The attempt of this special issue of Crime, Law and Social Change is to reflect on the need and present the evidence of what are the effective elements of a public integrity framework. The origins of this concept are to be found in the original paper by Langseth, Stapenhurst and Pope,1 where a ‘national integrity system’ was proposed as a comprehensive method of fighting corruption. They proposed eight independent pillars needed to fight corruption. Those were public awareness, public anti-corruption strategies, public participation, ‘watchdog’ agencies, the judiciary, the media, the private sector, and international cooperation. This amounted to a mixture of agency from three main areas: domestic civil society including the media and the private sector, domestic horizontal accountability agencies such as watchdogs and the judiciary, and international pressure. It was proposed that even the anti-corruption strategies should be ‘public’, in order to put some constraints on government as it was rightly understood that in a corrupt country the government is the main beneficiary of the status quo of the power establishment, so it can hardly be expected to be the sole or the even the principal actor in anticorruption reforms, at least not if such reforms are to be effective. Langseth, Stapenhurst and Pope’s mixture of agents had a sound logic of accountability, drawing as it did on three sources of agency, all different from government, so in principle able to exercise the constraints essential for control of corruption. Because the main question the anticorruption fighter addresses is not what does control of corruption consist in, but what brings it about.
Our theory presents control of corruption as the equilibrium between opportunities for spoiling and constraints limiting them because this is what statistical evidence speaks for. The essential elements of this equilibrium, transparency, administrative discretion, anticorruption regulation are in turn tested, and interacted with societal participation to arrive at a state-society model of corruption control. In the end, what we identify from all the cases in the world and data for more than two decades is indeed that control of corruption is a holistic equilibrium in every society, but also that one cannot fix a balance without being aware of its existence. This issue brings together a variety of articles, focussing on the different pillars of this theory.
Over the past years, an increasing number of studies have looked at the use of internet and communications technology (ICT) in the fight against corruption. While there is broad agreement that ICT tools can be effective in controlling corruption, the mechanisms by which they are doing this are much less clear. This paper attempts to shine some light on this relationship. It focusses on the role of ICT in empowering citizens and supporting civil society. It argues that enlightened citizens can use internet access and social media to inform themselves on corruption, mobilise support for anti-corruption movements and gather information in order to shine a lisght on particularistic practices. Defining corruption as a collective action problem, the paper provides quantitative evidence to support its claim that ICT can support collective action of an informed citizenry and thus contribute to the control of corruption.
Red tape has long been identified as a major cause of corruption, hence deregulation was advocated as an effective anticorruption tool, an advice which many country followed. However, we lack robust systematic evidence on whether deregulation actually lowers corruption. This is partially due to the difficulty of defining what is good regulation, but also to the lack of theoretical clarity about which type of corruption regulations impact on and to the deficient measurement of different types of corruption. In order to address the latter two gaps, we differentiate petty corruption from government favouritism and propose novel measurement of the latter by developing two objective proxy measures of favouritism in public procurement: single bidding in competitive markets and a composite score of tendering ‘red flags’. Using publicly available official electronic records of over 2.5 million government contracts in 27 EU member states and two European Economic Area countries in 2009–2014, we directly operationalize a common definition of favouritism: unjustified restriction of access to public contracts to favour a certain bidder. Petty corruption is measured using business surveys while the extent of business regulation is measured by Doing Business expert assessment of precise regulatory costs. Using country-level panel regression analysis, we find that deregulation has a heterogeneous impact on both low and high level corruption. It is largely ineffective in tackling government favouritism, with business start-up deregulation even facilitating such corruption. Whereas deregulating the various channels through which governments and businesses interact (e.g. obtaining construction permits) often decreases the perception of bribery and petty corruption. Policy consequences are profound and point at a more targeted and context-dependent promotion of the deregulation agenda. Full public procurement database is available at http://digiwhist.eu/resources/data/
The measurement of corruption is an old challenge of both academics and the policy community, due to the absence of a unanimously agreed upon definition and the widespread (although inaccurate) belief that owing to its informal and hidden nature, corruption is an unobservable phenomenon. The articles in this issue challenge this belief.
This is a special issue of the European Journal on Criminal Policy and Research.
While the last 20 years saw the invention of corruption rankings, allowing comparison between countries and the shaming of corrupt governments, such measurements are largely based on the perceptions of experts, lacking both specificity and transparency. New research, based on a comprehensive theory of governance defined as the set of formal and informal institutions determining who gets what in a given context, allow for more specific and objective, albeit indirect, measurements of control of corruption. Such measurements focus on the institutional framework which empowers public integrity and eliminates many current anti-corruption tools, while validating others. Most importantly, it provides a broader specific context which can empower reforms based on evidence and a clear measure to determine status and progress of corruption control.
