws in response to multiple major political corruption scandals of the early 2000s. State prosecutors show no deference in their investigations of corruption and/or illicit enrichment by public officials and private figures, no matter how powerful. The only limitation is the level of resources available to these agencies. The contemporary increase in the scope of corruption is not in the quotidian actions of low-level officials directly affecting the lives of ordinary citizens, but in influence trading and manipulation of formal processes. A separate, more recent and growing corruption problem comes from international drug cartels that have amplified their activities and money laundering in Costa Rica that some fear might outstrip the state’s capacity to keep corruption under control.

Background paper on Georgia

Georgia had a terrible reputation for corruption, both in Soviet times and under the presidency of Eduard Shevardnadze (1992-2003). After the ‘Rose Revolution’ that led to Shevardnadze’s early resignation, many proclaimed that the government of new President Mikheil Saakashvili was a success story because of its apparent rapid progress in fighting corruption and promoting neo-liberal market reforms. His critics, however, saw only a façade of reform and a heavy hand in other areas, even before the war with Russia in 2008. Saakashvili’s second term (2008-13) was much more controversial – his supporters saw continued reform under difficult circumstances, his opponents only the consolidation of power.Under Saakashvili Georgia does indeed deserve credit for its innovative reforms that were highly successful in reducing ‘low-level’ corruption. At the top, however, many UNM officials saw themselves as exempt: ‘high-level’ corruption continued and even expanded as the economy grew. Georgian Dream has not restored the ancien régime, but has allowed some patronage and clientelism to creep back into the system. The new Georgia has gained a reputation for ‘selective prosecution’; but some of this is dealing with causes célèbres from the Saakashvili era, while some is clearly persecution of the UNM.

Background paper on Estonia

As in all transition countries, corruption has been and remains a concern for Estonia. Still the country is an obvious top-achiever in comparison with the rest of the post-communist area. On the other hand, the last decade has been stable with the level of corruption almost unchanged and representing a certain plateau in development. The Estonian governance regime operates mostly in line with the principle of ethical universalism. Reportedly all key elements of the state are subject to quite high formal standards of transparency. Correct functioning of the public procurement system is the rule, and violations, although common, are more of an exception. Estonia appears to have a high level of equity of access to its education and healthcare systems.The search for causes of Estonia’s success often focuses on cultural factors. The high general level of interpersonal trust in the Estonian society is an unusual cultural feature of a post-soviet society. Plus the civil society and free media represent high normative constraints for corruption and particularism. It has been argued that in the beginning of 1990’s, Estonia experienced the most radical replacement of the political elite compared with Latvia and Lithuania where the old “nomenklatura” networks managed to perpetuate to a much larger extent. The new Estonian elite was willing and ready for thorough reforms of the judiciary and public administration.

Background Paper on Chile

This report examines the successful performance of Chile to control corruption. It discusses the importance of structural and institutional factors that have shaped Chilean political development and its political economy and then it analyses the mechanisms implemented to achieve such a goal.

Background paper on Bulgaria

The Worldwide Governance Indicators show that Bulgaria has made significant progress in the area of “control of corruption” since 1996. This finding contrasts with the general opinion of the Bulgarian population who perceive Bulgarian institutions as corrupt, and contradicts the decision of the European Commission to continue monitoring Bulgaria’s progress in fighting corruption and organized crime. Hence, there is a need for careful consideration and analysis to understand how much progress Bulgaria has really made in the fight against corruption. Can Bulgaria be considered an anti-corruption success story?

Background paper on Botswana

When compared to its African peers, Botswana is globally acknowledged for its relatively good democratic governance, prudent economic management and sustained multi-party system of government. Botswana’s postcolonial leaders have been given credit for their visionary leadership which has successfully blended modern and traditional institutions to create a participatory and economically viable democracy from an originally poverty-stricken country that was still being governed under traditional ideas of leadership when it achieved independence in 1966. Botswana has used the rule of law to transform a semi-autocratic traditional governance system of chiefs and associated centralised decision-making structures into relatively representative and transparent institutions of central and local government. The current system of governance is largely anchored in principles of both competition and merit as modes of operation, but although corruption  was not a critical challenge during the country’s earlier post-independence years, in the two decades from about 1990 it has become a serious and growing feature of Botswana´s society. This case study analyses the evolution of corruption as a major challenge to the sustaining of Botswana’s democratic and development. The main aim of this country report is to establish by use of meaningful indicators the state of corruption in Botswana and to depict societal responses in their attempts to control it.

