Corruption: Digging it up from the root?

It is challenging, and potentially dangerous, to say that there is a “root cause” of corruption–largely because corruption happens as a result of so many different factors which range for each situation in which corruption is present. An argument could be made for private personal gain being the root cause of corruption but private personal gain might just be more of a motivator to think about participating in corruption—not the direct cause of it. But we can at least look at the aftermath of corruption in many instances and see that private personal gain, whether it is wealth, power, etc., has been the motivator behind corruption. The problem with labeling private personal gain as the root cause of corruption is that, on some level, we are all capable of participating in corruption in order to seek out this private personal gain. However, not everybody chooses to achieve that gain through corruption—some people do it fairly (think politicians who really want to get elected but instead of buying votes—they just make themselves a more attractive candidate). It is difficult to say whether there is actually a root cause for corruption and I think I’d be fairly skeptical of any root that got thrown out as an answer.

That being said, I was intrigued by the authors pieces today in which they seemed to be making arguments that corruption occurs in some places/ times more than others as a result of either social norms, legal enforcement or both. I see the legal enforcement aspect of why corruption occurs in some places/ times being the most logical one. Looking at the data from the experiment with the UN parking tickets of people from different countries—it is clear that until legal enforcement was actually enforced after they received so many parking tickets—the corruption continued to occur. But once legal enforcement was enforced—corruption declined. And the main countries that abused this power of diplomatic immunity came from countries in which corruption was already largely present and the norm. I think this gives us insight into the places that corruption occurs—places in which there is no punishment for corruption. These are largely areas in sub-Saharan Africa and Latin America which have a history of governments that do not run smoothly and are built already upon the cornerstones of corruption.

The problem, however, with saying that legal enforcement (or lack of) can be used to describe why corruption occurs in some places/times more than others is that, in a lot of these cases, the lack of legal enforcement that allows for corruption is the result of an already corrupted government. Thus, corruption has occurred before there was legal enforcement. And even in the United States in which there is a lot of legal enforcement for corruption and crime—it still happens. Corruption is a concept—and as such, it is difficult to define what it is and why it happens.

 

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Corruption

Claiming that there is a single “root cause” of corruption is not completely justifiable being that corruption is multifaceted. Dissecting the different elements that contribute to it being awaken within a society is vital in grasping an overall definition for the term. However, while there may not be a “root cause,” there are certain elements and themes that have being reoccurring to explain why corruption has surfaced at certain places and times than others.

 

In Samuel Huntington’s Modernization and Corruption, he argues that modernization is believed to be the key contributor to corruption in societies. He supports his argument by firstly defining corruption as the result of going against society, and then continues on throughout the piece to explain how modernization has been a defining feature in episodes of societal rejection.

 

One case Huntington makes is that as societies evolve, or modernize, they are experiencing a period of transition, which alters what was previously viewed as normal in society. This process has the ability to shake members within a said society due to the fact that modernization is pushing developmental change onto their lives. The society is experiencing a shift, and those who are not willing to reject traditional standards have a higher probability of lashing out than those who are willing. Hence, modernization adding to the explanation of how corruption is more likely to occur at certain places and times than other.

 

Continuing on with this notion of transition brings up another aspect of corruption: power shifts within the government. Societies that are experiencing change or shifts in their government have the probability of experiencing corruption. When a country’s government has this type of power transition, there is a sense of trust that has to be either regained or rejected by society, which will pave the way for corrupt activity to present itself or remain absent. An example of this can type of corruption is examined in The Broker and the Thief: A Parable, by Robert Gay. The article focuses on the transition Brazil underwent into a democracy, and how the country’s shift in power awakened destructive activity in previously deemed as safer regions of the country.

 

Going alongside this transition while revisiting Huntington’s piece, another aspect that attempts to explain the timing and location of corruption is how large of a body the leaders are overseeing. Huntington argues that there is likely to be more corruption at lower and local levels rather than on the top. However, Huntington’s initial thought neglects the unstable national leaders, governments and institutions throughout the world- essentially stating that the good guys will always be found at the top. However, this is not always the case when dealing with authoritarian or dictator regimes. The presence or absence of corruption highly depends on the state governments structure since the local leaders and smaller bodies have to adhere to what the national leaders want. How these national leaders act is a key feature in how society will act being that they are supposed to follow suit to these norms.