Disclosure of income, assets and conflicts of interest can serve as powerful public accountability tools to draw attention to the abuse of public office, help prosecute corrupt offenders and create a culture of scrutiny in the public sector that deters corruption. Based on data of the World Bank’s Public Accountability Mechanisms initiative, we present the first indicator that captures a country’s financial disclosure in-law effort. By employing different panel data model specifications, we use this indicator to measure how the introduction of comprehensive financial disclosure systems impacted national corruption levels for 91 countries between 1996 and 2012. We present robust results that provide tentative evidence for a positive and significant relationship between a country’s capacity to control for corruption and the expansion of financial disclosure legislation for the years following the enactment.
In order to address the lack of reliable indicators of corruption, this article develops a composite indicator of high-level institutionalised corruption through a novel ‘Big Data’ approach. Using publicly available electronic public procurement records in Hungary, we identify “red flags” in the public procurement process and link them to restricted competition and recurrent contract award to the same company. We use this method to create a corruption indicator at contract level that can be aggregated to the level of individual organisations, sectors, regions and countries. Because electronic public procurement data is available in virtually all developed countries from about the mid-2000s, this method can generate a corruption index based on objective data that is consistent over time and across countries. We demonstrate the validity of the corruption risk index by showing that firms with higher corruption risk score had relatively higher profitability, higher ratio of contract value to initial estimated price, greater likelihood of politicians managing or owning them and greater likelihood of registration in tax havens, than firms with lower scores on the index. In the conclusion we discuss the uses of this data for academic research, investigative journalists, civil society groups and small and medium business.
Government favouritism in the allocation of public funds raises costs for any society in which corruption prevails. Particularistic transactions can be identified in three different situations: uncompetitive awards of public contracts when there is only one “competitive” tender, when public money is spent on contracts supplied by politically connected firms, and a situation of capture in which one private contractor obtains a disproportionate share of contracts issued by some public agency. This present research has tested for the relevance of those three types of particularistic transactions that signal government favouritism as they apply to the Romanian construction sector for the period from 2007-2013, and to do so has made use of original public procurement databases. Furthermore, it will be proposed here that the “kickback”—a percentage of particularistic awarded values—can be used as a measurement of corruption. Even conservatively estimated, kickbacks account for much of the cost borne by any society that fails to eradicate corruption. For our purposes here, amounts of kickbacks at county level have been controlled against criminal convictions for corruption at county level. As a result, data analysis provides strong evidence that kickbacks based on particularistic allocation of public funds are indeed relevant in the measurement of corruption, and the steps used to evaluate kickbacks can be used just as well for other countries.
Comparative research on corruption has always faced challenges on how to reliably measure this phenomenon. Indicators based on perceptions of or experience with corruption are the most common approaches, but these methods have also faced criticism regarding limitations to their conceptual and measurement validity. A number of scholars have thus sought to develop alternative, more objective, measures of corruption. Following this line of research, this paper relies on audit reports from Brazilian municipalities to construct a concrete indicator of political corruption. Data collection exploits the setup of randomized multiple audit rounds to construct a unique panel of 140 municipalities covering five administrative terms between 1997 and 2013. A first empirical application of data is presented, testing the potential deterrent effect of electoral accountability on future corruption levels.
Once of interest mainly to specialists, the problem of explaining how institutions change is now a primary concern not only of economists, but of the international donor community as well. Many have come to believe that political institutions are decisive in shaping economic institutions and, with them, the course of innovation and investment that leads to a developed society. This is the shift from patrimonialism to ethical universalism, a transformation that most of today’s advanced democracies accomplished through a long historical evolution. But there has been very little research on whether and how this kind of change can be engineered and speeded up by human design. The EU-funded ANTICORRP project that I have been leading aims to help fill this gap. The big challenge is to explain the shift of the governance paradigm from particularism to universalism in the few societies that have managed to accomplish it in the postwar era. Do these success stories offer any lessons about how other societies can make that journey?
The article examines the effect of meritocratic recruitment and tenure protection in public bureaucracies on regulatory quality and business entry rates in a global sample. Utilizing a cross-country measure on the extent of meritocratic entry to bureaucracy and a time-series indicator of tenure protection, it subjects theoretical claims that these features improve the epistemic qualities of bureaucracies and also serve as a credible commitment device to empirical test. We find that, conditional on a number of economic, political, and legal factors, countries where bureaucracies are more insulated from day-to-day oversight by individual politicians through the institutional features under consideration tend to have both better regulation, specifically business regulation, and higher rates of business entry. Our findings suggest that bureaucratic structure has an indirect effect on entrepreneurship rates through better regulatory quality, but also exert a direct independent effect.
State capacity has attracted renewed interest over the last years, notably in the study of violent conflict. Yet, this concept is conceived differently depending on where the interest lies. In this article, we focus on bureaucratic autonomy as a distinct concept and discuss its connection to state capacity in detail. Using panel data over 1990–2010 and a novel indicator of autonomy, we estimate the separate effect of state capacity and bureaucratic autonomy on child mortality and tuberculosis prevalence. The evidence suggests that bureaucratic autonomy has a stronger impact than commonly used measures of state capacity or traditional macroeconomic variables.
