Corruption in contemporary politics: A new travel guide 9780719088926

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Political corruption is a serious problem. It infringes the rules that define the means of wealth acquisition and the exercise of power, and damages the interests of the advantaged and the disadvantaged alike. For the advantaged wealth cannot be pursued and maintained safely, and for the disadvantaged development is thwarted and resources are redistributed from the poor to the rich. This book provides an accessible account of current thinking and debates about political corruption. It takes the reader on a journey that begins with what corruption is, why it is important to study and how it can be measured. From there it moves on to explore causes and consequences and how corruption can be tackled. Finally this study examines how these elements are playing out in established liberal democracies, former communist regimes and in what used to be commonly referred to as ‘the third world’. On the way it takes a couple of detours – firstly, to ascertain how the minimum of trust necessary for the corrupt transaction to take place is established and underwritten, and secondly, to survey the phenomenon of scandal, to which corruption may give rise. The book is offered as an informative ‘travel guide’ of potential interest to journalists and policy-makers as well as to students and academics researching matters on which political corruption has a bearing. James L. Newell is a former Professor of Politics and author of Silvio Berlusconi: A study in failure (Manchester University Press, 2018)

www.manchesteruniversitypress.co.uk

ISBN 978-0-7190-8891-9

9 780719 088919

Corruption in contemporary politics

Corruption in contemporary politics A new travel guide

James L. Newell

Manchester University Press

Copyright © James L. Newell 2018 The right of James L. Newell to be identified as the author of this work has been asserted by him in accordance with the Copyright, Designs and Patents Act 1988. Published by Manchester University Press Altrincham Street, Manchester M1 7JA www.manchesteruniversitypress.co.uk British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library ISBN  978 0 7190 8891 9  hardback First published 2018 The publisher has no responsibility for the persistence or accuracy of URLs for any external or third-party internet websites referred to in this book, and does not guarantee that any content on such websites is, or will remain, accurate or appropriate.

Typeset in 10.5/12.5 Sabon by Servis Filmsetting Ltd, Stockport, Cheshire

Contents

List of figures vi List of tables vii Prefaceviii List of abbreviations xi   1 Definitions of political corruption, and why study corruption 1   2 The growth, spread and measurement of corruption 21   3 The causes and explanations of political corruption 43   4 The mechanisms and dynamics of corruption 64   5 Political corruption and organised crime 82   6 Political corruption and scandal 103   7 Anti-corruption: prevention and control 124   8 Corruption in liberal democracies: a case study of Italy 143   9 Political corruption in Central and Eastern Europe 169 10 Political corruption in the developing and newly industrialised states194 Index

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List of figures

 2.1  Guardian headlines containing the roots of ‘corrupt’, ‘bribe’, ‘embezzle’, ‘fraud’ or ‘sleaze’ 24   4.1 The resources of corrupt exchange 74   4.2 Types of corrupt exchange 74   5.1 Numbers of persons reported for membership of mafiatype associations per 100,000 inhabitants, 1996–98 85   5.2 Persons convicted of participation in organised crime groups per 100,000 population, selected countries, 2006 92   6.1 The relationship between corruption and scandal 104   8.1 CPI score for Italy and mean CPI scores by regime type, 2015145   8.2 Perceived corruption and the experience of corruption, 2013145   8.3 Perceptions of corruption in Italy, CPI scores, 1995–2015 146   8.4 Confidence in public institutions and perceptions of corruption in Italy, 2013 147   8.5 Institutions perceived as corrupt in different regime types 148   8.6 People that paid a bribe, having come into contact with the service149   9.1 Mean CPI scores, former communist countries and Russia, and Western Europe, 2015 170   9.2 Mean CPI scores CEE countries plus Russia 1999–2015 170   9.3 CPI and Democracy Index scores, CEE countries and Russia, 2015 177 10.1 Mean CPI scores, Sub-Saharan African countries and NICs, 2015196 10.2 Mean CPI scores, Sub-Saharan African countries and NICs, 2000 and 2015 213

List of tables

8.1 Corruption and extortion-related crimes per 100,000 inhabitants reported in the Italian regions, 2011 9.1 NIS scores for Albania (2016) and Latvia (2011)

156 188

Preface

I decided to write this book after I had been teaching a course on political corruption at the University of Salford for a number of years; and in doing so I have sought to achieve two things. First, I wanted to add to my own knowledge of the field and thereby become a better teacher. Second, in sharing it with others, I wanted to add to their knowledge; for corruption is a serious problem whose effective resolution requires understanding. Obtaining understanding is often a challenging process in an age when everyday life for most people in Western societies is becoming increasingly time pressured, and the sheer quantity of available information to have to sift through has expanded to a degree unimaginable two or three decades ago, thanks to the advent of the internet. The problem looms especially large in a field such as political corruption, where the volume of scholarly literature is now vast. But for those outside academia in particular, much of what is available is of little use. First, there are a number of edited collections aimed at exploring corruption from a variety of angles, but which are often unhelpful because contributors take widely differing approaches to what counts as corruption and to its measurement. Second, there are a range of policy-oriented publications, such as those of Transparency International; but these often have a narrowly prescriptive focus. Finally, there are several research monographs; but these are often confined to a single facet of the problem or to one geographical area. Those wanting an accessible overview of the field are, to my knowledge, likely to struggle to find one. So a third purpose in writing this book has been to seek to meet the needs of those falling into this category, in the hope that it might be useful to – for example – journalists and others outside academia, as well as to students and academic colleagues researching matters on which political corruption has a bearing.

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The sequence of chapters is intended to take the reader on a journey beginning with what corruption is, why its study might be important and how it can be measured. From there we move on to explore its causes, its consequences and how it can be tackled, before finally discovering how these things are playing out in the established liberal democracies, in the former communist regimes and in what used to be commonly referred to as ‘the third world’. On the way we take a couple of detours: since corruption is a type of illegitimate transaction – meaning that the  parties to it are likely to be unable to trust one another to the degree necessary to make it possible at all – we pause in the realm of causes to ascertain how this trust is established and underwritten (Chapters 4 and 5). Because the corrupt transaction is illegitimate, its potential effects fall into two categories: those that arise when it remains hidden and is successfully concluded, and those that arise when it is unmasked – thus inviting us to survey in the realm of consequences the phenomenon of scandal and the potential for reform that flows therefrom (Chapter 6). So the book is offered as a (hopefully) informative ‘travel guide’, not as a dry and exhaustive ‘textbook’. It is offered as something akin to the travellers’ tales of old in which the authors’ descriptions of the places they discovered were as significant for readers as were their interpretations of the behaviour and customs of the people they found there. My own interpretation of corruption is that it is an exercise of power that infringes rules concerning the separation of the public and the private, with potential consequences for people generally (as when an apartment block collapses because its construction contravenes building regulations), but especially for the poor (because when it impacts on public spending decisions it can thwart development and redistributes resources from the poor to the rich). As a type of rule infringement it is therefore a social construct – which is not, however, to say that definitions of corruption vary from place to place. People in different locations have, at least at a general level of abstraction, the same understandings of what corruption is; where they differ is in terms of whether specific acts fit this understanding or not. As a type of rule infringement, corruption is inseparable from norms and from laws, the purpose of which is to maintain social order. And since the social order is highly unequal in terms of the distribution of resources, both material and non-material, norms and laws are products of conflict over such distribution. For the advantaged, wealth and power cannot be pursued and maintained safely unless their acquisition takes place by means perceived by others among the advantaged, and by the disadvantaged, as legitimate. So, since corruption is about rules defining legitimate and illegitimate modes of the

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acquisition of wealth and the exercise of power, it is of concern not only to the poor but also to the rich. Since the collapse of the Berlin Wall, this concern has been growing among mass publics and I see this as being closely related to the emergence of the neo-liberal consensus. By establishing that all institutions, public or private, are to be governed according to the assumptions and priorities of the private sector, the consensus has enhanced the incentives and opportunities for corruption. By decreeing the end of ideology, it has reduced party competition to a competition over the competence and integrity of its leading protagonists. In this it has been helped by the growing political significance of the mass media of communications and by the emergence of better-educated and more critical mass publics. One of the institutions one might have expected least likely to succumb to the neo-liberal consensus is the university. Having originated as a community of scholars pursuing knowledge for its own sake, it is now typically a business, subject to detailed, top-down management. Its students are the customers and its scholars are workers pursuing knowledge in many cases only to hit Research Excellence Framework targets. One might say that the university has become corrupt in the original sense of the word as having undergone a process of decay. Consequently, this book, and especially its later stages, were written in difficult circumstances created for me by my employer and ‘line manager’, whose acquiescence in the process can be seen, from one point of view, as part of a general syndrome whose more specific features are explored in this book. I thought it important to draw attention to this as a tiny opportunity to encourage a fight against the corruption underlying it; for one of the things my research for this book has taught me is that the powerful will pursue anti-corruption measures only in so far as they serve their interests. Ultimately, the elimination of corruption will depend on the struggles of ordinary people. If this work makes some tiny contribution to empowering people in that way, then it will have served a useful purpose.

Abbreviations

CDU CEE CLPR CPI EU FDI GCB GDP GRECO IMF M5s NGO NICs NIS OECD OLAF OLPR PM SPAI TI UK UN UNCAC US

Christian Democratic Union Central and Eastern Europe closed-list proportional representation Corruption Perceptions Index European Union foreign direct investment Global Corruption Barometer Gross Domestic Product Group of States against Corruption International Monetary Fund Movimento Cinque Stelle (Five-star Movement) non-governmental organisation newly industrialised countries National Integrity System Organisation for Economic Co-operation and Development European Union Anti-fraud Office open-list proportional representation prime minister Stability Pact Anti-corruption Initiative Transparency International United Kingdom United Nations United Nations Convention against Corruption United States

1 Definitions of political corruption, and why study corruption

Introduction On 23 June 2016, British citizens voted by 51.9% to 48.1% to leave the European Union (EU), in a referendum whose outcome was widely dubbed as a sort of ‘peasants’ revolt’. Against the advice of most of the political establishment, business leaders and expert economists, 17,410,742 people, a significant proportion of them living in deprived circumstances, produced an outcome widely thought to reflect anger at austerity, a sense of political impotence and frustration with mainstream politics. This sense of frustration has been on the rise since at least the beginning of the 1990s and can be seen – and not just in the UK – in declining election turnouts, falling party memberships and a growing reluctance to engage in conventional politics in other ways, such as attending political meetings.1 It is not that people are less interested in politics – participation in the less conventional forms of political engagement has in many cases grown over the same period – but that they have experienced a growing dislike of politics. Of course, widespread negative feelings towards politics are not new and there are a number of reasons why they have become more pervasive. One reason has been a growing distrust of politicians, and, to judge from opinion polls, the proportions of people trusting them are indeed small. As the results of a poll by Ipsos-MORI in June 2011 suggested: Nearly nine in ten (88%) adults across the United Kingdom say they trust doctors to tell the truth, … making doctors the most trusted profession measured. Politicians, however, remain the least trusted profession measured, with just one in seven people (14%) saying they trust politicians in general to tell the truth; just one person in six, 17%, say they trust

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g­ overnment ministers. To make matters worse for politicians at all levels, more people say they trust journalists (19%) and bankers (29%) than ­politicians. (Ipsos-MORI, 2011)

There are several reasons for these low and declining levels of trust. But there can be little doubt that one of the main reasons has to do with the widespread perception that too many politicians are too often found to be engaged in corruption and other forms of wrong-doing. Sometimes these perceptions appear to be mistaken. For example, it is probably not true – as some respondents to a survey in 2004 for the Committee on Standards in Public Life apparently believed – that ‘all or most’ MPs take bribes. But the fact that significant proportions of the public believe such things means that corruption today is an important political issue: undermining public confidence in the honesty and impartiality of public officials, it threatens to undermine democracy itself. As Herbert Morrison put it as long ago as 1947, ‘There can be no greater threat to the permanence of our democracy and our democratic liberties than that the public should get it into their heads that national or local government is irregular, subject to improper influences or even corruption and bribery.’2 The growing support for far-right, populist, anti-political parties, politicians and causes in a number of Western polities could be taken as evidence of the contemporary relevance of Morrison’s warning. With that in mind, we begin by considering what political corruption is or might be, for the study of anything requires that we have a clear understanding of its nature. We then discuss the different types of ­corruption and say something about why their study might be important. What is corruption? To understand what political corruption is, we must first understand the meaning of the word ‘corruption’. Dictionaries define it as a form of decay or adulteration. For instance, Webster’s New Collegiate Dictionary (1953) offers three definitions of the verb ‘to corrupt’: (1) ‘to make putrid; to taint’; (2) ‘to change from good to bad; to debase’; (3) ‘to draw aside from rectitude and duty, to pervert’. The first definition refers to both decay and adulteration in a physical sense – since ‘putrid’ means ‘rotten’, while ‘to taint’ means ‘to pollute’ or ‘to contaminate’; the second can refer to the debasement of currency and precious metals; the third definition clearly refers to a process of moral adulteration, because ‘rectitude’ and ‘duty’ are moral terms: we use them when we want to express judgements about what we think ought or ought not to be the case.

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3

Definitions of the term ‘political corruption’ have been heavily influenced by the meanings of corruption that fall into the moral category, as we shall see; and they have in common the idea that corruption is something that involves the adulteration of public interests by private interests, or a transgression of the rule that what is public and what is private should be kept rigidly separate. In one respect this idea is as old as humanity itself, for human beings have always attempted to understand the world by placing the things into different categories, which in itself reflects beliefs about what should rightly be kept apart. Mary Douglas (1966) uses this idea to explain why, in the Old Testament book of Leviticus, some animals are considered clean and others unclean, as Peter Bratsis (2003: 20) notes: The animals that are true to life in the sky are birds; they have feathers and two feet and they fly. All birds that do not fly are unclean since they defy these principles, as do all things that fly but are not birds. The animals true to life in the water are fish with scales and fins; all creatures in the water that do not have these characteristics are unclean. Animals that roam the earth are four-footed and move by walking, jumping or hopping. Animals that seem to have two feet and two hands, like crocodiles, mice and weasels, are unclean. All creatures that swarm are unclean since that mode of propulsion is proper to neither sky, nor land, nor water. Thus worms, snakes and the like are unclean.

The idea of uncleanliness, then, serves to keep things in their proper place: shoes off the dining table, food off clothes, cooking utensils out of the bedroom and so on. And the idea of political corruption serves a similar purpose – in this case to keep private-regarding considerations from affecting the behaviour of people in their capacities as ­representatives or officials of the public. The notion of political corruption is a relatively modern one, since the public/private distinction has become firmly established in politics only since the end of feudalism and the rise of industrial capitalism. It is true that the term ‘corruption’ was used before this, but it tended to refer to a process of decay rather than of adulteration – as in the idea of corruption of morals or in the quality of a regime, for example. It was only later that the notion of adulteration, and specifically the adulteration of public by private, tended to figure – and it is easy to see why. In the feudal era, everything belonged to the king, who secured his position by granting leasehold (time-limited) or freehold (indefinite, heritable) rights to use land in exchange for oaths of loyalty and material assistance from his vassals. Over time, vassals were able to exploit this need for assistance and put an end to the arbitrariness of royal powers

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by establishing the rule-of-law principle, beginning, in the British case, with Magna Carta in 1215. As the principle became ever more firmly entrenched, so too did its concomitant, that the king and his representatives ruled with their subjects’ consent. Thanks to this notion, by the eighteenth century it had become more or less a matter of consensus that while ‘the state [had to] have a monopoly of coercive power to provide a secure basis upon which “free trade”, business and family life [could] prosper, its coercive and regulatory capability [had to] be contained so that its agents [did] not interfere with the … freedoms of individual citizens’ (Held, 1996: 75). In other words, individuals were to be conceived of as inhabiting a private sphere independent of the state; within this sphere they were to be left free to pursue their own interests, without state interference. The separation of public and private became even more firmly entrenched with the spread of industrialisation in the late eighteenth and nineteenth centuries, when a type of society emerged whose management was an altogether more complex affair than that of the rural societies of earlier times. This society required legislation in vast quantities covering everything from the regulation of factories and transport to public health, education and more besides. Crucially, if this legislation was to be successfully implemented and to achieve the compliance of those whose behaviour it aimed to address, then it had to embody the fundamental principles of universalism and equality, and to be seen to have been passed in accordance with the principle that rules apply with the same force to everyone, regardless of their economic or any other circumstances. Otherwise, at a time when older forms of authority (the traditional and charismatic forms identified by Max Weber) were losing their force, they would have lacked legitimacy. A necessary prerequisite was the development of rules that would outlaw the pursuit of public office for private gain, prevent conflicts of interest and criminalise bribery and extortion. Such rules, by banning or rendering difficult the behaviour that today is commonly referred to as corrupt, would guarantee universalism and equality, and so ensure the more widespread and rigid application of the rule of separation of public and private. Thus, in 1809 the buying and selling of public office was prohibited, as was the offering of public offices in order to secure a seat in Parliament. The 1832 Reform Act reduced the number of nomination boroughs under the control of members of the aristocracy and introduced a uniform franchise, as well as voter registration. The 1835 Municipal Corporations Act introduced a uniform system of municipalities that were to be elected by resident ratepayers and were under an obligation to publish financial accounts liable to audit. In 1854, the Corrupt

Definitions, and why study corruption

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Practices Act began the process, later continued by the 1872 Ballot Act and the 1883 Corrupt and Illegal Practices Act, of stamping out bribery in elections by obliging candidates to publish their expenses and file them with an auditor. Also in 1854, the Northcote-Trevelyan Report recommended that recruitment to the civil service should be by open examination conducted by an independent ‘civil service’ board, with recruits segregated into a hierarchy of grades between which promotion would be on the basis of merit rather than patronage or preferment. This made a notable contribution to the final stamping out of what nineteenthcentury radicals and later historians referred to as ‘Old Corruption’, that is, the British government’s use of resources to bribe members of Parliament, municipal corporations and the like, and the availability, through patronage and nepotism, of sinecures and gratuitous emoluments, providing salaries and pensions to large numbers of wealthy officials, placemen and office holders and their families (Rubinstein, 1983). With the passing of ‘Old Corruption’ came the emergence of the modern public administration, organised along bureaucratic lines. A bureaucratic organisation is one in which: (a) the duty of each official to do certain types of work is delimited in terms of impersonal criteria; (b) the official is given the authority necessary to carry out his assigned functions; (c) the means of compulsion at his disposal are strictly limited, and the conditions under which their employment is legitimate are clearly defined; … Every official’s responsibilities and authority are part of a hierarchy of authority. Higher offices are assigned the duty of supervision, lower offices, the right of appeal … Officials … do not own the resources necessary for the performance of their assigned functions but they are accountable for their use of these resources. Official business and private affairs, official revenue and private income are strictly separated … Offices cannot be appropriated by their incumbents in the sense of private property that can be sold and inherited. (Bendix, 1960: 419)

In the modern public administration, the rule of separation of public and private reaches the maximum extent of its application, in the sense that it informs every one of the administration’s defining features. If political corruption has to do with transgressions of the public/ private distinction, then for the purposes of studying these transgressions we need a definition of the term that will tell us – without fear of contradiction, and independently of the context in which it takes place – what counts as corruption and what does not. Without a definition that meets these criteria, we cannot use the term for purposes of comparison, and if we cannot do that, then we cannot begin to investigate corruption’s causes, consequences and so on. The attempts that have been made

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to come up with a satisfactory definition can be thought of as belonging to one or the other of three categories corresponding to what I shall call ‘legal and norm-based definitions’, ‘public-interest definitions’, and ‘principal–agent definitions’. Legal and norm-based definitions are those which see ‘political corruption’ as the abuse of public office for private gain. For example, David Bayley (1966) argues: ‘Corruption, while being tied particularly to the act of bribery, is a general term covering misuse of authority as a result of considerations of personal gain, which need not be monetary.’ There are at least three problems with this definition and with legal and norm-based definitions in general. First, if political corruption must be said to take place whenever public officials break rules for considerations of personal gain, then it is impossible conceptually to distinguish corruption from similar but different phenomena such as ­‘embezzlement’ or ‘fraud’. Second, these definitions in effect stipulate that in order to count as corrupt, the behaviour of the holders of public offices such as civil servants and elected representatives has to break the rules or norms governing their conduct as the holders of such offices – but rules and norms, as we know, vary from one country to another. For example, until the MPs’ expenses scandal in 2009, few British members of Parliament or others in the UK saw much wrong in the idea that MPs would employ their spouses and other members of their families as secretaries and research assistants, whereas in the US Congress such conduct had long been regarded as highly improper. It is easy to see why the Americans might take this view. What is to stop MPs and their spouses simply taking the taxpayers’ money without the spouses actually doing any work? Exactly these allegations surfaced in some of the cases that gave rise to the expenses scandal, and they led the Independent Parliamentary Standards Authority (IPSA) to propose restrictions on the practice in the scandal’s aftermath. The problem from an academic point of view is that if, in order to count as corruption, behaviour has to break a law or some formally prescribed norm, then it is difficult to study it comparatively. We might conclude from the fact that there are more court cases arising from, or convictions for given types of, impropriety in one country than in another that corruption is more widespread in the first country than in the second. This would be a very flimsy basis on which to draw such a conclusion: the apparent difference could be a simple artefact of differences between the two countries in the kinds of behaviour that are legally defined as corruption even though the actual behaviour of people in the two countries differed little if at all.

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Third, legal and norm-based definitions are too narrowly focussed. By insisting that the distinction between corrupt and non-corrupt behaviour depends on whether or not it breaks legal rules or norms, such definitions make it impossible to regard as corrupt certain behaviour which, though perfectly legal, we might wish to regard as corrupt on other grounds. For example, until the early years of the twentieth century it was perfectly normal for solicitors holding money in trust for their clients, such as the child beneficiaries of wills, to enrich themselves by speculating with it. Throughout the eighteenth and well into the nineteenth centuries it was perfectly normal for the agents of political parties to bribe electors to vote the ‘right’ way. Although they were perfectly legal, such practices came increasingly to be seen as highly corrupt from an ethical point of view – which is why, besides being unethical, they also eventually became illegal. Public-interest definitions are those that declare that, in order to be corrupt, behaviour has to damage the public interest. For example, Rogow and Lasswell (1963: 132) argue that a corrupt act is one that ‘violates responsibility toward at least one system of public or civic order … A system of public or civic order exalts common interest over special interest; violations of the common interest for special advantage  are  corrupt.’ The problem with this definition and others in the same  category is that they beg the question: if political corruption is behaviour that violates the public interest, who is to say what ‘the public interest’ is? Either the investigator can decide, or else the views of the people whose behaviour is being investigated can be used to decide. However, in the first case the decision about whether or not a given behaviour is corrupt becomes an entirely subjective value judgement on the part of the investigator, and this too obstructs study of the phenomenon: any claim that an investigator makes about corruption is open to attack by any other investigator, who can claim that the first investigator is wrong simply because, in his or her opinion, the behaviour in question is not against the public interest and therefore not an example of corruption. If scholars are to study anything, whether it be political corruption, voting or anything else, they must at least agree among themselves as to what kinds of behaviour are to count as corruption, voting and so on. In this case we have exactly the same kind of problem that arises with legal and norm-based definitions, namely, that not only legal codes but also people’s views vary from one country to another. The mere fact that given types of behaviour are widely condemned in one country but not in another would not on its own entitle us to conclude that corruption is more widespread in the one than in the other.

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Principal–agent definitions are those which see the essence of political corruption as lying in transactions which violate the trust placed in an ‘agent’ by a ‘principal’. An agent is someone – such as a solicitor or a travel agent – whom we entrust to carry out work for us or to act on our behalf. In both examples we are the principal. We employ such people because we lack either the time or the know-how, or both, to carry out the work ourselves, and we pay them on the assumption that, in acting on our behalf, they will conduct themselves in such a way as to maximise our interests. Sometimes it is easy for us to determine whether the agent has genuinely sought to maximise our interests; but often it is not, because we cannot be present to monitor the work of the agent and/or because we do not ourselves have the necessary expertise to evaluate it. In such cases we are obliged to give the agent discretion to act as they see fit and to trust that their decisions will be the best ones from our point of view. Where difficulties of monitoring an expertise arise there is an inherent danger that agents will fail to discharge their duties towards their principals faithfully, and that they will seek to further their own interests instead of those of their principals. Examples of this sort of thing are endless: the solicitor who bills you for ten hours’ work when they have done only eight; the car mechanic who claims to have fitted a brand-new part to your car when it has in fact come from the scrap heap. These are both examples of what we normally understand by the term ‘fraud’. Another example of behaviour that exemplifies failure on the part of an agent faithfully to discharge their duties towards their principal is when the solicitor whom we have engaged to help us win a law suit against our neighbour accepts a bribe from the neighbour, in return for which our solicitor secretly acts so as to ensure that we lose. This, from the perspective of principal–agent definitions, is an example of corruption. From the principal–agent perspective, then, political ­corruption can be defined as something that takes place when (1) there is a secret violation of a contract that, implicitly or explicitly, involves a delegation of responsibility and the exercise of some discretionary power … (2) by an agent who, against the interests or preferences of the principal … (3) acts in favour of a third party, from whom he receives a reward … Focussing on political and bureaucratic corruption in a democratic regime, we should add a fourth condition (4) the principal is the state, or better, the citizens. (della Porta and Vannucci, 1997: 231–2)

Unfortunately, this definition still suffers from the comparability problem that we have noticed in connection with definitions in the other two categories, for it remains for the principal to decide what his or her interests are, and these perceptions may vary from one context to another.

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The basic problem in all these cases is that, whatever else it is, corruption is a type of rule infringement, where a ‘rule’ is a criterion of behaviour that indicates right and wrong ways of doing things. A rule can exist only in virtue of social interaction, and its infringement is to a greater or lesser degree morally condemned in the group whose social existence has given rise to it. Therefore, to describe given acts as ‘corrupt’ is to condemn them as illegitimate according to some set of standards – the problem being that these standards have no existence apart from in people’s perceptions. Corruption itself, therefore, is a social construct, behaviour which people label as such – like terrorism. And just as one person’s terrorist is another person’s freedom fighter, so it is with corruption: what for one may be a heinous bribe, for another may be an innocent gift. A good illustration of this is provided by the Poulson affair. John Poulson was an English architect born in Yorkshire in 1910. He left school without qualifications and joined a firm of architects, but failed his exams and in 1932 was dismissed. He then established his own firm of architects. Like a number of such companies in the immediate post-­Second World War years, Poulson’s was eager to win lucrative local-authority contracts arising from the massive rebuilding programmes in inner-city areas. After Poulson’s firm went bankrupt in 1972, it emerged that he had paid T. Dan Smith, the charismatic Labour leader of Newcastle City Council and the mastermind behind that city’s redevelopment, a so-called ‘fee’ of £155,000 in exchange for redevelopment contracts – and that payments had also been made to several MPs, health authorities, police officers and civil servants. Both Poulson and T. Dan Smith went to prison for corruption, while the Conservative minister Reginald Maudling, who was also an associate of Poulson’s, was forced to resign after his position was exposed by Paul Foot in the magazine Private Eye. One of the most significant consequences of the Poulson Affair was that it led directly to the establishment of the compulsory register of MPs’ interests, through which MPs are obliged to make public any financial interests that might conceivably impinge on their work in the House of Commons. But what is most interesting about the Poulson case is what it reveals about the attitudes that are frequently found among those involved in corruption. It often emerges, after they’ve been exposed, that they don’t actually regard themselves as having done anything wrong. T. Dan Smith, as John Garrard (2006) has written, was certainly one of these. In a BBC interview (‘Public Affairs’, 1990, no. 2), some years after emerging from prison, he observed: the implication of so many … authors … was that I was a crooked councillor … Nothing

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could be further from the truth … I think (Poulson) behaved in a way … common to most businesses, of offering holidays, entertainment. If that is corrupt, … the boxes at Ascot and Wimbledon are full of the recipients of the same kind of inducements. I’m not condoning it, but it’s a matter of how you interpret business ethics … what Poulson did was typically common of business practices then and now. Alderman Cunningham (‘Public Affairs’, 1990, no. 2, 1990), late chairman of Durham’s Police Authority, recipient of much Poulson generosity including a paid-for holiday in Portugal and another of those imprisoned, claimed, ‘if I am corrupt then the entire country is corrupt’.

It is partly because those involved in corruption so frequently don’t see what they’re doing as reprehensible that (as we shall see when we look at corruption prevention and control) corruption is so difficult to stamp out. The line between ‘generous hospitality’, for example, and outright bribery is by no means clear-cut, so that it is easy for those who practise it to justify it to themselves as a legitimate means of ‘getting things done’. The line between legitimate gift-giving and illegal corruption is indeed difficult to draw precisely. Reflecting on his interviewbased research among those involved in EU fraud rings, David Nelken (2003: 228–9) refers to ‘the banality of organised crime’, noting that ‘those who are actively engaged in EU fraud do their best to argue that everyone (or almost everyone) is corrupt – or at least corruptible. In seeking to “condemn the condemners” … they adopt an all embracing concept of corruption even describing the EU itself as a gigantic fraud.’ Reading Nelken’s observations, one feels prompted to say that when, in 1999, the entire European Commission was forced to resign precisely because of massive fraud, his informants might have felt that they had suddenly been given some empirical support for their view of the EU. This raises the rather alarming prospect that corruption exists only in so far as it is thought to exist, and therefore that our efforts to study and understand it must necessarily be in vain, for we are no longer authorised to say that one country is any more corrupt than another and to try to find out why this might be the case. Yet our instincts cry out against such a conclusion because, for all that corruption is a social construct, we know that it is not simply a figment of people’s imaginations: people do regularly die and are regularly injured as the result of corrupt activity, whether through the elimination of law enforcers and witnesses or when, for example, bribery and fraud lead to the adulteration of food, the diversion of funds away from much-needed infrastructure projects or the collapse of buildings erected without regard to safety standards.

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Fortunately, the comparative study of these pathologies and of corruption itself is not rendered completely forlorn by corruption’s socially constructed nature – at least if the countries being compared are culturally similar. In Europe, for example, between different countries there is a great degree of overlap in terms of understandings of what corruption is. Thus, article 319 of the Italian penal code defines ‘corruption associated with actions in conflict with official duties’ as something that takes place when the public official, ‘in return for failing to perform or for delaying the performance of an official duty, or for performing or having performed an action in conflict with their duties, receives, for themselves or a third party, a monetary reward or other utility that is not owed to them’; while article 318 defines in similar terms ‘corruption in the performance of official duties’.3 English common law defines corruption as bribery, meaning ‘the receiving or offering [of] any undue reward by or to any person whatsoever, in a public office, in order to influence his behaviour in office, and incline him to act contrary to the known rules of honesty and integrity’ (Cecil Turner, 1964: 381). In Poland, a law of 2006 defines corruption as ‘promising, offering, giving, requesting, receiving by any person, directly or indirectly, any undue economic, personal or other benefits, for themselves or any other person, or accepting a proposal or promise of such benefits, in return for the act or omission in the exercise of public duties or in the course of business’ (Muszyn´ska, Nováková and van Rossum, 2012: 2). Such approaches, it is true, in tying corruption to breaches of the trust placed in public officials, remain vulnerable to possible differences in principals’ (socially informed) decisions about the interests and preferences that officials are required to advance. However, while this might be a problem for large-N studies, it is one which we can assume looms less large when the countries being compared share the degree of similarity of those within a single region, such as Europe. Thanks to the cultural commonalities between such countries, the interests and preferences of principals are likely to display similar degrees of commonality: the states of Europe are all, by and large, founded on the rule of law and principles of universalism, sharing common Judeo-Christian traditions and so on. Types of corruption Assuming that a reasonably watertight case can be made for defining corruption in principal–agent terms, it is possible, building on the work of Susan Rose-Ackerman (1978: 61–3), to distinguish between four ­different types of political corruption.

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First, is the corruption that arises from the power of the authorities ‘to take decisions concerning the allocation of public money – what to buy, from whom to buy it, according to what criteria and so forth’ (Newell and Bull, 2003b: 38). This is the kind of corruption that was involved in the Poulson case. Second, is the corruption that arises ‘from the power to supply resources, public services and permits for the carrying on of a range of activities’ (Newell and Bull, 2003b: 38–9). This is the kind of corruption that arises when, say, you bribe local council officials to ensure that you are granted planning permission to build an extension on your house. It differs from the first kind in so far as it is related not to the state’s power to spend taxpayers’ money on the procurement of goods and services of various kinds, but to the state’s power to regulate and restrict what goes on in civil society, whether this be driving a car, flying a plane, building a house extension, opening a shop, or whatever. In all these cases, if we want to carry on the activity in question we have to obtain the state’s permission through the issue of a license, a permit or some other document. It is similar to corruption of the first kind in that in both cases the corrupt public official turns public resources (money in the first case, the authority to regulate private activity in the second) into private resources and allocates them not according to normatively defined criteria (the publicly decided-upon rules for their allocation) but according to market criteria (the laws of supply and demand set by the willingness of corrupt officials to ask for bribes and the willingness of private citizens to pay them). An example of this kind of corruption is that which is alleged to have taken place in relation to Keith Vaz MP and the so-called Hinduja passport scandal. On 25 January 2001 opposition MPs began to question the role that Mr Vaz, then Minister for Europe in the Foreign and Commonwealth Office, may have played in helping the billionaire Hinduja brothers (linked to a corruption investigation in India) to obtain UK passports; and on 21 March 2001 the Parliamentary Commissioner for Standards, Mrs Elizabeth Filkin, announced that she was opening an investigation into whether or not a company run by Mr Vaz’s wife had received a donation from a charitable foundation run by the Hinduja brothers. This was after Mr Vaz had been censured, in a separate allegation, for failing to register two payments totalling £450 from Sarosh Zaiwalla, ‘a solicitor whom he recommended for an honour several years later’ (BBC News, 2002a). What we know is that Mr Vaz ‘made inquiries to the Home Office about the Hinduja passport applications and is believed to have written to Tony Blair and Peter Mandelson on their behalf’ (BBC News, 2001).

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Mr Vaz himself was adamant that he had done nothing wrong in relation to the passports, saying that all kinds of people asked him for support. It is certainly true that it is a normal part of an MP’s duties to contact the civil service and other bodies on citizens’ behalf when requested, to seek the correction of mistakes, the speeding up of passport applications and such like when they are being dealt with unreasonably slowly, and so forth. What is definitely not normal is that MPs either demand or accept payments for their interventions, or that MPs should seek special, favourable, treatment for the citizens on whose behalf they are acting, because that puts in jeopardy the principle of equality before the law, the principle that rules and procedures must be applied to all citizens in exactly the same way regardless of irrelevant considerations such as their financial circumstances. Although Vaz was eventually cleared of wrong-doing in the Hinduja case, this was not before he had been forced to resign from the government (which he did in June 2001) or before the row had involved Peter Mandelson, who resigned as Northern Ireland Secretary in January 2001. Shortly before his resignation Mr Mandelson admitted that he had made a telephone call to Home Office Minister Mike O’Brien to enquire whether a passport application by one of the Hinduja brothers would be reconsidered after it had been turned down. This was after Mr Mandelson had in effect denied making the call, by claiming that he did not support or endorse the application and that the matter had been dealt with by his private secretary; and, more importantly, after it had emerged that the Hinduja brothers had offered, and Mandelson had accepted, a £1 million donation to underwrite the Faith Zone at the Millennium Dome, for which Mr Mandelson was responsible. Third, is the corruption that arises from the state’s power to investigate private conduct of various kinds – through the police, the courts, Her Majesty’s Revenue and Customs, trading standards officials and other bodies – and, where wrong-doing is uncovered, to apply penalties. These penalties range from prison sentences to fines, bans on performing certain kinds of activities such as driving a motor vehicle, or simply the insistence that taxes owed must be paid. This kind of corruption arises from the state’s capacity to impose costs on its citizens, and it takes place when public officials take bribes in exchange for agreeing not to impose costs, even though the situation in question demands it. What this has in common with the other two types of corruption, and indeed with all types of political corruption, is that it is an exchange relationship, that is, it involves an exchange of resources: bribes, on the one hand, and illicit services provided by the corrupt public official, on the other.