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Causes of Corruption

Corruption is a common topic in the field of political science, one that gets blamed while explaining the issues of a nation or trying to explain why something occurred. The concept of corruption and its causes are a bit more complicated than the general public make it out to be, and each paper we looked at takes a different view on corruption and offers an explanation for why it occurs where and when it does. Corruption, as defined by Huntington, is the exchange of political power for personal profit or gains.

According to Huntington, corruption occurs more frequently when it’s easier to get money than it is to get political power, so it’s easy to see that places with a higher potential for class mobility have more corruption. He makes the argument that it happens more in modernizing societies because the characteristics of those societies help enable it. He states three reasons for this. The first is that changes in societal structure fuel changes in what types of behavior are considered to be the norms, the second is the is a creation of new sources of wealth and power, and the third is the government filling new roles and taking on new responsibilities. Huntington would say the cause of corruption overall is the economic situation of the community.

Fisman and Miguel take a different approach and argue that corruption occurs when someone’s experienced social structure doesn’t discourage it and when it won’t be punished. They study a correlation between illegal parking and indicator of corruption in home country. They found that cultural experiences seem to then frame attitudes and tendencies toward corruption, while level of enforcement seems to determine whether people act on their corrupt desires or not, and at what frequency. They then see that the cause of corruption overall is the cultural background of the region and the ability to get away with it.

Gay explains that corruption occurs when there is an incentive to be corrupt that outweighs any negative consequences of this corruption. Support, whether active or passive, makes it easier for someone to act in a corrupt manner, as does lack of retribution from any source. In the case he studies, the corruption acts as an unspoken social contract; the people vote for the person chosen by the community leader, essentially ‘giving’ their vote to the leader to use as a bargaining chip, and in turn the community gains improvements, like paved roads and medical centers. He argues that the overall cause of corruption is the efficiency and effectiveness of corruption over other sources of achieving goals.

I think that each author is right in his own regard. I agree mostly with Gay’s conclusion, and would argue that his reasoning could be applied to the other two cases as well. In Huntington’s argument, he talks about how the economic situation specifically makes it easy for people to act in a corrupt matter, and in Fisman and Miguel’s article, they see radical change in behavior when enforcement increases. In both cases, corruption is higher when it is easy and more effective to be corrupt, and when it gets harder or corruption stops being as effective at achieving one’s goals, it goes down.

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Prep Exercise Prompt for 9/28/16…

In the first reading for Wednesday, Samuel Huntington provides both a concise definition for corruption and a brief narrative explaining why corruption is often common in developing areas (broadly defined, not by geography, but by economic station).  Meanwhile, all three papers we’re reading offer at least an implicit account of why corruption occurs in some times and places, and not others.

Samuel Huntington

For your response today, please consider the authors’ various positions in offering your own answer to the question–why does corruption occur in some places/times more than others? What is the “root cause” of corruption (or is there such a thing)?

Maintaining Political Power Through Economic Power

There is a level of dependency that exists between political power and economic power. Under any political rule, economic strategies are important if a leader wishes to either maintain power, maintain good standing with the citizenry or leave a good legacy. However, this interdependence between economic power and political power, or rather, the dependence of the latter on the former is heightened in authoritarian ruled states. Economic strategies economic power plays an integral role in the maintenance and continuity of political power.

In The Bottom Billion, Paul Collier points to several “traps” bottom billion countries get caught in. The natural resource trap and the bad governance trap aid in shedding some light on the various ways authoritarian governments and their leaders use economic power to maintain their political power. Reading Collier’s discussions bring to the fore two key questions for me:

  1. What threats exist for authoritarian governments and their leaders within their countries?
  2. What measures can they employ to mitigate or eradicate these threats?

Of course one ought not ignore that some leaders are merely corrupt or greedy and their exploitation of economic power has nothing to do with maintaining political power and everything to do with filling their pockets simply because of accessibility.

However, the threat of a coup d’etat or revolution is generally a major concern for authoritarian governments. As such, military spending remains high to keep the military at bay, which in turn can serve the purpose of keeping the citizenry at bay and avoiding revolutionary action. Authoritarian leaders are also faced with the issue of maintaining a great relationship with the elite in their countries. In this regard, bribes, cronyism, the awarding of controversial contracts and quite often serve as useful tools. The third threat is of course the fear of loss of power or control or rather the uncertainty of the length of rule. In this case, authoritarian leaders pocket as much as they can, while they still can.

