Corruption and Development: A Reappraisal

Corruption and development are two mutually related concepts equally shifting in meaning across time. The predominant 21st-century view of government that regards corruption as inacceptable has its theoretical roots in ancient Western thought, as well as Eastern thought. This condemning view of corruption coexisted at all times with a more morally indifferent or neutral approach that found its expression most notably in development scholars of the 1960s and 1970s who viewed corruption as an enabler of development rather than an obstacle. Research on the nexus between corruption and development has identified mechanisms that enable corruption and offered theories of change, which have informed practical development policies. Interventions adopting a principal agent approach fit better the advanced economies, where corruption is an exception, rather than the emerging economies, where the opposite of corruption, the norm of ethical universalism, has yet to be built. In such contexts corruption is better approached from a collective action perspective. Reviewing cross-national data for the period 1996–2017, it becomes apparent that the control of corruption stagnated in most countries and only a few exceptions exist. For a lasting improvement of the control of corruption, societies need to reduce the resources for corruption while simultaneously increasing constraints. The evolution of a governance regime requires a multiple stakeholder endeavor reaching beyond the sphere of government involving the press, business, and a strong and activist civil society.

Questions and Answers on Romania’s Anti-Corruption Implosion – Updated

In this brief report, Alina Mungiu-Pippidi answers key questions on the recent events in Romania regarding the passing of Ordinance 13/2017. This report covers questions on the ordinance itself, the protests which were triggered by it and the fight against corruption in Romania. The report was updated on 13 February 2017.

Case study report on control of corruption and EU funds in Ukraine

This report analyses the European Union (EU) – Ukraine relationship by looking at the impact of EU conditionality regarding the anti-corruption framework on the use and distribution of EU funding between 2007 and 2014. It shows that, historically, the EU concern with good governance in Ukraine has been materialised in the form of numerous anti-corruption conditions attached to transnational aid flows. Despite important improvements at institutional levels – particularly the set-up of the National Anticorruption Bureau, the Ukrainian practices and everyday routines have not changed fundamentally. Assessing the impact of EU funding in such a context marked on the one hand by pervasive corruption and on the other hand by a profound desire for change, can be a challenging task, especially due to the fact that a large share of international aid received has been directed to budget support, thus making it impossible to asses if it has been affected by corruption. Using secondary data analysis and interviews with key stakeholders, the report shows that the efficiency of EU assistance could be improved by increasing the levels of control, enhancing transparency and establishing a closer relationship with international partners who are more experienced in tackling EU funding fraud and grand corruption.

EU governance promotion in Tunisia: Lessons from the Arab Spring

This report explores the intersection between European Union assistance to Tunisia and the development of that country’s good governance and anti-corruption framework, both during times of stability under the authoritarian rule of former President Ben Ali and during the turbulent transition period that ensued after the Arab Spring. The report furthermore analyses the changes in funding priorities during the period 2007–2013, as well as the concomitant development and application of the EU’s conditionality framework. It argues that the EU’s use of the instruments at its disposal, as well as the incentives that were on offer, were not always helpful in pushing forward good governance and anti-corruption reforms, and indeed may even at times have been harmful to them.

Case study on EU aid and anti‐corruption and governance in Tanzania

Tanzania boasts one of the highest rates of economic growth in Sub-Saharan Africa. In the last decades it also established one of the most harmonised donors frameworks. However, the relationship between Tanzania and its donors has deteriorated significantly in recent years following several high-level corruption cases and slow progress on more complex governance reform. In response, the EU has reformed the composition of its development assistance modalities, which predominantly entailed a reduction in Budget Support, and has stopped committing further aid to Tanzania for the time being. These events indicate considerable limitations to the effectiveness of the EUs (and other donors’) measures to induce good governance through existing modi of development cooperation.

Improving governance in Kosovo: Evaluating the Impact of EU Conditionality through Policy and Financial Assistance

This paper seeks to evaluate the impact of EU policy and funds aimed at improving governance and controlling corruption in Kosovo. It examines the interrelation between EU conditionality as expressed in different policy documents and the financial assistance provided by the EU to Kosovo in the area of rule of law. The focus is on the period since 2007, although the paper begins with a brief overview of the conflict in Kosovo and its aftermath. The paper then tracks how the anti-corruption discourse features in policy documents and funding priorities, highlighting the EU conditionality mechanisms applied and the development assistance provided. It evaluates conditionality in the light of Kosovo’s anti-corruption performance during this period. The paper draws conclusions as to the effectiveness of EU policy and financial assistance in the area of anti-corruption, with a view to informing the ongoing policy debate on how to strengthen EU leverage in improving anti-corruption efforts in aspiring member-states, particularly in a post-conflict context.

Process-tracing report on Uruguay

This paper 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 nor fiscally sustainable neither electorally effective. The traditional parties –after an authoritarian period- had to adapt to programmatic competition and leave aside clientelism. Institutional transformations are the consequences of the strategies that parties took for electoral survival and they are functional to the new political equilibrium and help to maintain it. This paper traces the process of institutional reforms and elite behavioral changes that lead to that outcome. Data from a variety of sources is used- ranging from official figures and elite interviews, 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.