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One of the best examples of this type of corruption concerns one of the many allegations that have been made over the years against former Italian Prime Minister Silvio Berlusconi. Berlusconi is one of Italy’s richest businessmen. Beginning his career in the early 1960s as a ­building contractor, in the late 1960s Berlusconi had the idea of developing Milano 2, a garden city of around 3,500 flats … Companies in Switzerland … injected 4.1 billion lire … into the Italian companies responsible for Milano 2. So, on paper, this project belonged not to Mr Berlusconi, but to anonymous third parties. Officials at the Bank of Italy suspected that Mr Berlusconi was behind the Swiss companies. At the time, holding capital abroad without telling the authorities was a criminal offence. A team from the Guardia di Finanza [or Financial Police, whose remit is in many respects similar to that of British customs officials], led by Massimo Berruti, investigated in 1979, but concluded … that [Berlusconi] was not the beneficial owner of the Swiss companies. Mr Berruti’s boss signed the official report. Like Mr Berlusconi, he belonged to the infamous P2 masonic lodge. Immediately after his investigation, Mr Berruti left the Guardia di Finanza and worked as a lawyer for Mr Berlusconi. He is now a … member of parliament [in Berlusconi’s own political party, Forza Italia]. (Economist, 2001)

Another example, closer to home, involves corruption in the police. Numerous examples of police corruption have come to light in Britain over the years, for the fairly obvious reason that the police ‘are in constant contact with a criminal world where cheating, lying and bribing are a way of life’ (BBC News, 2002b) and whose members, if they are known to the police, have a particularly strong incentive to bribe them and may have access to copious resources with which to do it. One of the most famous examples of police corruption in Britain was that brought to light in the 1970s by Operation Countryman, an internal investigation within the Metropolitan Police which revealed extensive bribery of Flying Squad officers by Soho pornographers in exchange for protection from prosecution. Operation Countryman was referred to in a BBC report (BBC News, 2002b) which suggested that an additional factor may have been involved in police corruption: low pay. The report noted that ‘Senior officers have suggested –– that padding the pay packets of the rank and file is one way to stop bobbies lining their pockets themselves by less palatable means. “If you are not paying your police officers a wage they can live on, you are almost inviting them to indulge in malpractice,” said Sir Paul Condon, while at the helm of the Metropolitan Police.’4 Some writers would argue that corruption of the police and other non-elected public officials and administrators is best designated by the

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term ‘bureaucratic corruption’, rather than ‘political corruption’, preferring to reserve the latter term for those cases where, from the principal– agent perspective, the agent involved is an elected official. That said, it is important to note that the activities of each group presuppose the activities of the other. That is, in liberal democracies, administrators ultimately get their instructions from, and are accountable to, elected politicians, while elected politicians are dependent on public administrators for the implementation of their policies. For this reason, what we find empirically is that political corruption and bureaucratic corruption often go hand in hand. On the one hand, as della Porta and Vannucci (1999: 131) point out, politicians ‘define the essential lines of the public administration’s activity, influencing both the opportunities and risks of bureaucratic corruption’. On the other hand, bureaucrats are in a position to affect political corruption in so far as ‘they are often in a position to denounce the illegitimate actions of politicians, or they can refuse to carry out the measures desired by the latter’. Fourth is the corruption which arises at the level of legislatures and their members ‘when in exchange for items of legislation [or other legislative interventions] of benefit to single firms and/or powerful economic groups [or individuals], individual politicians personally, or their parties, receive payment for their role in securing such legislation [or legislative interventions] (Newell and Bull, 2003b: 39). Again, the case of Silvio Berlusconi can serve as an example. One of the ways in which Berlusconi made his fortune was by becoming the owner of Italy’s three largest private television networks. It all began in 1978 when he launched a local cable-television station for Milano 2, called Telemilano. This scheme became far grander. Mr Berlusconi’s ambition was to challenge [the state’s] monopoly on national television advertising, for which there was huge pent-up demand. Telemilano became Canale 5 in 1980. There was one major snag: only [the state] was permitted by law to broadcast nationally. Although private commercial television was unregulated in most respects, a court ruling in 1980 allowed private television stations to broadcast only on a local basis. But Mr Berlusconi soon found a way round this ruling. He bought programmes, especially American films and soaps, and offered them at very low prices to small, regional television stations. Mr Berlusconi collected the revenue from pre-recorded advertising slots that he inserted. Each station in the Canale 5 circuit agreed to broadcast the same programmes at the same time. In this way, he secured his national audience. (Economist, 2001)

Subsequently, in 1981 and 1983, Berlusconi bought his two largest private competitors, Italia 1 and Retequattro, but then faced potential

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disaster when, in October 1984, officials in several Italian cities shut down his television stations for broadcasting illegally. Within days, the Socialist prime minister, Bettino Craxi, signed a decree that would allow the stations to stay on air and later, in 1990, he helped to secure the passage of legislation that fully legalised Berlusconi’s position: In 1991 and 1992, Mr Berlusconi paid a total of 23 billion lire into Craxi’s offshore bank accounts from a clandestine part of his Fininvest empire, known as All Iberian. Following leads from their investigation of Craxi’s bank accounts, prosecutors discovered a secret and substantial network of Fininvest companies, incorporated in such jurisdictions as the British Virgin Islands and the Channel Islands. These companies were not disclosed as subsidiaries in Fininvest’s accounts. According to prosecutors, in 1993 Mr Berlusconi signed a letter to his auditors falsely stating that these companies were not part of the Fininvest group. (Economist, 2001)

From this it might be easy to get the impression that British legislators are by comparison much cleaner. The suspicion that they are not is fuelled by the sale of honours for cash – an allegation frequently made in connection with British prime ministers and governments, and one with a tradition that stretches back at least to David Lloyd George and William Gladstone.5 To give an example of this kind of allegation, on 25 August 2004 the Daily Mirror revealed that in May that year Tony Blair had made Paul Drayson a peer, six weeks before he gave the Labour Party £505,000. Paul Drayson ran a firm called Powderject, the government’s sole supplier of smallpox vaccine. On 25 May the Guardian revealed that ‘[t]he parliamentary ombudsman [had] expressed deep disappointment at the failure of John Reid, the health secretary, to comply with her rulings on freedom of information’ (Leigh and Evans, 2004). ‘For two years John Reid’s department … refused to give information about the award of a £32m contract, without normal competitive tendering, to Powderject for smallpox vaccine shortly after Powderject’s owner donated £100,000 to Labour’ (Davies, 2013). Not long after this came the ‘cash for peerages’ affair, which overshadowed the whole of Tony Blair’s final year in office as prime minister. Why is the study of political corruption important? Why, then, should one want to study political corruption? There are two answers to this question, one of which has to do with its incidence, and other with its effects. As far as the incidence of corruption is concerned there was a time, prior to the 1990s, when political scientists regarded it as

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­ redominantly, if not almost exclusively, a ‘third world’ phenomenon, p and of much lesser significance in the liberal democracies of Europe and elsewhere. This is not to say that political corruption was thought to be non-existent in these societies; rather, it was thought to be a marginal phenomenon, one that did not fundamentally affect the way they were governed. it was thought that in these societies, unlike in those of the ‘third world’, norms of due process were deeply rooted and this helped ‘to ensure that the phenomenon would remain incidental and sporadic’ (Newell and Bull, 2003a: 1). Following the exposure of corruption in a number of these countries, political scientists ‘were forced to abandon this cosy assumption. Felipe González in Spain; Neil Hamilton in Britain; Bettino Craxi in Italy; Helmut Kohl in Germany; Edith Cresson of the European Commission: these were only some of the most wellknown politicians caught up in a wave of scandals that seemed to touch an ever-increasing number of democratic countries and institutions as  [the 1990s] progressed’ (Newell and Bull, 2003a: 1). Such scandals revealed not only that corruption was present in liberal democracies but that in some cases it was widespread. This in turn suggested the possibility that, far from helping to minimise corruption through due process norms, liberal democratic arrangements might harbour institutions whose functioning actually helps to stimulate corruption. And so the wave of scandals since the 1990s has raised new questions about the causes of corruption. In doing so it has shone a light on the possible effects of corruption, of which four can be highlighted. 1 Corruption ‘involves the suspension of normatively defined criteria for the allocation of resources, in favour of an allocation mechanism – market exchanges – whose distributive consequences in turn depend on the arbitrary and unequal distribution of money and other resources. In other words, it results in an arbitrary and unequal distribution of precisely those resources – planning permission, licences and permits, public works contracts and so forth – whose distribution, by common consent, should rather be governed by nonarbitrary considerations and considerations of equality’ (Newell and Bull, 2003a: 4–5). 2 ‘[B]y undermining the principle of equality, corruption is … subversive of regimes called liberal democratic, whose authority rests precisely on the claim that they are successful in ensuring, through the franchise and political accountability, that every member of the electorate can have a say in public decisions – which are therefore made to conform to the wishes of the electorate as a whole. Corrupt

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exchanges entail the replacement of these wishes by considerations of private gain as the determining factors in the making of public decisions, thus undermining the very rationale for liberal democracy in the first place, and with it the trust and confidence of citizens in public institutions’ (Newell and Bull, 2003a: 5). 3 ‘[C]orruption creates a large number of far more immediate-term and tangible costs. These include the waste of tax-payers’ money involved in the efforts of contractors to recoup, through the inflated bills they present, the cost of bribes they have had to pay to obtain public works contracts. Yet another example is the perpetuation of the administrative inefficiency that forms the basis for demanding bribes in exchange for the application of special, “fast-track” procedures’ (Newell and Bull, 2003a: 5). 4 ‘[T]here is built into corruption, a significant self-generating mechanism, so that beyond a certain point it tends naturally to feed upon itself and so to spread. If we assume that persons are more likely to engage in corrupt exchanges, the more likely the anticipated benefits are to outweigh the anticipated costs, then it is apparent that the more widespread such exchanges have already become, the more likely this condition is to hold. Among other things, the more widespread corruption is the more thinly will the authorities have to spread the resources available to investigate it. The more this is so, the lower the material costs will be (in terms of the likelihood of getting caught). The lower the likelihood of getting caught, the more likely it is that still others become involved in networks of corrupt exchanges. In extreme cases, corruption may spread to the point that it becomes systemic – a situation in which due process norms have been more or less completely undermined and bribery has become largely unavoidable even for the unwilling’ (Newell and Bull, 2003a: 5). So, corruption arguably poses real threats to liberal democracies precisely because of its capacity to spread – and it is to the growth and spread of corruption, along with its measurement, that we turn in the next chapter. Notes 1 See, for example, Hay (2007). 2 House of Commons debates, 3 February 1949, vol. 460, col. 1956. 3 It is, in other words, something that takes place when, in return for performing a duty, the public official ‘receives, for themselves or a third party, a monetary reward or other utility that is not owed to them’.

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4 Perhaps cultural characteristics matter too: a colleague remarked to me that the suggestion that police officers are corruptible because their pay is so low begs the question why university teachers, who are worse paid, are not making a thriving career out of selling ‘Firsts’ for £1,000 an exam! Clearly, a convincing answer would depend on being able conclusively to verify the relative pay assumption (perhaps not an easy task) and it would recognise that the impact of pay does not take place in isolation, – as is discussed in more detail in chapter 3. 5 This illustrates that Britain, despite not being usually thought of as a particularly corrupt country, provides numerous examples of the phenomenon. This view of Britain as not being particularly corrupt accounts – in part at least – for what readers may feel to be a somewhat ‘Anglo-centric’ approach to my choice of examples in this chapter.

References Bayley, David (1966), ‘The Effects of Corruption in a Developing Nation’, Western Political Quarterly, 19(4): 719–32. BBC News (2001), ‘Keith Vaz: minister and networker’, 26 January, http://news. bbc.co.uk/1/hi/uk_politics/1137824.stm, accessed 10 February 2018. BBC News (2002a), ‘Timeline: Keith Vaz’, 8 February, http://news.bbc.co.uk/1/ hi/uk_politics/1809146.stm, accessed 10 February 2018. BBC News (2002b), ‘Does low pay mean crooked cops?’, 22 February, http:// news.bbc.co.uk/1/hi/uk/1804276.stm, accessed 3 February 2018. Bendix, Reinhard (1960), Max Weber: An Intellectual Portrait, New York: Doubleday Bratsis, Peter (2003), ‘The Construction of Corruption, or Rules of Separation and Illusions of Purity in Bourgeois Societies’, Social Text 77, 21(4): 9–33. Cecil Turner, J. W. (1964) (ed.), Russell on Crime, 12th edn, London: Stevens & Sons. Davies, Roy (2013), ‘Political corruption: a collection of links on politics and political corruption in relation to financial scandals’, www.ex.ac. uk/~RDavies/arian/scandals/political.html (accessed 3 February 2018) della Porta, Donatella and Alberto Vannucci (1997), ‘The Resources of Corruption: Reflections from the Italian Case’, Crime Law and Social Change, 27(3–4): 231–2. della Porta, Donatella and Alberto Vannucci (1999), Corrupt Exchanges, New York: de Gruyter. Douglas, Mary (1966), Purity and Danger: An analysis of Concepts of Purity and Taboo, London and New York: Routledge and Keegan Paul Economist (2001), ‘An Italian Story’, 26 April, www.economist.com/ node/587107, accessed 19 February 2018. Garrard, J. A. (2006), ‘Scandals: An Overview’, pp. 13–29 in J. A. Garrard and J. L. Newell (eds), Scandals in Past and Contemporary Politics, Manchester: Manchester University Press. Hay, Colin (2007), Why We Hate Politics, Cambridge: Polity Press.

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Held, D. (1996), Models of Democracy, 2nd edn, Cambridge: Polity. Ipsos-MORI (2011), ‘Doctors are most trusted profession – politicians least trusted’, 27 June, www.ipsos-mori.com/researchpublications/research​arch​ ive/2818/Doctors-are-most-trusted-profession-politicians-least-trusted.aspx, accessed 2 February 2018. Leigh, David and Rob Evans (2004), ‘Reid blocked freedom of information on Powderject, says watchdog’, 25 May, www.guardian.co.uk/uk_news/ story/0,3604,1223959,00.html, accessed 3 February 2018. Muszyn´ska, Barbara, Nováková, Petra and Wibo van Rossum (2012), ‘Fighting Corruption in Polish and Czech Legal Cultures’, Comparative Law Review3(1), www.comparativelawreview.unipg.it/index.php/comparative/ article/view/62, accessed 10 February 2018. Nelken, David (2003), ‘Political Corruption in the European Union’, pp. 220–33 in M. J. Bull and J. L. Newell (eds), Corruption in Contemporary Politics, Basingstoke: Palgrave Macmillan. Newell, J. L. and M. J. Bull (2003a), ‘Introduction’, pp. 1–6 in M. J. Bull and J.  L.  Newell (eds), Corruption in Contemporary Politics, Basingstoke: Palgrave Macmillan. Newell, J. L. and M. J. Bull (2003b), ‘Political Corruption in Italy’, pp. 37–50 in M. J. Bull and J. L. Newell (eds), Corruption in Contemporary Politics, Basingstoke: Palgrave Macmillan. Rogow, Arnold A. and Harold D. Lasswell (1963), Power, Corruption and Rectitude, Englewood Cliffs NJ: Prentice Hall. Rose-Ackerman, Susan (1978), Corruption: A Study in Political Economy, New York: Academic Press. Rubinstein, W. D. (1983), ‘The End of “Old Corruption” in Britain 1780–1860’, Past and Present 101 (November): 55–86.

2 The growth, spread and measurement of corruption

Introduction In this chapter we look at the growing attention academics have paid to the phenomenon of corruption and at the problems involved in its measurement. The period since 1990 seems to have been marked by growing levels of academic concern with the topic: ‘Inserting the expression “political corruption” into the search box of the British Library’s integrated on-line catalogue throws up 1,266 items – of which no fewer than 1,073 were published in 1990 or later’ (Newell, 2008: 40). The chapter first explores why the topic was relatively neglected until the early 1990s and why there has been growing interest in it since then; second, it considers the various difficulties involved in quantifying it. The issue is important since ‘the best way to understand problems’ (at least for those who prefer positivistic approaches to the social sciences) ‘is to measure them, analyse them and provide solutions to them’ (Landman and Carvalho, 2010: 2). And as we shall see, the two issues – measurement and the attention to corruption – are very much linked, since one of the reasons for the relative neglect of the phenomenon until recent years has been the difficulties involved in measuring it. Relative lack of attention to corruption until the early 1990s Two factors explain the relative neglect of corruption until the 1990s. The first of these lies in the difficulties in observing it or getting truthful reports about it. The previous chapter discussed some of the difficulties involved in reaching any clear agreement on the definition of corruption, and without an agreed definition of what it is, it is difficult to research it. Yet, even if agreement existed, a basic problem would remain: whatever specific definition one adopts, corruption is a type of rule infringement;

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it is deviant behaviour – behaviour which, by virtue of what we understand it to be, attracts opprobrium. It is therefore necessarily clandestine: its perpetrators seek to keep it hidden. The difficulty this creates for its study is obvious: you cannot, for example, seek out the kinds of officials most likely to be drawn into corruption by asking a sample of interviewees: ‘How often in an average week do you ask for bribes? Very often, quite often, not very often or never?’ It is hardly surprising that until relatively recently observers shied away from studying it. Second, corruption was not perceived by academics or policy-makers to be widespread in liberal democracies, but was widely regarded as being largely associated with poorer, underdeveloped societies. The thinking was that liberal democracies have a number of safeguards to ensure that politicians remain clean, not least democracy and party competition itself: governing politicians would avoid corruption in order not to give opposition parties a stick to beat them with and so damage their election chances. Underdeveloped societies, on the other hand, often lacked such democratic safeguards; moreover, because they were poor they encouraged states of relative lawlessness, of which corruption was a component, which in turn perpetuated poverty in a vicious circle. The suggestion that corruption was regarded as a minor phenomenon in liberal democracies before the 1990s cannot go unqualified. Well before then, Italy, Japan, Mayor Daly in Chicago, and the mayors of other large cities in the US, had all excited comment; but in so doing they testified to the perception that they were exceptions to a rule. In the case of Britain, these perceptions were also testified to by the way in which policy-makers responded to corruption when it came to light. As Alan Doig has noted, for many years the dominant strain in British political elites’ strategy for dealing with the exposure of corruption and misconduct was to treat the perpetrators as ‘rotten apples’: to subject identified cases to investigations that dealt with the offenders and that also repeatedly insisted on ‘the general integrity of institutions and the robustness of the procedures involved in dealing with the offences’ (Doig, 2003: 178). A very good example of this was the official reaction to the Poulson case described in chapter 1. One of the MPs caught up in the scandal was the then Shadow Commonwealth Secretary, Reginald Maudling. Maudling was anxious to build up a business career to keep up his income and Poulson needed a big name as chairman of one of his companies, Construction Promotion. In 1966 Maudling accepted an offer to be chairman for £5,000 per annum; in addition, his son Martin, who had left Oxford without a degree, went to work for another Poulson

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company, while Poulson agreed to donate large sums of money to a charity patronised by Maudling’s wife. In return, Maudling helped to bring pressure on the government of Malta to award a £1.5 million contract for the new Victoria Hospital to Poulson. He also changed Conservative Party policy so that three-quarters of the overseas development assistance to Malta would be given in the form of a grant and one quarter in the form of a loan, instead of the even split which the 1966–70 Labour government had decided upon. After all this came to light a number of inquiries were set up, one of which led to the establishment of a register of MPs’ financial interests. If MPs are obliged publicly to declare their interests, that makes it easier for the public to find out whether they are acting under the influence of financial inducements, as Maudling had appeared to be doing, and thus reduces the likelihood of it happening in the first place. However, the inquiry left it to MPs themselves to decide whether an interest was sufficiently significant and important to require registering. Another inquiry established in 1976 to investigate the conduct of the MPs caught up in the Poulson scandal found all to have fallen short of standards of conduct reasonably to be expected. But when Leader of the Commons, Michael Foot, urged the House ‘not to act like a sanctimonious lynch mob’, MPs refused to do anything more than simply ‘take note’ of the inquiry’s report (Doig, 1984: 154–5). So to sum all this up, much Western political science in the 1960s and 1970s was characterized by a certain confidence, bordering on condescension, in regard to … political corruption: essentially a problem of under-developed and non-democratic nations, its control and eradication depended upon institutional design, with liberal democracy providing the model towards which ‘developing’ nations would make inevitable progress. (Heywood, 1997: 435)

For this reason, what work was carried out on political corruption in liberal democracies was marginal to political science and had little prominence. Where corruption appeared in these societies it was regarded quite explicitly as an aberrant deviation from the norm, an exception; or, if it was regarded as more common than this, then it was thought to concern mainly the (newer) democracies of southern Europe – especially places like Italy and Greece. But even there it was regarded as a pathological phenomenon, a deviation from a norm, and was not viewed as something that had to be understood in order to enable political scientists to understand the ways in which democracy itself functioned.

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What, then, has been responsible for the growing attention paid to corruption since then? Growing interest in corruption and its causes since the early 1990s The growing attention to corruption has probably been driven by the extraordinary growth in its prominence as an issue in the societies, the politics and the media of Western democracies. This growth can be seen, in the case of the UK, by examining headlines in ‘quality’ newspapers such as the left-of-centre Guardian, which has a reputation for avoiding the sensationalism of some of the more popular dailies while being sensitive to matters of probity in public life. Quantifying the occurrence in Guardian headlines of words such as ‘corrupt’, ‘bribe’ and their derivations over the years 1984–2008 reveals a clear upward trend throughout the period, with a peak of 359 relevant headlines in 1997 (Figure 2.1). In the 1997 general election the Conservative Party sought to defend itself against allegations of ‘sleaze’ – an umbrella term covering acts of sexual impropriety, misuse of office and material greed. In October 1993 Prime Minister John Major had called for a reassertion of family values and private morality in a ‘back-to-basics’ campaign. When, in an election year, conduct by prominent Conservatives was revealed that was clearly at variance with what the prime minister claimed to be the party’s core values, it was thrust centre stage by journalists, for many 400 350

Number

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87 19 88 19 89 19 90 19 91 19 92 19 93 19 94 19 95 19 96 19 97 19 98 19 99 20 00 20 01 20 02 20 03 20 04 20 05 20 06 20 07 20 08

86

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Figure 2.1  Guardian headlines containing the roots of ‘corrupt’, ‘bribe’, ‘embezzle’, ‘fraud’ or ‘sleaze’

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of whom the unveiling of official hypocrisy is seen as a way of pursuing their calling as guardians of the public interest (Thompson, 2000; Moncrieff,  2006). Following an apparent decline in press attention to corruption and related matters in the early years of the Labour government that took over from the Conservatives in 1997, there has since been another revival of interest. If we ask what has been responsible for growing media attention to corruption, one obvious answer is the apparent growth in the number of scandals triggered by wrong-doing generally after 1990. 1 In France in 1993, François Mitterand (president from 1981 to 1995) was revealed to have been engaged in illegal wire-tapping, supposedly to keep aspects of his private life (such as an illegitimate child, a 1981 cancer diagnosis and involvement with the Vichy regime) secret. Prior to that, in 1989, it had come to light that Urba, a consultancy organisation set up by the Socialist Party in 1971, had been used as a channel for secret payments to the party by firms bidding for public contracts. After Jacques Chirac assumed the presidency following Mitterand’s departure, he was named in several cases of alleged corruption dating back to his time as mayor of Paris, and in 2011, following his departure from office in 2007 and the end of his presidential immunity from prosecution, he was convicted of diverting pubic funds, abuse of trust and illegal conflicts of interest and was given a two-year suspended prison sentence. 2 In Ireland in the early 1990s the so-called beef scandal arose from allegations of malpractice in the beef-processing industry, including allegations that in exchange for payments to the Fianna Fáil Party leading politicians had used their influence to try to thwart investigations into EU fraud allegedly perpetrated by companies owned and controlled by Larry Goodman. Goodman was an Irish businessman who in 2013 found himself caught up in the so-called horse-meat scandal, when it came to light that companies operating in a number of European countries had advertised foods as containing beef which were then found to contain undeclared or improperly declared horse meat. 3 In the US, Bill Clinton’s presidency from 1993 to 2001 was dogged by various incidents, including allegations of financial and sexual misconduct while he was Governor of Arkansas in the 1980s, specifically that he and his wife, Hillary, had assisted business associates in the Whitewater Development Corporation to obtain illegal loans for the financing of local land and construction projects, and that he had sexually harassed an Arkansas state employee, Paula Jones. Then,

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the infamous Monica Lewinsky scandal broke in 1998, as a result of which the President was charged with perjury and obstruction of justice – charges of which he was acquitted following a 21-day Senate trial in February 1999. All of this took place against the background of the Savings and Loan Crisis – the insolvency of over 1,000 small lending institutions between 1986 and 1995 – which led to revelations of widespread instances of control fraud1 in which a number of senior politicians were alleged to have been complicit. 4 In Japan, the Recruit Scandal of 1988–89 (resulting from the use of insider trading as a means of bribing a number of senior politicians) was followed in 1991 by the Kyôwa Affair, which arose from corrupt payments to the head of the Hokkaidô and Okinawa Development Agencies, Abe Fumio, who used his influence to provide Kyôwa, a steel girder construction company, with approval to build a golf course. This was followed by the Sagawa Kyûbin and Genecon scandals of 1991–93. They too involved corrupt payments to senior politicians by private-sector firms and played a significant part in the ruling Liberal Democratic Party losing its overall parliamentary majority for the first time since its foundation in 1955. A series of scandals in the second half of the 1990s originated in payments to senior administrative officials in exchange for confidential information about planned inspections of credit institutions, and for other favours. 5 In Britain, traditionally renowned for a relative absence of corruption, John Major’s 1992–97 government, having set itself up as a government committed to returning to a high level of morality (‘back to basics’) was subsequently mired in allegations of sleaze and corruption, including a string of sexual scandals involving back-bench MPs; suggestions that ministers had encouraged firms to supply arms to Iraq during the Iran–Iraq war from 1980 onwards, in breach of the government’s own arms embargo; and the exposure of several MPs by Mohammad Al Fayed, the owner of Harrods, for accepting cash payments in return for asking questions in Parliament. After Labour’s election to government in 1997, among other things were allegations that a decision to exempt Formula 1 from a ban on tobacco advertising had been driven by a £1 million donation to the Labour Party by motor-racing boss Bernie Ecclestone; Tony Blair’s decision in 2006 to force the Serious Fraud Office to abandon an investigation into possible bribery arising from a multi-billion-pound arms deal between BAE Systems and Saudi Arabia; ‘cash for honours’, involving allegations in 2006 and 2007 of a link between party donations and the provision of life peerages; and the 2009 MPs’ expenses scandal.

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6 Most notoriously, in Italy in the early 1990s, an initially small-scale corruption investigation involving a minor party functionary in Milan provided investigators with information implicating yet others, with the result that what became known as the Tangentopoli or ‘Bribe City’ scandal quickly spread to other towns and cities, soon bringing to light an extensive and sophisticated system of corrupt party funding. The scandal was so huge that it brought down the political class in its entirety through the electoral collapse and organisational disintegration of all the parties that had governed Italy since the war, and resulted in a transformation of the party system in which, from 1994, competition was dominated by Silvio Berlusconi and his personal party, Forza Italia. Largely because of this, issues of corruption and public probity continued to loom large in Italian politics, a central issue being Berlusconi’s penchant for using his position as prime minister to secure legislation designed to benefit him personally by serving his private financial interests. Public perceptions of widespread venality among members of the political class played a hugely important role in the explosion of support for the anti-political Fivestar Movement, whose success at the 2013 election looked for a while as though it had rendered the country ungovernable. 7 In Spain, support for the Socialist government of Felipe González, prime minister from 1982 to 1996, was in its later years undermined by several corruption scandals, most notably one involving Civil Guard director, Luis Roldán (who used his position to amass a fortune and, when this was discovered, accused several others, including the prime minister himself), and also by the GAL scandal (where it was revealed that Ministry of the Interior funds had been used to set up anti-terrorist assassination squads during the 1980s). There have since been a spate of further corruption scandals, a number of which are still ongoing. In the so-called Gürtel Case, some forty people, including three former Popular Party (PP) treasurers, are alleged to have been involved from 1999 to 2009, when it came to light, in a massive bribes-for-contracts scheme involving several regional governments and public funds totalling €449 million. Meanwhile, in the Barcenas Case it is alleged that the former PP treasurer operated a slush fund from which payments were made to several high-ranking party officials, including the prime minister, Mariano Rajoy. 8 In Germany, it was revealed in 1999 that Helmut Kohl, Chancellor between 1983 and 1997 and architect of the unification of Germany, had kept secret party accounts for the CDU (Christian Democratic Union), with anonymous cash donations, party slush funds and secret foreign accounts. What became known as the CDU ­donations

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scandal also involved payments made to former CDU treasurer Walther Leisler Kiep by German arms dealer Karlheinz Schreiber, who was extradited from Canada in 2009 following a ten-year battle and sentenced to eight years in prison. 9 In March 1999 following the actions of a whistle-blower and pressure from the European Parliament, the entire European Commission resigned en masse, an independent committee of inquiry having found several commissioners guilty of favouritism (French commissioner, Edith Cresson, for instance was reported to have awarded job contracts to a friend who was unqualified for them and did little work) and the Commission as a whole guilty of having lost control of the mechanisms of internal auditing and accountability. This wave of scandals gave the study of corruption an attractiveness it had not had before. For one thing, it heightened public anxieties about the standards of probity of those in public life – anxieties that were reflected in the emergence of a number of new anti-corruption agencies as well as a range of corruption-related policy initiatives. Transparency International, a non-governmental organisation based in Berlin with branches in various countries around the world, was founded in 1993. It seeks to bring an end to corruption both within countries and in international business transactions by bringing people together and sponsoring research into corruption and anti-corruption efforts worldwide. In the UK, 1994 saw the setting up under Lord Nolan of the Committee on Standards in Public Life, a standing body to advise government ‘about standards of conduct of all holders of public office … and make recommendations as to any changes … which might be required to ensure the highest standards of propriety in public life’.2 In 1997 Organisation for Economic Co-operation and Development (OECD) member countries, along with a number of non-member countries, signed the Anti-bribery Convention, which obliges its signatories to make the attempt to bribe foreign public officials a crime under their domestic law. In 1999, seventeen members of the Council of Europe agreed to set up the Group of European States against Corruption (GRECO) to bring about improvement in the domestic anti-corruption legislation of its members. In 2003, the United Nations adopted the Convention against Corruption with analogous objectives. In 2010, the UK adopted the Bribery Act,3 which has been described as ‘the toughest anti-corruption legislation in the world’ (Breslin, Ezickson and Kocoras, 2010: 362). Scholars were aware that the wave of scandals might reflect an actual as well as perceived decline in the standards of probity of public officials, and that if this was the case, then corruption was much more of a

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problem for the liberal democracies than they had hitherto assumed. Of course there was no certainty about this. It was possible, for example, that the apparent rise in the number of corruption and corruptionrelated scandals was due to a greater chance of exposure rather than to any actual growth in the phenomenon itself. A number of developments pointed in this direction. They included the growing availability of new communications and surveillance technologies, which have made it much easier to gather information through covert means and to make that information rapidly available, thus making privacy much more difficult to maintain. In 2010 three former cabinet ministers, Stephen Byers, Geoff Hoon and Patricia Hewitt, were suspended from the parliamentary Labour Party after being caught on camera apparently expressing a willingness to trade their political influence for profit. In February 2015 former foreign secretaries Jack Straw and Sir Malcolm Rifkind were secretly filmed by Daily Telegraph journalists who posed as representatives of a fake Chinese firm, apparently offering their services to the supposed company for cash.4 The examples are many. The new technologies have been deployed by undercover journalists, who, have been much more powerfully driven, since the 1970s Watergate scandal, by the culture of investigative journalism and desire to discover and disclose hidden secrets. Arguably, they have been incentivised by audiences who seem to be increasingly in the grip of anti-political sentiment and forced to make voting choices based on their assessments of the credibility and trustworthiness of political leaders – who, for their part, have been decreasingly inclined to offer voters the old ideological cues for electoral decision making, as the principled disagreements that once separated left and right have become less pronounced in party competition. This being the case, in their search for political advantage parties have increasingly turned to allegations of wrong-doing by their opponents – and in doing so they have in effect collaborated with investigative journalists. For example, the Hinduja passport scandal (see chapter  1) actually originated in a series of parliamentary questions initiated by Liberal Democrat MP Norman Baker, the answers to which were then passed to the Observer newspaper. So, the growing prevalence of corruption scandals seems to be a function of a very large number of factors besides any growth in corruption itself. Still, at least two pieces of circumstantial evidence suggest that beneath all the scandals, corruption has indeed become an increasingly serious problem. The first is that, coinciding with the growing number of affairs, the period since the 1980s witnessed a change in political culture in many respects. The 1980s saw the rise of politicians like Margaret Thatcher in the UK and Ronald Reagan in the US, with their

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emphasis on liberalism, free markets and individual material success. These were politicians who were driven not simply by practical considerations but by a political ‘project’ (Hall, 2011: 10) focussed not just on a set of economic policies but on the attempt to alter, societywide, modes of organisation, thought and value. Citizens were impelled away from trade union membership and towards share ownership and house purchase as their sources of economic security. Not collective bargaining but individual initiative and ‘getting on your bike’5 were to be the means to satisfy people’s aspirations. This continued and developed further under New Labour from 1997, where choice in the provision of services, the citizen-as-customer, league tables and targets all ensured that the public sector would be run according to the ways of the business corporation. Consequently, the themes of individualism, materialism and the drive for financial gain received a much higher profile in political discourse during the period after 1980 than they had previously. The result was to bequeath a political culture in which ‘the encouragement of financial gain as an indicator of worth, has placed a premium on self-centred secularism and materialism’ (Doig, 2003: 189), as well as to hand down an unbending belief in government circles that ‘private sector values, procedures and practices [provide] the best framework for the delivery of public services either by the private or public sectors’ (Doig and Wilson, 1995: 17). Much the same could be seen in other liberal democracies. In Italy, for example, the 1980s were years in which the waning influence of the Catholic church, continuing high rates of economic growth, the decline of the protest activity of the ‘years of lead’ and the retreat of political activists to the private sphere, the growth, pioneered by Berlusconi, of private television and the promotion of new consumer models all brought a growing entrenchment of values of hedonistic individualism. The work of American sociologist Robert Merton helps to make clear why such values, procedures and practices might be expected to be insidious for the integrity of public officials. Merton (1938: 674) argued that deviant behaviour, of which corruption is an example, was a possible response to a ‘dissociation between culturally defined aspirations and socially structured means’. In other words, people are at risk of falling into antisocial behaviour when they find themselves confronted with certain culturally prescribed goals (such as material success), on the one hand, but on the other hand find that the social structures regulating their conduct make it difficult or impossible to achieve those goals – that is, when there is a disconnect between culturally defined ends and the socially legitimate means of attaining them. Merton argued that under such circumstances there were five possible responses: acceptance of

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both ends and means (what he called ‘conformity’); rejection of both ends and means (‘retreatism’); rejection of ends and means and substitution of new goals and standards (‘rebellion’); rejection of the ends but acceptance of the means (‘ritualism’); acceptance of the ends but rejection of the means (‘innovation’). ‘Retreatism’ is characteristic of the ‘drop out’; ‘ritualism’ describes the kind of behaviour that people engage in when they conform to norms outwardly, ‘going through the motions’ but lacking an inner commitment to the underlying social values of the organisation; ‘innovation’, or criminal behaviour such as theft, fraud, bribery and so on, is typical, in Merton’s view, of situations in which the goals of success are presented as being desirable and potentially available to all (as in the ‘office-boy-to-president’ stereotype) but where individuals find that access to the means of attainment is in fact blocked or limited. This arguably describes, with reasonable approximation, the situation of some public officials working in the kinds of cultural contexts that were created by the success of politicians like Margaret Thatcher and Silvio Berlusconi, both of whom, incidentally, themselves personified to a degree the rags-to-riches cultural stereotype. On the one hand, officials were told by the likes of Thatcher that ‘hard work … will not always get you to the top but should get you pretty near’, and by Labour’s Peter Mandelson that he was ‘intensely relaxed about people getting filthy rich’, and were enjoined to accept modes of working that reflected private-sector methods, attitudes and standards of performance. On the other hand, they were enjoined ‘to ensure that traditional publicsector values [were] not neglected in the effort to maximize economy and efficiency’ (1994 report of the House of Commons Public Accounts Committee, quoted by Doig, 2003: 182) and, especially post-Nolan, to accept that these standards would be secured by codes of conduct and enhanced scrutiny and monitoring. So the coincidence of the increasing prevalence of scandal with these cultural changes suggests that the former might just be reflective of a spread of corruption and other ­illegitimate forms of private-regarding conduct. The second piece of circumstantial evidence pointing towards a growing problem of corruption is the fact that many of the scandals referred to above arose from allegations of the illegal funding of political parties – that is, parties collecting bribe money in order to finance themselves – and that the period coincided with growing financial difficulties for political parties. Their memberships were declining. In the UK for example, Labour Party membership, according to the Electoral Commission (2004: 9), declined from 405,238 in 1997 to 214,952 in 2003; membership of the Liberal Democrats fell from

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100,000  to  73,305, and of the Conservative Party from 400,000 to 320,000. In Italy, membership in political parties plummeted from 3,804,000 in 1991 to 1,330,000 in 1993, when Tangentopoli was at its height (Newell and Bull, 2003: 46; Follini, 1997: 250). These falls were reflected in precipitous declines in party membership ‘throughout the OECD countries’ (Hay, 2007: 21). These declines in the financial and labour resources available to political parties were taking place at a time when the costs of politics and political campaigning were rising – this thanks to the information technology revolution, the growing reliance on media professionals and the increasing need for research. So, political scientists were increasingly attracted to the study of corruption because of (1) an increasing prevalence of political scandals and (2) the growing public anxieties they were causing, and because (3) all of this suggested that corruption was becoming a growing problem in objective terms. Revelations of illegal party funding provided scholars with a fourth reason to pay growing attention to corruption as a research topic, because they suggested that far from, or at least besides, providing safeguards against bribery, as had previously been thought, liberal democratic institutions might, by their very nature, actually incentivise it. Indeed Alessandro Pizzorno (1992) argued that the potential for corruption was inherent in liberal democracies ‘because in such systems the function of political inter-mediation between electorate and government is largely carried out by private agents (that is, parties) using private resources and because the activity of inter-mediation is not separable from activities designed to gather the resources necessary to carry it out’ (Newell and Bull, 2003: 37). In other words, since political parties are the principal intermediaries through which citizens and governments interact with each other, and since the activity of intermediation helps parties to attract the financial resources they need for their very existence, parties and their representatives are faced with a constant temptation to carry on their intermediation in a corrupt way, using their occupation of public office to provide illegitimate favours for citizens in exchange for bribes. If, then, the potential for corruption was indeed inherent in liberal democracies, it could no longer be argued in relation to these regimes that it was something incidental to them, something whose understanding was unnecessary for an understanding of how the regimes themselves worked. If the issue of political corruption has been growing in prominence, and, the desire of academics to study it has correspondingly increased, then academics have to pay attention to the issue of how to measure it. If you want to find out about the conditions under which corruption is more or less likely to be present in a country or in a given town or

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among different types of people, higher and lower class and so on, then you have to have some means of measuring it. The measurement of corruption Measurement of corruption requires solutions to three sets of problems. First, it is necessary to resolve the definitional issue, as it is impossible to measure anything in the absence of a clear conception of what it is to begin with. Having resolved definitional issues to the degree possible, the researcher is then confronted with the tasks of, second, deciding on the criteria by which assess the degree of ‘corruptness’ of given acts and,  third, of devising means of recording the incidence of such acts in given places over a given time period. Both tasks pose significant problems. Is an act ‘more’ or ‘less’ corrupt depending on the amount of money involved, the status of the perpetrators, the amount of damage it causes or perhaps something else altogether? Suppose that we decide to use as our criterion the amount of money involved. But is country A, with 100 bribes involving payments of $2 each, more or less corrupt than, or perhaps as corrupt as, country B with 2 bribes involving payments of $100 each? Given that what is commonly thought of as ‘corrupt’ is either illegal or morally condemned, or both, how is one to assess the incidence of a phenomenon that, as a consequence, is hidden to some unknown degree? Of the three problems, the first was discussed chapter 1. Several attempts have been made to address the second problem, the better known including those based on Heidenheimer’s (2002) distinction between ‘black’, ‘grey’ and ‘white’ corruption: The evaluation ‘black corruption’ indicates that in that setting that particular action is one which a majority consensus of both elite and mass opinion would condemn and would want to see punished on grounds of principle. ‘Gray corruption’ indicates that some elements, usually elites, may want to see the action punished, others not, and the majority may well be ambiguous. ‘White corruption’ signifies that the majority of both elite and mass opinion probably would not vigorously support an attempt to punish a form of corruption they regard as tolerable.