In looking at examples, Lewis (1996), highlights how Nigerian leader General Ibrahim Babangida, used actions such as paying off elites, publicly denouncing the SAP to maintain good standing with the Nigerian people (albeit reforms were implemented), side payments inter alia to maintain and prolong his authoritarian rule and further his agenda. Conversely, Michael Ross clearly illustrated the “natural resource trap” and its  effects on Libya. Ross posits that high oil revenues results in a decline on dependency on taxes. This can prove quite beneficial for authoritarian leaders as lower taxes can equate to a more compliant and pleased citizenry.

Collier, Lewis and Ross help illustrate how authoritarian leaders have used economic power for their own political advancement and they have all discussed the adverse effects this had on economies, leadership and the citizenry in the long run. Authoritarian leaders throughout the global south have used economic power to gain, maintain and prolong their political power. This has been done through economic control, payoffs inter alia and there is no question that this works. However, it is worth noting is that using economic power in this way is not absolute  and exploring the reasons why.

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The Logic of Political Behavior in Weak States: Conflict, Natural Resources, and Rent-Seeking

Economic power is critically important in society and power dynamics and the control of it in essence is what politics is all about. Control of economic power might be important but what is most critical is how and where this economic power is invested. Different systems of governance approach this in different ways. Authoritarians regimes are known for their limit will or tendencies for distributive justice. They usually are characterized by corruption, bias distribution of resources, marginalization of minorities opposing groups, nepotism and their ilk. With all these injustices and the conflicts that come with them, authoritarian regimes many a times effectively use economic power to maintain their grip on authority.

Autocratic government master the art of mind joggling, they usually either by the use of fear or raising false hopes get the people into following their policies. A prebendalist system as discussed by Peter Lewis would share resources to a closed group (like senior government officials or technocrats) that operate on political patronage, this he argued was what existed in Nigeria before the coming of the more autocratic military regimes. Former President Ibrahim Babangida for example started with prebendalism but went on to take up a predatory approach which most authoritarian leaders adopt.

The predatory approach aggressive as it is works effectively for autocracies, they reap the people of their resources, close the spaces for participation and reward very few people, who are usually used to control the majority. It is very much individual center and greed driven. They therefore take advantage of their monopoly of violence to extreme levels just to create the kind of fear amongst the people that would enforce obedience and ‘maintain order’.

Autocratic government also know when and where to push and pause, as in the example of Nigeria’s Reform program (the IMF’s Structural Adjustment Programs) in the late 1980s. Babangida was able to play on both sides with the IMF and the Nigerian people. He public condemned the IMF’s proposal (Just to get public opinion to his advantage) but went ahead with them in the following months and during the reform process, he would back-out on commitment when there was strong local pressure against it. These strategies of dictators like Babangida show the weakness of institutions and procedures under autocratic regimes. They are only serving the cause of the autocrats who are only interested in maintaining power, thus they fail in achieving the development goals they are primarily set to achieve. This is very what Paul Collier discussed work in The Bottom Billion.

Apart the Development, Natural Resource, Land Locked with Bad Neighbour, the Bad governance in a Small country trap was blamed for holding people in the bottom billion. Autocracies govern in ways that make the rulers very rich whilst their people live in destitution. These they can do through strong control of resources, less accountability and transparency just as in the case of oil rich nations where governments choose to keep records of their oil revenue of out the public view.

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Authoritarian Governments and Economic Power

In the Bottom Billion Paul explains that in developing countries, there are some types of circles existed to lead to a bad situation. Poverty, hopelessness for people and Dependence upon primary commodity exports increase the risk of civil war. And terrible government and policies can destroy an economy. And, I believe it is hardly possible for government to change all things at the same time. However, I think government has to accept the fact the country shouldn’t have to depend on natural resources. If they have considerable natural resources like oil, it has to be the advantage of getting out of poor countries. However, oil profits encourage the government and politician. As a result, they don’t take tax and spend money, whatever they want to do such as an election.

 

As he explained president Banda, there has to be a person who has courage to make a difference, because making differences is always necessary to make anything better especially when crisis. Also developing countries which depend on natural resources have to restrain how much they sell to other foreign countries.

 

After reading the political economy of decline in Nigeria, I thought Nigeria was able to continue good economy after promising an economy and political change and structural adjustment program by working bank and IMF if there are not politicians who care about themselves. On the other hand, the reason Nigeria government couldn’t stabilize or improve its economy is related to what Paul explains. It is because the way the government took care of economic policy and oil. As Paul used the example of Norway, I think there is a way to use oil in a smart way to make growth.