Process-tracing report on Taiwan

Since Taiwan became democratic in 1992 and especially after the change in ruling parties in 2000, the passage of new laws and the reform of existing ones have defined more clearly than ever what constitutes “corrupt” behavior and legal changes have followed international norms. Moreover, since the change in ruling parties, judicial independence has been guaranteed and anti-corruption agencies have been strengthened considerably. Despite the fact that there is still corruption and that the institutional configuration of Taiwan’s anti-corruption agencies is far from optimum, these are major achievements.The present report explains these achievements by analyzing the impact of two turning points in Taiwan’s history, democratization and the change in ruling parties, on agency in Taiwan’s anti-corruption reforms. It does so by applying the methodology of process-tracing which investigates the historical developments around these two “critical junctures” in Taiwan’s history while taking into consideration enabling and constraining factors “inherited” from the authoritarian era. The analysis primarily draws on interviews conducted with former and present officials, judges, and investigators in October 2014.

Process-tracing report on South Korea

Various indicators of corruption show that South Korea has been relatively successful in control of corruption, compared to other Asian countries. Since its independence, South Korea has been transitioning, if not completed a transition, from particularism of the limited access order to ethical universalism of the open access order. How did this happen?  This paper first compare the political, economic and social bases of contemporary control of corruption in South Korea with those in the early period of post-independence, focusing on the norms of ethical universalism vs. particularism. Then, the process-tracing analysis finds four periods with different equilibria of norms of particularism and universalism. Each period is defined by major political events such as the establishment of two divided countries (1948), Student Democratic Revolution (1960) followed by the military coup led by Park Chung-hee a year later, democratic transition (1987), and the financial crisis and the first peaceful change of government (1997). This paper also identifies several critical reforms that have contributed to the change of governance norms. The dissolution of the landed aristocracy, relatively equal distribution of wealth and rapid expansion of education due to sweeping land reform (1948 and 1950) laid the structural foundations for the growth of ethical universalism. Gradual expansion of civil service examinations (1950s-1990s), democratization (1960 and 1987), good governance reforms (1988- ) and post-financial crisis economic reform (1998-9) promoted norms of ethical universalism. This paper also explores how these reforms were carried out, who were the main actors, what factors enabled and constrained them, and what impact they made on governance norms.

Process-tracing report on Georgia

Georgia represents a remarkable case of transformation from a particularistic regime to ethical universalism even though it remains to be a ‘borderline case. This paper looks at Georgia’s path to reform in 2004-2012. It outlines a timeline of changes, discusses political actors of change and their backgrounds and then looks at internal and external factors which were regarded as significant in bringing about such change. It is argued that the young elite, both ideologically and structurally cohesive, capitalised on the window of opportunity and implemented ‘big bang’ reform in 2004-2008. As time passed the new incumbents developed vested interest that became apparent in 2008-2012 when a state-business nexus re-emerged with the state apparatus becoming increasingly manipulated for the sake of private and group interests. These interests undermined market competition, and elite networks used state power to control economic and political structures during the Saakashvili administration. Even though concerns over particularistic practices have remained, petty bribery has decreased substantially.

Process-tracing report on Estonia

In controlling corruption, Estonia is an obvious top-achiever in comparison with the rest of the post-socialist area countries. Some historical legacies apparently facilitated this state of affairs – Estonia was by and large the wealthiest republic of the Soviet Union with the most developed elements of autonomous civil society and considerable exposure to Western information. The strong anti-communist and nationalist mood of Estonians appear to be a key driving force behind the drastic replacement of the ruling elite, which culminated in the 1992 parliamentary elections. This report explores the replacement of the old Communist nomenclature, provides insights into some of the reforms undertaken and the roles of their proponents.The ruling groups changed again in 1995 but the governments of 1995-1999 were probably too short-lived, too weak and indeed not reactionary enough to reverse many of the positive effects of the reforms of the previous period. New legal guarantees of public access to information and broad access to online public services came after 1999 to serve as another layer of constraints on corruption. It can be surmised that a virtuous circle developed, perpetuated in the interplay between, on the one hand, pressures of public opinion requiring efficient and universalistic governance and, on the other hand, initiatives from government in response to public needs. Episodes of corrupt particularistic acts are still recurrent in Estonia but they do not outweigh the overall success.

Process-tracing report on Costa Rica

This paper track Costa Rica’s long transition from a particularistic to a universal ethical society using a process tracing mythology. It argues that the origins of Costa Rica’s success began in the early 20th century followed by three subsequent tipping points that resulted in limiting opportunities for corruption. Each of these tipping points enhanced corruption-free governance through the devolution of political power across the branches of government, the decoupling of the executive branch’s control over state accountability agencies, the creation of new agencies whose actions expanded the anticorruption capacity of state agencies, and the remove of legal impediments on the media to investigate and publish stories about corrupt officials. It details the central role of the media in the most recent period as a public watchdog investigating and reporting on many cases of apparent corruption by public officials. It also identifies many recent cases where the media (traditional and internet-based) initiated investigations into corruption before the state’s official anti-corruption agencies investigated and prosecuted them. The analysis draws on primary research and interviews with former and current public officials, magistrates, historians, and investigators.