The distinction highlights an important truth: given types of corruption are evaluated differently in different settings. For instance, in Wincanton (the fictitious name given by John Gardiner (1970; 1978) to an eastern American town) corruption was widely perceived as a fact of life that would probably always exist, and the average voter was interested in crime only in so far as it affected him personally. Thus, ‘35 percent

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thought it all right for city officials to accept payments from companies, and 27 percent had no objections if the mayor profited financially from municipal land purchases as long as the price charged was “fair”’ (Heidenheimer, 2002: 153). These attitudes were perhaps not surprising, since Wincanton was chronically corrupt and characterised by bigcity machine politics; and they arguably reflected a degree of tolerance perhaps much less likely to be found in towns and cities elsewhere in America, where strong communities and viable voluntary associations meant that people did not feel a need to have recourse to powerful intermediaries in order to benefit from administrative programmes or assert their rights. But, as a device for helping us to measure corruption, the black, grey and white distinction is arguably of limited value, since one is inclined to balk at the suggestion that actions are more or less corrupt depending on where they take place or on how they are evaluated there. An alternative approach is that of Shleifer and Vishny (1993), who assume a principal–agent model of corruption, defining it as bribery, and so distinguish between corruption without theft and corruption with theft. The first takes place when the corrupt official turns over the official price of the resource they are supplying, such as a passport or an import licence, to the government and charges the buyer a bribe which they, the official, pocket, so that for the buyer, the cost of the resource is higher than its official price. Corruption with theft, on the other hand, takes place when the corrupt official [d]oes not turn anything over to the government at all, and simply hides the sale. In this case, the price that the buyer pays is only equal to the bribe and might even be lower than the official price. For example, customs officials often let goods through the border for less than the official duty but then give nothing at all to the government. (Shleifer and Vishny, 1993: 602)

The distinction is useful, in that it draws attention to the conditions under which corruption is likely to spread. In the case of corruption with theft, competition among buyers is likely to ensure that its incidence rises. If, for example, firms can pay bribes to avoid having to pay taxes, then firms that don’t pay bribes have higher costs than those that do, and so they risk going out of business. Moreover, in the case of corruption with theft, the interests of the official and the buyer – the corrupted and the corruptor – coincide so that the latter has no incentive to report the official to the authorities. In the case of corruption without theft, the situation is the opposite. To pay a bribe means that the bribe-payer’s costs are higher than they would otherwise be, and so, if anything, they have an incentive to avoid payment if possible and to turn in the corrupt official. Hence this type of corruption is less likely to spread than the

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other kind, all else being equal, and therefore is less ‘dangerous’, one might argue, than the other kind. One might therefore suggest that the corruptness of bribery with theft is greater than the corruptness of bribery without theft. The most comprehensive efforts to devise a means of distinguishing actions in terms of their degrees of corruptness have been made by Peters and Welch (2002). They define corruption broadly and take account of the characteristics of all four of the main elements involved, namely, the corrupted, the corruptor, the payment involved and the favour done in exchange for the payment. For them, first, an act is more corrupt if the official involved is, say, a judge rather than a politician – since judges ‘have traditionally been held to higher standards with regard to conflictof-interest situations than legislators’ (Peters and Welch, 2002: 158); and if they perform the allegedly questionable act during the course of their official duties (for example, putting their mistress on their payroll simply because that person is their mistress) rather than outside their duties (for example, engaging, in their free time, the services of a sex worker). Second, an act is less corrupt if the corruptor (the recipient of the favour) is one of the official’s constituents than if they are not, since ‘acts which are performed under the rubric of “constituency service”, no matter how questionable, have a certain legitimacy’ (Peters and Welch, 2002: 158). Third, an act is more or less corrupt depending on the size of the payoff, whether it is specific or general, given in the short or the long term. Thus, a directorship given to a legislator after they have left office betokens an act that is less corrupt than an immediate cash payment in exchange for some legislative favour. Fourth, favours done for constituents and/or that have some kind of public as well as private benefit are less corrupt than those with the opposite characteristics. Like the criteria of Heidenheimer and of Shleifer and Vishny, this attempt also performs a useful service, for it begs the question, ‘On what basis do Peters and Welch come to their conclusions?’ The answer is: the perceptions of what they refer to as ‘a large group of public officials’ (Peters and Welch, 2002: 160), specifically, 441 state senators in the United States. This is useful because it highlights the fact that while their proposed scheme offers a conceptual framework that is potentially useful for comparison, its actual utility will depend on the extent of overlap between countries in the perceived degrees of corruptness of actions involving similar types of official receiving similar-sized bribes and so on. In other words, do other people perceive things the same way that US state senators do? Our observations in relation to Heidenheimer’s and Shleifer and Vishny’s attempts at devising schemes of ‘corruptness’ suggest some doubt about this.6 Nevertheless, resolving

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that issue satisfactorily would then allow the researcher to pass on more or less serenely to the issue of enumeration. For obvious reasons, relying on court records or newspaper reports for counting purposes has significant drawbacks, begging the questions: What is the relationship between the amount of exposed corruption and the amount of corruption in total? How might this relationship change over time? The inability to count directly has taken researchers in the direction of developing proxy measures based on the idea that since corruption has a number of measurable correlates, we can quantify the incidence of corruption in given places in give time periods by measuring the correlates. For instance, corruption appears to be associated with ‘opacity’, or an absence of transparency in areas such as the legal system, accounting standards, business regulation and so on: ‘A key reason for keeping transactions secret is to conceal corrupt practices. With ­transparency come prying eyes’ (Hall and Yago, 2000: 2). Barth et al. (2001) designed an ‘opacity index’, which sought to capture a ‘lack of clear, accurate, formal, easily discernible and widely accepted practices in the broad area where business, finance, and government meet’ (Barth et al., 2001: 3). Interviews were conducted with the chief financial officers of medium-size and large firms based in a range of countries, with equity analysts familiar with the countries, with bankers in the countries and with employees of PricewaterhouseCoopers (the study’s sponsor) residing in each of the countries. Respondents were asked a series of questions relating to things like shareholder rights, the enforcement of rules against conflicts of interest, consistency of accounting standards, ease of access to information on government policies regulating business and so on. The responses were then aggregated to produce an overall ‘opacity score’ for each country, running from 0 (‘perfect transparency’) to 150 (‘complete opacity’). The measure appears to correlate well with other indices that might similarly be used as proxies, such as the World Bank’s ‘rule of law’ index designed to measure perceptions of the incidence of crime, the effectiveness of ­judicial institutions and the enforceability of contracts. Meanwhile, Hall and Yago (2000) estimated the impact of opacity on sovereign bond spreads, controlling for a range of other variables, and found that the cost to a country’s economy was significant, and thus confirmed the well-established negative effects of corruption on inward investment, economic growth, income equality and so forth. Of course, what actually count when it comes to investment ­decisions – and therefore the array of consequences that flow from them  – are decision-makers’ perceptions of corruption, and this provides the fundamental justification for the third category of attempts at e­ numeration,

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the perception surveys: although they are fallible, perceptions have real consequences. In fact, the surveys probably belong in the same category as the opacity index and similar proxy measures as tools that rely ultimately on respondents’ subjective assessments, given that in the final analysis the barriers to quantifying corruption directly seem insurmountable. The most well known of the measures based on perceptions surveys is Transparency International’s ‘Corruption Perceptions Index’ (CPI), which is constructed in ways analogous to those used for the opacity index. It draws on data from thirteen surveys and assessments of business people and local experts produced by a number of independent organisations (such as Freedom House and the Economist Intelligence Unit) for a range of purposes. The index is thus constructed by extracting from the sources the information provided by responses to questions about corruption, its prevalence, the use of integrity mechanisms and so on. For each country for which at least three sources are available the information is combined to produce a score on an index of perceptions of public-sector corruption that runs from 0 to 100 (until the 2012 CPI, from 0 to 10), where 0 indicates that the country in question is perceived to be highly corrupt, while a score of 100 means that it is perceived to be very clean. It is difficult to use the CPI to draw conclusions about change over time, since the sources on which it is based tend to vary from year to year; but cross-sectional analyses have shown that it correlates well with a range of other proxy measures such as the ones mentioned above, and with the kinds of variable, such as Gross Domestic Product (GDP), with which one would expect corruption to be correlated (lowincome countries being more corrupt than high-income ones). Indeed, as Johnston (2001) has noted, a good deal of academic research has been carried out using CPI findings, from which solid evidence has been produced showing that corruption negatively affects economic development (Mauro, 2002) and reduces foreign direct investment (Wei, 1997). Other research has shown that it is most prominent in high-inflation economies (Braun and Di Tella, 2000), where there are weak political and administrative institutions (Knack and Keefer, 1995), where political competition is weak (Braun and Di Tella, 2000; Johnston, 2002) and where ethno-linguistic divisions are deep (Mauro, 1995; Easterly and Levine, 1996). Overall, the CPI seems to confirm what many have always argued: that corruption is most prominent in poor, undemocratic and unstable countries (Johnston, 2001: 160–1). On the other hand, the CPI has come in for extensive criticism (see, among the others, the Economist, 2010; Campbell, 2013). The criticisms

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have been wide ranging; however, the most significant are arguably those stemming from the problem of the ‘double hermeneutic’ (Giddens, 1984): the tendency of ‘lay’ understandings to enter into social scientists’ understandings of the world, and which in their turn enter constitutively into the world they describe. One wonders, for example, about the possibly self-referential quality of the index stemming from awareness of a country’s CPI ranking on the part of those whose corruption perceptions are then used to compile the index itself; and about the possibility that clean-up campaigns, perhaps driven by corruption perceptions, actually result in worse rather than better CPI scores by raising the profile of the issue. Campbell (2013) argues that CPI scores deter investment in important developing economies such as Brazil. To the extent that the absence of inward investment in countries is a significant cause of corruption, to that extent the CPI might arguably contribute to the ­corruption it purports to measure!7 Aside from this, with any measuring instrument the bottom line is whether it measures what its creators intend it to measure with an acceptable degree of reliability, and in the case of the CPI the debate has been long running, heated and technically complex.8 Beneath the technical details the most fundamental points for and against the CPI would appear to be the following. On the one hand, its results are plausible: ‘it is difficult to dispute the notion that Canada is less corrupt than Poland and that Poland is less corrupt than Kenya’ (Johnston, 2001: 164); it correlates well with what we reasonably take to be the concomitants and consequences of corruption; and it would be unfair to take its inventors to task for having produced a measure whose validity is less than perfect: if doubtful conclusions are drawn by using it, then the fault lies with the lack of caution of those deploying it rather than with its inventors. On the other hand, it does raise some fundamental questions, not the least being what is actually meant by ‘measurement’ in this case. In the abstract, it would appear to mean ascertaining the incidence, in a given time and place, of actions of given degrees of corruptness. We have already noted the difficulties involved in establishing ‘degree of corruptness’ and of aggregating corruptness measures to produce a single score. The CPI, unfortunately, is compiled in such a way that it ignores these complications. It is based on sources each of which taps a different aspect of the phenomenon of corruption. For example, the information from the Gallup International survey (used in the 1997–1999 CPIs) refers to the number of corrupt acts; the International Crime Victim Survey (2000 CPI), Global Competitiveness Report and World Bank Private Sector Survey refer to the value of the bribes paid; the Asian Intelligence Issue and World Bank Private Sector Survey refer to the damage done by

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c­ orruption (Thompson and Shah, 2005: 7–8). Consequently, when these aspects are combined into a single score supposedly reflecting the ‘level of corruption’ in a country, it is not clear what this actually means, nor the sense in which countries’ scores are comparable. To give a rough example, suppose that in city A there were 5 murders and 95 incidents of shoplifting, whereas in city B, there were 95 murders and 5 incidents of shoplifting. The size of the population is the same in both cities. Then, the total crime rate is the same in the two cities. But no one would venture to say that they are equally safe cities to live in. This is an exaggerated example of what happens in the CPI, where grand embezzlement and petty corruption are treated as the same entity. (Thompson and Shah, 2005: 8)

Conclusion The drive behind the compilation of the CPI was the desire to devise a single measure to enable cross-country comparisons (in large part thanks to the growing sensitivity of international agencies and multinationals to the issue of corruption); but the result has been problematic, since corruption takes different forms in different contexts. For instance, as we shall see in more detail in chapter 4, there is a world of difference between the frequent, routine acts of extortion engaged in by low-level officials in a desperately poor country in Africa, say, and the corruption that might be involved in securing a multi-billion-dollar arms deal or in bids to host international sporting tournaments such as the football World Cup. This suggests not that corruption should not be measured, merely that its different forms should perhaps be measured separately; for measurement, in whatever crude or precise sense, is essential. Only if we are in a position to measure corruption in some sense can we do anything about it; for only if – at whatever level of sophistication – we can measure it can we find out what causes it. It is to the issue of causes that we turn our attention in the next chapter. Notes 1 ‘Control fraud’ (a term coined by American lawyer and academic William K. Black) is said to take place when persons at the apex of private companies and other institutions are able, because of their positions, to subvert control and accountability procedures (e.g., through selective hiring and firing) for the ­purposes of personal gain (see, e.g., Black, 2005). 2 House of Commons Debates, 25 October 1994, col. 758. 3 See chapter 4, notes 2, 3 and 4.

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4 The episodes were symptomatic of the phenomenon known as the ‘revolving door’, that is, the movement of former legislators and regulators to positions in industry (which thereby gains information and influence) and, vice versa, the employment of industry professionals as advisors by government (in order to obtain the support of corporations and influence within them). 5 In response to the suggestion that city riots in 1981 were caused by unemployment, Norman Tebbit MP told in a speech how his father had ‘got on his bike’ to look for a job during the 1930s depression. 6 Note that this is not a matter of what is corrupt for one person not being corrupt for someone else: there probably is widespread agreement among publics crossnationally on what corrupt actions are. The difference is in terms of how those actions are evaluated: Are they inevitable or avoidable; sometimes or never justified? and so on – and therefore in the public affect towards them, whether outrage, resigned acceptance, etc. 7 Concerns that perceptions may not be a good proxy for the reality have led researchers to propose, among other approaches to measurement, studies of actual experience of corruption. These point in the direction of a smaller corruption problem in countries like Brazil than the CPI suggests (Campbell, 2013: 263–7). The best known of these experiential surveys is Transparency International’s Global Corruption Barometer, which asks respondents whether they have paid a bribe in the last twelve months. As it is based on a standardised questionnaire there are fewer doubts than with the CPI about the comparability of its results over time, although there are doubts about cross-national variations in willingness to admit to paying bribes. The Barometer correlates reasonably well with the CPI, although some countries’ positions vary across the two measures; and while it can tell us about petty corruption it leaves us ignorant about grand corruption, with which ordinary citizens do not come into contact (Holmes, 2015: 41–5). 8 For a useful discussion of a number of the issues involved, see Johnston (2001) and Thompson and Shah (2005).

References Barth, James R. et al. (2001), ‘The Opacity Index’, http://people.stern.nyu.edu/ adamodar/pdfiles/articles/opacity.pdf, accessed 10 February 2018. Black, William K. (2005), ‘Control Fraud as an Explanation for White-Collar Crime Waves: The Case of the Savings and Loan Debacle’, Crime, Law and Social Change 43(1): 1–29. Braun, M. and R. Di Tella (2000), ‘Inflation and Corruption’, Working Paper 00-053, Cambridge, MA: Harvard Business School, Division of Research. Breslin, Brigid, Doron Ezickson and John Kocoras (2010), ‘The Bribery Act 2010: Raising the Bar above the US Foreign Corrupt Practices Act’, Company Lawyer 31(11): 362–9. Campbell, Stuart Vincent (2013), ‘Perception is not Reality: The FCPA, Brazil, and the Mismeasurement of Corruption’, Minnesota Journal of International Law 22(1): 247–81.

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Doig, Alan (1984), Corruption and Misconduct in Contemporary British Politics, Harmondsworth: Penguin. Doig, Alan (2003), ‘Political Corruption in the United Kingdom’, pp. 178–190 in M. J. Bull and J. L. Newell (eds), Corruption in Contemporary Politics, Basingstoke: Palgrave Macmillan. Doig, Alan and J. Wilson (1995), ‘Untangling the Threads of Sleaze: The Slide into Nolan’, in F. F. Ridley and A. Doig (eds), Sleaze: Politics, Private Interests and Public Reactions, Oxford: Oxford University Press. Easterly, W. and R. Levine (1996), ‘Africa’s Growth Tragedy: Policies and Ethnic Divisions’, Washington DC: World Bank, Policy Research Department, Macroeconomics and Growth Division. Economist (2010), ‘Murk Meter’, 28 October, www.economist.com/ node/17363752, accessed 10 February 2018. Electoral Commission (2004), ‘The funding of political parties: Report and recommendations’, https://www.electoralcommission.org.uk/__data/assets/ pdf_file/0005/163238/The-funding-of-political-parties-report-and-recom​men​ dations-December-2004.pdf, accessed 10 February 2018. Follini, M. (1997), ‘Il ritorno dei partiti’, Il Mulino 370 (March–April): 242–51. Gardiner, John A. (1970), The Politics of Corruption: Organized Crime in an American City, New York: Russell Sage. Gardiner, John A. (1978), ‘The Politics of Corruption in an American City’, pp. 167–75 in Arnold J. Heidenheimer (ed.), Political Corruption: Readings in Comparative Analysis, New Brunswick, NJ: Transaction Publishers. Giddens, Anthony (1984), The Constitution of Society: Outline of the Theory of Structuration, Cambridge: Polity Press. Hall, Stuart (2011), ‘The Neo-liberal Revolution: Thatcher, Blair, Cameron – the Long March Of Neoliberalism Continues’, Soundings 28: 9–27. Hall, Tom and Glenn Yago (2000), ‘Estimating the Cost of Opacity Using Sovereign Bond Spreads’, Policy Brief no. 13, Milken Institute, www.milken​ institute.org/publications/view/31, accessed 10 February 2018. Hay, Colin (2007), Why We Hate Politics, Cambridge: Polity Press. Heidenheimer, Arnold J. (2002), ‘Perspectives on the Perception of Corruption’, pp. 141–54 in Arnold J. Heidenheimer and Michael Johnston (eds), Political Corruption: Concepts and Contexts, 3rd edn, New Brunswick, NJ and London: Transaction Publishers. Heywood, Paul (1997), ‘Political Corruption: Problems and Perspectives’, Political Studies 45(3): 417–35. Holmes, Leslie (2015), Corruption: A Very Short Introduction, Oxford: Oxford University Press. Johnston, M. (2002), ‘Party Systems, Competition and Political Checks against Corruption’, pp. 777–94 in A. J. Heidenheimer and M. Johnston (eds), Political Corruption, 3rd edn, New Brunswick, NJ: Transaction. Johnston, Michael (2001), ‘Measuring Corruption: Numbers versus Knowledge versus Understanding’, pp. 157–79 in Arvind K. Jain (ed.), The Political Economy of Corruption, London and New York: Routledge.

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Knack, S. and P. Keefer (1995), ‘Institutions and Economic Performance: CrossCountry Tests Using Alternative Institutional Measures’, Economics and Politics 7(3): 207–27. Landman, Tod and Edzia Carvalho (2010), Measuring Human Rights, London and New York: Routledge. Mauro, P. (1995), ‘Corruption and Growth’, Quarterly Journal of Economics 110(2): 681–712. Mauro, P. (2002), ‘The Effects of Corruption on Growth, Investment and Government Expenditure’, pp. 339–52 in A. J. Heidenheimer and M.  Johnston  (eds), Political Corruption, 3rd edn, New Brunswick, NJ: Transaction. Merton, Robert K. (1938), ‘Social Structure and Anomie’, American Sociological Review 3(5): 672–82. Moncrieff, Chris (2006), ‘A Journalist Looks at Political Scandal’, pp. 61–76 in John Garrard and James L. Newell (eds), Scandals in Past and Contemporary Politics, Manchester: Manchester University Press. Newell, J. L. (2008), ‘Ethical Conduct and Perceptions of Public Probity in Britain: The Story So Far’, Perspectives on European Politics and Society, 9(1): 39–52. Newell, J. L. and M. J. Bull (2003), ‘Political Corruption in Italy’, pp. 37–49 in M. J. Bull and J. L. Newell (eds), Corruption in Contemporary Politics, Basingstoke: Palgrave Macmillan. Peters, John G. and Susan Welch (2002), ‘Gradients of Corruption in Perceptions of American Public Life’, pp. 155–72 in Arnold J. Heidenheimer and Michael Johnston (eds.) Political Corruption: Concepts and Contexts, 3rd edn. New Brunswick and London: Transaction Publishers. Pizzorno, Alessandro (1992), ‘Introduzione. La corruzione nel Sistema politico’, in D. della Porta, Lo scambio occulto: Casi di corruzione politica in Italia, Bologna: il Mulino. Shleifer, Andrei and Robert W. Vishny (1993), ‘Corruption’, Quarterly Journal of Economics 108(3): 599–617. Thompson, John B. (2000), Political Scandal: Power and Visibility in the Media Age, Cambridge: Polity Press. Thompson, Theresa and Anwar Shah (2005), ‘Transparency International’s Corruption Perceptions Index: Whose Perceptions Are They Anyway?’, http://siteresources.worldbank.org /INTWBIGOVANTCOR/Resources/Trans​ parencyInternationalCorruptionIndex.pdf, accessed 2 February 2018. Wei, S. (1997), ‘How Taxing Is Corruption on International Investors?’, National Bureau of Economic Research Working Paper 6030, Cambridge, MA: National Bureau of Economic Research.

3 The causes and explanations of political corruption

Introduction How can we explain or account for corruption? If scholars have attempted to overcome the difficulties of measuring corruption, the reason why they have done so is quite simply because of the desire to find out what causes corruption, and you cannot test hypotheses about what causes corruption unless you can measure it. In turn, the desire to find out what causes corruption stems from the fact that corruption is perceived as a problem, and you cannot begin to deal with a problem until you know what causes it. Two very broad questions face scholars who have sought to explain corruption: (1) Under what conditions will individuals become caught up in it as either corruptors or the corrupted? (2) What explains why there is more or less of it –­ or, in other words, why do levels of corruption appear to be higher in some contexts than in others? Clearly, the two questions are not unrelated. One reason why a person might become caught up in corruption is because they perceive it as a means of supplementing an inadequate salary; therefore, one suggestion we might make to explain why corruption seems more widespread among Nigerian than among UK civil servants, say, is that the former are paid much less than the latter. But the questions are also different: lower s­ alaries might throw light on why there is more corruption among  Nigerian than British civil servants generally; but, assuming that their salaries are uniformly low, it will not help us to understand why some Nigerian civil servants behave corruptly while others remain honest.1 This chapter comprises two sections corresponding to the questions identified above.

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Explaining the corruption of individuals In seeking to explain why individuals do anything, one can adopt two basic approaches. Either we assume that human beings behave much like anything else in the universe, i.e. that their behaviour is the result of laws of cause and effect, and we try to find out what those causes are; or else we assume that, as meaning-attributing creatures, humans behave differently to the rest of the universe and we seek to understand their behaviour in its own terms by trying to find out how they themselves would explain it: their reasons for it. ‘Causes’ and ‘reasons’ are different. Causes are contingently related to their supposed effects, that is, they will produce their effects under some circumstances but not others: short circuits, for example, might cause house fires in dry weather but not in wet weather. Reasons, in contrast, are necessarily related to the actions they explain, in the sense that it is a person’s reasons for an action that make it the action that it is, rather than something else: for example, to say that a person committed manslaughter rather than murder is to say that the reasons underlying his action were of one kind and not another. Studies informed by this second, ‘interpretivist’ perspective (the elucidation of whose epistemological2 and ontological assumptions3 deserves far more attention than I can give it here) typically seek to throw light on corruption by employing unstructured interviewing and other socalled qualitative methods in order to throw light on the meaning that actors attach to their action, that is, to render it intelligible to us in the sense that we can imagine ourselves acting in that way if we had those thoughts and beliefs. A very good example of this sort of thing is given by the research, reported by Donatella della Porta and Alberto Vannucci, into the workings of corruption and organised crime in Italy. They note, among other things, the gratifications that their respondents derived from their antisocial behaviour: When Mario Chiesa received his first bribe he felt gratified more for the recognition of his importance that it involved than for the money itself: ‘I felt one-hundred-per-cent a politician; from head to toe. But not because I had more money in the bank. I felt like a real politician because I was finally free from a kind of tutelage.’ (della Porta and Vannucci, 1997: 240–1)

Similarly, the sense of importance to be had features strongly in the accounts that mafiosi give of their behaviour: ‘As a mafioso told the judges: “I do not solicit politicians. They solicit me at election time. They need me, I don’t need them”’ (della Porta and Vannucci, 1999: 225). Testimonies of these kinds are very valuable because they can be scrutinised by the researcher for the purposes of developing general

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t­heories  – in this case, for example, the corrupt behaviour can be explained (at least in part) by its role in responding to the human desire for recognition. Ideally, general theories will be developed via a research strategy exemplified by what is now a rather old study of criminal behaviour, Donald Cressey’s ‘The Criminal Violation of Financial Trust’ (1950). In this study, Cressey seeks to formulate a theory of the conditions under which people placed in positions of financial trust violate that trust by embezzlement and such like. Interviewing prisoners held in the Illinois State Penitentiaries at Joliet, Cressey begins with the hypothesis that trust violation takes place when violators conceive of their actions as merely ‘technical violations’ – but abandons it when he encounters respondents who report that they knew all along their behaviour was illegal and wrong. A second hypothesis is that violation takes place when the violator faces a real or imagined financial emergency – but this hypothesis too has to be revised: some respondents said they had faced no financial emergency, others that they had faced more significant emergencies in the past but had not then violated. A third hypothesis is that violation is linked to the presence in the life of the violator of a financial obligation that he feels compelled to keep secret. The appearance of negative cases leads to the abandonment of this hypothesis too, and the formulation of a fourth hypothesis: that violation is linked, more broadly, to a secret financial problem, to knowledge that the problem can be dealt with by means of the trust violation and to possession of the necessary technical skills to perpetrate it. This hypothesis is then revised for a final time when some interviewees report that they had found themselves in such circumstances in the past but that ‘the situation [had not been on that occasion] in sharp enough focus “to break down their ideas of right and wrong”’ (Cressey, 1950: 742). As finally formulated, the hypothesis is that trust violation takes place when the perpetrator has: a non-sharable financial problem; recognition that violation will help him to solve it; the necessary skills; the ability to rationalise his behaviour in such a way as to reconcile it with conceptions of himself as a trustworthy person. Since he finds no further cases disconfirming this hypothesis, this becomes the explanation for trust violation that Cressey chooses to offer. His research exemplifies an approach called ‘analytic induction’, that is, the attempt to formulate explanations that apply to all cases of a phenomenon through: the search for disconfirming cases; revision of the hypothesis or redefinition of the problem under investigation; further searches; further revisions and/or redefinition – until the point is reached at which no further negative evidence can practically be found. The technique has been used to account for a wide range of behaviours socially

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condemned to one degree or another, from drug use (Becker, 1953; Lindesmith, 1968) and theft (West, 1978) to homicidal assault (Katz, 1988). However, as an approach to accounting for corruption, there are two problems with it. First, while it makes it possible to specify the necessary conditions for behaviour, in the absence of which the behaviour will not take place, it does not enable identification of the sufficient conditions – the conditions which, if present, will always produce the behaviour in question – because it remains possible, after the analysis has been completed, that for the behaviour to take place there remain further, unidentified conditions that must be fulfilled besides those ­identified. So the explanation remains incomplete. Second, and more profoundly, while the approach typically begins with data rich in information about actors’ own understandings of their behaviour, the ultimate objective is to produce a causal explanation – and yet the extremely varied nature of corruption as a phenomenon creates enormous difficulties for explanation of this kind. For example, in some contexts the human desire for recognition may play an important role, but in others none whatsoever. A study of widespread corruption in the Hong Kong police in the 1970s, for instance, found that new recruits were told that they could: 1. ‘Get on the bus’, i.e. if you wish to accept corruption, join us; 2. ‘Run alongside the bus’, i.e. if you do not wish to accept corruption, it matters not but do not interfere; 3. ‘Never stand in front of the bus’, i.e. if you try to report corruption, the ‘bus’ will knock you down and you will be injured or even killed … (Second Report of the Commission of Enquiry under Sir Alistair BlairKerr, Hong, 973, quoted by Klitgaard et al., 2000: 19)

Meanwhile, in discussing corruption at the interface between entrepreneurs and local-government officials in Italy della Porta and Vannucci (1997: 247) noted that [d]uring the course of a heated negotiation, secretly recorded, a broker warned an entrepreneur – interested in obtaining permission to build on a piece of land – of the danger of reprisals: You have to honour the commitment. If you say, I’ll give you the six million when I see the building regulation plan and then you don’t pay you might as well shoot yourself … Afterwards, every time you have to deal with the Commune, the Province or the Region or whatever, they will throw it out.

In these cases fear seems to be far more important as a driver of corruption than any desire for recognition, the general lesson appearing to

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be that motivations will be heavily dependent on the context; for what is distinctive about these two examples is that they took place in situations in which corruption had become systemic, i.e., it had spread throughout the sectors concerned, and hence to a large extent was unavoidable. So, in seeking to account for corruption at the level of its individual participants, it is arguable that one may well relinquish the search for generally applicable causes and instead seek insight (through knowledge of the reasons and motivations for individuals’ behaviour and the context in which it takes place that comes from the ‘thick description’4) into the mechanisms and dynamics of corruption (see chapter 4). Turning now to the ‘cause and effect’ approach, theorists working from an economic perspective have sought to explain corrupt behaviour by reference to the costs and benefits involved: simply, people will enter into corrupt transactions, given the existence of opportunities for them, when the benefits in terms of the rewards – monetary and otherwise – outweigh the costs in terms of things such as the chances of getting caught, the severity of the punishment if caught and so on. The decision whether or not to engage in corrupt activities will also depend on how the expected rewards and punishments compare with those associated with alternative activities. If we assume that two parties, the corruptor and the corrupted, come together, like buyers and sellers in a market, to exchange illicit favours for bribes, the economic perspective also allows us to explain differences in the levels or presence of corruption from one context to another, because the quantity of corrupt transactions that take place in any given setting can be predicted by examining the presence of all those factors on the sellers’ side (low wages, the extent to which their work can be monitored and so on) that might incentivise them to supply corrupt services, and the factors on the buyers’ or corruptors’ side, (bureaucratic inefficiency, burdensome regulations and so forth) that might lead them to demand such services. When costs and benefits are adduced in order to explain corruption, those that count are the ones perceived as such by the actor himself. In other words, what explains corrupt behaviour is the actor’s perception of the associated costs and benefits. And so, economic explanations are not purely causal – they also involve making assumptions drawn from the opposing, interpretive perspective. We must keep in mind, too, that actors’ perceptions of costs and benefits, and the factors influencing them, are likely to be many and to be interrelated in complex ways, so that there can be no simple or ‘complete’ explanation of corruption. Given this, the following paragraphs describe how a series of factors influence the cost-benefit calculations of officials such as to raise or lower their willingness to supply corrupt services, and the factors ­suggested by

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research to affect the propensity of private actors to demand corrupt services. Supply-side factors On the supply side, five factors in particular have been widely discussed and investigated. Low wages Intuitively, one would expect low salaries for public officials to lead them to indulge in corruption as a means of supplementing an inadequate income, and they are often cited as a significant cause of corruption, especially in some of the desperately poor countries of sub-Saharan Africa, where government officials may also be paid irregularly, and sometimes not at all. But the issue is sometimes also raised in contexts closer to home – Operation Countryman (see chapter 1), being a good example. However, the relationship between wages and corruption levels is a controversial one in the literature, for at least two reasons. First, the impact of wages on the propensity to corruption depends crucially on the presence or absence of other opportunities for public officials to supplement their incomes. For example, where other sources of employment are widely available, officials appear more likely to take second jobs rather than accept bribes to supplement their incomes. Then again, wages may form only a part of the remuneration package available to public officials. Where total remunerations packages include not just salaries but also housing and/or free health care, for example, public officials are receiving in-kind benefits that are especially valuable in times of inflation and so, despite low salaries, they will refrain from corruption in order to ensure their continued access to such benefits. Second, when discussing the relationship between salaries and corruption, much presumably depends on whether one is talking about wages in absolute terms or relative terms. The fact that public officials’ wages are relatively low may lead not to corruption but simply to a tendency for suitably qualified officials to leave their jobs and seek better-paid employment in other sectors – leaving the less-well-qualified behind. Meanwhile, the less-well-qualified left behind have an incentive to remain honest, knowing that if they lose their jobs they are unlikely to be able to find employment elsewhere. For these reasons, it is perhaps not surprising that at least one cross-national study (Van Rickegham and Weder, 1997 cited by Rose-Ackerman, 1999: 72) actually finds a negative association between civil-service wages relative to p ­ rivate-sector wages in ­manufacturing and the level of corruption.

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Privatisation and deregulation It has often been argued in the literature that privatisation and deregulation programmes may stimulate public officials to exploit the available opportunities for corruption because of such programmes’ effect in enhancing the value that the public and politicians attribute to the pursuit of self-interest, at the expense of the importance attached to commitment to public service by adhering to rules and attitudes of probity. As Yves Mény (1996: 315) has argued: ‘virulent attacks on state intervention, the welfare state, and the bureaucracy’ have lowered the moral costs of corruption by blurring the ‘lines of distinction between the public and private spheres’. Alan Doig (2003: 182) points out, in relation to the effects of change in the public sector under successive Conservative governments after 1979, that ‘the Audit Commission – the public body that appoints external auditors for local government and the National Health Service – [argued in a 1993 report] that “numerous recent changes to the nature and operation of local government services … such as the delegation of financial and management responsibilities, while contributing to improved quality of service, have increased the risks of fraud and corruption occurring”’. Meanwhile, Leslie Holmes (2003: 198) discusses neo-liberalism as a possibly significant factor in the corruption to be found in the countries of Central and Eastern Europe, arguing that ‘outsourcing, public sector “downsizing” etc. typically leads to a higher sense of insecurity among officials and hence lower levels of loyalty to their employer (i.e. the state)’. The costs of democratic politics In many ways this refers to the point made in chapter 2, namely, that there is a built-in incentive for parties and elected officials to engage in corruption in democratic regimes, simply because they require money in order to carry on their activities. As Rose-Ackerman (1999: 133) puts it: ‘Elections must be financed, and … [f]inancial pressures give politicians an incentive to accept payoffs’. This factor points to the paradox that if democratic elections might be expected to reduce the incentives on politicians to be corrupt, for fear that their exposure will undermine their chances of re-election, then elections also encourage parties and candidates to seek to elicit campaign contributions in exchange for favours granted to the donors. Not surprisingly, worries about the possibility that the costs of elections might lead to corruption are greatest in those societies – such as the United States – where election costs are greatest. This points yet again to the difficulty of defining and measuring corruption – for if financial contributions are made to parties because of the donors’ expectations of what

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the parties will do if elected, at what point does any given contribution cross the line separating what we would regard as legitimate from what we would define as a ‘bribe’? Rose-Ackerman (1999: 134) quotes a US member of Congress as having said: ‘it would be hard to argue that contributions don’t open doors. Do I think a vote or a member can be bought by contributions? No. But there’s always the subtle influence by the contributors.’ This points to the importance both of freedom of information legislation and of legislation regulating the financing of parties in reducing the likelihood of corruption arising from elections and party competition, because if voters appear likely to penalise parties ‘who seem too deeply beholden to special interests’, then they cannot do so ‘unless they know both how their representatives behave and who has given them money’ (Rose-Ackerman, 1999: 133). Conversely, corruption seems likely to flourish where political party donations do not have to be made public and where the quid pro quo for the donation is not obvious to voters. This is in any case difficult to establish at the best of times: for how do we know when a legislator has taken a position because of a contribution from a donor and when he or she has taken a position simply because he or she shares the donor’s point of view? Finally, one might expect the likelihood of the costs of democratic politics being met corruptly to be a function of the extent of corruption in related spheres. Corruption in the public administration, for example, will make it possible for political parties to finance themselves through the activities of dishonest officials – especially in contexts (Italy and Greece being oft-cited examples) where, historically, party connections have been important in enabling individuals to secure public-sector employment. In these contexts political parties have been able, in effect, to ‘capture’ the public sector, using clientelism and patronage appointments as a means of shoring up their electoral support and then using the corrupt proceeds deriving from such appointments for the same ends. This topic is explored in more detail, considering the Italian case, in chapter 8. The ease with which the actions of public officials can be monitored In many ways this is the supply-side counterpart of the likelihood of getting caught on the demand side. The more difficult it is for voters to know what their representatives are up to, the more likely are the latter to be tempted to exploit their positions for the purposes of corruption. Likewise, the more difficult it is for the activities of administrative officials to be monitored by those further up the bureaucratic hierarchy, the more likely are officials to be tempted by corruption. On

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the other hand, it does not follow that corruption will necessarily be lower where monitoring is easier. This will depend on whether those charged with doing the monitoring are themselves corrupt. It may well be that officials and those charged with monitoring their activities collude, sharing the bribe money and with the monitors in effect being paid to keep silent. Moreover, attempts to increase the monitoring of public officials’ activities may well have effects that are the opposite of what is expected. As Frank Anechiarico and James Jacobs (1996: 207) have argued: in searching for solutions to the corruption problem, we must look beyond the traditional strategies of monitoring, control and punishment … Laws, rules, and threats will never result in a public administration to be proud of; to the contrary, the danger is that such an approach will create a selffulfilling prophecy: having been placed continuously under suspicion, treated like quasi-criminals or probationers, public employees will behave accordingly.