 

In the Oil Curse, Michael L. Ross, claims that the money governments get from oil is easy to hide, so authoritarian governments can easily hide oil money from the people, and they can use whatever they want with this hidden money. I think this theory can be related to the chapter 2 in the Bottom Billion. Money can be used in inappropriate ways, such as for elections to get votes, which leads to a decline of economy. Moreover, they think they can depend on only natural resources, but this is not how government should deal with stabilizing their economy. Because they need to think about how they use money, which is the most important for making profit.

 

All three articles focused on how oil is used in developing countries to make money because they all want to explain once they make mistakes the way of spending money from oil. It destroys their government and economic growth. Therefore, a way to escape from being a poor country is considered better way in government. Also, if there is a significant economic policy, you have to keep doing that.

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Authoritarian Governments and Economic Power

Katie Norman–Prep Exercise #4:

The formation of government is complex. Maintaining power is no easy task for leaders. As we have mentioned in class, dictators are highly skilled in maintaining their power through use of coercion and seduction. In times of crisis, authoritarian governments and their leaders use economic power to hold onto political power in several different ways.

Through his discussion of the “traps” that the poorest countries are stuck in Paul Collier proposes that governments often choose to implement policies and programs that do not solve underlying problems within the economy. They do this in order to maintain their power and control. He notes that governments in the bottom billion are frequently afraid of their own armies. The threat of a coup d’etat or conflict inspires government officials to maintain high military spending. Additionally, natural resource traps produce what Collier calls a “boom-and-bust phenomenon” which makes it hard to see when the government is making mistakes. This leads to mass miscomprehension and false consciousness. He states that patronage politics, while feasible, often leave the corrupt as winners. This attracts crooks rather than altruists to power. With crooks and villains in charge, he suggests that good governance is rare and that even when it is attempted it cannot generate opportunities where there are none. This implies that the government just needs to avoid doing obvious harm rather than focusing on doing much good. Not everyone loses from bad governance. Collier suggests that authoritarian governments are paying to keep their citizens uneducated and ill-informed in order to maintain control.

Adding to the idea that the corrupt become winners, Peter Lewis provides a detailed account of the corruption and economic policies in Nigeria from 1985 to 1994. He discusses the Babangida regime in depth, stating that during this time an SAP supported by the International Monetary Fund was proposed to the leader. Babangida publicly rejected the proposal in order to maintain popularity within the country. Using political manipulation, populist side payments, elite dispensation, and overt repression Babangida was able to introduce orthodox measures of reform (supported by the IMF) under a nationalist guise. Lewis suggests that the Nigerian government was able to find leeway to pursue their own personal agendas by offsetting vagaries in political reform with shifts in economic policy. Michael Ross discusses the ways in which oil revenues play a role in the distribution of economic wealth. He states that governments with high oil revenues often become less reliant on tax revenues and thus become disproportionately dependent on oil.

Interestingly, each of these three authors brought forth the idea of “Dutch Disease.” This economic phenomenon suggests that exports lose their value domestically with the discovery of natural resources. Collier, Lewis, and Ross each imply that authoritarian governments cover up Dutch Disease by focusing on the newfound wealth from natural resources rather than on the economic downfall in other areas like manufacturing and agriculture. This leads to further inequality and corruption.

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Using Economic Power to maintain Political Power.

According to Paul Collier (2007), developing countries are falling behind and apart in contrast to developed countries because of the traps namely “the conflict, the natural resources trap, the trap of being landlocked with bad neighbor and the bad governance” in bottom billion countries. In such countries, authoritarian governments and their leaders always use economic power to hold on to political power. Collier (2007) believes that when a country has abundant natural resources but bad governance, export the surplus natural resources and neglect other major sectors, eventually reducing the developmental growth of a country.

To understand it better, one can take Nigeria as an example. As an impact of oil revenues built up in Nigeria in the 1970s, country’s other valuable income generating products such as cocoa and peanuts were neglected and they could not enter in to the global trade market. The authorities were focused only on oil industry and neglected other valuable sectors. As a result, Nigerian living standard declined to half when oil revenue reduced drastically during 1980s. Collier further discusses that when a country transitions from autocracy to democracy, there are strong incentives for groups to compete for election. They use public money to bribe voters. When there is an abundance of resource, they try to use it to make political influences by delivering good public infrastructure to the people than their opponents. Sometimes, they even bribe leaders of different ethnic communities so that they can buy votes of the groups who more likely to be loyal to their groups in bottom billion countries.