Background paper on Qatar

Qatar is judged by international anti-corruption indices to be among the highest performing countries in the Middle East and North Africa. The Qatari government has streamlined its regulations regarding business practices and engaged in reforms from above that have liberalized the Qatari economy and increased its strength and viability. However, Qatar is a neo-patrimonial absolute monarchy in which the state is not immune from private interests, and where the ruling family can bypass the rule of law. The complete control by the monarch of state institutions and policies leaves no space for bottom-up calls for reform, or for independent assessment of the performance of the state and the actions of the ruling family by civil society and the media. The permeation of informal networks (mainly in the form of tribal relations) within state institutions and civil society, the lack of interest in and avenues for political participation among Qatari citizens, and the clientelistic relationship between citizens and the state support the continuation of this status quo. This paper analyses the structures and mechanisms of Qatar’s governance regime that reveal the contradictions inherent within the categories covered by anti-corruption indices. In doing so, it suggests a number of shortcomings in the methodologies and scope of those indices as they specifically apply to Qatar, and poses a number of questions regarding the kind of information that is difficult to find but which is crucial to address in order to form a clearer picture of corruption and anti-corruption practices in Qatar. The paper concludes that the absence of this information in the first place casts a shadow of doubt over the performance of Qatar in anti-corruption indices. Also, the indices’ focus on measuring the scope of state functions while not measuring the strength of state institutions is a key reason behind the discrepancy between Qatar’s anti-corruption ranking and the mechanisms and structure of its governance regime. Instead, the paper proposes specific indicators related to the governance regime that allow for a more comprehensive look at corruption and anti-corruption practices in Qatar.

Bulgarian Anti-Corruption Reforms: A Lost Decade?

The Worldwide Governance Indicators show that Bulgaria has made significant progress in the area of “control of corruption” since 1996. This finding contrasts with the general opinion of the Bulgarian population who perceive Bulgarian institutions as corrupt, and contradicts the decision of the European Commission to continue monitoring Bulgaria’s progress in fighting corruption and organised crime. Hence, there is a need for careful consideration and analysis to understand how much progress Bulgaria has really made in the fight against corruption. Can Bulgaria be considered an anti-corruption success story?

In this paper, the authors seek to answer the above questions by providing a background analysis on Bulgaria’s governance regime. According to research, Bulgaria has made some progress in its transition from patrimonialism to open access order but the main features of its governance regime remain these of competitive particularism. In legal terms Bulgaria displays some open access order features but they do not translate into practical implementation.

Following the country’s EU accession in 2007 progress has been uneven, and has mostly been driven by civil society demands for change, which culminated in mass street protests in 2013. Progress in the political corruption domain has been limited. Power distribution in Bulgaria has opened up to competition but is still concentrated in few political party leaders and powerful business conglomerates, interlinked in a complex web of dependencies with former secret service and communist party elites, which still have privileged access to state resources. Convictions, in particular of high-ranking politicians and administrators are non-existent or rare, a sign that the rule of law and accountability have not yet taken hold in the country.

Tax Simplification and Informal Economy in developing and transitioning countries

Informal economy is present in all countries; however it is in low and middle income countries that it has its deepest roots with some measurements estimating it to average at above 40% of national GDP. This represents a large part of the economy and poses serious problems for economic development and the relationship between state and society. It also means a significant loss in tax revenue, that poor countries need for the provision of public goods, resulting in the undermining of state capacity (Fukuyama, 2004). This leads to a vicious cycle, since without the efficient provision of public goods the incentive for tax compliance further decreases.

As tax structure and bureaucratic burden haven been identified as primary causes for informal economy, in the following we want to analyze whether lower costs of compliance actually lead to lower levels of informal economy.  Given that in recent years some countries have implemented flat tax as tool for tax simplification, the authors explore the question of whether flat taxes have actually lived up to their promise and increased tax revenue or lowered levels of informal economy.

Pedro Obando and  Johannes Wahner are both Master’s of Public Policy candidates at the Hertie School of Governance in Berlin.

Becoming Denmark: Historical Designs of Corruption Control

Why do some societies manage to control corruption so it manifests itself only occasionally, as an exception, while other societies do not and remain systemically corrupt? And is the superior performance of this first group of countries a result of what they do or of who they are? Most current anticorruption strategies presume the former, which is why institutions from developed and well-governed countries are currently being copied all around the world. At least on paper, there are few states left that are missing a constitutional court, some form of checks and balances, or an ombudsman (the number of countries with these elements grew from 47 in 1990, 100 in 2003 and 135 by 2008). Skeptics, on the other hand, endorse the latter view, believing in the cultural determinism of corruption and good governance. More recently, following the failure of the first generation of anticorruption reforms, a middle-ground position has begun to emerge: that the most relevant lessons lie not in what developed countries are currently doing to control corruption but rather in what they have done in thepast, when their societies more strongly resembled the conditions in today’s developing world (Andrews 2008). However, as this subject area is largely unknown to governance scholars and practitioners alike, it is difficult even to estimate the potential value of such historical lessons. I plan to address this gap by asking not how corruption is eradicated but rather how societies have built—over time—systems to protect their common resources from being spoiled by individuals or groups.

The Legacies of 1989: The Transformative Power of Europe Revisited

Why has the EU succeeded in promoting democracy in the new member states but failed in promoting good governance?  This essay seeks to answer this question first by distinguishing governance from political regimes, and second by exploring to what extent national governance—which is defined as the set of formal and informal institutions that determine who gets what in a given country—is susceptible to being improved by external pressure or intervention. It concludes that improving governance remains a challenge even for the democratic character of the European project.