Characteristics of party and electoral systems If party competition may be expected to reduce the incentives on parties to engage in corruption by reducing their chances of being returned at the next election if they are exposed, then we must acknowledge that these risks are greater or lesser depending on the characteristics of the party system. Some party systems make the supply of corrupt exchanges more likely than others. For example, where two relatively evenly matched parties each compete for overall majorities of seats, as in Britain, we might reasonably expect the competition of each to act as a brake on the corrupt temptations of the other. On the other hand, where, as in Italy for much of the post-war period, a large centre party – the Christian Democrats – was able to maintain itself in office constantly by virtue of the agreement with its smaller-party allies permanently to exclude from office the parties furthest to the left and right, we can expect to find that the brakes on corrupt temptations will be weaker. Electoral systems also have been discussed in the literature as enhancing or diminishing the incentives on politicians to provide resources corruptly. It is commonly claimed that democracies where voting is by closed-list systems of proportional representation are more likely to witness attempts to fight corruption than are democracies that have open lists. In closed-list systems the voter simply makes a choice of party, and the specific candidates elected are determined by the order in which they appear on the party list. Thus an individual candidate’s chances of being elected are relatively less dependent, than in open-list systems, on satisfying their party’s nominal supporters, and relatively

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more ­dependent on the party hierarchy, who determine the order of candidates’ list placements. In the open-list system, by contrast, voters are able not just to select a party but also to express preferences among their chosen party’s candidates. Thus a candidate’s chances of being elected depend at least as much on their success in competing with fellow candidates from the same party as on their success in competing with candidates from rival parties. Since the degree to which candidates from the same party can compete with each other in terms of (broad-based) policy proposals is limited (because policy divisions would undermine the electoral prospects of all candidates, to the benefit of those of rival parties), they have an incentive to attempt to outdo each other through providing voters with patronage benefits – which can easily degenerate into out-and-out corruption. Kunicova and Rose-Ackerman (2003), on the other hand, advance a theoretical argument about the effects of electoral rules that is just the reverse of the above. They argue that with closed lists (CLPR) party candidates will have relatively few opportunities for corrupt gains (which, if they are indulged in, will tend to be monopolised by party leaders), owing to the dependence of candidates’ electoral prospects on the party leaders and thus the relative powerlessness of the candidates vis-à-vis leaders. By contrast, with open lists (OLPR), candidates have some power to appeal to voters directly, over the heads of party leaders. Also, the opportunity offered by OLPR to choose between individual candidates creates a direct link not just between re-election and the past collective performance of the party’s candidates, but also between the candidates’ individual performances and their re-election chances. Therefore, assuming that corruption imposes costs on citizens in terms of inflated budgets, low-value public projects and so forth, candidates will have an incentive to avoid corruption, since voters will punish corrupt politicians by voting against them at the next election. For these reasons, one expects to find fewer corrupt legislators in systems using OLPR than in systems using CLPR. Demand-side factors Turning to the demand side, among the factors affecting actors’ propensities to seek out corrupt services, there are four that are especially worth mentioning. A scarcity of public benefits for which demand is itself high An example of this would be a scarcity of import and export licences for trade in commodities whose buying and selling offers the promise of high rewards. Clearly, the greater the profits to be made by trading in the

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commodities, and the scarcer the licences available to carry on the trade, the greater will be the incentives on traders to seek one of the licences for themselves by bribing officials in order to get it. As Rose-Ackerman (1999: 11) notes: The allocation of scarce import and export licenses is a frequent source of payoffs … with bribes linked to the value of the benefits conferred. In the Philippines in the early 1950s … [t]hose with political connections could easily obtain licenses so long as they paid a 10 per cent commission … In Nigeria, the regime in power in the early 1980s resisted free trade reforms favoured by the International Monetary Fund (IMF) apparently because the existing system of import licensing was a major source of payoffs.

Another example is that of public housing. Here is Rose-Ackerman (1999: 13) again: Corruption has occurred in public housing programs in the United States where the number of qualified households far outstrips the number of places in subsidized units. In one Connecticut town, officials operated two lists – one for the honest and another, faster moving queue for those who made payoffs … In Washington D.C., two city officials were convicted of accepting bribes to certify unqualified people for subsidized housing and to give applicants higher priority on the waiting list than they deserved … Similar corruption has arisen in the allocation of public housing in Hong Kong and Singapore where demand also exceeds supply … In Hong Kong the amounts paid were a function of the value of the benefit disbursed.

Bureaucratic inefficiency Time is money, so where the public administration is inefficient, firms have an incentive to pay bribes in order to avoid delays and increase the pace of administrative throughput. This would appear to be a rather common cause of corruption. Thus, ‘[i]n many countries a telephone, a passport, or a driver’s license cannot be obtained expeditiously without a payoff’, with one Indian newspaper reportedly having published a list of standard ‘fees’ payable for a range of routine public services such as the installation of an electricity meter (Rose-Ackerman, 1999: 15). Self-evidently, the more inefficient the public administration and the more essential the service in question, the more likely is bribery to take place. What is important to note about the corruption that is rooted in administrative inefficiency is that the corrupt officials receive bribes not for services that they are not supposed to provide (such as giving licenses to people not eligible to receive them) but for services that they are s­upposed to provide anyway. In short, they receive bribes just for doing their jobs.

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High levels of taxation and heavily burdensome regulations The state has the capacity to impose taxes and to regulate the activities of individuals in civil society. Both taxes and regulations impose costs on individuals and organisations – so that, all other things being equal, where we find these state-imposed costs to be higher, so also should we expect a higher incentive on individuals to try to offer bribes to evade these costs. As Rose-Ackerman (1999: 20) argues: ‘Corruption is especially common when nominal tax rates are very high, as in the transitional states in Eastern Europe and the former Soviet Union.’ It also appears to be common in areas such as building inspection, and in the regulation of environmental hazards and workplace safety. For example, ‘in Korea after a department store collapsed in 1995, it was revealed that the contractors used substandard concrete and that city officials had taken bribes to allow the violation of safety rules. In Turkey, after earthquakes destroyed many buildings in late June 1998, construction deficiencies were revealed. Government-built schools and hospitals were especially hard-hit, leading many people to suspect that building inspectors and other government officials had been corrupted’ ­(Rose-Ackerman, 1999: 18). A particularly interesting example of a situation in which burdensome regulations lead to corruption appears to arise when the burden of regulations is due to their complexity. For example, Mauro Magatti (1996) has argued that in Italy corrupt exchanges in the area of tax inspection have been significantly encouraged by the complexity of the relevant legislation. ‘For, by making both inspectors and inspected aware of the near certainty that some irregularity could be found if it were searched for, the laws thereby gave the two sides a “built-in” incentive to deal with the situation by reaching some mutually beneficial accommodation’ (Newell and Bull, 2003: 39). The likelihood of being found out This is rather self-evident and, to a degree, depends on at least one of the three factors already discussed. Thus, where the efficiency levels of police forces and other bodies charged with investigating corruption are lower, so will the chances of being caught engaging in bribery also be lower. Interestingly, the likelihood of being found out would seem also to depend on how widespread corruption is already. Not only is it the case that where corruption is already widespread, the resources available for its investigation must be spread more thinly; but also tolerance of attempts at bribery will almost certainly be the greater, the more widespread it already is. In order for any society to exist, and in order for any individual to feel secure, there must be a certain minimum level of trust

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among people that they will behave honestly towards each other. For example, if consumers are to be able to do their weekly food shopping without fear, they must be able to have a minimum degree of trust that the food they are buying has been produced according to the regulations for such things, and that it is therefore probably safe to eat. Bribery undermines this trust. For example, if consumers are aware of newspaper reports that unidentified producers have been bribing food standards inspectors to overlook violations of regulations, then they can no longer be so trustful that the food they are buying is safe. Life becomes less secure both for them and for food producers, who may find it more difficult to sell their produce. Consequently, attempting to bribe in a society or area of activity where bribery is rare carries a relatively high risk of being reported to the authorities, because an approach which threatens to undermine the ability of people to trust one another thereby threatens the security of everyone. Conversely, attempting to bribe in a society or area of activity where bribery is already widespread carries a relatively low risk of being reported to the authorities, this as a result of an approach which can do little to reduce levels of trust between people, and is therefore potentially less threatening to people’s security, simply because levels of trust are already low. Explaining variations in the incidence of corruption In addressing this issue scholars have brought into play aggregate-level variables (e.g., the extent of social cohesion, the presence of social capital and so on) that apply to societies as wholes, in addition to the individual-level variables (actors’ (perceptions of their) salaries, government-imposed regulations and so on) that we have already considered. In doing so, they have linked the presence of corruption to the characteristics of societal values and norms, seeing cultural factors as being particularly important. A very influential theory inspired by this idea is one associated with Robert Putnam’s (1993) book, Making Democracy Work. Putnam is concerned to explain why it is that some democratic institutions seem to perform better than others, that is, that some are responsive to their constituents while institutions elsewhere appear not to be; that institutions in some countries appear to be administratively efficient and in other countries less so; that some institutions appear to be able to get things done, while others have difficulty doing so. In short, why is it that some institutions offer government that is responsive, efficient and effective (and therefore less likely to be corrupt), and others do so to a much lesser degree?

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In order to investigate this question, Putnam carried out what can probably best be described as a natural experiment. He looked at the case of Italy, noting that in 1970 fifteen new regional governments were established with identical powers and functions. Those in northern regions like Emilia Romagna were models of efficiency – where citizens were treated courteously, government was assisted by all the latest computerised technology and the regional authorities had produced all kinds of benefits for citizens from day-care centres to vocational training sites, repertory theatres and so on. Those in southern regions, like Puglia, were at the opposite end of the spectrum, with the result that, as Putnam put it, ‘The citizens of Puglia do not disguise their contempt for their regional government; indeed, they do not often think of it as theirs’ (1993: 5). Putnam also noticed that the social, economic and cultural contexts into which the new regional institutions had been planted differed radically as between the North and the South. For example, the North was, and always has been, much more affluent than the South. So he reasoned that if he could systematically analyse, compare and measure the performance of regional institutions in their different social, economic, cultural and political settings – ‘Just as a botanist might study plant development by measuring the growth of genetically identical seeds sown in different pots’ (1993: 7) – he might thereby get some insight into his question of why it was that democratic institutions vary in terms their performance. He began by carefully measuring the differences in performance of northern as compared to southern regional administrations, using twelve indicators including: (1) cabinet stability: how long did regional coalition governments manage to survive in office? (2) Budget promptness: to what extent did the regions manage to approve their budgets on time? (3) The breadth of the regions’ statistical and information services. (Institutions with better information can usually respond to citizens more effectively.) (4) Legislation: how coherent, comprehensive and creative?5 Having established that regions did indeed differ in performance, he then asked what it was about the social, political and economic environments within which the institutions were embedded that might account for the variation, hypothesising that better and worse performing regional institutions differed in terms of the degree to which their surroundings approximated the ideal of the ‘civic community’. A ‘civic community’ is one in which (1) citizens, though not selfless saints, participate, in a spirit of cooperation in public affairs; (2) ‘Citizens interact as equals, not as patrons and clients nor as governors and petitioners’ (Putnam, 1993: 88); (3) citizens are respectful and trustful towards

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one another; (4) there are a large number of civil and political associations (since involvement in such associations tends to instil habits of ­cooperation, solidarity and public-spiritedness). Putnam then tested his theory by developing measures of the features of the ‘civic community’ he had outlined. He found that (1) participation in public affairs as measured by differences in electoral turnout and newspaper readership does indeed differ between the regions with better- and less-well-performing governments; (2) regions with the better-performing governments do indeed have more civil associations (e.g. sports clubs) per head of population than the less-well-performing regions … and so on. Given, then, that the degree to which a society approximates a ‘civic community’ seems to exert a powerful influence on the degree to which its political institutions perform well, the question that naturally arises is: Why is this the case? And the answer Putnam gives is that civicness is important because it produces what he calls ‘social capital’: ‘Social capital here refers to features of social organization, such as trust, norms and networks, that can improve the efficiency of society by facilitating coordinated actions’ (1993: 167): Like other forms of capital, social capital is productive, making possible the achievement of certain ends that would not be attainable in its absence … For example, a group whose members manifest trustworthiness and place extensive trust in one another will be able to accomplish much more than a comparable group lacking that trustworthiness and trust … In a farming community … where one farmer got his hay baled by another and where farm tools are extensively borrowed and lent, the social capital allows each farmer to get his work done with less physical capital in the form of tools and equipment. (James Coleman, Foundations of Social Theory, 1990; quoted by Putnam, 1993: 167)

So, where there is lots of social capital, institutions perform better because social capital creates self-reinforcing trust: the more you trust me, the more I trust you, and so on. Trust enables people to cooperate more effectively (e.g., you don’t need to spend lots of money on monitoring and enforcing agreements); cooperation allows a group to achieve more than it can without it (just as physical capital allows you to produce more goods than without it). In short, social capital allows institutions to be more productive, i.e., to perform better. Why then, should high levels of social capital be associated with low levels of corruption and vice versa? Think about what happens when levels of trust between people are low: low levels of trust, like high levels, are self-reinforcing because of their capacity to be self-fulfilling: i.e., if I

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don’t trust you, and you don’t trust me, then we will each tend to behave towards each other in ways that confirm that we were each empirically correct not to trust each other in the first place. If we (and others) don’t trust each other, then we find it difficult to cooperate. The consequence of an inability to achieve our goals through cooperation is that we have to find other mechanisms through which to get what we want, and these will usually be of an individualistic kind, e.g. petitioning politicians for specific favours, perhaps in exchange for bribes. Moreover, where people cannot trust each other, they will be unable to trust that rules and laws will be applied impartially and therefore they have little incentive themselves to act in law-abiding ways – and this too will increase their willingness to offer and take bribes to get what they want. We can sum up all of this by saying that in places where social and political life has the characteristics of civicness, corruption will be low because there are higher levels of social trust and higher levels of confidence on the part of citizens that their fellow citizens will be law abiding. Putnam (1993: 111, 115) makes the point very well when he writes: Collective life in the civic regions is eased by the expectation that others will probably follow the rule. Knowing that others will, you are more likely to go along too, thus fulfilling their expectations. In less civic regions nearly everyone expects everyone else to violate the rules. It seems foolish to obey the traffic laws or the tax code or the welfare rules if you expect everyone else to cheat … [Consequently, in the less civic regions], [p]olitical participation is triggered by personal dependency or private greed, not by collective purpose. Engagement in social and cultural associations is meagre … Corruption is widely regarded as the norm, even by politicians themselves, and they are cynical about democratic principles … Laws (almost everyone agrees) are made to be broken, but fearing others’ lawlessness, people demand sterner discipline. Trapped in these interlocking vicious circles, nearly everyone feels powerless, exploited, and unhappy. All things considered, it is hardly surprising that representative government here is less effective than in more civic communities.

I have described Putnam’s study in some detail because it represents an especially sophisticated, painstaking and widely quoted example of a piece of research inspired by the basic idea that much in terms of variation in the incidence of corruption can be accounted for by variations in cultural phenomena. There are other studies belonging to this genre. For example, reflecting a research tradition that stretches back at least to Emile Durkheim6 and Max Weber,7 some analysts have sought to explain cross-national differences in corruption in terms of religious differences, suggesting that the apparent tendency of the countries of north-western Europe to be ‘cleaner’ than the countries of south-eastern

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Europe may have something to do with the fact that the former are predominantly Protestant while the latter are predominantly Catholic. Daniel Treisman (2000), for instance, uses CPI scores and regression analysis to test the hypothesis that corruption will indeed be lower in countries with a Protestant tradition and finds that ‘[t]he larger the proportion of Protestants in a country’s population as of 1980, the lower was corruption perceived to be’ (2000: 32). As a data-analysis technique that allows the researcher to explore the effects on a dependent variable (an ‘effect’) of several independent variables (or ‘causes’) simultaneously, regression analysis is well suited to the task of throwing light on the crucial question of why religion and corruption seem to be related.8 Treisman’s analysis suggests that it may have to do with the role of religion (i.e. Protestantism) in fostering economic growth and stable democracy, both of which are associated with lower corruption.9 By including several variables at once, regression analysis also enables the researcher to identify spurious relationships10 and assess the relative importance of variables11 – and from the analyses of Treisman and other researchers, such as Goel and Nelson (2008), it appears that cross-national variations in corruption are also significantly affected by the size and scope of the public sector, by government decentralisation and by urbanisation. A large public sector does not increase corruption in and of itself, but because it tends to involve more regulation. Decentralised government tends to lower corruption, possibly because it brings government activities closer to citizens, enabling them to monitor them more easily. Countries with larger proportions of their populations living in urban areas are less corrupt, presumably because corruption is easier to detect and may attract greater stigma in urban than in rural settings.12 Conclusion The demand and supply factors examined above refer to the characteristics of the political and social environment that create (or weaken) incentives for both corruptors and the corrupted to become parties to corrupt exchanges, on the assumption that they have opportunities to do so. The opportunities, in broad terms, for corrupt exchange were examined in chapter 1. But pinpointing the opportunities and the incentives to engage in corrupt exchanges is to identify necessary, rather than sufficient, conditions for a corrupt exchange to take place. Even though a number of incentives and opportunities are present, the corrupt exchange might still not take place because a vital ingredient is missing. That ingredient is trust.

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Trust is important because the corrupt transaction as an economic exchange relationship has the peculiarity that the contracting parties cannot rely on the authorities to enforce their contract, precisely because it is (certainly) regarded as unethical and (in all probability) illegal. This being the case, both parties have a strong incentive to cheat their counterpart: both know that if one of the parties to the agreement fails to keep their side of the bargain, then the aggrieved party cannot seek redress by reporting the matter to the authorities without incriminating themselves. The result is a temptation to cheat. For instance, if a student and a university professor reach an agreement that in exchange for money the professor will give the student’s essay a mark of ‘excellent’ regardless of its quality, then, if they are clever the student will persuade the professor to accept payment only when the mark for the essay has been confirmed – and then refuse to hand over the money. Likewise, if the professor is clever they will demand payment up front and then mark the essay according to what they genuinely thinks it is worth. It is because of this problem of trust between the parties that, as transactions go, the corrupt type of transaction is a relative rarity (at least in most advanced liberal democracies). At this point we encounter a seeming contradiction. On the one hand, the analyses of scholars such as Putnam suggest that where trust is not very widespread in a society we are likely to find that levels of corruption are comparatively high. Now we seem to be saying that a lack of trust undermines the possibilities for corruption. A resolution to this seeming paradox requires an understanding of the mechanisms and dynamics of corruption – mechanisms and dynamics that enable corrupt agreements to be sealed despite the unavailability of the public authorities to enforce them. It is to the mechanisms and dynamics of corruption that we turn in the next chapter. Notes  1 One must also be careful to avoid the ecological fallacy, i.e., making inferences about individuals based on the characteristics of the groups to which they belong. Thus, from a finding that Nigerian civil servants as a group were paid less and were more corrupt than their British counterparts, it would not follow that within either category the worse paid were more likely to be corrupt than the better paid.  2 Epistemological assumptions are assumptions about the nature of knowledge and the grounds on which beliefs are justified – assumptions concerning ‘how to go about studying’ the world.  3 Ontological assumptions are assumptions about the nature of reality, ‘what is ultimately real’.

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 4 ‘Thick description’ refers to a methodological approach, widely used in sociology and anthropology, that involves providing a detailed account of behaviour and its context in such a way as to render it meaningful to an outsider.  5 The remaining indicators were: (5) How innovative is legislation? (6) How many day-care centres are there for the given number of children? (To measure the capacity to implement policy at the grass roots.) (7) How many family clinics are there for a given regional population? (8) How sophisticated is the region’s industrial policy? (9) Agricultural spending capacity. (10) Local health unit expenditure. (11) Housing and urban development. (12) Bureaucratic responsiveness, measured by having confidants approach the administration in each region with three fictitious problems (e.g., about reimbursement for a medical bill incurred when the inquirer was abroad) and evaluating replies for promptness, clarity and comprehensiveness.  6 In 1897 Durkheim (1858–1917) published his famous book Suicide, in which he noted, among other things, that suicide rates were higher among Protestants than among Catholics or Jews and sought to explain the difference in terms of the smaller number of commonly accepted beliefs and practices of the former, and therefore Protestantism’s greater tendency to permit free enquiry and to have weaker community ties of thought and action, a lower degree of unity, solidarity and integration. Low levels of integration result in high suicide rates because they deprive the individual of reasons for existence, generating moral confusion, so that the least discouragement gives birth to self-destructive tendencies.  7 First published as a two-part article in 1904–5, Weber’s Protestant Ethic and the Spirit of Capitalism argued that modern capitalism differed from preceding types in that it involved the rational organisation of labour within continuously functioning enterprises geared to the accumulation of wealth for its own sake, rather than for the worldly pleasures it can bring. What explains this historically peculiar circumstance is Puritanism’s notion of the ‘calling’, or the belief that the highest form of moral obligation is the pursuit of one’s duty in worldly affairs (Giddens, 1976: x–xiii).  8 An overview of the basic techniques of regression analysis is given by Sykes in ‘An introduction to regression analysis’ (Sykes, 1993).  9 Treisman (2000: 32–3) argues that the relationship could also be due to Protestantism’s greater tolerance of challenges to authority (and therefore a greater likelihood of the discovery of official abuses); its lower tolerance of moral lapses; its lesser emphasis on the family (and therefore a smaller likelihood of nepotistic abuses); its acceptance of the separation of Church and state (and therefore the possibility that it enhances the capacity of civil society to monitor the state effectively). 10 A spurious relationship is said to exist when there is a correlation but no real causal relationship between two variables. For instance, there is a tendency for richer people to be more inclined to vote Conservative than less well-off people. While this might be because of a direct causal relationship between income and vote, it might rather be because older people earn more than younger people and because people grow more conservative as they age – in which case the apparent

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causal relationship between income and vote comes about because age causes both. 11 In the example given in the previous note, holding age constant (by examining the relationship between income and vote within samples of people of the same age or similar ages) would enable the researcher to establish the existence of a spurious relationship. They might find the relationship to be weaker than when age is not controlled, but still present. In this case they would conclude that although income is less important for voting decisions than the simple correlation between the two might lead one to assume, it still exerts some more or less significant effect. 12 Of course one is tempted to suggest that urban societies are also more prosperous than rural ones and that this is what explains their lower corruption levels – a temptation that provides another illustration of the utility of the kinds of analysis considered here: Goel and Nelson (2008) control for per capita GDP in the investigation from which the finding is derived.

References Anechiarico, Frank and James Jacobs (1996), The Pursuit of Absolute Integrity, Chicago: Chicago University Press. Becker, H. S. (1953), ‘Becoming a Marihuana User’, American Journal of Sociology, 59: 235–42. Cressey, Donald (1950), ‘The Criminal Violation of Financial Trust’, American Sociological Review 15(6): 738–43. della Porta, Donatella and Alberto Vannucci (1997), ‘The Resources of Corruption: Some Reflections from the Italian Case’, Crime, Law and Social Change 27(3–4): 231–54. della Porta, Donatella and Alberto Vannucci (1999), Corrupt Exchanges: Actors, Resources and Mechanisms of Political Corruption, Berlin and New York: de Gruyter. Doig, Alan (2003), ‘Political Corruption in the United Kingdom’, pp. 178–90 in M. J. Bull and J. L. Newell (eds), Corruption in Contemporary Politics, Houndmills: Palgrave Macmillan. Giddens, Anthony (1976), ‘Introduction’, pp. vii–xxiv in Max Weber, The Protestant Ethic and the Spirit of Capitalism, London and New York: Routledge. Goel, Rajeev K. and Michael A. Nelson (2008), ‘Causes of Corruption: History, Geography and Government’, BOFIT Discussion Papers 6/2008, Bank of Finland, https://core.ac.uk/download/pdf/6659495.pdf, accessed 2 February 2018. Holmes, Leslie (2003), ‘Political Corruption in Central and Eastern Europe’, pp. 193–206 in M. J. Bull and J. L. Newell (eds), Corruption in Contemporary Politics, Houndmills: Palgrave Macmillan. Katz, J. (1988), Seductions of Crime: Moral and Sensual Attractions in Doing Evil, New York: Basic Books.

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Klitgaard, Robert et al. (2000), Corrupt Cities: A Practical Guide to Cure and Prevention, Oakland, CA: ICS Press. Kunicova, J. and S. Rose-Ackerman (2003), ‘Electoral Rules and Constitutional Structures as Constraints on Corruption’, mimeo, Department of Political Science, Yale University, 4 June. Lindesmith, A. R. (1968), Addiction and Opiates, Chicago: Aldine. Magatti, Mauro (1996), Corruzione politica e società italiana, Bologna: il Mulino. Mény, Yves (1996), ‘“Fin de Siècle” Corruption: Change, Crisis and Shifting Values’, International Social Science Journal 149: 309–20. Newell, J. L. and M. J. Bull (2003), ‘Introduction’, pp. 1–6 in M. J. Bull and J.  L.  Newell (eds), Corruption in Contemporary Politics, Houndmills: Palgrave Macmillan. Putnam, R. (1993), Making Democracy Work: Civic Traditions in Modern Italy, Princeton, NJ: Princeton University Press. Rose-Ackerman, Susan (1999), Corruption and Government: Causes, Consequences and Reform, Cambridge: Cambridge University Press. Sykes, Alan O. (1993), ‘An Introduction to Regression Analysis’, https://chicago​ unbound.uchicago.edu/law_and_economics/51/, accessed 2 February 2018. Treisman, Daniel (2000), ‘The Causes of Corruption: A Cross-national Study’, Journal of Public Economics 76(3): 399–457, www.sscnet.ucla.edu/polisci/ faculty/treisman/Papers/causes.pdf, accessed 18 February 2018. Van Rickegham, Caroline and Beatrice Weder (1997), ‘Corruption and the Rate of Temptation: Do Low Wages in the Civil Service Cause Corruption?’, Working Paper 97/93, International Monetary Fund, Washington, DC. West, W. G. (1978), ‘The Short Term Careers of Serious Thieves’, Canadian Journal of Criminology 20: 169–190.

4 The mechanisms and dynamics of corruption

Introduction Exploring the work of Robert Putnam (1993) in the last chapter led us to the conclusion that, all else being equal, corruption is more likely to be found in societies with lower than with higher levels of trust. If you cannot trust others to abide by the rules, then there is no point in doing so yourself,1 and if public officials cannot be trusted to behave impartially, then one has to appeal to their private interests to get assurance that one’s case will be dealt with in a timely and effective manner. On the other hand, at the individual level a lack of trust undermines prospects for the successful conclusion of corrupt transactions: because each party knows that the other cannot denounce cheating to the authorities without incriminating himself, each is fearful of being cheated by the other and is therefore incentivised to hold back from making a corrupt agreement in the first place. And yet, as we know, corrupt agreements are made and corrupt transactions are successfully carried out – which raises the question: How, given the initial lack of trust of the contracting parties, is this possible? The answer lies in the mechanisms and dynamics involved in and underlying the corrupt exchange, as these have the effect of helping the parties to overcome the trust problem. By the ‘mechanisms’, I mean all the resources, social and personal, psychological and material, that the parties bring to the transaction. By the ‘dynamics’ I mean the social processes, the actual patterns of action and interaction through which transactions take place. With this in mind, showing how ­mechanisms and dynamics enable the overcoming of each of the problems that each of the parties face at each stage of the process should enable us to understand some of the ways in which corruption ‘works’ in practice.

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The stages of corrupt exchange Let us assume that you are looking to conclude a corrupt transaction, and consider the first problem that you face: the successful identification of a reliable counterpart. Such a person is one who is willing to be a party to the exchange and who, upon hearing your proposal, will not immediately report you to the authorities.2 There are two crucial issues here. First, how can you know (in advance and before you make it) that your proposal is likely to be favourably received and not result in your being reported?3 Second, the consequences of being reported are potentially huge: you may be punished; your personal reputation will suffer; this will impact negatively on your future career opportunities. So, in principle, the identification of a reliable counterpart is enormously risky.4 But your problems do not end there. Having found a reliable counterpart, you then have to negotiate the terms of a deal with them. This involves a number of questions: How much is to be paid, when, how and in what form? What is to be given in return and when? This stage too is fraught with danger because, typically, the negotiations have to be conducted in secret, such that failure to agree carries the risk of exposure. For example, as a consequence of the Wuhan Court bribery case in China in 2002 it came to light that corruption was widespread in the Chinese judiciary. This was because of extensive investigations that were prompted by the actions of a disgruntled citizen who was upset that judges had failed to review his life sentence after he had given them ‘gifts’, and who therefore, out of revenge, made an anonymous complaint about corruption and irregularities at the Wuhan Court (Lam and Lai, 2005). In India in 2009 a man by the name of Mr Lodh attempted to board a train with his pregnant wife and was confronted by police officers demanding a bribe of 100 rupees in exchange for being allowed to carry his bicycle into the train compartment. When he said he didn’t have enough money and offered 5 rupees instead, a row broke out between the men, as a result of which Mr Lodh’s wife was pushed from the moving train, fell under its wheels and was killed instantly (Henderson, 2009). Once you have found what seems like a reliable counterpart and have agreed the terms of a deal with them, you then have the problem of ensuring that the deal is actually delivered upon. The fundamental issue here is eloquently expressed by the entrepreneur who was quoted in the World Bank’s 1997 Development Report (1997: 34) as saying: There are two kinds of corruption. The first is one where you pay the regular price and you get what you want. The second is one where you pay

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what you have agreed to pay and you go home and lie awake every night worrying whether you will get it or if somebody is going to blackmail you instead.5

In such a situation your problems as a corruptor fall essentially into two categories. First, your counterpart might fail to comply in various ways: besides simply failing to deliver, having taken your money, they might take your money and then attempt to renegotiate or demand a further payment. Alternatively, they might comply, but invalidate the service they have agreed to provide by selling it several times. For example, there are cases in Italy of corrupt entrepreneurs who have paid public officials for confidential information about the criteria to be used in the award of public-works contracts – only to discover, when the decision about whom to award the contract has been made and their bids have been made public, that they have been defrauded by the officials who have sold the same information to all of them (della Porta and Vannucci, 1997: 238–9). As the other party, you might find that your counterpart fails to comply by resorting to forgery. In ‘How Criminals Enforce their Deals’ Johann Lambsdorff (2012) writes: In India there is nowadays frequent use of counterfeit money for bribes. The money is produced in Pakistan and can be bought for reasonable amounts. Bribees do not have the time to check the money and deliver the service in exchange for the falsified currencies. Likewise, in China a public servant was arrested due to corruption charges. When his house was searched for evidence, fake antiquities were found. The explanation was that he had accepted these antiquities in exchange for corrupt services not knowing that they [were] fake.

So, you have to find mechanisms to ensure that contractual agreements are met ‘honestly’. Finally, if they are not met, you have to make a two-fold decision: were they not met because your counterpart cheated, or for reasons beyond their control? What are you going to do about the situation? Retaliation and punishment might be risky. On the other hand, failure to react will involve having to sustain a loss and might also involve a loss of reputation in a world of illicit transactions where, as we shall see in more detail later, reputation is crucial to the successful conclusion of the transactions themselves. For example, a reputation for being powerful, one not to be crossed, disincentivises cheating by one’s counterpart and may provide reassurance to the bribe payer about one’s ability to deliver the corrupt services in question (della Porta and Vannucci, 1997: 245). In summary, then, as a participant in the world of corrupt exchanges, you face the risk of loss at each of four stages: the search for a

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c­ ounterpart; negotiating the terms of a deal; implementation of the deal; obtaining redress in the case of implementation failure. The risks of corrupt exchange At each stage, the actual substance and the actual extent of the risks vary. These seem to depend on the characteristics of four things: (1) the transaction involved; (2), the persons involved and the nature of the relationship between them; (3) the social context in which the transaction takes place; (4) the resources each party brings to the transaction. We will examine each of these in turn. Corrupt transactions, as we saw in chapter 2, can be ‘with theft’ or ‘without theft’ (Shleifer and Vishny, 1993), and, all else being equal, the latter kind is more likely to fail at the initial stages with a demand for bribes being reported, since the interests of the parties are opposed (whereas in the former case their interests coincide, both standing to gain from successful conclusion of the transaction). For the same reason, one might also expect defection (i.e. cheating) on the part of the bribe payer to be greater at the later stages of the transaction. Again, this is so, all else being equal, because another way in which corrupt transactions can differ is that they can be one-off exchanges between people who never expect to see each other again, or events or exchanges between people who do expect to have to do business again in the future. In the former case both parties have a strong incentive to defect  – like the informal intermediaries monopolising the courts in Niger. Seeing defendants arrive, they tell them that the judge is their cousin, take money s­ upposedly to ‘square’ things with the judge, go in and greet the judge, come out and tell the defendant that the judge will take care of matters and then disappear (cited by Vannucci, 2011: 1). In the latter case the temptation to defect is lower, thanks to the knowledge of both parties that cheating will render future transactions d ­ ifficult if not impossible – as illustrated by the secretly recorded ­warnings, cited in chapter 3, that were given to an Italian entrepreneur who, by corrupt means, wanted to obtain permission to build on a piece of land. He was told: ‘You have to honour the commitment. If you say, I’ll give you the six million when I see the building regulation plan and then you don’t pay you might as well shoot yourself … Afterwards, every time you have to deal with the Commune, the Province or the Region or whatever, they will throw it out’ (della Porta and Vannucci, 1997: 247). A rather similar situation might be said to pertain when the relationship between the two parties is one of friendship: cheating a friend

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undermines the relationship itself and therefore the possibility of any future amicable relations. In 2008, G. de Graaf and his co-authors published the results of an investigation into the scale, nature and handling of cases of corruption in the public sector in the Netherlands. They sent a questionnaire to 341 public-sector organisations asking them a series of questions about any internal corruption investigations that had been carried out. On the basis of the answers provided, de Graaf (2008: 90) and his colleagues wrote that research into the nature of corruption leads to the conclusion that the briber and the bribed usually know each other well before the violation of integrity occurs. This is not confined to business or instrumental relationships, because an element of friendship or affection is regularly involved … Corruption in these situations is not so much the result of a civil servant who is out to make a profit, but is more likely to ensue from a conflict between the moral obligations in the official’s own micro-sphere (the circle of family and friends) and the ethics of public administration.