Process-tracing report on Chile

This paper traces the historical roots of Chile’s low tolerance for corruption and analyzes how the country has successfully remained free from significant corruption scandals despite the greater access to information and more demands for transparency that often result in uncovering corruption in areas that were previously inaccessible to the press and civil society. The economic transformations undertaken under military rule (1973-1990) and consolidated once democracy was restored in 1990 have created a stronger civil society, a freer press and have increased demands for transparency. There is growing information on corruption scandals as the number of social and political actors has increased and there is more competition for resources and markets. As power is more widely distributed, there is less opportunity for covert corrupt practices and more pressure to end former common corrupt practices. While opportunities for corrupt practices expand with economic growth—both in per capita and total national GDP—tolerance for corruption has remained low and a stronger civil society has raised probity standards in the public sector.

Between condemnation and resignation: Study on Attitudes Towards Corruption in Dar Es Salaam, Tanzania

Tanzania represents one of the well-documented cases of countries in Sub-Saharan Africa where corruption is endemic. This has remained the case in spite of manifold commitments on the part of the regime to fight this problem and of the fact that Tanzania has in place, what is in the opinion of international experts, a state of the art anti-corruption legislation.

This article presents evidence collected through ethnographic research about the attitudes towards corruption of citizens in urban low income areas of Dar es Salaam, the largest city in Tanzania, and explores some of the factors underpinning such attitudes. The research focused on experiences with corruption in the health sector, and on some of the coping strategies that citizens resort to in face of the difficulties encountered when seeking medical attention at public health facilities. With regard to the latter, it is well known that mutual help associations are playing an increasingly important role across Africa, which in turn suggests a relevant set of questions regarding the role that horizontal social networks found in these communities play in relation to prevailing corrupt practices but also regarding their potential role to develop more effective anti-corruption approaches. Regardless of the surge in the NGO “industry”, as denounced by some scholars, witnessed in Tanzania, we are interested in the role of these grassroots level associations as they are exactly of the kind that is expected to generate high levels of social capital, which – in the literature- is associated with favourable governance outcomes.

The Splintering of Postcommunist Europe

There are two radically different versions of the postcommunist narrative. One tells the triumphal tale of the only world region in which the reforms recommended by the “Washington consensus” worked. The other and more realistic account speaks of a historic window of opportunity that lasted for only a quarter-century, during which efforts by the West and patriotic elites of Central and Eastern Europe managed to drag the region into Europe proper, leaving Europe and Russia pitted against each other along the old “civilizational” border between them. This essay argues that while Institutional choices matter in the postcommunist world, geopolitical and civilizational boundaries still set the horizons of political possibility.

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.

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.

Institutional performance and social values in Russia

This report focuses on corruption practices in Russia and presents the results of a survey that was conducted between July and November 2013.

The questionnaire was translated into Russian and was adapted slightly after the first five interviews. The interview was time consuming (from 1 to 3 hours) and many respondents became tired very quickly; hence, some coffee/tea breaks were integrated whenever it was possible. The interviews were conducted in such places as homes, workplaces, at a café, and sometimes in a car during a long drive. Some of the questions were not interesting from the viewpoint of respondents, such as the questions about social norms and values (more comments in the text). Some respondents had difficulties in attributing scores to the work of public institutions and the government, especially less educated and/or retired respondents.

The results of the survey conducted in the second half of 2013 provided some information on trust and experiences with local institutions, as well as serious problems in the community, the quality of services provided by institutions and access to these services, and social norms and values.

Survey: Institutional performance and social values in Hungary

The following report is based on data collected during ethnographic fieldwork, as a part of the ANTICORRP project, Work Package 4 – The Ethnography of Corruption. In particular, it deals with the results of a survey conducted in Hungary on a small sample of 103 inhabitants of the city of Budapest.

The aim of the survey is to collect information on how different areas of the public and private life are perceived by the respondents, and in particular: public institutions, local development, local customs, and values. The main focus of the questions is to investigate how people deal with the problem of corruption (if perceived at all), its effects, practices, social and cultural norms, as well as with the anti-corruption discourse, both at a local and national level. It is important to stress that the word “corruption” itself is not directly used in the survey, with one exception in section D, where it is used to address one of a series of hypothetical scenarios. Avoiding direct references to corruption as a phenomenon was a choice based on the awareness that corruption itself is hard to define and to frame, since it consists of multiple practices not always perceived as fraudulent or illegal, which are not necessarily fitting the social understanding of object corruption. Using a word that has such strong moral and social implications in the public discourse would have possibly influenced the results of the survey, and make the respondent feel at unease or bias their responses when dealing with such matters.

The survey target has been the ordinary residents in the above mentioned cities, in an attempt to give a bottom-up perspective of the relationship between the citizen and the institutions at multiple levels (from local to nations and supranational), as well as to underline how the citizens relate to such institutions in matter of social trust and ability to interact with them.

The survey is aimed at providing comparable data among the countries it has been conducted in, in the scope of the WP4 research. Therefore it serves the purpose of providing information which could be used in a wider, comparative framework.

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.