Peter Lewis (1996), in his Prebendalism to Predation: The Political Economy of Decline in Nigeria, explains about the course of economic policy General Ibrahim Babangida, also a military elite, had adopted in Nigeria from 1985 through 1994 and its impact on contemporary Nigerian economy. As Babanfida shifted his rules to more repressive methods and also offered rents to crucial constituencies, his poor governance using methods such as political manipulation, side-payments, elite dispensation led to misery of the citizens. Also, it further supported Collier’s view regarding how autocracy and bad governance works in bottom billion countries.

Michael L. Rose in his article, The Oil Curse, discusses about how government can turn petroleum from curse into blessing, points out that in all countries petroleum reserves are owned by governments that affects both size and source of oil revenues. Unlike other industries, oil business can earn profit beyond production costs but such businesses should intervene further with good programs and policies to make it more sustainable. Otherwise, it may be a curse for the nation.  For instance, Libya’s access to oil and how Libyan were benefited short term tax cuts, government’s inability to make this opportunity sustainable led them to “Death Disease”, he refers.

To conclude, it is clearly stated that oil industry itself is a blessing rather than curse if it is not manipulated by government power. To take full advantage of surplus natural resources and to make it sustainable, authorities should launch effective programs and policies.

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References

Paul Collier (2007), The Bottom Billion: Why the Poorest Countries are Falling Behind, and What Can Be Done About it, Chapters 2-6

Peter Lewis (1996), “From Prebendalism to Predation: The Political Economy of Decline in Nigeria,” Journal of Modern African Studies, 34:1, pp. 79-103

Michael Ross (2012), The Oil Curse (Princeton, NJ: Princeton University Press), pp. 27-62

Maintaining Political Power via Economic Power

Authoritarian governments wrest, or maintain, their political power by using different economic strategies to either stagnate the nation’s economy, or provide incentives for citizens to increase their output, and misuse the public revenue available to them. The relationship between economic and political power is symbiotic. One cannot exist, at least for a substantial amount of time, without the other.

Paul Collier notes the nature of this balance in The Bottom Billion. One of the outlined “traps” for bottom billion states (i.e. the global south), is the presence of bad governance. Often, not everyone suffers from bad governance – that is to say, the elite class benefit from the misadministration and poor implementation of economic policies as it benefits them personally. A political or economic crisis can push an already irresolute government to implementing corrupt practices for personal gain – the legitimate monopoly of violence becomes a predatory “roving bandit” administration.

This is highlighted in Peter Lewis’s case study of the decline of the political economy of Nigeria from 1985 to 1994. In facing the sharp decline in the price of oil in the mid 1980s, Ibrahim Babangida, president of Nigeria with a military rule, transitioned from prebendalist governance to predation. As is the case with many leaders of short lived or tumultuous regimes, we can speculate that Babangida had the best interest of the Nigerian nation in mind when the World Bank and International Monetary Fund began to help him implement the structural adjustment programs to stabilize the government. As Collier predicted, Babangida’s poor governance lead to misery for all but a handful in the long-term. While the masses were provided a “carrot and stick” style governance, elites were given payoffs to ensure political loyalty.

Political insecurity also leads to corruption. As with the Nigerian president, other authoritarian leaders resort to corruption and misuse of funds in order to ensure their positions. While Nigeria’s economy initially benefitted from the structural adjustment programs, the inability for their political leaders to remain substantially altruistic created greater tensions when different areas of the economy suffered.

This phenomenon is prevalent, too, in states dependent on the raw commodity of oil. Michael Ross touches on the problems of the Libyan governments policies in regards to its oil. Libya suffers from two of Collier’s plagues, both the natural resource trap and bad governance trap. Ross details that Libya’s access to oil did help the public for a time, primarily in the form of tax cuts. But the inability for the Libyan government to transform this initial economic growth into something more sustainable – like goods and services – the unregenerative quality of oil led the economy to succumb to the Dutch disease. While markets outside of oil suffered, corrupt elite leaders ensured their financial standings through acts such as signing unproductive contracts that further destabilize revenue and economic development. Collier notes this in several other nations as well – such as Angola, Madagascar, and Sierra Leone. In times of crisis, authoritarian governments and their leaders often revert to “roving bandit” style leadership and the affixed relationship between economic and political power leads to a stagnation or even decline of development.

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