Likewise, the risks of defection will be lower, the more the parties involved have shared values. In other words, if the corruptor and the corruptee have common customs, ideological and cultural outlooks, and especially if they hold them in contrast to outside forces to which they are both opposed, then it is possible, if not likely, that these commonalities will create feelings of mutual obligation to each other that are sufficiently strong to counteract any temptation that either one might have to take actions damaging to the other. This is illustrated clearly by the state of relative lawlessness that overran parts of southern Italy in the years immediately after 1861 when the country was unified (and that could only be put down through recourse to ferocious repression). The point is that unification was an elite-driven process, the new Italian state being perceived as an alien imposition with which the southern peasant could not identify. Consequently, acts defined as illegal by the state but not so defined according to local conventions would not be reported and their perpetrators would be protected and sometimes regarded as heroes. Local conventions stood for ‘our’ law and ‘our’ justice against ‘their’ law and ‘their’ justice, the law and justice of the rich (Hobsbawm, 1978: 15–16). The nature of the social context in which the corrupt transaction takes place is clearly relevant to the risks involved. Specifically, in contexts in which corruption is the rule rather than the exception, then the risks will clearly be much lower than in the opposite situation. For example, the international non-governmental organisation Human Rights Watch (2010) has written that ‘[t]he Nigeria Police Force, established in 1930,

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has a long history of engaging in unprofessional, corrupt, and criminal conduct’: Countless ordinary Nigerians attempting to make precarious ends meet as taxi drivers, market traders, and shopkeepers are accosted on a daily basis by armed police officers who demand bribes and commit human rights abuses against them as a means of extorting money. Those who fail to pay are frequently threatened with arrest and physical harm. Far too often these threats are carried out. Meanwhile, victims of crime are obliged to pay the police from the moment they enter a police station to file a complaint until the day  their case is brought before a court …. Police corruption affects nearly every Nigerian, though it disproportionately impacts Nigeria’s poor. (Human Rights Watch, 2010)

In such circumstances, where corruption is so widespread that it is practised routinely and more or less openly, the parties might still be tempted to defect at the implementation stage, depending on the nature of the transaction and the relationship between them, but the bribe payer may have very little realistic prospect of maximising his interests by defecting at the initial stage by reporting matters. The resources of corrupt exchange Let us now consider the resources that the parties can bring to the process with a view to managing the problems of trust that arise at each stage of bringing off a corrupt transaction, and how they might acquire those resources. One obvious resource is information: the more you know about your potential counterpart, the less risk there is in deciding whether or not to approach them in the first place. The question you are faced with is: how can you obtain this information, bearing in mind that obtaining it might itself be risky? If you are considering bribing one of your lecturers, for example, you might think twice before making enquiries among his or her colleagues about their knowledge or impressions of his or her trustworthiness and corruptibility. So, you might decide to obtain the necessary information surreptitiously. For example, if you were a police officer in Hong Kong in the early 1970s, according to what Klitgaard et al. (2000) have to say, you might have placed money on a fellow officer’s desk. It came to light at this time that ‘Hong Kong police were deeply involved with drug traffickers, gambling dens, and prostitution rings, which paid the police to look the other way. The police department evolved its own syndicates to process corrupt receipts’ (2000: 18). Corruption was extensive and well organised, and the issue was what to do about new officers who joined the force from time to time. Could they

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be trusted to join the game, or at least to keep their mouths shut about it? This information was obtained by placing sums of money on their desks: if the officer failed to report an overture of this sort, then his corrupt fellow officers would know that he would be afraid to report any subsequent corrupt activities that might come to his notice – obviously so, because he would be aware that he himself had done something wrong and was thus potentially open to blackmail. So, information, if it is of a compromising kind, can be used to help overcome the problems of trust not only at the initial stage but at later stages too, for it can be used as a powerful weapon to dissuade counterparts from failing to agree terms and, having agreed terms, from failing to deliver. Another potential resource that might be drawn upon by both corruptors and the corrupted at all stages of the transaction is the threat of third-party enforcement of the kind provided by mafia-type organisations. Through the threat and sometimes the actuality of violence, these organisations provide as a private good that enforcement of contracts which the state otherwise provides as a public good. As the party to a corrupt exchange I might seek to reduce the risks that my counterpart will fail to agree terms or to respect the terms of the agreement, by making clear that I have friends capable of making him an offer he cannot refuse. Such friends can be extraordinarily useful, as ex-mafioso Gaspare Mutolo said when explaining the workings of the Mafia’s ­protection rackets in cities such as Palermo: When the entrepreneur then gets in touch and pays [protection money], he sometimes benefits too: first, because a friendship develops between the person who goes to collect the monthly payment and the entrepreneur, who is thus able to see that the local mafioso is a normal person who behaves that way for the money; and secondly because he has the guarantee that if something is stolen from him, those in mafia circles will make it their business to see that he gets back what has been stolen … With the development of such a relationship, naturally, when a lady or a man comes to me and says, ‘Listen, my son is about to get married and needs a job’, I take the matter up among these factories and I find work for him. (CPM, 1993: 1223, my translation)

Third, where corrupt transactions take place repeatedly, rather than just occasionally, the circulation of information on actors’ previous behaviour may come to be relied on by both corruptors and the corrupted in order to know who can be trusted and who cannot. In such situations the parties’ reputations become a crucial resource for overcoming reticence, putting minds at ease and facilitating the corrupt exchange. One of these may be a reputation for honesty – as was

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s­uggested by Adriano Zampini. Zampini was an intermediary who, from the 1970s, made his living by bringing together entrepreneurs and political administrators belonging to the Turin city council. Taking money from the entrepreneurs, he would retain a ‘mediation fee’ for himself and then pass on the rest of the money in bribes (della Porta and Vannucci, 1999: 153). After his activities were exposed and he was arrested, Zampini wrote a book called Io coruttore (‘I the corruptor’), which was a sort of guide to success in corruption. In it he wrote: ‘Don’t ever think of cheating others, not even in jest. The consequence of being caught would be the end of the relationship’ (quoted by della Porta and Vannucci, 1997: 247). Elsewhere he noted: ‘Above all, if you want to have a minimum of credit as a corrupter it is necessary to honour commitments and be as precise as a Swiss watch. If 10 million must be paid at 10 o’clock on the 10th of November you have to be there five minutes early with not a sixpence less than the sum agreed’ (quoted by della Porta and Vannucci, 1997: 247). Another reputational resource, as we have seen, is a reputation for being powerful – an especially important resource, given that it can be used to attract clients and overcome their suspicions, and bearing in mind that until such time as one’s power is tested, to have a reputation of being powerful is actually to be powerful. There are plenty of examples available, especially from the Italian case, of the means that corruptors and potential suppliers of corrupt services have used to acquire such a reputation. One such means, interestingly, is ostentation. Della Porta and Vannucci (1997: 246) note: Every ostentation of wealth, even the most glaring, becomes a form of selective ‘advertising’ directed at potential corruptors. The undisguised frequenting of an increasing number of fashionable circles and expensive night-clubs, and a predilection for expensive clothes, cars and homes, reassure the corruptor that bribes will be accepted and put to good use … Sergio Restelli, for example, secretary to Claudio Martelli, vaunted a ‘white Porsche, a home of 300 square metres in the Parioli district and another amongst the rustic scenery of the Villa Borghese’ although he had no private professional position whatsoever. He admitted the advertising function of this ostentation: ‘I undoubtedly left open the idea that I could be corrupted’.

Unless the corrupt exchange is taking place in the circumstances exemplified by the practices of the Nigerian police, described above, then both the corruptor and the corrupted will have to take steps to ensure that their transaction remains secret if they want to reduce the risks of exposure and prosecution to a minimum. Corruption involving the clients and directors of a number of driving schools in Sicily came to light when it transpired that the schools were obtaining driving licences

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and selling them to people wanting to avoid the driving test. Matters were revealed following official complaints from the owner of a driving school excluded from the collusive arrangements who found that he was losing clients to those involved in the conspiracy (Vannucci, 2012: 151). In the face of risks such as this, corruptor and corrupted have to do what they can to ensure that their actions leave no traces and therefore are more difficult to prove in a court of law. A resource they will often seek to rely on in order to achieve this relates to the qualities of the commodities they exchange. For example, a corrupt official might be involved in a decision about the award of a public-works contract through competitive tendering and be in receipt of a bribe from a firm interested in winning the contract. Instead of agreeing simply to manipulate the decision-making process on the firm’s behalf – potentially very risky, depending on the quality of the firm’s bid – he might supply the firm with confidential information about the criteria to be used in assigning the contract (so that the firm can win the ­contract in a seemingly legitimate fashion) – much less risky, since it is more easily concealed. The corruptor, meanwhile, has the problem of arranging for the bribe to be paid without being found out, and will be aware that transfers of money involve a range of risks of exposure, with the risks being proportionate to the size of the sums involved. Bank transfers leave obvious traces. Cash can be used instead, but it has first to be obtained and then conveyed in secret to its recipient. In the UK, and almost certainly in other jurisdictions too, withdrawing large amounts of cash from banks is now more difficult and much more likely to leave traces than it once was, thanks to banks’ frequent imposition of limits on cash withdrawals and their insistence that customers must provide evidence of what they want the cash for – this because of the banks’ fears of falling foul of money-laundering regulations and so incurring large fines (Boyce, 2014; Guardian, 2015). Once it has been obtained, cash may be difficult to transport in secret unless large-denomination banknotes are available – and these are becoming increasingly difficult to obtain. ‘British banks and money exchange businesses stopped [distributing] €500 notes in 2010 after a report showed criminals accounted for 90% of demand’ (Farrell, 2016). At the beginning of 2016 Mario Draghi, president of the European Central Bank, indicated that the institution was considering whether to continue issuing the notes at all. The potential impact of this on the risks of grand corruption can be surmised by considering what it would take to transport US$1 million in cash. In US$20 bills, US$1m in cash weighs roughly 110lbs and would fill 4 normal briefcases [about double that if the notes are used]. One courier

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could not do this. In US$100 bills, the same amount would weigh roughly 22lbs and take only one briefcase. A single person could certainly do this, but it would not be that discrete [sic]. In €500 notes, US$1m equivalent weighs about 5lbs and would fit in a small bag. (Sands, 2016: 10)

So, €500 notes represent a very significant advantage – especially if one also takes account of the increasingly frequent use, at airports and elsewhere, of sniffer dogs able to detect significant amounts of cash, besides drugs, explosives and other substances. The risks of exposure do not end once the cash has been consigned, as something then has to be done with it: depositing large amounts of cash at a UK bank will involve having to overcome the same sorts of hurdle as those in the way of withdrawing large amounts (Dunn, 2014), while making large numbers of small deposits may arouse equal suspicion. On the other hand, storing large amounts of cash elsewhere will involve varying degrees of risk of loss and theft, besides a more or less significant loss of investment income. If it is a large amount, the cash will somehow have to be laundered, with all the difficulties that in turn may entail. Because of the difficulties associated with bribery using cash, the history of political corruption is replete with examples of other commodities being used as means of payment, from gifts to electoral support, advertising space, favourable media coverage and the placement of clients (della Porta and Vannucci, 1997: 240–2). The corruptor’s commodities are used to facilitate corrupt transactions in other ways too, beginning with the search for a reliable counterpart; for, having identified a potential supplier of the corrupt service one is seeking to obtain, one then has to make an initial overture that is potentially fraught with danger. Gifts may be used as a means of ‘testing the water’, communicating one’s intentions, but in a way that is sufficiently ambiguous to avoid being incriminating. They may also be used to build friendships and senses of shared identity which, as we have seen, themselves help to minimise risks of defection. The use of gifts in this way is, apparently, particularly significant in cultures in which relationships like those captured by the Chinese concept of guanxi are important – that is, cultures in which individuals can and do prevail upon personal contacts to perform favours or exercise influence on their behalf. The English concept of the ‘old boy network’ describes something similar. In such contexts, the meaning of gifts is highly ambiguous and, precisely because of this ambiguity, they can be an extremely powerful means of cementing corrupt relationships, creating strong obligations that are of doubtful propriety but very difficult to avoid without creating offence.

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What is the nature of the resource? Material Human

Who provides the resources? Others

The corrupt party themselves

Information (the power to blackmail) Third-party enforcement (the power to blackmail)

The commodities of the exchange (the power to persuade) Reputation (the power to persuade)

Figure 4.1  The resources of corrupt exchange

To sum up all this, at every stage of the process of carrying through a corrupt transaction there are external risks (the risk of exposure) and internal risks (the risk of defection) of various degrees of magnitude, which the parties to the exchange seek to diminish by drawing on their resources. Doing this facilitates the exchange, making it possible despite the risks. The resources are provided either by the parties themselves or by others and are either material or human, thus giving rise to four possibilities (Figure 4.1) and four types of resource: information; third-party enforcement; the parties’ reputations; the commodities of exchange. Types of corrupt exchange The mechanisms and dynamics of corruption can be used to make a further distinction between types of corruption, in addition to that made in chapter 1 in terms of different types of the exercise of public power. Thus Alberto Vannucci (2011) distinguishes between petty corruption, individual corruption, structural corruption and systemic corruption (Figure 4.2) in terms of differing combinations of: (1) the frequency and expected duration of corrupt exchanges; (2) the size of the resources involved. The risks associated with corruption seem all to be more or less directly related to these variables. For example, to the extent that there are expectations that corrupt transactions will be repeated rather What are the sizes of the commodities involved? Small Large

Are corrupt transactions repeated or one-off? Repeated

One-off

Structural corruption Systemic corruption

Petty corruption Individual corruption

Figure 4.2  Types of corrupt exchange Source: Vannucci (2011)

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than being one-off events, it is more likely that they will be underpinned by shared values if not friendship, that information on the reliability of potential counterparts will be available and so on. To the extent that the resources involved are small rather than large, so will the risks associated with the transfers of bribe money, the performance of the corrupt service and so on be correspondingly low, relatively speaking. Petty corruption is characterised by a low frequency of corrupt exchanges – that is, both parties view their exchange as a one-off event that is unlikely to be repeated (although they may well be involved in similar exchanges with others) – and by commodities (the bribe and the service) low in value. Both features lead, on the one hand, to the expectation that the exchange is unlikely to take place at all: its one-off nature stands in the way of building trust; the low value of the commodities may be insufficient to justify the risks of exposure. On the other hand, the low value of the commodities diminishes the size of those risks; and the barriers to trust created by the one-off nature of the transaction may be weakened by a range of circumstantial factors. If, in the social context concerned, the overcoming of everyday bureaucratic problems  – such as getting an annual car roadworthiness certificate, getting one’s goods cleared through customs, avoiding a parking fine – often requires complying with demands for bribes then the transaction may well take place, with the risk of exposure being low because the bribe payer calculates that the costs of an official complaint in terms of the time and expense to make it outweigh any benefit in terms of the compensation to be expected, even assuming that the complaint is successful. Individual corruption is exemplified by bribery in international arms deals; in the stipulation of sizeable contracts for the supply of goods and services to the public administration; and in judicial decisions involving large sums of money or the potential infliction of lengthy jail terms. In these instances the opportunities for corrupt exchange are very much one-off and there is much at stake. The parties do not know each other, so the external and internal risks loom large. In such circumstances the activities of mediators are usually required if the exchange is to take place at all. Their roles are somewhat analogous to the roles played by lawyers and estate agents in facilitating legal transactions. Knowing both the corruptor and the corrupted; knowing the corruptor’s requirements and what the corrupted can and cannot do, the mediator is in a position to act as a go-between, taking upon themselves (in exchange for a ‘facilitation fee’, part of the bribe) the burden of creating and sustaining the trust necessary to make the transaction possible. Often they will be a lawyer or administrator with the necessary skills, both professional and interpersonal, to create and sustain trust; and to that end they will t­ypically

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employ a range of the resources – informational, reputational and so on – discussed earlier. Thanks to the work of the mediator, the corruptor is spared the costs of finding a reliable provider of the corrupt service they require. As neither the corruptor nor the corrupted have to deal with each other directly, the mediator is able, at each stage of the transaction, to use their acquaintance with both to provide the necessary reassurances to each of them. In principle, the problem of trust between corrupt and corrupted is ‘transferred’ to the relationship between the mediator and the corrupt and the mediator and the corrupted, with the risk that the mediator may themselves be cheated by either party. However, mediators typically work for one or the other of the parties on an on-going basis; in other words, for one side or the other exchanges with the mediator are not one-off but repeated. The party may be dependent on the mediator for future opportunities for corrupt exchange; and, as we have seen, future opportunities act as a disincentive to defection. Good examples of this type of corruption are those described by Nicholas Gilby (2014) in his history of bribery in the British arms trade. Arms manufacturers would use business agents to help them seal their deals, as these people would be in possession of the required information about countries unfamiliar to the firms and, as a Ministry of Defence official noted, they could ‘lobby officers and officials … find out about the availability of funds and perhaps suggest to people that availabilities might be created; they sniff out the activities of our competitors and they sing the virtues of our equipment and our services’ (quoted by Gilby, 2014: 4). One such agent was Geoffrey Edwards. A hard-drinking resident of Jersey (Gilby, 2014: 4), in the mid-1960s Edwards was instrumental in helping a consortium of three British companies win a contract with Saudi Arabia for the provision of an air defence system worth just over £103 million (about £1.5 billion at today’s values) and described by the British ambassador in Jedda as ‘the greatest of all British overseas defence contracts’ of the time (quoted by Gilby, 2014: 9). In cases like this, bribes were integral components because ‘[t]he advantages of buying one warship or gun, as opposed to another, were often uncertain, and arguments could thus easily be swayed. The orders were often very large, so that a single decision was more critical for an arms company. And the sales were usually conducted in secrecy for reasons of national security’ (Anthony Sampson, The Arms Bazar, quoted by Gilby, 2014: xi). In the Saudi air defence system case, the documents cited by Gilby make it clear that the company executives involved found bribery distasteful; moreover, it was often problematic in the recipient countries, whose rulers ‘knew that their subjects would not like them enriching themselves’, where ‘the exposure of bribery

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could cause a scandal’ and where bribery could also be politically toxic because ‘[i]f some well-connected people were paid off, and their rivals were not, then the agent’s actions could make Britain’s relations with some highly influential people very difficult’ (Gilby, 2014: 24). It is not surprising, then, that the commission which seems to have been paid to Edwards – 7.5 per cent of the purchase price, or £7.8 million (£112 million at today’s values) – was hefty: agents had to be extremely skilful in ensuring that bribe payments did not cause the problems described and, by making the bribe payments from the commissions they received, they made it possible for the companies they were working for, as well as British government representatives, to deny any knowledge of them. Structural corruption is exemplified by the corruption that has been uncovered from time to time in countries such as Italy, Poland and China, where, in exchange for information about deaths in their institutions, hospital administrators and medical personnel have received small bribes per body from undertakers, with the bribe money being pooled and shared out among staff on a regular basis (Vannucci, 2011: 16–18). The fact that information rather than a decision is sold in these cases reduces the risk of exposure, and in some instances the risks have been further reduced by decoupling the flows of information, on the one hand, and the payment of bribes, on the other, through the payment of monthly ‘fees’. In these circumstances, the risks of exposure and defection are further contained by each party’s possession of compromising information concerning the involvement of every other party and by each party’s desire to continue a series of payments which, though modest when considered singly, amount to a considerable income stream over time. Of course, risks remain, thanks to the possible presence of honest agents unwilling to participate in the game; but the regularity of the exchanges leads to the emergence of norms and conventions of behaviour that are designed to ensure secrecy and discretion, and often helps to break down the resistance of the honest to involvement by giving the impression that ­corruption in the sector concerned is inevitable and unavoidable. Systemic corruption, finally, has many of the characteristics of structural corruption, with the additional component that third-party enforcers are often involved in order to deter the defection by which the parties might be tempted due to the large size of the commodities involved. Networks of connivance are thereby strengthened; concomitantly, the seeming inevitability of the phenomenon and the norms and conventions surrounding the payment of bribes are also strengthened. This, in turn, reduces – if not eliminates – the risks involved in identifying people willing to reach corrupt agreements in the first place, and thus the extent to which corruption becomes a self-sustaining phenomenon, perceptions of its

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pervasiveness themselves ensuring that it remains pervasive. The Wuhan Court bribery case (Lam and Lai, 2005) and corruption in the Hong Kong police (Klitgaard et al., 2000) are examples of this kind of corruption. Conclusion Analysis of the mechanisms and dynamics of corruption highlights that the risks associated with corrupt exchange are very heavily dependent on corruption in the past. Those who have been parties to successful corrupt transactions in the past are, by virtue of that, more likely to trust each other enough to agree to further corrupt transactions in the future. If they do so, then this will encourage others to join the game. Assume that the transactions are between a tax inspector and a firm, with fiscal irregularities being overlooked in exchange for bribes; the firm now has a competitive advantage that other firms will want to eliminate. Beyond a certain point it may be more costly for these firms to report matters than simply to bribe too. The more pervasive corrupt transactions like these are, the more worthwhile it becomes for others to take on the risks and associated costs involved in joining the game, as the costs can be spread over an increasing number of opportunities for further transactions. In short, analysis of the mechanisms and dynamics of corruption reveals in concrete terms the operation of those self-generating qualities and vicious circles referred to in chapter 1. Not infrequently, the operation of such vicious circles is underpinned by the activities of organised crime, with the latter using corruption to secure and maintain its impunity, and thus its capacity to underwrite the corrupt transactions of others. It is to a more detailed examination of the relationship between corruption and organised crime that we turn our attention in the following chapter. Notes 1 You might be tempted to suggest that this argument is ethically dubious: bad behaviour on the part of others doesn’t justify my own bad behaviour and might even be encouraged by my behaving badly. But the argument is based not on a moral, but on a logical problem, often referred to as the ‘collective action problem’, deriving from the work of Mancur Olsen (1965). A collective action problem is said to exist when there is a state of affairs (a clean government and a law-abiding citizenry in this case) in which everyone would be better off than they currently are, but to the realisation of which the individual is unable to contribute with any guarantees that anyone else will do likewise. Because of this, and because contributing is a cost to the individual, he is incentivised not to change his current

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behaviour. Since every other actor in the situation is incentivised to do likewise, nothing changes, even though all actors would be better off if change did happen. The collective action problem arises in relation to a wide range of issues besides corruption – environmental damage being the classic example. 2 Under section 1 of the 2010 Bribery Act, for example, you are considered guilty of an offence if you merely offer or promise ‘a financial or other advantage to another person’ and the advantage is intended ‘(i) to induce a person to perform improperly a relevant function or activity, or (ii) to reward a person for the improper performance of such a function or activity’. 3 One might, understandably, ask what would incentivise a person, when offered a bribe, to report matters rather than keep silent. In the UK case, the 2010 Bribery Act is once again relevant. Under section 7, an organisation can be found guilty of failing to prevent bribery if bribery is committed on its behalf and it cannot show that it has in place ‘adequate procedures designed to prevent persons associated with [it] from undertaking such conduct’. The Act places an obligation on the Secretary of State to ‘publish guidance about procedures that relevant commercial organisations can put in place to prevent persons associated with them from bribing’. The current guidance states that ‘[t]he procedures put in place to implement an organisation’s bribery prevention policies … might embrace … [t]he reporting of bribery including ‘speak up’ or ‘whistle blowing’ procedures’ (Ministry of Justice, 2011: 22). Thus, under the Act, organisations risk prosecution unless they have policies in place obliging their employees to report cases of attempted bribery, and employees are at risk if they fail to report such cases. The author’s own institution, for example, has an ‘Anti-bribery Policy’ (University of Salford, 2017) which states: ‘All concerns or suspicions of bribery, fraud or corruption must be reported’ (section 3.14) and that ‘[a]ny breach of this Policy … is likely to result in disciplinary action or removal from office’ (section 4.1). 4 One can refer again to the 2010 Bribery Act for an example. Under section 11 of the Act a conviction for attempted bribery can be punished by a prison term of up to 10 years, or a fine or both. 5 For example, you might worry about the possibility of being blackmailed because you were secretly filmed when you made the payment. Peter Tickner (2015: 94) cites the first prosecution to take place under the 2010 Bribery Act: in the autumn of 2011, Munir Patel, a court clerk, was sentenced to three years’ imprisonment after pleading guilty to using his position to ‘get rid of’ motoring offences such as speeding charges in return for cash payments. ‘The Sun newspaper caught Patel when they secretly filmed him accepting a £500 bribe to remove a speeding charge.’

References Boyce, Lee (2014), ‘“What are you doing with YOUR money?” Furious customers hit back at high street banks forcing strict checks on getting out large sums of cash’, This is MONEY.co.uk, 28 January, www.thisismoney.co.uk/ money/saving/article-2547286/High-street-banks-block-customers-takinglarge-cash-sums-counter.html, accessed 2 February 2018.

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CPM [Commissione parlamentare d’inchiesta sel fenomeno della mafia e sulle altre associazioni similari] (1993), Audizione del collaboratore di giustizia Gaspare Mutolo, XI legislature, 9 February, Rome, Camera dei Deputati, www.senato. it/service/PDF/PDFServer/DF/170786.pdf, accessed 19 February 2018. de Graaf, G., Huberts, L. W. J. C. and J. M. Nelen (2008), ‘Is the Glass Half Full or Half Empty? Perceptions of the Scale and Nature of Corruption the Netherlands’, Perspectives on European Politics and Society 9(1): 84–94. della Porta, Donatella and Alberto Vannucci (1997), ‘The Resources of Corruption: Some Reflections from the Italian Case’, Crime, Law and Social Change 27: 231–54. della Porta, Donatella and Alberto Vannucci (1999), Corrupt Exchanges: Actors, Resources and Mechanisms of Political Corruption, Berlin and New York: de Gruyter. Dunn, Sam (2014), ‘“I’ve been a loyal customer for 50 years, but HSBC wouldn’t take my £7,300”: Why banks won’t let you pay cash into your own account’, This is MONEY.co.uk, 5 February, www.thisismoney.co.uk/ money/saving/article-2551823/Why-banks-wont-let-pay-cash-account.html, accessed 2 February 2018. Farrell, Sean (2016), ‘Scrap high-denomination banknotes, urges ex-bank boss’, Guardian, 8 February, https://www.theguardian.com/business/2016/feb/08/ high-denomination-bank-notes-should-be-scrapped, accessed 2 February 2018. Gilby, Nicholas (2014), Deception in High Places: A History of Bribery in Britain’s Arms Trade, London: Pluto Press. Guardian (2015), ‘Want to make a big cash withdrawal? Don’t bank on being allowed’, Guardian, 12 September, https://www.theguardian.com/money/​ 2015/sep/12/big-cash-withdrawals-bank-barclays-denied-access, accessed 2 February 2018. Henderson, Barney (2009), ‘Indian police “threw pregnant mother from train for failing to pay bribe”’, Telegraph, 21 June, www.telegraph.co.uk/news/ worldnews/asia/india/5595299/Indian-police-threw-pregnant-mother-fromtrain-for-failing-to-pay-bribe.html, accessed 2 February 2018. Hobsbawm, Eric J. (1978), Primitive Rebels: Studies in Archaic Forms of Social Movement in the 19th and 20th Centuries, Manchester: Manchester University Press. Human Rights Watch (2010), ‘Everyone’s in on the Game: Corruption and Human Rights Abuses by the Nigeria Police Force’, 17 August, https://www. hrw.org/report/2010/08/17/everyones-game/corruption-and-human-rightsabuses-nigeria-police-force, accessed 2 February 2018. Klitgaard, Robert, Maclean-Abaroa, Roland and H. Lindsey Parris (2000), Corrupt Cities: A Practical Guide to Cure and Prevention, Washington, DC: World Bank, http://documents.worldbank.org/curated/en/709171468743399124/ pdf/multi-page.pdf, accessed 2 February 2018. Lam, Wing and Zenobia Lai (2005), ‘The Wuhan Court Bribery Case’, Human Rights in China brief, www.hrichina.org/sites/default/files/PDFs/ CRF.1.2005/1.2005TheWuhanCourt.pdf, accessed 2 February 2018.

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Lambsdorff, Johann Graf (2012), ‘Economics of Corruption 2012: 6. How Criminals Enforce their Deals’, www.wiwi.uni-passau.de/fileadmin/dokumente/lehrstuehle/ lambsdorff/Economics_of_Corruption_2012/6_How_Criminals_Enforce_Their_ Deals.pdf, accessed 2 February 2018. Ministry of Justice (2011), ‘The Bribery Act 2010 – Guidance’, https://www. justice.gov.uk/downloads/legislation/bribery-act-2010-guidance.pdf, accessed 2 February 2018. Olsen, Mancur (1965), The Logic of Collective Action, Cambridge, MA and London: Harvard University Press. Putnam, Robert (1993), Making Democracy Work, Princeton, NJ: Princeton University Press. Sands, Peter (2016), ‘Making it Harder for the Bad Guys: The Case for Eliminating High Denomination Notes’, M-RCBG Associate Working Paper Series No. 52, Harvard Kennedy School, https://www.hks.harvard.edu/ centers/mrcbg/publications/awp/awp52, accessed 2 February 2018. Shleifer, Andrei and Robert W. Vishny (1993), ‘Corruption’, Quarterly Journal of Economics 108(3): 599–617. Tickner, Peter (2015), Fraud and Corruption in Public Services, London and New York: Routledge. University of Salford (2017), Anti-Bribery Policy, Version Number 1.2, 9 June, www.salford.ac.uk/__data/assets/pdf_file/0005/909266/AntiBriberyPolicy. pdf, accessed 2 February 2018. Vannucci, Alberto (2011), ‘The Informal Institutions of Corruption: A Typology of Informal Governance Mechanisms and Anti-corruption Policies’, integrita. sspa.it, Working Paper No. 3. Vannucci, Alberto (2012), Atlante della corruzione, Turin: Gruppo Abele. World Bank (1997), World Development Report: The State in a Changing World, New York: Oxford University Press, https://openknowledge. worldbank.org/handle/10986/5980, accessed 2 February 2018. Zampini, Adriano (1993), Io corruttore, Naples: Tullio Pironti.

5 Political corruption and organised crime

Introduction In the last chapter we saw that corrupt exchanges can involve the interaction of a range of different types of actor. This chapter focusses on one of those types: the third-party enforcers. Enforcers offer the threat – and sometimes the actuality – of violence to ensure that, once the parties to a corrupt exchange have agreed to do business and have agreed terms, the terms are respected. To that extent, they offer something analogous to the insurance policies available in the world of legal contracts to firms and individuals to protect them against non-compliance or the consequences of non-compliance. For example, firms can take out a form of insurance known as a fidelity bond to protect them against wrongful acts committed against them by, e.g., consultants or sub-contractors. Another example is the kind of travel insurance that offers to compensate policy holders if their flights are cancelled or the airlines lose their luggage. The insurance facilitates the making of contracts by reducing the fears of each party that they will lose out in the event that the other party, for whatever reason, is unable or unwilling to comply. So it is with organisations like the Sicilian Mafia: in areas where it has been strong it has been able, through its protection rackets, to charge what are in effect insurance premiums to local entrepreneurs. In exchange, the entrepreneurs have been able to expect protection against a range of threats, from theft to those deriving from the actions of competitors, public officials and so forth. We will call the players focussed on in this chapter ‘mafias’, meaning that they are a specific type of criminal organisation.1 Whatever else they also do, what distinguishes them is that they seek to control territory and perform quasi-governmental functions (Anderson, 1995:  34) by engaging in extortion, and providing protection services in exchange.2

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In some respects, they might be regarded as analogous to legal debtcollection agencies or private security firms, the difference being that mafias impose themselves on their clients, and that once their services have been engaged they cannot easily be dismissed. For example, a ­politician might accept mafia protection against competitors by making use of a mafia’s power to mobilise voters through its capacity to intimidate. But having done that, he will find that he himself is subject to intimidation if he refuses to return the favour in ways demanded of him, and that he cannot free himself of mafia tutelage by appealing to the agents of law enforcement because in doing so he would incriminate himself. We begin by looking at the characteristics of mafias and then consider the conditions under which they succeed in establishing themselves as powerful entities offering the protection and contract enforcement that are their distinguishing features. We then look in detail at the ­relationship between mafias and corruption. The characteristics of mafias In order to be able to offer their services effectively, mafia groups have to be credible: their threats of violence have to be taken seriously, and so they have to be able to keep themselves out of the hands of the law – which suggests the existence of significant obstacles in the way of their growth. Since their activities are illegal, and since they operate under the constant threat of arrest and the confiscation of their assets, like any criminal organisation they are under pressure to limit the number of their employees and customers in order to keep to a minimum the points of potential information leak to which they are exposed.3 In the world of illicit transactions, where legal enforceability is absent, the temptation to cheat and to seek revenge is a constant presence and, consequently, so is mistrust. So it is that criminal enterprises find it difficult to expand and rarely have branches ‘in more than one metropolitan area’ (Paoli, 2003a:  35), because the more they expand, the more difficult it is for them to control the behaviour of their members.4 Members might be tempted to look after their own interests by revealing information that compromises the interests of their criminal associates if their own ­mistakes lead them to fall into the hands of the law. It is true that they might be punished with violence (and often are). But by then it will be too late, and in any event the criminal organisation will view violence as very much a last resort: it is never risk free, and its exercise sends the message that the organisation’s authority has been challenged. This would be damaging to the organisation, because

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what any criminal organisation wants is for those living in its area of operations to fear it. Fear brings compliance with demands, the silence of those ‘in the know’ and thus the organisation’s own power and impunity. So what is important to the criminal organisation is the reputation for violence, the belief on the part of those living in its area that it ‘is capable of deploying effective and violent instruments of dissuasion, [so that] the need to turn to actual violence declines’ (della Porta and Vannucci, 1999: 223). Criminal organisations are therefore likely to be small and ephemeral entities. One should be wary of the kinds of images too often conjured up by the mass media, by politicians and by the agents of law enforcement, who have a vested interest in persuading citizens that organised crime is ‘on the march’. These images often associate organised crime with ‘thousands of criminals linked together in nation-wide alliances, and even in international alliances’ (Cressey, 1972: 14). Such images seem, on the face of it, unlikely to be accurate. So, what does the ­available evidence tell us? In the UK, the term ‘gang culture’ often has a central role in periodic moral panics about crime, especially youth crime. A research report for the Runnymede Trust, an independent race-equality think-tank, suggests that while violent youth crime clearly exists as a more or less significant social problem, ‘“the gang” continues to exercise a powerful hold on our imagination, and carries with it a seductive set of associations … that has proved remarkably resilient to the mass of contradictory evidence’ (Alexander, 2008: 13). That is, while the entities referred to by the term ‘gang’ are not mythical, the idea that they are invariably well organised and violent, as opposed to ‘informal, disorganised and transient’, ‘diverse in form and activities’, has very little evidence to back it. In Italy, the problem of the Sicilian Mafia and similar groups in cities like Naples has loomed large since at least the 1950s. However, it is revealing that while, according to the World Bank,5 there were three intentional homicides per 100,000 people in Italy between 2010 and 2012, this was no higher than the number in Denmark and New Zealand, half of the number in Belgium and one fifth of the number in the United States. Meanwhile, the suggestion that mafia groups are localised rather than large-scale, extensive entities is suggested by figures on the numbers of persons reported for membership of mafiatype associations, which reveal extreme variation even within Sicily itself (Figure 5.1). The much lower presence of the Mafia in Italy as a whole, as compared to its areas of strength, reflects what we learn about its organisational characteristics from such studies as Letizia Paoli’s Mafia

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at an ia Ra gu sa Sir ac us a

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Figure 5.1  Numbers of persons reported for membership of mafia-type associations per 100,000 inhabitants, 1996–98

Brotherhoods: Organised Crime Italian Style (2003b). Paoli argues that, far from being an enterprise with organisation-wide goals to the achievement of which the activities of all its members are oriented, the Sicilian Mafia is an organisation whose unitary nature, such as it is, comes from the simple fact that it is made up of a number of structurally homologous groups, each seeking to regulate economic activity within a specific geographical area by running protection rackets and so on. The fact that each group is recognised by all of the others as forming part of the same association stems merely from the awareness of their members that they have in common certain aims, beliefs, concerns and so on. This commonality may enable members of the different groups to cooperate to a certain degree, but they are in no sense dependent on each other as they would be if they each had the differentiated and specialised roles typical of well-integrated organisations such as legal business enterprises. What gives the Mafia its unitary character, such as it is, is what Émile Durkheim, in The Division of Labour in Society (1893), called ‘mechanical solidarity’, that is, the awareness of likeness and similarity, common rituals and routines – as opposed to what he called ‘organic solidarity’, where the pursuit of organisation-wide goals is possible because internal differentiation and specialisation of roles renders each organisation member dependent on all the others. Against this background, there have been two fundamental obstacles to the expansion of Mafia power. One is that the Mafia has rarely been able to develop centralised structures of command and coordination because such bodies have had no independent means, separate from each of the groups, by which to enforce their decisions. The other is that

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the pool of potential members from it is able to recruit has always been essentially confined to those who are already part of the Mafia subculture. Consequently, even when, in the 1970s and 1980s, the Mafia was heavily involved in the international drugs trade, from which it made very large sums of money, it faced significant difficulties of acquiring major power in international markets because its involvement was the involvement of small groups on time-limited projects; and, given the limits on its capacity to recruit, its ability to acquire the specialised knowledge and contacts needed to gain a position of power was likewise limited (Paoli, 2000). Similarly in Russia, Michael Johnston notes that ‘Russian organized crime is decentralized and non-hierarchical: instead of a unified national network thousands of small gangs operate with little or no coordination … They may cooperate for a time on larger projects, but overall organized crime is a universe of small, shifting groups exploiting ­whatever elicit opportunities are at hand’ (Johnston, 2005: 129). Because of this, the activities of organised criminals are difficult to eliminate because law enforcement agencies are faced not with large, powerful organisations, but with the opposite situation. For example, because the drugs market is supplied by large numbers of small-scale traffickers, each with his or her own supplier, even the seizure of large amounts of drugs rarely has an impact on availability. Thus, ‘in 1994 over five tons of cocaine were seized on the outskirts of Milan. As a key expert put it, “the news of the day was not the seizure, but the fact that the Milanese market did not run out of cocaine even for half a day”’ (Paoli, 2003a: 37). Federico Varese (2011) argues that although mafia groups have been able to open branches in distant territories – for example, ‘the migration to the United States of Italians, some with mafia skills, at the turn of the nineteenth century gave rise to a set of powerful mafia groups known as the “five families” in New York City’ (Varese, 2011: 5) – not all cases of transplantation succeed. For example, after interviewing a number of entrepreneurs involved in legal and illegal markets in China, Varese concluded that, despite the opportunities created by the opening up of the Chinese economy from the late 1970s, triad groups from Taiwan and Hong Kong had ‘not yet emerged as a viable mafia supplying private protection’ (2011: 177). This was because powerful protectors were already available on the ground in the form of corrupt elements of the state apparatus. So, while members of foreign triads are present in China, they have found their way there largely because of police repression at home; and disputes concerning contracts, both legal and illegal, are resolved by others through what is known as the ‘protective

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umbrella’. That is, because Chinese courts are ineffective in enforcing contracts and protecting citizens from official harassment, entrepreneurs enter into arrangements with members of the state apparatus whereby, in exchange for regular payments, officials use their authority to protect their clients from harassment by other officials and from competitors, the dishonesty of debtors and so forth. While members of Hong Kong and Taiwanese triads in China have found conditions there for potential success (such as language and ancestry in common with the indigenous population) they have also found that they are unable to act ‘as a viable mafia supplying private protection’ (2011: 177) because they have to compete with corrupt officials who have been quick to arrest triad members attempting to encroach on their turf (e.g., by acting as illicit debt-collection agencies). Bruce Gragert (1997) has suggested that the Japanese Yakuza counts about 80,000 members organised into about 3,000 gangs. These figures, if true, imply about twenty-six members per gang. This is larger than the seven-member gangs suggested by estimates of the presence of organised-crime in the UK (see note 3). The greater size is probably due  to the relative cohesiveness that comes from the status contract which, in the case of the Yakuza and other mafia groups like the triads and Cosa Nostra, ties the member to the group (see below). Still, although they may cooperate with others, Yakuza groups are autonomous, not controlled by larger entities; and, as in the case of their Italian counterparts, the reservoirs from which they can recruit are relatively limited.6 Thus we see that would-be criminal groups in general, and mafia groups in particular, face a potentially precarious existence and ­considerable obstacles in the way of their consolidation of power. And yet they must succeed in this if their ability to act as contract enforcers is to have any credibility. Under what conditions are they likely to be successful? Conditions for the consolidation of mafia groups One very important condition appears to be weakness on the part of the state, a relative inability of the public authorities to enforce laws and the rule of law, thanks to a lack of trust in them on the part of the ­citizens for whom they are responsible. The less that ordinary citizens trust the authorities – that is, the lower their confidence that public officials will apply and abide by the law – the lower their willingness to abide by the law, and therefore the harder it is for the authorities to apply it.