The gradual drop in public confidence in the EU since the beginning of the 2008 economic crisis indicates an erosion of the long-held belief among citizens and elites alike that European integration is the best option to secure a better future. But is it EU democracy that is being challenged here, or is democracy itself challenging the prospects for EU integration? To answer this question, this article briefly reviews first-hand evidence of the basis of trust and the loss of it in European institutions. The evidence is dealt with at a national rather than individual level, and comprises mostly survey data and primary facts that can inform a policy argument. This article does not offer a full explanation of populism nor of attitudes to democracy or globalization, each of which clearly deserve an article in their own right. Instead, it uses data to deconstruct the myths of the EU loss of confidence and its connection with democracy. The two main factors found to decrease trust in the EU are economic growth and confidence in national governments’ performance in terms of controlling corruption.
Many believe innovation can lead the way out of the present economic crisis. In Europe and the United States leaders have repeatedly referred to the importance of innovation, research and education to sustaining economic growth. The concept that innovation is the key to prosperity is great- but we must understand that this applies to a certain governance context which is seldom encountered in the real world.
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.
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.
Over the past couple of years, international law and international relations scholarship has shifted its focus from the question of whether human rights treaties bring any state-level improvements at all to investigations in the domestic context of the factors and dynamics influencing state compliance. In this direction, and focusing on the European Court of Human Rights, this study inquires into the factors that account for variable patterns of state compliance with its judgments. Why do national authorities in some states adopt a more prompt and responsive attitude in implementing these judgments, in contrast to other states that procrastinate or respond reluctantly? On the basis of a large-N study of the Strasbourg Court’s judgments and a comparison across nine states, this article argues that variation in state implementation performance is closely linked to the overall legal infrastructure capacity and government effectiveness of a state. When such capacity and effectiveness are high and diffused, the adverse judgments of the Strasbourg Court are unlikely to be obstructed or ignored, even when the government, political elites, or other actors are reluctant and not in favour of substantive remedies.
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.
What is to be done when an entire education system is corrupted, when universities sell cheap diplomas and the best academics move abroad? Corruption in the academy can be challenged by a ‘clean universities’ ranking and the power of press coverage.
This paper analyzes the relationship between the mode of international investment and institutional quality. Foreign investors from a capital-rich North can either purchase productive assets in a capital-poor South and transfer their capital within integrated multinational firms or they can form joint ventures with local asset owners. The South is ruled by an autocratic elite that may use its political power to expropriate productive assets. The expropriation risk lowers the incentive to provide specific capital in an integrated firm and distorts the decision between joint ventures and integrated production. We determine the equilibrium risk of expropriation in this framework and the resulting pattern of international production. We also analyze as to how globalization, which is reflected in a decline in investment costs, influences institutional quality.
This study empirically analyzes the effects of de jure financial openness on institutional quality as captured by indicators on investment risk, corruption level, impartiality of judiciary system, and the effectiveness of bureaucracy. We show that a higher degree of financial openness improves institutional quality mainly by reducing investment risks. We also study the effect of a single liberalization reform. Again, we find evidence for the beneficial impact of financial liberalization with the exception of corruption. We additionally show that the benign consequences of financial opening for the institutional development are even larger if financial liberalization is supported by simultaneous political liberalization, while financial deregulation in former socialist countries tends to worsen institutional quality.
Control of corruption in a society is an equilibrium between resources and costs which either empowers or constraints elites predatory behavior. While most research and practice focuses on legal constraints, this paper investigates normative constraints, deemed to be more important, especially civil society and the press. Fresh evidence—both historical and statistical—is found to support Tocqueville’s assertions regarding the importance of collective action and the joint action of media and associations in not only creating a democratic society, but controlling corruption as well. However, little is known on how to build normative constraints.
This paper analyzes the influence of financial integration on institutional quality. We construct a dynamic political-economic model of an autocracy in which a ruling elite uses its political power to expropriate the general population. Although financial integration reduces capital costs for entrepreneurs and thereby raises gross incomes in the private sector, the elite may counteract this effect by increasing the rate of expropriation. Since de facto political power is linked to economic resources, financial integration also has long run consequences for the distribution of power and for the rise of an entrepreneurial class.
The recent history of Eastern Europe can best be understood as a transition to a new social contract between the postcommunist state that emerged from its communist predecessor and the postcommunist citizen who evolved from the communist subject. It is the relationship between state and society under communism that best explains the divergent paths taken by the former communist countries after 1989. Where societies had been weak, these networks managed to capture full social control during the transition, using their influence to appropriate former state assets. Where the gap had been widest between the level of state power and the level of social autonomy during communism, the most difficult transitions ensued, as there was no ground on which to build a social contract.