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The weakness of the state was clearly central to the emergence of the Sicilian Mafia in the period following Italian unification in 1861. Three processes were at work. First, unification was essentially an elite-driven process whereby the Piedmontese kingdom took over, and imposed its political structures and processes on, the whole of the peninsula. The franchise was strictly limited; consequently, for the ordinary Sicilian peasant living in a region that in any case ‘had a long tradition of resistance to outside domination’ (Anderson, 1995: 35–6), unification meant little more than that ‘the oppression of Piedmontese tax collectors was added to that of the local landlord’ (Hine, 1993: 13). Second, the new state upheld the power of local landlords to govern their localities in arbitrary and clientelistic ways. Clientelism, by its very nature, creates relations of personal dependence: it means that particularistic favours are done in exchange for obedience or political allegiance, thereby preventing the effective exercise of rights of citizenship and equality, and so weakening commitment to concepts of legality. Third, since the state deferred to the authority of local landlords it effectively allowed them to use the private violence which the state itself officially prohibited. Consequently, nascent mafia groups, hired to run large estates in their landowners’ absence, came to play ‘critical roles of mediation between peasants, landowners and the state’ (Anderson, 1995: 36). Using the threat of violence to underwrite contacts and resolve disputes, the Mafia offered a certain guarantee of social order and, through extortion, was able to enjoy a degree of popular acquiescence in the areas where it was strong. The weakness of the state is also central to the strength of mafia groups in Russia. Essentially, following the collapse of the communist system, economic and legal reforms had to be devised and implemented by government officials, among whom corruption seems to have been widespread thanks to features of life under the former regime with its shortages of basic necessities, the bureaucratic inefficiencies of the partystate apparatus and the fact that this apparatus offered no legitimate way of influencing policy from below (Johnston, 2005: 131). Consequently, when state assets were privatised, their sell-off was managed by powerful officials who had the motive and the means (by rigging asset sales) ‘to turn major state assets into personal property’ (Johnston, 2005:  132). At the same time, these officials were responsible, in a short space of time, for replacing political and administrative institutions that were unaccountable and failed to adhere to rule-of-law principles with ones that did. This effort was unsuccessful to a significant degree, because of officials’ lack of experience of with institutions of this type and their opportunistic and corrupt attitudes. Given this situation, new laws and institutions, such as those defining property rights and providing for

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contract enforcement, lacked credibility – with the result of fuelling both organised crime and further corruption in tandem. For example, Oleg Deripaska, one of Russia’s most aggressive bizinis oligarchs, had his eye on an industrial plant in the nation’s Far East not long ago. He got what he wanted, not through a buyout, but by bringing a low-profile legal proceeding before a friendly judge in a court thousands of miles to the west. The plant’s rightful owners, knowing nothing of the case, defaulted on the judgement; equally friendly local police then helped Deripaska seize the plant. (Johnston, 2005: 120)

In such a context of insecurity and uncertainty, mafia gangs provide needed protection: ‘Entrepreneurs put a “roof” (krysha) over their enterprises by paying local mafiyas for protection against ordinary crime, official harassment, threats from other gangs, and of course from crimes by the very people being paid off’ (Johnston, 2005: 130). A second condition for the consolidation of the power of would-be mafia groups is that they are able to secure their impunity by entering into stable, corrupt relations with public officials. That is, by bribing law-enforcement officials on a regular and on-going basis, they may acquire the immunity from prosecution that is essential if they are to carry on their illegal activities unmolested and unharassed. For example, Japanese Yakuza groups have a custom of bribing local police and government officials that stretches back to Japan’s emergence as an industrial society at the beginning of the twentieth century, when corruption of public representatives allowed the groups to diversify their activities from gambling and street stalls to the organisation of day labourers for construction jobs and the development of legitimate businesses as fronts for their criminal activities (Gragert, 1997: 154–5). For the agents of law enforcement, systematic corruption may both raise their incomes and enable them to bring order to the illegal activities going on in their areas. The centrality of corruption to the life of organised crime groups seems implicit in the work of Donald Cressey. In describing Cosa Nostra in the United States, Cressey (1972) reserves a considerable amount of space to the part played by what he calls the organisation’s corruptors, arguing that associated with each of its families there were three positions essential to its very existence: positions that he called ‘the enforcer’, ‘the corruptor’ and ‘the corruptee’. The ‘enforcer’, as the term suggests, is the person who performs the function of ensuring that members conform to the organisation’s rules by arranging for the penalising, maiming or killing of members who transgress. The person in the position of corruptor, Cressey (1972: 36) writes, ‘bribes, buys, intimidates,

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threatens, negotiates, and sweet-talks himself into a relationship with police, public officials, and anyone who might help “family” members secure and maintain immunity from arrest, prosecution and punishment’. The ‘corruptee’ is any public official in the pay of the organisation, and might be a judge, a prosecutor, a police or probation officer, and, although not an actual member of the organisation, works for it and forms part of its division of labour. Not surprisingly, Earl Warren, one-time Chief Justice of the United States, ‘said that it could be taken as a “rule of thumb” that corruption is the basis of organised crime’ (Cressey, 1969), while in 1967 the United States President’s Commission on Law Enforcement and Administration of Justice argued that it was precisely the elements of enforcement and corruption that constituted the defining ­characteristics of organised crime. Under what conditions will criminal groups’ efforts to corrupt be successful – bearing in mind that they will have to overcome all of the obstacles in the way of corrupt transactions that were discussed in chapter 4, namely, finding a reliable counterpart, agreeing terms and ensuring that the counterpart actually delivers on the deal. Popular attitudes seem important; the most powerful groups appear to be those that enjoy a degree of social acceptance – linked, in turn, to the founding myths and codes of conduct popularly associated with them. For example, until at least 1992 the Yakuza ‘openly admitted who they were as each group had its own distinctive insignia inscribed onto lapel pins and flags’ (Gragert, 1997: 163), their acceptance by Japanese society being rooted in popular images of them as honourable outlaws and Robin Hood-type characters (Gragert, 1997: 149–50). Likewise, Cosa Nostra has traditionally enjoyed a degree of popular support, not only because it has provided services (protection and the enforcement of contracts) for which there is a real need, but also because it has reflected in its own codes of behaviour precepts of ‘honour’ extant in the wider society – involving the assertion of one’s rights through recourse to one’s own resources and the exclusion of any involvement of the public authorities. Under such circumstances the authorities appear at times to have concluded that the maintenance of social order was easier through connivance and the search for peaceful co-existence than through attempts at repression. A third condition is that organised criminals may also find fewer obstacles in the way of establishing corrupt relations with public officials in places where people interact more on the basis of particularistic rather than universalistic criteria: contexts like that of the Indian village, studied by Prakash Reddy (cited by Tanzi, 1995: 164). There it was clear that, because family contacts were very close and frequent,

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there was an unwritten norm that government officials were expected to help friends and relatives, even if doing so meant that ‘this behaviour might require bending, or even breaking, administrative rules and departing from “universalistic principles”. The person who refused to provide this help would be seen as breaking the prevailing moral code and would not be popular’ (Tanzi, 1995: 165). Because of what such behaviour has in common with corruption (a public agent’s betrayal, in favour of a third party, of the trust placed in him by his principal) we would expect organised crime to secure its impunity by corrupting public officials more easily in this context than it could in contexts where the principle of universalism is more strongly rooted. For this reason, we would expect organised crime to be more strongly rooted in places like southern Italy and Japan than it is in such contexts as the UK and Germany. This is difficult to assess with hard data because much depends on the definitions used by those who gather the data. How does one define ‘organised crime’ in such a way as to allow one to distinguish it from crime that does not fall into this category? On the one hand, the term ‘organisation’ denotes a structure of roles, existing independently of their incumbents, among whom there are stable and routine patterns of interaction. On the other hand, organisations differ in terms of their degree of formality. At one end of the spectrum are highly informal organisations, such as groups of friends, street-corner groups, delinquent gangs and so forth, that do not have a consciously decided-upon structure for the achievement of some collective goal. At the other end of the spectrum are highly formal organisations, such as business firms and universities, that have a clear division of labour, limit entrance, have explicitly stated rules governing the interaction of their members and have an explicitly stated set of organisational objectives. This means that organisation is a matter of degree and, therefore, that it is very difficult to use the term ‘organised crime’ to distinguish one type of crime from another. As Cressey (1972: 12) has put it: ‘There is some degree of organization even in a group of two middle-class girls who, on the way home from school, drift into Woolworths and shoplift some lipsticks.’ For this reason, there is no hard and fast way to distinguish between ‘organised crime’, on the one hand, and criminal activity not belonging to this category, on the other. However, a 2010 United Nations report giving figures for those convicted of participation in organised crime groups by country shows the kinds of variation that one would arguably expect if the suggestion about organised crime being more strongly rooted in the particularistic cultures is correct (Figure 5.2).

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Figure 5.2  Persons convicted of participation in organised crime groups per 100,000 population, selected countries, 2006 Source: Harrendorf, Heiskanen and Malby, 2010, Table 1, pp. 74–5

A fourth condition underpinning the power of a mafia is that it is able to secure its own internal cohesion by drawing on social ties of a noneconomic kind. For most criminal groups internal cohesion is ­difficult to achieve thanks to the problem of generating and sustaining trust between people interacting in ways that are illegal. As the Spanish proverb puts it, ‘piensa el ladrón que todos son de su condición’ (the thief thinks that all are of his condition). The most powerful mafia groupings – the Sicilian Cosa Nostra, the Chinese Triads and the Japanese Yakuza – achieve the necessary ‘honour among thieves’ in part because they bind their members together through ‘status contracts’, reflecting the remoteness of their origins as ancient entities, pre-dating the emergence of modern markets. Max Weber recognised status contracts as pre-modern types of agreement, defining them as contracts that address a person’s total legal situation and entail a change from one status to another, e.g., to become someone’s slave, wife or vassal (Swedberg, 1998: 101). He also distinguished them from ‘purposive contracts’, which are secular and ‘aim solely … at some specific (especially economic) performance or result’ (Weber, quoted by Swedberg, 1998: 101). The difference between the two is the difference between a marriage contract and an employment contract. Whereas the former is all-inclusive and involves a change in the universal position of the parties, the latter merely gives a new orientation to the relationship between them, leaving their statuses unchanged. Whereas the former creates a familial, fraternal relationship, the latter does not and the parties remain strangers. Consequently, the former, but

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not the latter, is effected by oaths and such like involving surrender to a supernatural power that is presumed to threaten the parties in the event of anti-fraternal conduct.7 The very significant consequence of all of this is that the status contract, but not the purposive contract, determines who you are and what sort of relations you can and cannot have with others, while creating obligations that are completely open ended: they do not require you to do anything specifically, but equally, there is nothing that in principle may not be asked of you. Status contracts thus rest upon the norm of generalised reciprocity8 and ‘upon a principle of legitimation identical to the one that underlies the authority claims of a patriarchal master’ (Kronman, 1983: 105). Since relationships within mafia groups are authoritarian ones, the effect of status contracts is to considerably strengthen the positions of leaders vis-à-vis subordinates, whose obedience is expected to be unconditional and unquestioning. And since they may be called upon to fulfil tasks none of which is predetermined, generalised reciprocity ‘allows the divisions of tasks and roles to be flexible, according to specific and often unforeseeable organizational necessities’ (Longo, 2014: 128). Internally, therefore, mafia groups are very resilient and thus relatively resistant to the efforts of law-enforcement authorities to undermine them. Of course, resilience is not always perfect: the history of mafia groups is replete with examples of internal conflicts, killings and betrayals. The reason is that internal relations are informed not just by principles of unconditional loyalty but also by principles of a more conditional, instrumental kind. For one thing, the status contract allows the brutal exploitation of followers by leaders – making it possible for the former to use the latter for their personal ends without the latter being able to question anything – and thus induces a heavy dose of scepticism and pragmatism in the attitudes and behaviour of ordinary members. For another thing, the requirement for secrecy means that within the typical mafia organisation information is shared among members on a strictly ‘need-to-know’ basis, its circulation being thereby reduced to the indispensable minimum. Because of this, and because the organisation is not a rational-legal bureaucracy (so that the s­truggle for power within it is constant), paranoia among members is acute (Dickie, 2004: 6). In summary, weak states, the bribery of law-enforcement officers, particularistic cultures and relative cohesion are all conditions enabling mafia groups to enjoy the power and solidity required to enable them to act as effective enforcers of corrupt transactions.

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In what ways are organised crime and corruption linked? Corruption and mafia groups are, then, connected in a vicious circle: as organised criminals, mafiosi have an incentive to use bribery in order to secure their own immunity from prosecution, and the more successful they are in doing this, the easier it is for them to expand their activities, leading to still more bribery to secure their immunity, and so on. In such efforts not only money but violence and the threat of violence can be used as commodities of exchange. In the case of the Sicilian Mafia, for example, offers of the threat of violence have been taken up by politicians in order to discourage those who owe them bribes from avoiding payment; in return, the Mafia has been able to oblige politicians to intercede, when necessary, with judicial personnel. As former Mafia member Tommaso Buscetta once put it: Forget the idea that some pact is reached first. On the contrary, one goes to that candidate and says: ‘… I can do this and that for you now, and we hope that when you are elected you will remember us’. That candidate wins and he has to pay something back. You tell him, ‘We need this, will you do it or not?’ The politician understands immediately and acts always. (quoted by della Porta and Vannucci, 1999: 221)

Of course, the judicial, legislative and executive branches are all formally separate from one another; but winning candidates are in a position to act for Mafia accomplices, thanks to the informal political pressures to which judicial processes are vulnerable in Italy. Thanks to the considerable de facto scope for discretion that is available to public prosecutors, and to prosecutors’ tendencies – through penal initiatives in the areas of workplace safety, environmental pollution, tax evasion, fraud and so forth – to use their powers to tackle social issues, politicians have traditionally been keen to have friends in the judiciary in order to avoid initiatives ‘inconvenient’ or embarrassing to them (Newell, 2005). Thanks to the power of the Court of Cassation to move cases from the jurisdiction of one prosecutor’s office to that of another, politicians who are keen to ‘bury’ politically sensitive cases have often established informal relations of connivance with judges by doing political favours in exchange for judicial favours (Newell, 2006). For example, seven-times prime minister Giulio Andreotti (formally charged with Mafia involvement but later acquitted), was said to have helped the political career of ex-magistrate and senator Claudio Vitalone, who had managed to win Andreotti’s ‘appreciation’ through a range of judicial favours for his supporters and friends (della Porta, 1998). Meanwhile, factions in the judiciary’s professional and self-governing bodies, the Associazione n ­ azionale

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magistrati (National Association of Magistrates) and the Consiglio Superiore della Magistratura (Higher Judicial Council), although not formally tied to the political parties, are more or less openly ‘close to’ one political formation or another. Thus, through the judicial factions closest to them ideologically, politicians have often been able to influence ‘the assignment of magistrates to various posts and in particular the choice of the heads of judicial offices’ (di Federico 1989: 35; quoted by Alberti, 1996: 287). Besides money and the threat of violence, Mafia groups have in the past been able to offer politicians a third resource, that of electoral support, using their power and authority to control the vote in the areas where they are strong. Until the electoral law was changed in 1993, parliamentary elections took place on the basis of the open list system of proportional representation whereby the voter could express up to four preferences among their chosen party’s list of candidates. Preferences could be expressed by writing either the names or the assigned numbers of the preferred candidates on the ballot paper. By telling voters what combination of names and/or numbers to write on their ballot papers, the Mafia could, if not completely destroy the secrecy of the ballot, at least gauge how closely voters in its districts adhered to its instructions.9 By obtaining a single blank ballot paper, the Mafia is apparently able to control the vote in an area by having its representative fill in the ballot paper and give it to a voter as they enter the polling station. Inside the  polling station the voter obtains their ballot paper, but instead of using it they deposit in the ballot box the paper given to them by the Mafioso, and they give their own blank paper to the Mafioso as they leave the polling station. The Mafioso then fills in that paper and gives it to the next voter – and so on. However, as the Italian parliament’s antiMafia committee once noted, More often, no outright intimidation is needed. Advice is sufficient. The absence of political energy and passion, the notion that a vote serves only to mark one’s adherence to a clientele group and not to indicate a choice of ideas, and the levelling of political traditions among the different parties all lead [voters] almost naturally, without any forcing, to respect the ‘marching orders’ [given by the Mafia]. (quoted by della Porta and Vannucci, 1999: 226)

Hence the importance to the Mafia of impunity, something that ‘not only has an instrumental value but is also particularly important in a symbolic sense’ (della Porta and Vannucci, 1999: 228). ‘Beyond its effect on individuals, immunity from punishment confirms the overall power of the criminal organization, legitimises the organization in the

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eyes of citizens, and mocks the function of the state. Thus, impunity is a structural necessity for the organization that confers the aura of “de facto legality” on its operations. Impunity is the principal concern of the [Mafia]’ (quoted by della Porta and Vannucci, 1999: 228). With this impunity the Mafia is able to ensure that large numbers of voters give their support to the politician who provides this service, in order to retain and increase its strength, and with it the number of votes it is able to control. Thus the incentive on the politicians to seek to acquire votes by offering immunity from prosecution increases, and so forth. Mafia groups have also been known to corrupt members of the judiciary directly and have then used their connections with corrupt politicians to obtain the resources needed to bribe these members. Thus, della Porta and Vannucci (1999: 142) note that, ‘According to Leonardo Messina, a member of the Mafia who turned state’s witness, when a new magistrate arrived, “an entrepreneur [close to the Mafia] would always see to finding him a house, see to the garden [usually with the mediation of a local politician]”’ (della Porta and Vannucci, 1999: 142). The activities of the Mafia and of corrupt politicians have thus tended to feed each other through a range of vicious circles and complex networks.10 However, occasionally the presence of the Mafia has served to contain corruption, at least in the field of public works contracts. • First, ‘The suppression of competition is a nearly universal dream of established entrepreneurs’ (Gambetta and Reuter, 1995: 133, quoted by della Porta and Vannucci, 1999: 133) in the sense that, if in the market in which a firm operates it can form a cartel with other firms, or even better, if it can become a monopoly supplier, then selfevidently it can potentially realise much higher profits than it will if it has to compete with other firms able and willing to offer the same goods at lower prices. • Second, in the field of public works contracts it sometimes happens that firms are able and willing to reduce competition by reaching secret agreements among themselves whereby they coordinate their respective bids, thus fixing ‘in advance both who will win the competition and how much the public body will pay. The company awarded the contract can then compensate the others with a share of its profits, or let another company take its turn in the future’ (della Porta and Vannucci, 1999: 229). The possibility of this happening has been observed in many parts of the world, not just Sicily but also in such apparently ‘clean’ and uncorrupt places as the Netherlands.11 • Third, however, ‘firms participating in this cartel have to resolve the problem of potential defection’ (della Porta and Vannucci,

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1999: 229); that is, they have to find a means of ensuring that each of them actually sticks to the collusive agreement and doesn’t succumb to the temptation to cheat by using their knowledge of each other’s bids to submit a lower bid. • Fourth, this means may be provided by organised crime groups such as the Mafia, which see to it that the cartel agreement is upheld under the threat or use of force. In parts of the world where organised crime is particularly deeply rooted and influential these sorts of conspiratorial cartel arrangements are likely to be particularly strong and durable. For example, della Porta and Vannucci (1999) have noted that in parts of southern Italy such cartels, where they exist, are especially solid because the Mafia, ‘by promising to take illegal but effective action against any member who tries to break the rules of the conspiracy [thereby provides] … members with c­ redible ­assurance that it is likely to be of lasting benefit’. In other words, precisely because of its power, whenever a new public contract is to be awarded the Mafia can ‘bring [cartel] members together for the initial discussion, provide them with greater assurance that the conspiracy will last, and make it last by enforcing the rules’ (Reuter, 1985: 60, quoted by della Porta and Vannucci, 1999: 229). Therefore, where such collusive arrangements exist, firms can in effect ‘do without attempts to corrupt politicians and public officials’ in order to win contracts (della Porta and Vannucci, 1999: 230). Indeed, the existence of a strong and organised crime-backed cartel actively dissuades them from doing so, for it presents each businessperson with a choice of four alternatives. That is, they can ‘(1) accept the rules of the game and thus enter into an arena in which each player will eventually be awarded the contracts assigned to him [or her] under the discretionary rule of the Mafia organization; (2) reject those rules but still compete for contracts, which means meeting retaliation from the [Mafia] organization; (3) abandon [that particular geographical area altogether]’; (4) ‘denounce the facts publicly or to investigating authorities’. Self-evidently, the presence of organised crime ‘makes the first and third … options more attractive, and the second and fourth … alternatives more risky’ (della Porta and Vannucci, 1999: 230–1). Conclusion The relationship between corruption and mafia organisations is multifaceted. On the one hand, such organisations make use of corruption to secure their own impunity, and on the other hand, they underwrite

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agreements for corrupt exchanges. However, performing this contractunderwriting function may on occasion reduce the amount of explicit bribery that goes on. It is likely that this can happen only where the mafia organisation is very strong; and the strength of such organisations, as of organised crime generally, is easy to overestimate if one thinks in terms of popular media images which present it as a kind of underground ‘multinational organisation’. The fact that the typical criminal group works in conditions of illegality where the state is by definition unavailable to underwrite contracts and bargains means that much of the time it must inevitably remain small in scale. Where it does have significant dimensions, this is because it has managed to secure a degree of impunity by corrupting public officials. The extent to which it is able to do this appears to be significantly influenced by the cultural characteristics of the environment in which it operates. Where these characteristics are favourable, widespread illegality seems more likely than elsewhere (as we saw in chapter 2 in the case of Wincanton) to be met by attitudes of resignation – with the result that corruption, when it is revealed, is less likely than elsewhere to result in major scandals. However, through scandals, corruption may have significant political and social consequences in the fields of prevention and reform. It is to the conditions under which corruption is likely to give rise to scandal that we turn our attention in the following chapter. Notes  1 This begs the question, ‘What other types are there?’ If criminal activities are ultimately about the illegal acquisition of resources, then it would seem possible to distinguish three types of crime group corresponding to three alternative means of illegal resource acquisition: sequestration through force or fraud (covering theft, counterfeiting, kidnapping, identity fraud); the supply of illegal goods and services (such as drugs) and/or the illegal supply of legal goods and services (e.g., through smuggling); protection and enforcement (the activities I am suggesting here define a ‘mafia’).  2 The suggestion reflects the tendency to use the term ‘mafia’, colloquially, to refer to any secret arrangements and agreements within an organisation that are designed to regulate activity in ways that deviate from those prescribed by the organisation’s official rules, to the advantage of the group operating the arrangements and agreements.  3 According to a 2011 BBC News report (BBC News, 2011), police estimated that organised crime in the UK involved 6,000 groups and up to 38,000 people. If these figures are to be believed, they imply that the average UK organised crime group involves fewer than seven people.

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 4 It is this problem of controlling members, as we shall see later, that explains the oaths of secrecy and the initiation rituals that are characteristic of mafia groups like Cosa Nostra, the triads and the Yakuza.  5 http://data.worldbank.org/indicator/VC.IHR.PSRC.P5, accessed 2 February 2018.  6 Gragert (1997: 167) suggests that recruits come predominantly from ‘bosozoku (hot-rodder) youth motorcycle gangs’ and from two discriminated groups: ethnic Koreans and ‘the burakumin – members of Japan’s ancestral untouchable class’.  7 Hence the initiation rituals by which prospective members of a mafia are brought into the group – rituals that appear to display considerable overlap. One witness at a trial in Cleveland, Ohio in 1999 was asked about his induction into the Mafia and responded: ‘“you get together with the other members, you took an oath, draw blood from a finger and burn a religious card to take an oath of silence”’ (McCarthy, 2011: 234). In the case of triad groups, McCarthy  (2011:  234) suggests that the ritual ‘includes a sponsor for the recruit,  an emphasis on the voluntarism of his joining, a recitation of triad history, swearing of an oath before an altar, a reminder of the severe consequences of betrayal, swearing allegiance to his brothers, and something to do with blood, the recruit possibly drinking his own blood mixed in with that of others. So both mafia and triad inductions have witnesses, oaths, and blood rituals.’  8 The concept of reciprocity refers to the norm that we make fitting and proportional responses to benefits and harms that we receive. Reciprocal obligations range from the specific and precise, such as those set out in a business contract (which stipulates what will be given when, by whom and under what conditions), to the generalised, when it is understood and accepted that obligations to give are unqualified, not conditional upon gifts of any specific quantity or quality being returned within any specific time period.  9 Criminals have been known, in more recent times, to do this by insisting that, in the privacy of the polling booth, voters photograph their completed ballot papers using their mobile phones. In order to combat the practice, in 2008 the Italian parliament passed law no. 96/2008 making it illegal to take into polling booths mobile telephones or other equipment capable of being used to take ­photographs. 10 In parts of Italy, and also in Japan, collaboration between organised crime and politicians has a long history stretching back to the period of the Cold War, of American intervention in domestic politics and of fears of communism. In Italy, the power of the Communist Party provided the rationale for a range of illegal actions on the part of elements of the political class and state bureaucracy (Bull and Newell, 2005: 99), ranging from intelligence gathering and sabotage, to relying on the Mafia, where it was strong, to control the vote and maintain social order. In Japan, in the immediate aftermath of the Second World War, American occupation forces used Yakuza members to break strikes and attack leftist leaders – thus beginning a long series of episodes of collaboration between

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the groups and high-ranking officials of the ruling Liberal Democratic Party (Gragert, 1997: 157–63). 11 Petrus van Duyne and Maarten van Dijck (nd), for example, provide a detailed and fascinating account of how, in 2001, it came to light that hundreds of Dutch construction firms had been able to use collusive arrangements to rig prices and divide up the market for transport infrastructure contracts. In this process the participating firms would keep tallies of their respective debts and clear them at the end of the year. Often they managed to do this while avoiding direct payments to each other (which would have required the use of false invoices). For example, they would sometimes pay by delivering materials, with invoices, but at prices lowered or raised to the amount of the debt or the claim. In such cases there would be no fraud; everything would be regularly accounted for; all relevant taxes, such as VAT, would be paid.

References Alberti, A. (1996), ‘Political Corruption and the Role of Public Prosecutors in Italy’, Crime, Law and Social Change 24(4): 273–92. Alexander, Claire (2008), (Re)thinking ‘Gangs’, Runnymede Trust, http:// www.blackeducation.info/upload/docs/RethinkingGangs-2008.pdf, accessed 2 February 2018. Anderson, Annelise (1995), ‘Organised Crime, Mafia and Governments’, pp. 33–54 in Gianluca Fiorentini and Sam Peltzman (eds), The Economics of Organised Crime, Cambridge: Cambridge University Press. BBC News (2011), ‘Organised crime strategy promises “tougher approach”’, www.bbc.co.uk/news/uk-14318162, accessed 2 February 2018. Bull, Martin J. and James L. Newell (2005), Italian Politics: Democracy under Duress, Cambridge: Polity Press. Cressey, Donald (1969), Theft of the Nation: The Structure and Operations of Organized Crime in America, New York: HarperCollins. Cressey, Donald R. (1972), Criminal Organization, London: Heinemann della Porta, Donatella (1998), ‘A Judges’ Revolution? Political Corruption and the Judiciary in Italy’, paper presented to the workshop on ‘Italy: Changes, Constraints and Choices’ of the Joint Sessions of Workshops of the European Consortium for Political Research, University of Warwick, 23–28 March. della Porta, Donatella and Paolo Vannucci (1999), Corrupt Exchanges: Actors, Resources and Mechanisms of Political Corruption, New York: de Gruyter. di Federico, Giuseppe (1989), ‘The Crisis of the Justice System and the Referendum on the Judiciary’, pp. 25–69 in Robert Leonardi and Piergiorgio Corbetta (eds), Italian Politics: A Review, vol. 3, London and New York: Pinter. Dicke, John (2004), Cosa Nostra: A History of the Sicilian Mafia, London: Hodder and Stoughton.

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Durkheim, Émile (1893), De la division du travail social: Étude sur l’organisation des sociétés supérieures, Paris: Félix Alcan éditeur. Gragert, Lt Bruce A. (1997), ‘Yakuza: The Warlords of Japanese Organized Crime’, Annual Survey of International and Comparative Law 4(1): 147–204, http://digitalcommons.law.ggu.edu/cgi/viewcontent.cgi?article=1034&conte xt=annlsurvey, accessed 2 February 2018. Harrendorf, Stefan, Heiskanen, Markku and Steven Malby (2010), International Statistics on Crime and Justice, United Nations and European Institute for Crime Prevention and Control, https://www.unodc.org/documents/data-andanalysis/Crime-statistics/International_Statistics_on_Crime_and_Justice.pdf, accessed 2 February 2018. Hine, David (1993), Governing Italy. The Politics of Bargained Pluralism, Oxford: Clarendon Press. Johnston, Michael (2005), Syndromes of Corruption: Wealth, Power and Democracy, Cambridge: Cambridge University Press. Kronman, Anthony T. (1983), Max Weber, Stanford: Stanford University Press. Longo, Mariano (2014), ‘Mafia-like Culture and Its Function in a Newly Formed Italian Criminal Organization. The Case of Sacra Corona Unita’, pp. 117–131 in Nicoletta Serenata (ed.), The ‘Ndrangheta and Sacra Corona Unita: The History, Organization and Operations of Two Unknown Mafia Groups, Cham, Switzerland: Springer. McCarthy, Dennis MP (2011), An Economic History of Organised Crime: A  National and Transnational Approach, London and New York: Routledge. Newell, James L. (2005), ‘Judicialisation and the Americanisation of Italian Politics’, Journal of Modern Italian Studies (10)1: 27–42. Newell, James L. (2006), ‘Organised Crime and Corruption: The Case of the Sicilian Mafia’, pp. 147–175 in Petrus C. Van Duyne, Almir Maljevic, Maarten van Dijk, Klaus Von Lampe and James L. Newell (eds), The Organisation of Crime for Profit: Conduct, Law and Measurement, Nijmegen: Wolf Legal Publishers. Paoli, Letizia (2000), ‘Il crimine organizzato in Italia e in Germania’, pp. 85–122 in Vincenzo Militello, Letizia Paoli and Jörg Arnold (eds), Il crimine organizzato come fenomeno transnazionale, Milan: Giuffrè Editore. Paoli, Letizia (2003a), ‘The Invisible Hand of the Market: The Illegal Drugs Trade in Germany, Italy and Russia’, pp. 19–40 in Petrus van Duyne, Klaus von Lampe and James L. Newell (eds), Criminal Finances and Organising Crime in Europe, Nijmegen: Wolf Legal Publishers. Paoli, Letizia (2003b), Mafia Brotherhoods: Organised Crime Italian Style, Oxford: Oxford University Press. Swedberg, Richard (1998), Max Weber and the Idea of Economic Sociology, Princeton, NJ: Princeton University Press. Tanzi, Vito (1995), ‘Corruption: Arm’s-length Relationships and Markets’, pp. 161–84 in Gianluca Fiorentini and Sam Peltzman (eds), The Economics of Organised Crime, Cambridge: Cambridge University Press.

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van Duyne, Petrus C. and Maarten van Dijck (nd), ‘All in the Dutch Construction Family: Cartel Building and Organised Crime’, https://pure.uvt.nl/portal/en/ publications/all-in-the-construction-family(1087fbb2-a41c-4c83-ac2d-77a​ 552025826).html/, accessed 19 February 2018. Varese, Federico (2011), Mafias on the Move: How Organized Crime Conquers New Territories, Princeton, NJ: Princeton University Press.

6 Political corruption and scandal

Introduction In the last chapter we considered the relationship between political corruption and organised crime. Thanks to the close connection between the two concepts, ‘organised crime’ and ‘corruption’ are often confused with one another or used interchangeably. This also seems to be the case with the concepts of ‘corruption’ and ‘scandal’. Yet the two are different. Corruption is by definition an illegitimate activity and therefore likely to remain hidden. Therefore, you can have corruption without scandal simply because corruption has not been revealed. Corruption will give rise to scandal only when it comes to public attention – but may not do so even then. It is possible that the revelation of corruption fails to produce a scandal, perhaps because it is of the ‘white’ variety (discussed in chapter 2) and therefore not of the kind that people take especially seriously, or about which they feel especially scandalised. Finally, the occurrence of a scandal is not dependent on the revelation of corruption, but can take place without it, quite independently of it. In fact, a scandal can take place not because corruption has occurred, but merely because it is presumed to have occurred;1 and it might also take place even without any such presumption whatsoever – this because it has been sparked by a misdemeanour other than corruption.2 In short, using the language of causality, we can say that corruption is neither a necessary nor a sufficient condition for a scandal to take place.3 If corruption takes place, then it may or may not give rise to a scandal. Likewise, a scandal can take place with or without the occurrence of corruption. Figure 6.1 shows the various possibilities. Corruption and scandal, then, are related in complex ways. In order to disentangle them we need a working definition of scandal, which will tell us about its

104 Has corruption taken place? Yes

No

Corruption in contemporary politics Has there been a scandal? Yes

No

The corruption has been revealed and has scandalised: there has been a corruption scandal The scandal has taken place either because corruption is presumed to have taken place, or because the scandal has been triggered by something other than corruption

Corruption has remained hidden or its revelation has failed to scandalise

Figure 6.1  The relationship between corruption and scandal

main characteristics and about the conditions that have to be fulfilled in order for a scandal to be ignited. Defining and characterising scandal Readers will know instinctively what a scandal is, and may be aware of some of the most famous ones. The Profumo affair occurred in the UK in the 1960s after the Minister for War, John Profumo, lied to the House of Commons about an affair he had had with a woman, Christine Keeler, who was also involved with the Soviet naval attaché. The Watergate scandal occurred in the US in the 1970s after it was revealed that five men acting on behalf of President Nixon had broken into the Democratic National Committee offices in the Watergate complex in Washington, DC to install listening devices. The IranContra affair occurred in the US in the 1980s after it was revealed that the Reagan administration had sold weapons to Iran to secure the release of American hostages in Lebanon and had used the proceeds for the illegal funding of anti-communist rebels, the Contras, in Nicaragua. The Monica Lewinsky scandal occurred in the US in the 1990s after allegations were made that President Clinton had had an inappropriate sexual relationship with a White House intern, Monica Lewinski, and Clinton’s denials led to charges of perjury against him. The Lehman Brothers scandal broke in 2008 after the Lehmans’ investment bank collapsed and it was alleged that it had used accounting fraud to boost its financial position. Scandal, then, clearly has to do with some kind of transgression; in fact, the term as originally used (it first appeared in English in the sixteenth century)referred to transgressions of moral codes which were often religious in character. Today, as the above examples testify, it refers

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to a broader range of transgressions, ones no longer specifically linked to religious codes. Thompson (2000: 13) provides a working definition, suggesting that the term ‘refers to actions or events involving certain kinds of transgressions which become known to others and are sufficiently serious to elicit a public response’. Following Thompson, we can say that the term as currently used refers primarily to actions, events or circumstances which have the following characteristics. First, their occurrence or existence involves the transgression of certain values, norms or moral codes. Not all transgressions of values, norms or moral codes are scandalous, hence the word ‘certain’. In particular, some transgressions are too trivial to give rise to a scandal. For example, if an MP or other celebrity is fined for a minor motoring offence it is unlikely to excite much, if any comment. At the other end of the scale are transgressions so huge – genocide, for example – that the term ‘scandal’ seems out of place. People will obviously be horrified and express all of the sentiments of outrage etc. that we typically associate with being scandalised; but somehow we feel uncomfortable about calling such occurrences scandals, perhaps because we feel that to do so is to reduce their significance, to imply that they are of lesser gravity than they actually are.4 Thus, the term scandal tends to be applied to transgressions that are sufficiently serious to prompt the disapproval of others, but which fall short of being the most serious crimes. What are the types of norms and values whose transgression is likely to give rise to scandal? Values and norms change rapidly – for example, those governing relationships between people of different genders, races and sexual orientations – and what counts as scandalous activity in one context might be regarded as quite normal in another: extra-marital affairs or bigamy might be good examples here. But, despite the diversity and variability of the norms that are relevant to scandal, certain types appear to be more scandal prone than others. In particular, the norms governing sexual relations, financial transactions and the pursuit and exercise of power appear to be especially scandal prone. This may be because of their bearing on a person’s integrity: if we ask what it is that distinguishes transgressions that give rise to scandal from those that do not, one of the answers seems to be that those that do so (for example, the actions of Chris Huhne),5 but not those that do not (for example, the actions of Raoul Moat),6 challenge our previously held assumptions about the character or rectitude of the person(s) concerned. The actions of both Chris Huhne and Raoul Moat were shocking – if anything, the actions of Moat more so than those of Huhne. But whereas those of Huhne were inherently dishonest (in the sense of there being an intent to deceive), those of Moat, however appalling, were not.

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Norms whose transgression ignite scandals are not necessarily ones on which there exists widespread consensus. In fact it is precisely a lack of consensus, due to the constantly changing nature of norms, that more often than not underlies scandal. For example, the late-nineteenthcentury Salford gas scandal described by Garrard (2005) arose because of allegations of bribery made by a coal contractor, Ellis Lever, who was disgruntled that the practice of paying ‘commissions’ on contracts for coal and gas equipment excluded moral and upright contractors such as himself. It emerged as the scandal unfolded that, although widely regarded as disreputable, the practice was also widely perceived as having long been ‘implicit compensation, recognised by all sides, for the allegedly inadequate salaries and rightfully high social expectations of gas managers’ (Garrard, 2005: 14). This is an excellent illustration of the point that norms are multiple, and consequently our attitudes to events are necessarily shifting and ambiguous. As a result, when scandals arise they most often do so less because someone has done something universally recognised as wrong, and more likely because somebody had behaved in such a way as to place them, suddenly, on the wrong side of a constantly shifting moral borderline (Garrard, 2005: 25). Just as the transgression of some norms is more likely to give rise to a scandal than the transgression of others, likewise, transgressions of norms by some people are more likely to give rise to scandal than the same transgressions by others. Obviously, much depends on the visibility and importance of individuals, and this is the second characteristic. Put simply, if I were to be caught shoplifting, then the news would be much less likely to provoke a scandal than if the prime minister were to be caught doing so. As Thompson puts it: ‘All citizens may be formally equal before the law, but not all transgressors are equal in the court of scandal’ (Thompson, 2000: 15). True, in the first case, the revelation may give rise to a sense of shock among my friends and acquaintances as deep as the sense of shock that would arise among the general public in the second case. But scandal is more than just a feeling of shock: among other things, it involves the expression of shock among a group of people wider than those the person is acquainted with. Much also depends, besides how well known the people are, on the nature of the positions they occupy and what, as a consequence of holding those positions, is generally expected of them in behavioural terms. We normally expect better behaviour from priests than we do from footballers. Hence, if news breaks that the archbishop of Canterbury has been cheating on his wife, then it will give rise to a far bigger scandal than if news breaks that David Beckham has been doing so. The lesson appears to be that if individuals, through their positions or

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otherwise, espouse particular norms or beliefs, then they are especially vulnerable to scandal if their private lives are subsequently revealed not to meet those standards. Much also depends on the number of people involved. Although transgressions by those in lower-status occupations are less likely to give rise to a scandal than transgressions by those in more exalted positions, the humble are not immune. What appears to matter is the public visibility of a role. Thus, ‘single directors of banks can easily produce scandals; ordinary bank clerks rarely manage it. Gas managers can induce scandals; gas fitters cannot unless their particular “fiddles” occur on a systemic scale, and only sometimes then’ (Garrard, 2005: 17). In addition, scandals may be as much concerned with secondary transgressions as with the original transgression itself. For example, in the Profumo affair there is debate about how significant the Minister of War’s transgression (having an affair with someone – Christine Keeler – who was also sleeping with a Soviet naval attaché) actually was; but it was his denial (lie) to Parliament that he had any improper relations (i.e., a secondary transgression) that proved his undoing. Similarly, Nixon’s fall over the Watergate scandal had more to do with his attempts at a cover-up than with the original transgression (breaking into the Democratic Party’s campaign headquarters). So, exposure of the original transgression can prompt an intensifying claim/denial/counter-claim cycle which becomes more important than the original transgression itself – which throws a spotlight on the third characteristic of scandal, namely, that the occurrence of the events or incidents is typically secret or concealed but is subsequently found out or is strongly believed to exist by individuals other than those involved, that is, by ‘non-participants’. If scandal involves a process of making public a transgression, or an alleged transgression, then a fourth characteristic of a scandal is that some ‘non-participants’ will disapprove of the actions/events/incidents and may be offended by them. This does not mean that people are necessarily genuinely upset by what has happened or that the people themselves rigorously uphold the norm/value/standard themselves. Often, you can have scandal which is based on little more than mild disapproval, but amusement at seeing a government minister caught with his pants down. Nobody was particularly upset or angry when news broke that former Prime Minister John Major had had an affair with former minister Edwina Curry, for example. But you need what Thompson (2000: 30) describes as ‘the public articulation of opprobrious discourse’ in order for a transgression to become a scandal. Therefore, fifthly, there must be a public expression of disapproval, or some public denunciation of what has happened or is presumed to have

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happened. Disapproval by itself is insufficient unless it is actually voiced, and unless this voicing reaches a wide circle of people. For this reason, as we shall see later, the communications media play a crucial role both in triggering scandals and in the way they subsequently unfold. Finally, a scandal involves the revelation of information that threatens the reputation of the person(s) involved and therefore it unfolds as a power struggle. We can think of scandals as power struggles because they create very strong incentives for those implicated in them to use cover-ups and denials, to fight back against their accusers, as part of a struggle to ward off the threat to their power resources that is entailed by the attack on their reputations. Reputations are time consuming and arduous to establish, but very quick and easy to lose, as any second-hand car dealer knows very well. His reputation as a trustworthy trader is his most crucial asset (Thompson, 2000: 248) and he might be put out of business altogether by the sale of just one dodgy car. Former Italian Prime Minister Silvio Berlusconi’s oft-repeated response to the various allegations of wrong-doing made against him – that they were the work of politically motivated prosecutors – illustrates very clearly the idea that scandals are power struggles. Something very interesting follows from this: because of what is at stake, the struggles that constitute scandals can be expected to be intense (as the example of Berlusconi illustrates), but in some instances the costs involved – especially those involved in denial or cover-up – may be such that perpetrators decide to avoid them, concluding that their reputations are best served by strategies of damage limitation. Under these circumstances, they may themselves choose to reveal the wrong-doing of which they are guilty, aware that any damage they suffer is likely to be lessened by a policy of frankness from the start. For example, they may be aware that news of their misdemeanour is about to break and decide that public opprobrium will be tempered by a clean confession that pre-empts announcements made by others. In that way they retain some control over the flow of information, and this will also assist the process of damage limitation. A very good example of this came in the run-up to the UK general election of 1992, when then leader of the Liberal Democrats, Paddy Ashdown, decided to confess to a brief affair he had had with his secretary, Tricia Howard, in 1987. When he became aware, after the affair had ended, that Ms Howard was going through a divorce, he told his solicitor of the relationship, fearing that his name might be mentioned. The solicitor made notes of the conversation and placed them in his office safe. Mr Ashdown then became aware that News of the World reporters were offering Ms Howard large sums of money for her story of the

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relationship and called his solicitor, who discovered that the notes had been stolen from his office safe. Although an injunction was obtained to prevent the details becoming public, it did not apply in Scotland, and Ashdown heard that a story was to be run in the Scotsman. He therefore decided to call a press conference (Thompson, 2000: 142–3). The decision seems to have been a sensible one: ‘screaming tabloid headlines did nothing to prevent his personal popularity rising, after he had made his public statement, from 34 to 47 percent according to polls, while his party moved ahead from 13 to 15 percent (Sarasota Herald Tribune, 1992)’ (Newell, 2010: 3). Had he sought instead to adopt a strategy of denial, he would not have been able to prevent the scandal ‘from escalating into a prolonged struggle over the accuracy or otherwise of [such] denials, with all the dangers inherent in attempting to conceal evidence and ensure the complicity of others’ (Thompson, 2000: 141). This case would appear to illustrate a general rule, which is that in deciding whether to incriminate themselves perpetrators must first weigh the costs of denial – in terms of the risks, and the consequences of denials being shown to be false – against the costs involved in the revelation of the initial misdemeanour. In Ashdown’s case, involving a relatively minor transgression, the latter were outweighed by the former. In other cases, strategies of denial may simply be unavailable, perhaps because the scandalous events take place in public, in which case perpetrators have no choice but to engage in damage limitation – although in such instances the strategy is as likely to be based on an attempt to obtain mitigation, as on a simple confession of guilt – as the case of Paul Farrelly illustrates. Late in 2010, Mr Farrelly, a Labour MP, became involved in a physical confrontation in a House of Commons bar with a newspaper seller, who informed the Daily Mail that he intended to make a complaint to the police. Mr Farrelly is reputed to have said: ‘It is not good to rise to provocation and you could call it a John Prescott moment if you like, but I was attacked and acted in self-defence like any ordinary person would’ (politics.co.uk, 2010). To sum up, then, a scandal is a phenomenon that typically involves (1) the transgression or alleged transgression of certain norms by (2) people in positions of public visibility where (3) the allegations become public, leading to (4) disapproval, (5) public expressions of that disapproval and hence (6) a struggle over the reputations of those involved. Political scandals Against this generic background, expressions like ‘sex scandal’, ‘financial scandal’ and so on draw attention to an implicit distinction in common parlance between different types of scandal. This is an issue

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that academic writers have addressed explicitly, and particular attention has been devoted to the question of what makes a scandal political. To say that it is one that involves a politician is too simplistic because politicians operate in a social and institutional network concerned with power, and it seems necessary to take this into account in any description. Broadly speaking, there are two approaches to what makes a scandal political. Markovits and Silverstein (1988) focus on the nature of the act or the transgression. They argue that political scandal derives from a violation of due process: ‘In our view, the critical feature of any political scandal is not the degree of personal gain involved nor is it the normative merit of the ends sought, but rather it is the presence of any activity that seeks to increase political power at the expense of process and procedure’ (1988: 6). This is why, for them, scandal can occur only in liberal democracies, because liberal democracies are founded on a tension between the need to use power but at the same time to ensure that use of that power conforms to due process, i.e. it is limited in its scope. It follows, therefore, for Markovits and Silverstein, that ‘at the core of each scandal [is] the quest for political power at the expense of due process and procedure.’ (1988: 7). This also means that scandals are political only when they involve an abuse of power at the cost of due process, which means that some, e.g., sex or financial scandals may not in fact be political scandals even if politicians are involved in them. An alternative and broader approach is provided by Thompson (2000), who argues that a scandal is political by its situation in a ‘political field’ and its relationship to what he describes as ‘symbolic power’. By political field he means ‘the field of action and interaction which bears on the acquisition of and exercise of political power’ (2000: 98), that is, the field of action and interaction shaped by the institutions of the state, of local government or of transnational bodies like the EU or the UN. By ‘symbolic power’ he means various resources like recognised competence, prestige and so on – resources which individuals can call upon in order to get people to do what they want by convincing them that what they want is legitimate. In this respect, symbolic power is to be contrasted with ‘coercive power’, whereby people get others to do what they want by the exercise of force or the threat of the exercise of force. Thus, ‘symbolic power’ or symbolic capital is an important resource/ instrument of political power. It sits alongside other resources such as good party organisation and solid financial backing. However, the immediate threat of political scandal is that it can deplete the supply of symbolic capital on which an individual’s power rests (and this can

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in turn affect other resources on which that power also rests). An individual’s reputation is at stake, and so, therefore, their credibility and therefore their capacity to intervene, persuade and influence people. So, while the substance of a scandal can appear to the general public to be relatively trivial – as in the case of Chris Huhne’s driving licence penalty points, for example – for the individuals involved it is in fact very serious, because it is related to power and can have severe consequences for the exercise of that power. Political scandals, therefore, are forms of struggle over symbolic power. The public disclosure of transgressions threatens the reputation and credibility of the individuals concerned, thereby destroying the symbolic resources they have built up, and therefore threatening the amount of political power they exercise. So, Thompson offers a broader approach to the notion of ‘political scandal’ than do Markovits and Silverstein: while they say that that scandals are political only when they involve an abuse of power, so that sex or financial scandals are not political simply because they involve a politician, Thompson’s position is that such scandals are political because they take place in the political field and involve symbolic power. On this basis, he identifies three types of political scandal. 1 Sex scandals. These involve the public disclosure of activities of political figures which constitute, or are perceived or presented as constituting, a transgression of the codes governing the conduct of sexual relations in the political field. These are struggles over symbolic power which can have serious political consequences (e.g., the Clinton–Lewinsky affair). 2 Financial scandals. These involve the disclosure of activities by political figures in the political field which involve an infringement of rules governing the acquisition and allocation of economic resources. These sorts of political scandal usually involve hidden linkages between economic and political power and are more likely to end up with prosecutions. 3 Power scandals. These involve the disclosure of activities which infringe the rules governing the acquisition or exercise of political power. This makes these scandals the purest form of political scandal, in so far as the norms being transgressed are precisely those which govern the wielding of political power. Power scandals may involve illicit financial transactions of different kinds, but finance is not at the root of them. The key thing is that the activities involved constitute a transgression of the rules and norms regulating the competition for and exercise of political power.

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The important point to emphasise is that sex scandals and financial scandals may not necessarily always be political scandals. They are political scandals when they occur in the political field, involve ­individuals in this field and have consequences within this field. Causes of scandals How, are scandals brought into being? What actors are involved? A scandal involves the transmission of allegations to a public, so, clearly, journalists are important. Colourful news stories have commercial value; journalists will want to pursue agendas through exposés; they are likely to have a commitment to the provision of entertainment and/or a search for the truth as they see it. But other actors are important too; because before potentially compromising information can be ­ transmitted by journalists, it has to be brought to their attention. First, we encounter the work of the whistle-blower, or the ‘person in an organization [who calls] attention to the illegal or immoral behaviour of others in the organization or of the organization itself’ (Seagull, 1995: 386). Traditionally, whistle-blowing has been discouraged by perceptions that it is ethically ambiguous, and by the possibility of organisational retaliation; but recently there has been growing legal protection for people willing to blow the whistle on wrong-doing,7 with a seemingly consequential shift in attitudes in the direction of a growing tolerance of it.8 Second, information might be brought to journalists’ attention thanks to the actions of people who leak information for a variety of possible motives. Leaking as the revelation of confidential information may expose wrong-doing (and thus overlap with whistle-blowing), but this is not invariably the case.9 And while blowing the whistle is a deliberate action, leaks may happen inadvertently.10 Third, as we have seen, scandals may be precipitated by perpetrators themselves; and fourth, while whistle-blowers, leakers and perpetrators are all people ‘on the inside’, scandalous information may also come to the attention of the media thanks to ‘outsiders’, such as freelance journalists, photographers and investigators. ‘Outsiders’ have grown in number, due to changes in technology – new digital and online technologies having greatly extended the opportunities for ordinary people to produce and disseminate news material – and thus changes in the organisation of news gathering, with the result that ‘[f]or the first time in our history, the news increasingly is produced by companies outside journalism’ (Kovach and Rosenstiel, 2006). Finally, scandals may be triggered by the actions of the aggrieved clients of organisations – as, for example, the scandals surrounding child

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sex abuse within the Catholic Church. Here, technological change has made it possible for individuals to come together, for example in webbased action committees, despite being widely dispersed geographically, and to do so with unprecedented rapidity.11 The unfolding of a scandal Once compromising information has escaped the control of transgressors and come to the attention of journalists, it must be transmitted to a smaller or greater number of ‘non-participants’ if a scandal is to ensue, and here the role of the mass media is crucial. Thanks to the growth and consolidation of the mass-circulation press, investigative journalism (where journalists increasingly look beyond official sources for their news) and new information technologies, scandals are ‘mediated events’ that extend well beyond the original transgressions that prompted them. But more than that, the unfolding of a scandal in the media can actually alter its character, because ‘[a] scandal is not merely something that is revealed but also something that is shown, reported, staged and kept alive day after day’ (Ekström and Johansson, 2008: 18). Consequently, ‘disclosure through the media, and commentary in the media, are not secondary or incidental features of [modern scandals]: they are partly constitutive of them’ (Thompson, 2000: 61). The modern ‘mediated scandal’ therefore has a number of distinctive characteristics, as compared with the traditional scandals that might have taken place before the rise of the mass-circulation press round about the middle of the nineteenth century. First, and most obviously, disclosure and disapprobation take place through mediated rather than face-to-face communication. Consequently, while a traditional scandal tended to be limited to a given locale and to take place at a specific time, there are no spatial or temporal limits to mediated scandals: they can become national and even global events which persist across time. Hence, mediated scandals involve a far larger number of so-called ‘non-participants’ than do traditional scandals: potentially millions of people or more. Therefore, compared with traditional scandals, mediated scandals are more likely to involve both first-order and second-order transgressions. Because they are mediated, there is much stronger immediate pressure on the individual either to confirm or deny accusations and, if the latter, and if there is a second-order transgression, there is likely to be further investigation and accusation, denial and so on, thus generating a spiral of claim and counter-claim. As a result, the durability of a mediated scandal is potentially longer than that of a traditional scandal because it can be sustained by the media, which both decide on its level of prominence and shape it.

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Seen from this perspective, a mediated scandal has a life of its own, in four phases: the pre-scandal phase (with investigations leading to exposure); the scandal proper (with disclosure resulting in claim and counterclaim); culmination (when the scandal is brought to a head through an admission of guilt, a resignation, a sacking or, perhaps, prosecution); and aftermath, as the scandal gradually fades out, with public interest waning and media organisations deciding that it no longer merits the same levels of attention. During these phases, the scandal does not just ‘happen’. Its character and development (indeed, whether it develops at all) are shaped by the media. The scandal is literally played out in the media, which ‘operate as a framing device, focusing attention on an individual or an alleged activity and refusing to let go’ (Thompson, 2000: 74), and which often provoke second-order transgressions. Media personnel and organisations have definite reasons for generating and sustaining a scandal: financial gain, political objectives, professional self-conceptions, competitive rivalries (Thompson, 2000: 78–84). Almost all of the non-participants, meanwhile, experience the scandal purely through the media: it is a ‘mediated experience’. This is not to suggest that ‘mediated scandals’ are somehow superficial or that they always exaggerate what are small issues into big scandals, although this does sometimes occur. Mediated scandals generate discussion and debate about ethical and moral questions over which there is often widespread disagreement, and bring them to the fore; questions such as: Can our politicians be trusted? Are they corrupt? Should we proceed on the assumption that they are inevitably corrupt? As Giglioli (1996: 381) notes, ‘The knowledge people have of political corruption and the judgement they make about it result from the attention given to it by the news.’ In assessing the benefits or otherwise of mediated scandals, we should consider them in the context of their potential to be a useful regulating mechanism in liberal democracy. The importance of the role of the media can be seen in Italy in the case of the so-called Tangentopoli (‘Bribe City’) corruption scandal of the early 1990s. The media made a critical difference both to the development and to the impact of the scandal. By providing saturation coverage of the events (including live coverage of many of the trials), thus dramatising them, they ensured that those events took on extraordinary dimensions, even though corruption in Italian politics was nothing new. By framing the investigations and trials as events in an epic struggle between villains and the people – the latter represented by the magistrates, who were portrayed as popular heroes, the former by the indicted politicians – the media presented the events themselves as scenes in a

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morality play. Overlooking serious issues about the structural problems of corruption or the ethical issues raised, but developing ‘a moral drama where virtue triumphed in the end and the villains were exposed and punished’ (Giglioli, 1996: 388), the media ensured that the impact of the scandal would be huge, leading to the downfall of an entire political class, the disintegration of all the major parties that had governed the country since the Second World War and the complete transformation of the party system. It was not surprising that many politicians later branded the media coverage as having been not only one-sided but a witch hunt.12 Thanks to the significance of the media for the occurrence of scandal, it has been suggested that alongside sex, financial and power scandals there is a fourth type, qualitatively different from the other three in that it originates not with transgressions that take place outside the media but with transgressions that (in most cases) take place in and through the media. This is what Ekström and Johansson (2008) refer to as the ‘talk scandal’. This is essentially rooted in the tendency for an increasingly large proportion of modern political activity to be carried on in and through the media (these are by far the main vehicles of communication for politicians, who must use them for the permanent campaign, i.e., the use of governing as a means of mobilising support, and the mobilising of support as a means of governing effectively). As the term ‘talk scandal’ suggests, the transgression involved is something that is said. ‘First-order’ transgressions arise from private utterances deliberately leaked to the media; from private utterances coming to the attention of media personnel by mistake;13 from utterances made to undercover journalists posing as people from other walks of life;14 and from public utterances that cross the boundary of what is expected and acceptable (for example, at press conferences or during interviews).15 The latter kind in particular is revelatory of the distinctiveness of the talk scandal, namely, that it arises out of a transgression that is not merely uncovered and presented by the media, but is in a very real sense created and staged by them. That is, the transgression requires the involvement of the politician, but the journalist creates the conditions for it to take place and frames its discussion and thus, in that sense, manufactures it. ‘Secondorder’ transgressions reveal the overlap between talk scandals and other types of scandal in that they are utterances that are made in the attempt to ward off attacks provoked by first-order transgressions (however these may arise) and that transgress because they involve lying, evasiveness, trivialising, displaying ignorance and so on, but that, in terms of media focus and attention, can come completely to overshadow the ­first-order transgression.

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The prevalence of scandals The role of the media in the initial explosion and subsequent development of scandals draws attention to the fact that they are more likely to be found in liberal democratic regimes than in other types of regime, because, in the absence of free and independent media, allegations of misconduct are less likely to come to public attention. Another reason for this pattern is that scandals frequently arise out of transgressions or presumed transgressions of norms of due process – which are less well developed in non-democratic contexts than in democratic ones. Where scandals do take place in non-democratic regimes this is often due to power struggles between ruling factions, for which the fomenting of scandal involving opponents becomes a useful tool in the pursuit of rival ambitions. Of course this can and does happen in liberal democratic regimes too, especially those regimes in which the pattern of media ­ownership limits its autonomy from politics. Scandal seems to have become an increasingly salient feature of political life in many liberal democracies today. In chapter 2 we suggested some of the possible reasons for this: the growing risks of exposure thanks to technological developments; the activities of investigative journalists seeking to cater to the demands of audiences increasingly in the grip of anti-political sentiments; a growing tendency of politicians themselves to rely on allegations of wrong-doing in the search for ­political advantage. To these we may add the following. On the ‘supply side’, politics has become increasingly personal in the sense that there has been a growing tendency for parties – thanks partly to their growing reliance for communication on mass media, being aware that personality ‘sells’ better than policy – to appeal to voters by focussing more on the qualities and presumed competences of their candidates than on what they stand for. The successful politician today is thus a celebrity. Consequently, since 1978 there has been a progressive dismantling of the notion that certain areas of a public figure’s private life should remain sacrosanct. Nowadays if you become a public figure, or even just aim to become a public figure, you should expect the media to analyse all aspects of your current life and trawl through all aspects of your past life. This new culture has allowed investigative journalists to justify seizing the opportunities presented by new technologies to ‘dig for dirt’, as Chris Moncrief (2005: 75) has made clear: journalists, me included … regard politicians as fair game if they step out of line. They are constantly preaching at us, so if they err, then they get what they deserve. Time and again you get MPs delivering moralistic speeches

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in the House of Commons, and then jumping into a mistress’s bed the ­following day. It deserves exposure.

This has been matched by equally significant developments on the ‘demand side’. We live in an age of rapidly changing values, making it more difficult for those in positions of public visibility to know exactly where the line between right and wrong is drawn. At the same time, mass publics have arguably developed more stringent expectations of their politicians and have become more assertive in expressing them, thanks to a number of developments. In an effort to improve the performances of public agencies of various kinds, successive governments have insisted on the ‘new public management’ (with its emphasis on market competition and therefore on ‘customer focus’). Encouraging citizens to view themselves as consumers of government services, they have raised expectations, making citizens more demanding.16 Likewise, the considerable increase in recent years in the volume of legislation in areas relating to discrimination, fairness and probity (this thanks to the work of the Committee on Standards in Public Life and similar bodies) has led to an extension of accountability norms to a wide range of new areas such as disability, age, sexual orientation, freedom of information and so on. Organisations such as WikiLeaks have responded to this trend. Finally, today’s more exigent citizens are also much better educated than the generation that preceded them and thus much better equipped to assert themselves, as well as being much more politically ‘tuned in’. Against this background it comes as no surprise to find that the evidence does indeed point in the direction of a considerable increase in the significance of scandal in recent years. Using the LexisNexis online database (which contains full-text articles from UK national and local newspapers) to explore the occurrence in Guardian headlines of the word ‘scandal’ over the quarter century from 1985 to 2009 reveals that in the first five years the annual average occurrence of the word was 75. Between 1990 and 1994 it was 117; between 1995 and 1999, 130. It then declined slightly to 127 in the following five years, before rising to 153 between 2005 and 2009.17 The consequences of scandals What function do political scandals perform? To what extent can they be said to be damaging to liberal democracy? Might they help to reinforce it and, if so, how and to what extent? Inevitably, when a political scandal breaks the visible impact often seems to be one of crisis and a more or less widespread feeling that the system must be rotten to

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the core etc. A succession of political scandals, exposing corrupt practices, for example, can seriously undermine trust in politicians and the political system. And there is no doubt that scandals can have enormous popular appeal: people delight in seeing the high and mighty cut down to size, in being able to indulge and to have confirmed their feelings of righteous cynicism (Garrard, 2005) – which is precisely why journalists are so attracted to transgressions. If that is the case, then, given what we have said about talk scandals, we might ask about the extent to which the damage to the political system (in terms of trust in politicians and so forth) is done by the underlying transgression itself, as opposed to the way in which it is managed by the media. At the beginning of chapter 1 we noted an increasingly widespread sense of frustration with mainstream politics, linking it with perceptions of corruption and other forms of wrong-doing in public life. Clearly, there has to be a certain amount of actual wrong-doing for public attitudes to be affected, but what has the effect is people’s perceptions of the transgression, and both perceptions and the transgression itself are, in a very real sense, manufactured by the media. This shines a light on the impact of corruption, highlighting that it is important to distinguish between the impact of the activities of corruption and the impact of the exposure of corruption: they may not amount to the same thing (for example, the activity may be economically damaging in various ways, its exposure may be the catalyst for reform). It also shines a light on the role of the media generally in liberal democracies and the debate around the extent to which, in connection with the press and broadcast media in these systems, it is possible to talk of a ‘media malaise’.18 All that said, it is also important to view political scandals from the other perspective: that they are an essential part of the operation and regulation of liberal democracy. If we accept that varying degrees of corruption and of other forms of wrong-doing are inevitable in any political system, then political scandal can perform an important restorative and therefore – as far as the future is concerned – preventative function. As Markovits and Silverstein (1988: 9) put it, ‘The rituals of political scandals and their resolutions take the abstract values of liberal democracy and make them tangible and visible. They reaffirm for the citizenry that the process does work, that it does curtail the arbitrary exercise of political power, and that the political system by and large deserves the support and loyalty of all citizens.’ Besides helping to restore the status quo ante, scandals can, of course, lead to much-needed reforms: they force urgent problems to the top of the political agenda and create sometimes irresistible pressure for change. There is no doubt that they are important agencies of attitude change, probably serving to consolidate change: as

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we remarked earlier in this chapter, attitudes tend to be ambiguous, as they and the norms underlying them are constantly shifting. Scandals often arise from mismatches between competing imperatives, and hence different groups’ perceptions of right and wrong.19 Scandals and their resolution serve to resolve matters and restore consensus about where the boundaries lie. Conclusion In this chapter we have explored the notion of political scandal and sought to show how it differs from corruption, and how it is related to it. Political scandal is related not just to corruption, but to any form of transgression. Yet, having a comprehensive understanding of the concept of corruption and of its significance as a phenomenon requires an exploration of how the political scandal it may produce can develop in such a way as to have its own dynamic. This is essential if we are to understand some of the consequences of the exposure of corruption, which we will be looking at later in the book. It is also essential if we are to understand why, in recent years, there have been increasingly resolute attempts to prevent and control the spread of corruption. It is to this subject – the prevention and control of corruption – that I turn in the next chapter. Notes  1 This is obviously the case when someone is believed to have behaved corruptly but is in fact innocent. It might also be said to be the case when misconduct triggering a scandal is referred to as corruption but is in fact not so. An example of this sort of thing might be the UK MPs’ expenses scandal of 2009, which was widely referred to in the media as a corruption scandal. But, however reprehensible the MPs’ behaviour might have been on other grounds, whether it was an example of ‘corruption’ as such is very much a matter of debate – especially because much (though not all) of the behaviour in question broke no formal rules.  2 An example of this sort of instance might be the Alder Hey organ retention scandal which broke in the 1990s when an inquiry revealed that staff at Alder Hey Children’s Hospital, Liverpool and several other hospitals were retaining the tissue and organs of dead people for research purposes, without relatives’ knowledge.  3 To say that X is a necessary condition for Y is to say that if X takes place, then Y may or may not take place, depending on the presence of other necessary conditions, but that if X does not take place then Y will not take place. To say that X is a sufficient condition for Y is to say that if X takes place, then Y will take place,

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but that if X does not take place, then Y may or may not take place, depending on the presence of other sufficient conditions.  4 It is not just the gravity of certain atrocities that prevents us from using the word ‘scandal’ in connection with them, but also the fact that they are perpetrated openly. We tend to associate scandal with actions that the public had previously been ignorant of and that are suddenly revealed – which is obviously not the case when, for example, a mass shooting or a suicide bombing takes place. If it subsequently came to light that the authorities had failed to prevent the action due to shortcomings within the agencies of law enforcement and prevention, say, then that might provide the basis for a scandal.  5 Chris Huhne is a former MP and Secretary of State for Energy who, in 2012, was forced to resign his ministerial position after he was charged with perverting the course of justice in connection with a speeding case that had involved his wife claiming to have been the driver and accepting licence penalty points on his behalf.  6 Raoul Moat was the 37-year-old man who, in 2010, killed himself during a stand-off with police that had arisen while Moat was on the run, having shot his former girlfriend, her boyfriend and a police officer.  7 In the US, the False Claims Act was amended in 1986 to provide employment protection for whistle blowers and, in the ten years following, settlements and judgments under the Act rose from $86,479,949 to $1,093,508,535 (data from the False Claims Act Legal Center at https://www.taf.org/Public/Resources_​ by_​Topic/​FAC_​False_​Claims_​Act/​Statistics/​Public/​Resources_​by_​Topic/​FCA—​ False_​Claims_​Act/​Statistics.aspx?​hkey=​58d89481-​aa8e-4b52-8d06-​8a37a​44d​ 1ff9, accessed 19 February 2018). In the UK, the 1998 Public Interest Disclosure Act protects employees from dismissal who make disclosures of certain types of information, provided that they make them to the right ‘prescribed person’ (http://webarchive.nationalarchives.gov.uk/20070705192629/http://www. direct.​gov.​uk/​en/​Employment/​Employees/​Resolving​Workplace​Disputes/​DG_​ 10026552, accessed 2 February 2018). Under the Swedish legislation, ‘public servants can blow the whistle to anyone even the press and are protected against exposure’ (Fitzpatrick, 2003: 192).  8 Megan Lane (2004) writes: ‘The number of people calling a national helpline with concerns about misdeeds at work has more than doubled in the past five years. The helpline, run by the charity Public Concern at Work, offers independent advice to whistle-blowers.’ ‘No longer are whistle-blowers seen as traitors or tale-tellers, not least because it is far easier – and less risky professionally – to do so’ (Lane, 2004).  9 For example, politicians may engage in the selective leaking of information prior to an impending policy announcement in order to judge the likely public reaction to it, or to raise or lower the likely impact – in which case leaking begins to shade into the area of spin or news management. 10 A very good example of this occurred in April 2009 when UK Metropolitan Police Assistant Commissioner Bob Quick was forced to resign after having been seen carrying a secret document, visible to press photographers, on his way to a meeting in Downing Street (Dodd and Batty, 2009). As a consequence of the

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mistake, police were forced to anticipate a series of anti-terrorist raids designed to foil an alleged Al-Qaida bomb plot. 11 See, for example, the website of the Survivors Network of those Abused by Priests (SNAP) www.snapnetwork.org/, accessed 10 February 2018. 12 In doing so, they reflected a not uncommon tendency for those caught up in scandals to seek to defend themselves by donning the mantle of victimhood. At the height of what, in terms of scale, could perhaps be considered the UK’s answer to Tangentopoli, i.e. the MPs’ expenses scandal, one of the most highprofile of the MPs involved, former cabinet minister Hazel Blears, explained her resignation from the Government by saying, ‘I’d had four weeks of intense media pressure, the like of which I have never known, not just on me but on my husband, my dad, my family. At that point I’d had enough’ (BBC News, 2009). Meanwhile another MP wrote on her political blog that the scandal had created such an unbearable atmosphere at Westminster that everyone there feared a suicide, and that many of her colleagues were ‘beginning to crack’ (Johnson, 2009). 13 For example, the remark made by Prime Minister Gordon Brown during the 2010 election campaign, unaware that his lapel microphone was still switched on, that a woman he had just encountered on a walkabout was ‘bigoted’. 14 In chapter 2 Jack Straw and Malcolm Rifkind are mentioned as politicians caught out in this way, but the available examples are numerous. 15 For example, the remark made by Ken Livingston, in a radio broadcast in April 2016, that ‘when Hitler won his election in 1932, his policy then was that Jews should be moved to Israel. He was supporting Zionism before he went mad and ended up killing six million Jews’ (BBC London News, 2016). The remark was widely deemed to be anti-Semitic. 16 ‘[T]he proportion of consumers who expect any complaint they make in person to be dealt with either “immediately” or on the “same day” has increased from 56% in 2001 to 65% in 2003 … consumers in the same survey identified “Government” as the second worst industry for handling complaints effectively’ (DCA, 2004: 23). 17 Of course the growth could be an artefact of a change in the dimensions of the paper or of a shift in the focus of its coverage. It might also reflect a change in the use of language: perhaps a greater willingness to label as ‘scandals’ revelations that the paper might once have referred to in less highly charged terms such as ‘affair’ or ‘controversy’, or that it might have reported more circumspectly (using such terms as ‘gossip’ or ‘rumour’). Yet even if this is the case, it would itself be revelatory of a significant shift in the way that events in politics and other public spheres have been perceived (that is, in terms of the concept of scandal) in the UK and elsewhere: scandals are social constructions; so as long as something is labelled a scandal by large enough numbers of people sufficiently powerful to make the label stick, then it is a scandal. 18 A discussion of this issue is beyond the main concerns of this book. Briefly, the suggestion of a media malaise is that, while in an ideal world the media should reinforce democracy by providing scrutiny, representation and a forum for

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­ iscussion as well as raising awareness of issues and stimulating public engaged ment, in practice they facilitate the expression of a restricted range of views and fail to promote understanding, with the result of engendering cynicism and discouraging public engagement. 19 Again the examples are plentiful. The Alder Hey organ retention scandal (see note 2) once again comes to mind. Here the conflict was presumably between the moral imperatives surrounding informed consent and those surrounding the need to facilitate medical research. The MPs’ expenses scandal is another good example. The behaviour that came to light would have been seen by many as akin to embezzlement of public funds. Underlying the scandal appears to have been a perception on the part of the House of Commons authorities themselves that the expenses system offered a way of remunerating MPs at an appropriate level at a time when above-the-board pay increases through raising the basic salary seemed politically impossible.

References BBC London News (2016), ‘Ken Livingstone’s “Hitler supported Zionism” outburst BBC London News’, 28 April, https://www.youtube.com/watch? v=WdZShPMCgPc, accessed 2 February 2018. BBC News (2009), ‘Blears to face confidence motion’, 13 June, http://news.bbc. co.uk/1/hi/uk_politics/8097955.stm, accessed 2 February 2018. DCA [Department for Constitutional Affairs] (2004), ‘Delivering Justice, Rights and Democracy: DCA Strategy 2004–09’, www.dca.gov.uk/dept/strategy/ dcastratfull.pdf, accessed 24 July 2016. Dodd, Vikram and David Batty (2009), ‘Police chief Bob Quick steps down over terror blunder’, Guardian, 9 April, www.guardian.co.uk/uk/2009/apr/09/ bob-quick-terror-raids-leak, accessed 2 February 2018. Ekström, Mats and Bengt Johansson (2008), ‘Talk Scandals’, Media, Culture and Society 30(1): 61–79. Garrard, John (2005), ‘Scandals: An Overview’, pp. 13–29 in John A. Garrard and James L. Newell (eds), Scandals in Past and Contemporary Politics, Manchester: Manchester University Press. Giglioli, P. P. (1996), ‘Political Corruption and the Media in the Tangentopoli Affair’, International Social Science Journal, 149 (September): 381–94. Johnson, Simon (2009), ‘Hazel Blears admits three regrets: “Youtube, brooch and resignation timing”’, Telegraph, 13 June, www.telegraph.co.uk/news/ politics/labour/5517723/Hazel-Blears-admits-three-regrets-Youtube-broochand-resignation-timing.html, accessed 19 February 2018. Kovach, Bill and Tom Rosenstiel (2006), ‘The Elements of Journalism. What Newspeople Should Know and the Public Should Expect – Introduction’, Journalism.org, June, www.journalism.org/node/72, accessed 4 June 2016. Lane, Megan (2004), ‘The rise of the whistle-blower’, BBC News Online Magazine, 26 February, http://news.bbc.co.uk/1/hi/magazine/3485348.stm, accessed 2 February 2018.

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Markovits, Andrei S. and Mark Silverstein (1988), The Politics of Scandal: Power and Process in Liberal Democracies, New York and London: Holmes. Moncrieff, Chris (2005), ‘A Journalist Looks at Political Scandal’, pp. 61–76 in John Garrard and James L. Newell (eds), Scandals in Past and Contemporary Politics, Manchester: Manchester University Press. Newell, James L. (2010), ‘Sex, Lies and Public Money: Recent Scandals in Britain and Italy’, paper presented to the panel ‘Morality, Political Scandals and the Detachment of Citizens from the Political Process I’ at the 60th Annual Conference of the UK Political Studies Association, Edinburgh, 2 March–1 April. Seagull, Louis, M. (1995), ‘Whistleblowing and Corruption Control: The GE Case’, Crime, Law and Social Change, 22: 381–390. Thompson, John B. (2000), Political Scandal: Power and Visibility in the Media Age, Cambridge: Polity Press.

7 Anti-corruption: prevention and control

Introduction The connection between corruption and scandal is directly related to prevention and control, because it is largely due to the growth of corruption scandals in the UK and elsewhere that there have been increasingly resolute attempts since the early 1990s to prevent and control the spread of corruption. Scandals are important in driving efforts to tackle problems like corruption because they push problems – suddenly and ­dramatically – to the top of the political agenda and create the public pressure needed to ensure that they are taken seriously. With this in mind we consider first the conditions under which measures to tackle corruption are likely to be more or less successful, bearing in mind that any given measure may work well in some contexts, less so in others. Then we ask: Under what conditions will the authorities’ efforts to tackle corruption be greater or lesser, that is, more or less strenuous? The answer to this question may at first sight seem obvious: efforts to combat corruption will be greater when there is lots of it about. But in reality the answer is not so simple. In order for the authorities to make any attempt to combat corruption, they have to be aware of it; they have to want to combat it (which might not be the case if they are under insufficient political pressure to do so, especially bearing in mind that doing so will require resources they might prefer to spend on other things); and they have to have adequate means to do so: in some of the world’s poorest states this will typically not be the case, and indeed, precisely because of poverty these countries’ state apparatuses may be so corrupt that effective campaigns against corruption are well-nigh impossible. Finally, discussion of the factors influencing the efforts that the authorities are likely to make in tackling corruption naturally raises the question of what they are actually doing, which we address in the penultimate section.

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Conditions for the success of anti-corruption efforts Measures to combat corruption can be aimed either at preventing it from happening in the first place or, if it has already happened, investigating and punishing it in such a way as to prevent it from happening again. This means that anti-corruption measures can broadly be thought of as belonging either to a category of legislative efforts – efforts to combat corruption through legislation designed to deter it and make it more difficult – or to a category consisting of judicial and investigative efforts – the efforts of law-enforcement agencies to detect and punish it. Here we will focus mainly on legislative efforts, that is, anti-corruption policy, because the success of efforts to detect and punish corruption is partly dependent on having the right policy in the first place. The chapter considers anti-corruption measures under four headings: first, measures to reduce the incentives on private individuals to offer bribes and on public officials to accept them; second, measures to reduce the scope for discretionary decision making on the part of public officials. (Much if not all of what we understand corruption to be arises because an official or group of officials is empowered to take decisions and because private individuals want to influence those decisions, whether they be about spending public money, granting permissions of various kinds or whether or not to impose certain penalties. So all else being equal, limiting the power of officials to take such decisions should reduce the risk of bribery taking place in connection with them.) Third, measures to increase the risks of corruption, i.e., the likelihood of its detection; and fourth, measures to punish corruption once it has been detected and its existence has been proved in a court of law. Obviously, here the aim is to design punishments in such a way that not only is the public desire for justice seen to be satisfied, but they are effective in deterring the perpetrator from repeating the offence and others from committing the same offence. Measures to reduce the incentives to offer and/or to accept bribes Many of the potential policies belonging to this category have been especially popular among supporters of the neo-liberal approach to economic management (for which Margaret Thatcher and Ronald Reagan were famous), their argument being that the most powerful way to reduce incentives to offer and/or accept bribes is simply by reducing the scale of government. Since much of what we think of as corruption arises from the state’s capacity to spend money, and thus involves the bribery of public officials engaged in decisions about the allocation of contracts for the supply of goods and services, – the suggestion is that if

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you reduce the scale and extent of the state’s activities, then corruption will go down, because there is now less public money for officials to allocate. Moreover, the neo-liberals argue, since corruption also arises from the state’s capacity to regulate what goes on in the private sector through the issue of licences, permits and so forth, if you limit the extent of public red tape and bureaucracy by eliminating these, this too should help reduce the level of corruption where it exists. If all this is true, there are two major ways in which the ‘state downsizing’ for which neoliberals argue can be achieved. One way is by the abolition of specific state activities and/or programmes of public expenditure, and here the neo-liberals do appear to have a point: if the state were to abandon the so-called war on drugs, for example, legalising their production, sale and consumption, there would no longer be any possibility of law-enforcement officers either being offered or accepting bribes in this area. To take another example, gambling used to be outlawed in large numbers of states in the US, but has now largely been legalised in many of them, with the consequences that there was a decline in corrupt receipts by the police and the authorities were able to raise money for needed services without having to raise taxes. In some cases the measure may have contributed to urban regeneration, as in the case of Atlantic City, where legalisation in 1978 led to the city becoming a significant tourist destination, revitalising what had previously been a run-down slum community.1 EU expenditure on the Common Agricultural Policy (CAP) has given rise to fraud and associated corruption which, over the years, has cost EU tax-payers thousands of millions of pounds (Nelken, 2003: 221). So, again: abolishing the CAP would automatically abolish fraud and corruption in this area. A second way in which government downsizing can be achieved is through privatisation. And here the neo-liberal argument is that by removing certain assets from state control you convert ‘discretionary official actions into private, market-driven choices’ (Rose-Ackerman, 1999: 35). Again, you reduce the incentives for corruption; that is, whereas the official involved in running a public enterprise can afford to make corrupt decisions regardless of their consequences (because the security of their position is ultimately a matter of political decision making), the same individual involved in running a private enterprise knows that the security of their position depends on making commercially sound decisions, and so has an incentive to make decisions with that in mind, no matter how much those affected by the decisions may attempt to bribe them. While all this may seem very straightforward and difficult to gainsay, in fact the position is less straightforward than it appears at first sight,

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because under some conditions the abolition of state activities and/or programmes of expenditure may not reduce corruption and may even increase it. For example, if a government were to seek to reduce corruption in the issuing of licences required to start up business enterprises by reducing the number of licences each entrepreneur was required to obtain from ten to just one, the officials responsible for issuing the one remaining licence might simply have access to higher bribes (Rose Ackerman, 1999: 40). Likewise, ‘[d]e-regulating in one [geographical] area may [simply] increase corruption elsewhere’ (Rose-Ackerman, 1999: 40), as happened in the case of onions exported from Niger to Côte d’Ivoire. Onions are very popular and highly prized in Côte d’Ivoire and are thus a valuable source of income for neighbouring Niger, where they are grown. A successful effort by the US Agency for International Development to reduce corruption in Niger by reducing the number of checkpoints established by police and customs officials along onion transport routes ‘led to an increase in payoffs [bribes] and tax levels in Côte d’Ivoire as the onions neared their destination’ (Rose-Ackerman, 1999: 41). The lesson from this seems to be that if deregulation is to be successful in reducing corruption, then it has to be systemic, going right across the board and possibly even crossing national boundaries. Second, while simply abolishing specific government activities, such as the suppression of drugs, must necessarily eliminate corruption in the area of activity concerned, ‘a general program to shrink the size of government will not necessarily reduce corruption’ because, while ‘[p]rogram elimination removes the corrupt incentives that accompanied it … budget cutbacks that leave the program intact may not’ (­Rose-Ackerman, 1999: 40). For example, a government may reduce overall levels of public expenditure and thus the number of contracts that it has available. Some firms which previously supplied the state with goods and services will find markets for their products elsewhere, but some will not. ‘Domestic military contractors are usually in this category’ (­Rose-Ackerman, 1999: 41). What might then happen is that firms which are unable to find other customers for their products ‘bribe to obtain a share of the shrinking pie of government business. The total quantity of bribes might fall, but the bribe per project can rise’ (­Rose-Ackerman, 1999: 41), with the result that, as measured by the overall amounts of money involved, the level of corruption remains the same as before. Third, general cutbacks in public expenditure may actually lead to an increase in corruption. For example, cuts in expenditure may lead to a reduction in the number of officials issuing driving licences, passports etc., so that getting these things takes much longer than before. In such

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a case the likely outcome is that corruption increases as long queues and big delays create an incentive for people to offer to pay ‘speed money’. Now consider privatisation: while it appears to make sense to argue that privatisation reduces corruption by ‘converting discretionary official actions into … market driven choices’ (Rose-Ackerman, 1999: 35), experience has shown – notably in the countries of Eastern Europe and the former Soviet Union – that the process of privatisation ‘is [nevertheless] fraught with corrupt opportunities’ (Rose-Ackerman, 1999: 35). For example, when a public utility is privatised, by definition it has to be sold to private individuals, and the most common way of doing this is by means of a public auction, with shares in the utility going to the highest bidders. Bids will be high or low depending on the perceptions of those submitting bids of the likely performance of the utility in question. Under these circumstances, ‘corrupt officials may present information to the public that makes the company look weak while revealing to favored insiders that it is actually doing well. The insiders are then the high bidders in what appears to be an open and above-board bidding process’ (Rose-Ackerman, 1999: 36). This appears to be one of the reasons why, in the former Soviet bloc, ‘the former nomenklatura (… the various elites from the communist era)’ (Holmes, 2003: 198) were disproportionately represented among the shareholders of newly privatised companies in the period following the collapse of communism. One final and self-evident problem with government downsizing as a means of reducing the incentives to engage in bribery is that there are large numbers of spending and regulatory programmes which simply cannot be cut back or eliminated. For example, states cannot give up collecting taxes, so corruption in the collection of taxes cannot be solved by this means (Rose-Ackerman, 1999: 44). Most would also agree that states cannot simply give up spending money on attempts to control environmental pollution, so again, corruption in this area cannot be solved by this means. This brings us to the second category of anticorruption measures: measures to reduce the scope for discretionary decision making on the part of public officials. Measures to reduce the scope for discretionary decision making The potential for corruption in the interaction between public officials and private citizens is inversely related to the degree of latitude or discretion that officials have in terms of how they behave towards citizens. One of the reasons why corruption rarely arises in the sale of postage stamps is because this discretion is almost non-existent. Any customer faced with the demand for a bribe by a post-office clerk can simply go to another clerk or another post-office; while any clerk faced with the offer

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of a bribe in exchange for extra stamps will be dissuaded from accepting it by the knowledge that their sales of stamps and the amount of money deriving therefrom can be very easily monitored. There are three ways in which levels of official discretion can be reduced: (1) by simplifying laws; (2) by introducing user fees; (3) by creating competitive pressures within government. The simplification of laws is most obviously applicable in the area of tax collection. For example, corrupt exchanges in Italy have traditionally been ‘given significant encouragement by the complexity of the relevant [fiscal] legislation. … For, by making both inspectors and inspected aware of the near certainty that some irregularity could be found if it were searched for, the laws thereby gave the two sides a “built-in” incentive to deal with the situation by reaching some mutually beneficial accommodation’ (Newell and Bull, 2003: 39). So, in this instance, official discretion is rooted in the complexity of legislation and one way to reduce such discretion is by making the legislation less complex. In Mexico, for example, it was decided to alter the basis of small-business taxation so that henceforth firms below a certain size would pay a lump sum per person employed. The idea was that this was a simpler basis on which to levy taxes than alternative bases such as firms’ profitability, which can be more easily hidden or under-estimated. Although firms complained that the measure was unfair, it did succeed in raising revenue through reductions in tax evasion (Rose-Ackerman, 1999: 45). The introduction of user fees involves, in effect, converting illegal bribes into legal fees by making it possible for the users of scarce government services, such as the supply of passports, to get a faster service by paying an above-the-board fast-track fee. Here, the discretion of officials to decide whom to serve first – and thus the potential for bribery – is reduced by stipulating that those who get the preferential, faster, treatment, are the ones who are prepared to pay for it. For example, the UK Passport Office2 offers three levels of service to renew a passport, at three different prices: standard, up to one week, and one day. Another example is tradeable pollution rights. In 1990 the US government passed the Clean Air Act, under whose terms sulphur dioxide emissions would be controlled not by means of inspections and clean-up orders – a potential source of bribery – but by allowing firms to purchase ‘the right to pollute the air with a ton of sulfur dioxide, the leading cause of acid rain, for $1,500 through the Chicago Board of Trade’ (Allen, 1992). Allen (1992) reported: ‘The unusual pollution rights market, generally supported by environmentalists, is intended to encourage innovation among electric utilities as they prepare to cut sulfur dioxide emissions. Utilities that reduce sulfur dioxide emissions below their EPA-permitted level can

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profit by “selling” their unused pollution allowance to other companies.’ Although pollution rights do not eliminate the need for inspections and firms can still bribe officials to misreport the results of inspections, nevertheless they do, arguably, reduce the potential for corruption since firms that want or need to pollute beyond given levels can do so simply by purchasing pollution rights rather than through bribery. Creating competitive pressures within government starts from the recognition that in a good many instances public officials’ scope for discretion is rooted in the fact that their jurisdiction is defined by geography, thus giving them a ‘degree of monopoly power’ (Rose-Ackerman, 1999: 49) over citizens. For example, if officials with responsibility for issuing building permits are ‘each assigned [to] a different geographical area’ (Rose-Ackerman, 1999: 49), there is a high potential for corruption rooted in the fact that if you want to put up a building in any given area, there is only one official to whom you can apply for a permit. If, on the other hand, the officials have overlapping jurisdictions, thus giving ‘clients a choice of which bureaucrat to approach’ (Rose-Ackerman, 1999: 49), then the potential for corruption is reduced: a client faced with a demand for a bribe by the first official they approach can apply to a second official instead. And although this official too may ask for a bribe, the fact that none of them has a monopoly makes it possible for clients to ‘shop around’ and at least not have to pay very large bribes. Likewise in the area of law enforcement, where police corruption in the US, for example, has probably been kept in check at least partly because of the overlapping involvement of local, state and federal agencies in the field of drug enforcement (Rose-Ackerman, 1994). Measures to increase the likelihood of detection Self-evidently, the easier it is for law-enforcement officials to obtain relevant evidence, the greater the likelihood of detection, and there are at least three different ways in which this evidence-gathering can be facilitated. One is by giving at least one of the parties to a corrupt transaction an incentive to report matters to the police. Thus, ‘[i]n some countries, bribe payers are treated more leniently than recipients’ (Rose-Ackerman, 1999: 53), while in other countries the payment of bribes is not criminalised at all. In such circumstances, where bribe-payers receive benefits to which they are legally entitled (for example, connection to the telephone network, or the installation of an electricity meter) the chances are that they ‘are likely to arouse public sympathies, not blame’ (RoseAckerman, 1999: 54) and to see themselves as ‘extortion victims who would be better off in an honest world’ (Rose-Ackerman, 1999: 56). For this reason, ‘[s]uch bribe-payers are potential allies in an anti-corruption

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effort’ with ‘an incentive to report corrupt demands’ (Rose-Ackerman, 1999: 56). However, this strategy is much less likely to work where the bribe-payers receive a benefit to which they are not entitled (for example, a diver’s licence without proof of having passed the driving test) or a benefit that is illegal (such as police complicity in violations of the drugs laws). In both these cases the bribe-payers, like those receiving bribes, remain better off if the corrupt transaction remains undetected. A second strategy is to provide incentives for third parties to come forward with relevant evidence. For example, a number of countries make it possible for disappointed bidders for public contracts to sue for damages; clearly, if they can provide evidence that their lack of success was due to corruption on the part of other bidders, they are more likely to win their cases. Other countries have measures to reward or to protect whistle-blowers ‘within firms and public agencies who come forward with evidence of wrongdoing’ (Rose-Ackerman, 1999: 58). For example, the US False Claims Act3 ‘pays whistleblowers a share of the total penalties and other damages levied against firms for wrongdoing that has injured the federal government. The rewards are available to people both inside and outside the firm [and i]f the whistleblower brings suit and is successful, he or she can recover from 25 to 30 percent of the penalty’ (Rose-Ackerman, 1999: 58). As we noted in chapter 6, legal protection for whistle-blowers has been growing, along with a seemingly growing tolerance of the practice of whistle-blowing; yet the obstacles to it remain formidable. In the UK, for example, the 1998 Public Interest Disclosure Act provides whistleblowers with employment protection, as a consequence of which the number of cases brought to employment tribunals by whistle-blowers rose from 157 in 1999/2000 to 1,761 in 2008/2009 (Lewis, 2010: 1). However, it does not prevent employees who make disclosures from being blacklisted; it does not protect them from libel proceedings if the allegations turn out to be false; nor does it protect them from prosecution if disclosure of the information concerned is a criminal offence under some other law;4 and, most importantly, it provides no protection against the likely personal costs of making a complaint (which may include ostracism and other substantial psychological costs, even if employment is protected). Consequently, it seems probable that of the potential number of cases that could be revealed, thanks to whistleblower protection, the actual number will remain small for the foreseeable future. In any given instance, for whistle-blowing to take place the potential whistle-blower must first be satisfied that what they reveal is sufficiently wrong to justify complaint; then they must feel that they are in a position to make a complaint; must be satisfied concerning the likely

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consequences for the perpetrator; must weigh the likely personal costs of making a complaint; and, finally, must overcome the free-rider problem (Fitzpatrick, 2003: 193).5 Only if all of these hurdles can be overcome will a person blow the whistle. A third and particularly intriguing strategy making it easier for lawenforcement officials to obtain relevant evidence is suggested by the investigations that gave rise to the Tangentopoli scandal in Italy (see chapter 2). It appears that in that case public prosecutors were able to obtain evidence of corruption by large numbers of politicians and public officials by their shrewd deployment of a tactic based on the ‘prisoner’s dilemma’. This term describes a situation in which two actors each have to make a choice between two alternatives, where the consequences of the choice depend crucially on the choice made simultaneously by the other actor and where the two have to decide separately. In the classic formulation of the dilemma two individuals (we’ll call them Tom and Stuart) are held by the police in two separate cells, unable to communicate with each other and both accused of the same crime. They are both told the same thing: that if they both confess, they will each get four years in prison; that if neither confesses then they will each get two years; that if one confesses but not the other, then the one that confesses will go free while the other will get five years. Tom and Stuart are aware that it is better for them both to remain silent and take two years each than it is for them both to confess and get four years. But Tom is also aware that if Stuart confesses while he remains silent (which Stuart might be tempted to do because in that case he will go free) then he, Tom, will get five years. And he is not at all sure that he can trust Stuart. Therefore Tom concludes that the best course action is to confess: in that case, if Stuart does confess then he, Tom, will get four years, not five; while if Stuart remains silent, then he, Tom, will go free. Unfortunately, Stuart reasons in precisely the same way, so that the outcome is that they both confess and get four years rather than the two years that they might have done had they been in a position to communicate with each other and agree on how to respond. At the time of the Tangentopoli case media commentators suggested that preventive custody laws were used at least sometimes to create a kind of prisoner’s dilemma for suspects, thereby allowing investigators to obtain ready confessions. Like the procedures in force in other democracies, the Italian code of criminal procedure provides that if there are grounds for thinking there is a risk that someone accused of a serious crime will tamper with the evidence, escape or pose a danger to the public, then they can be remanded in custody. (A range of safeguards surround the use of such a measure so as to prevent its being

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(ab)used as a form of punishment before guilt has been established through a proper trial.) It has been suggested that during Tangentopoli investigators may have used this measure for the doubtful purpose of acquiring evidence by implying to defendants that they would be released in the event of a confession, or held in custody in the event of a refusal to cooperate. It is thought that this was partly responsible for the tendency, characteristic of Tangentopoli, for the confessions of those in custody to lead to voluntary confessions by those at large, in a sort of ‘domino’ effect as the investigations and the scandal unfolded and spread. Those outside prison were unable to communicate with those on remand. They would have been aware that they were at risk of being implicated by those inside and that if they were arrested, then they too might be held indefinitely if they refused to cooperate, but that if they presented themselves and confessed at an early stage, then they might be able to expect some leniency in court. Thus, after the initial instances of corruption in the Tangentopoli scandal had come to light, there was a veritable rush on the part of politicians, administrators and entrepreneurs to confess the part they had played in networks of corrupt exchange (Nelken 1996: 104), with the result that the confessions of one suspect led to those of another, and those to the confessions of still others and so forth. Measures to punish corruption, once detected The role of these measures is to discourage further acts of corruption, and at least two conditions must be fulfilled if they are to achieve this. First, the size of penalties must be appropriate. One might assume that the larger the penalties, the more effective they will be, but this is the case only if the size of the penalty is tied to the size of the bribes paid. If this relationship does not exist, then the attempt to combat corruption by this means quickly runs into the paradox that while the number of acts of corruption will be lowered, the high fixed penalty will increase the size of the bribes paid in those corrupt transactions. ‘If the penalty is high, officials must receive a high return in order to be willing to engage in bribery’ (Rose-Ackerman, 1999: 54). Second, legal definitions of corruption have to be pitched at the right level of detail and complexity so as to allow investigating officials to determine easily whether or not the behaviour they are examining constitutes an act of corruption. On the one hand, penalties cannot discourage further acts of corruption if legal complexity makes it easy for acts that should be classed as corruption to end up being defined as something else instead. For example, some legal systems make a distinction between corruption and extortion. If the penalties are different

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­ epending on how the action in question is classed, then defendants will d have a strong incentive to try to ensure that their actions are classed in the way most favourable to them. For example, if a corrupt entrepreneur can claim that refusal to pay for public contracts would have resulted in their going out of business, then they might successfully portray themselves as a victim of extortion rather than as a corruptor and thus go scot-free, even though the facts of the case are such that in reality they ought to be punished. On the other hand, insufficient detail in the relevant laws might also make it easy for acts that should be classed as corruption to end up being defined as something else. For example, della Porta and Vannucci (1999: 61) note that Italian law is silent concerning those situations in which bribes are paid to politicians and officials not for some specific service but as a general retainer allowing the bribe-payer to demand corrupt favours whenever convenient – thus making it difficult if not impossible for investigators to demonstrate that ­corruption has in fact taken place in such instances. Strenuousness of anti-corruption efforts The efforts that the authorities make to combat corruption through measures like those described above vary considerably, even between countries that are otherwise quite similar. At one end of the spectrum, in the UK a vast swathe of anti-corruption and related legislation since the early 1990s6 culminated in the passage of the Bribery Act of 2010. This measure places such extensive obligations on individuals and companies that it has been called ‘the toughest anti-corruption legislation in the world’ (Verschoor, 2011).7 At the other end of the spectrum, notwithstanding Tangentopoli, many have judged Italy’s record since 1992 as disappointing: for example, Alberto Vannucci (2012: 257–63) argues that some positive measures have been outweighed by ad personam legislation favouring Silvio Berlusconi, which has hampered anti-corruption efforts because either its symbolic or its practical implications, or both, have made the work of the judiciary more difficult. Some of the greatest obstacles in the way of reform efforts have been faced by the former communist countries, which in the years following 1989 were obliged to establish and embed new political structures embodying the rule of law just at a time when, due to the fragility of the new structures themselves, the simultaneous process of economic transformation, the communist legacy and the poor role models offered by the West, ­corruption seemed to be widespread and growing.8 Considerable variation in the efforts of individual countries is perhaps to be expected, bearing in mind the large number of variables likely

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to impinge on them. Thus, it seems reasonable to hypothesise that the strenuousness of the authorities’ efforts will depend at the very least on the extent of the problem (its relationship with anti-corruption efforts probably taking the form of an inverted ‘U’); the nature of the political culture; the resources available to tackle the problem; the degree of public/political pressure surrounding it; officials’ perceptions of the consequences of corruption and of the exposure of corruption; and the power of those who would lose from, and therefore resist, anticorruption efforts. All of these are likely in turn to be influenced by a host of further variables deriving from international pressures, domestic ­pressures and the nature of the institutional set-up. One of the most well-known international pressures has come from  the initiative of the OECD in adopting an anti-corruption programme from 1989 (probably as a result of US pressure). This involved seeking to persuade countries to agree to a Convention on Combating  Bribery of Foreign Public Officials, and resulted in the signatories agreeing to alter their domestic legislation to, among other things, deny the tax-deductibility of bribes in international business transactions. Pressures from the domestic environment derive not only from scandals, as we have seen, but also from election outcomes. ‘[I]n Britain, the change of government in 1997 put the Labour Party under immense pressure to address corruption in local councils. For it was aware of the importance of concerns about public standards in the downfall of the outgoing Conservatives and thus that some well-publicized instances of corruption in Labour-controlled councils made it highly vulnerable to partisan attack’ (Newell, 2005: 165). With regard to the institutional set-up, all else being equal, democracies where voting takes place by CLPR are more likely to witness attempts to fight corruption than are democracies that have open lists. With closed-list systems, candidates’ chances of being elected depend on the party leaders, who determine the order of candidates’ list placements. With OLPR, where voters can express preferences among their chosen party’s candidates, a candidate’s chances of being elected depend on their success in competing with fellow candidates of the same party; this encourages the provision to voters of patronage benefits, which can easily degenerate into out-and-out corruption. Consequently, those who would lose from, and therefore resist, anti-corruption reforms are likely to be less numerous and/or powerful in the former than in the latter case. Geddes (1991; 1994), who investigated civil service reform in Latin America, argues that in Colombia and Uruguay voting by CLPR facilitated the reform effort, while Brazil and Chile both had open-list

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systems and failed to reform (cited by Rose-Ackerman, 1999: 201; Newell, 2005: 166–7). Reform is more likely in two-party systems with regular alternation in power (such as Britain and the US) than in multi-party systems with disproportionate access to corrupt exchanges (such as pre-1994 Italy, where the Christian Democrats where the mainstay of all feasible governing coalitions and the second-largest party, the Communists, languished permanently in opposition). While reforming parties may gain electoral support by advocating change, this has to be set against the loss of votes deriving from the reduction in opportunities for corrupt exchanges. Any party that advocates reform may therefore suffer a loss of votes to rival parties which outweighs any gain to be derived from the advocacy of a cleaner system, and this is more likely to be the case where its own access to corrupt exchanges has been greater than that of rival parties. Parties can in principle lose as well as gain votes when they introduce anti-corruption reform because no measure is cost free: even if no votes are corruptly gained, reform might still bring vote losses because it diverts resources from other areas. The party that moves first, in the sense of actually introducing reform, will suffer more losses than other parties, as voters will not hold the latter responsible for the reform. Therefore, reforming efforts are likely to be relatively few in multi-party systems with disproportionate access to corrupt exchanges. On the other hand, in two-party systems with regular alternation of power, parties will be evenly matched in terms of their access to corrupt exchanges; if they can collaborate to legislate change, neither party will lose votes and both will share in any benefits of reform. This may explain why civilservice reform designed to clean up the public administration, making it more meritocratic and less corrupt, came relatively early in Britain and the US and only later in other democracies. Finally, the example of nineteenth-century America suggests that the distribution of power between central and sub-national units of government is relevant for anti-corruption efforts. On the one hand, as the efficiency of government services began to loom large in voters’ minds, federal politicians found that the dispensing of patronage (which also consumed much time and energy) eventually became a political cost rather than a benefit. On the other hand, patronage was increasingly controlled by state and local party bosses whose interests were not necessarily congruent with those of federal politicians. Federal politicians thus supported reform because it was a way for them to reduce the power of rivals at lower levels of government (Rose-Ackerman, 1999: 206; Newell, 2005: 168).

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Anti-corruption regimes The institutional profiles of countries are therefore clearly significant in terms of the efforts they are likely to make to combat corruption – but what are they actually doing? We will explore this issue in more detail in the next three chapters, while here describing some of their joint, international efforts. Perceptions that the world is globalising, that it is becoming increasingly integrated economically, politically and socially, have gone hand in hand with perceptions that corruption and similar problems are increasingly spanning international borders and therefore increasingly in need of international cooperation to solve them. A significant development since about 1990 has been the emergence of novel international regimes in the field of corruption prevention and control, with the result that efforts have been made towards greater ­cross-national uniformity in anti-corruption matters. A ‘regime’ is simply a set of rules for political conduct. At the international level regimes can range from a treaty to govern states’ interactions in some limited area to the full panoply of rules surrounding the workings of an international organisation like the UN. In the field of ­corruption, the main regimes at the European level are: • GRECO: the Group of States against Corruption. GRECO was set up in 1999, thanks to a ‘partial agreement’9 of seventeen of the member states of the Council of Europe, and now includes all forty-seven members of the Council plus Belarus and the US. Its objective is to bring about improvement in the domestic anti-corruption legislation of each of its members by monitoring their compliance with the organisation’s strictures on the issue and through peer pressure. ‘It helps to identify deficiencies in national anti-corruption policies, prompting the necessary legislative, institutional and practical reforms. GRECO also provides a platform for the sharing of best practice in the prevention and detection of corruption’ (Council of Europe, nd). GRECO’s activities are of two sorts: first, cyclical evaluations by GRECO-appointed experts of the legislation and practice of member countries, through questionnaires and on-site visits, leading in each case to the production of a report and recommendations in relation to the country concerned; second, assessments of whether recommendations have been implemented satisfactorily, based on situation reports and supporting documents supplied by the country in question within 18 months of its evaluation. • OLAF: the European Union Anti-fraud Office. This was set up in 1999 as the successor to UCLAF (Unité de coordination de lutte

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anti-fraude), which, in light of the resignation of the EU Commission that year was perceived as having fallen short of the responsibilities placed upon it. OLAF’s purpose is to carry out investigations into allegations of fraud, corruption and similar forms of misconduct within EU institutions (internal investigations) and outside them whenever funds deriving from the EU budget are at stake (external investigations), and to advise EU institutions and their representatives on the development of anti-fraud legislation and policies. OLAF is part of the EU Commission but has budgetary and administrative autonomy, which are designed to make it operationally independent. Under a Director appointed by the Commission, it consists of about 500 staff, about 160 of whom are investigators. Investigations are instigated either by OLAF on its own initiative or at the behest of an EU agency or an EU member state. Both internal and external investigations culminate in the drafting of a report of the findings that is sent in the former case to the EU body concerned, in the latter case to the member state(s) concerned. Although reports include recommendations on action to be taken, it is up to the competent representatives of the bodies receiving them to decide what, if anything, should follow from them. • Regional Anti-corruption Initiative: Previously the Stability Pact Anticorruption Initiative (SPAI) and renamed in 2007. SPAI was set up in 2000 on the initiative of the Stability Pact for South Eastern Europe, an entity which, since 1999, has brought together the states of the region (Albania, Bosnia-Herzegovina, Bulgaria, Croatia, Moldova, Romania, Serbia and Macedonia), the EU member states and a range of other states and international organisations. The purpose of SPAI is  to provide incentives to the states of South Eastern Europe to reform their domestic institutions and procedures in ways that will enhance their capacity to prevent corruption. It fulfils its purpose through the adoption of bi-annual work plans designed to enable it to assist members in raising public awareness, identifying needs, sharing best practice, cooperating in anti-corruption measures and implementing international anti-corruption agreements. As well as being influenced by the above regional-level structures, European states’ anti-corruption efforts and strategies are also influenced by organisations with a global reach: the OECD, the UN and international non-governmental organisations (NGOs). The UN’s Convention against Corruption (UNCAC), which came into force in 2005, requires its signatories to take effective anti-corruption measures (by ensuring the existence of independent anti-corruption bodies, the transparent

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r­ecruitment of public officials, codes of conduct etc.); to criminalise a wide range of corrupt acts; to work collaboratively to prevent and investigate acts of corruption and to prosecute those involved; to provide cooperation and assistance to each other in attempting to recover the proceeds of corruption. NGOs have helped to enhance anti-corruption efforts and capacities through the full range of activities used by pressure groups to promote a cause, including the provision of advice. For example, Transparency International had a significant input into the development of the UNCAC. Assessment of the impact of the actions of the international regimes and NGOs is rendered difficult by the impossibility of accessing both evidence of what would have happened otherwise and direct evidence of corruption. On the one hand, those influenced by the realist school of international relations, according to which the world is essentially anarchical, with international institutions lacking the capacity to enforce decisions, have a pessimistic view. On the other hand, liberal internationalists, for whom humans are reasonable as well as egotistical have a more optimistic view. Of these two perspectives, realism captures a part of the truth. For example, notwithstanding the OECD Convention on Combating Bribery of Foreign Public Officials, when it came to light in 2006 that the UK Serious Fraud Office was investigating allegations that British Aerospace had been involved in bribing members of the Saudi royal family to obtain a lucrative arms contract, Prime Minister Tony Blair was able to put a stop to the investigations, and in doing so relied on ‘public interest’ arguments (e.g., concerning jobs). Clearly, the decision had been driven by the calculation that in this case there was more to be lost than to be gained by action consistent with international treaty obligations. However, this is not to say that such obligations count for nothing, which is plainly not the case. Regional and global regimes like GRECO and the UNCAC do place national-level policy-makers under some pressure to take action and to account for themselves to international partners on whom they are dependent in various ways. GRECO, for instance, publishes its evaluation and compliance reports online. When a headline on its website declares that a country like Finland ‘has an effective system for preventing corruption among members of parliament, judges and prosecutors’ but that ‘there is still room for improvement – particularly with regard to conflicts of interest among parliamentarians’ (Council of Europe, 2013), this must have a significant impact. The UNCAC also carries some force: it is not just a document to which those signing up have put their signatures, but a set of institutions designed to drive forward implementation of the Convention and ­procedures for

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monitoring signatories’ compliance with it. So, anti-corruption efforts take place within a context of multi-level governance, within and above states, and this is not without consequence for the incidence of the phenomenon itself – or at least for the strenuousness with which the authorities tackle it. Conclusion In this chapter we have attempted to provide an overview of the field of corruption prevention and control by discussing, first, the conditions under which measures to combat corruption will be more or less successful and, second, the conditions under which measures are most likely to be adopted. While there is some credibility in neo-liberal arguments in favour of government downsizing as a means of reducing or eliminating incentives to engage in bribery, nevertheless, downsizing appears to work only under certain, rather tightly circumscribed conditions. Bearing in mind that in any case downsizing can go only so far, we then looked at an alternative approach to the fight against corruption: reducing the official discretion in decision-making that is a necessary condition for corruption to exist at all. We then examined judicial efforts to combat corruption, looking in particular at some of the conditions that facilitate the gathering of evidence and thus maximise the chances of corruption being detected, and at two of the conditions that seemingly have to be fulfilled if penalties for corruption are to be successful in deterring it. With regard to countries’ efforts to combat corruption, domestic pressures, international pressures and the countries’ institutional profiles all have an impact on the extent of their commitment to reform, and the measures they are actually taking are now heavily influenced by the international institutional context. The significance of institutional factors for anti-corruption efforts will be appreciated more fully when, in the following chapter, we examine Italy as a case study of corruption in the liberal democracies. Notes 1 Of course, one might want to argue in the case of gambling – and perhaps also in the case of drugs – that the gains of legalisation are outweighed by the costs: one of the arguments of opponents of the original proposals in the UK’s 2005 Gambling Act, for example, was that allowing huge, 24-hour, Las Vegas-style casinos would lead to problem gambling, with the poor, in particular, being vulnerable to spending money they couldn’t afford on the promise of a very small chance of winning.

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2 https://www.gov.uk/government/organisations/hm-passport-office, accessed 7 February 2018. 3 See chapter 6, note 7. 4 For example, in 2003 Katheryn Gun, a translator employed by the British government’s GCHQ (Government Communications Headquarters) passed to the Observer newspaper an e-mail, purportedly from Frank Koza, a US National Security Agency Official, supposedly asking British officials to tap the telephones of United Nations delegates in the run-up to a vote on war in Iraq. Such actions would have been illegal in international law. Ms Gun was sacked from her job (it is an offence to disclose intelligence and security information without authorisation) and she was charged under the Official Secrets Act. Ultimately the case was dropped amid much speculation that the decision not to proceed had to do with the fact that the defence was planning to argue that Ms Gun was attempting to stop an illegal war and that this trumped any obligations under the Official Secrets Act – a line that might have forced the revelation of documents, potentially embarrassing to the Government, concerning the advice it had received about the war’s legality. 5 Ms Gun seems to have been driven by the force of high ideals: in a BBC Newsnight interview she explained her actions by saying that the e-mail had angered her, adding: ‘I felt that what they were suggesting we did was wrong, both legally and morally. And I had a lot of questions about the war as well, as did millions of people around the world’ (BBC News, 2004). Otherwise, she might have been dissuaded from her course by any one of the aforementioned disincentives. The free rider problem refers to the incentive on the recipients of public goods (goods which have to be made available to everybody if they are to be made available to anybody, e.g. a clean environment) not to contribute towards the costs of their provision – resulting in the goods being underprovided. 6 Much of it was prompted by the work of the Committee on Standards in Public Life, set up in 1994, in the wake of a long series of allegations of abuse, as a standing body ‘to advise the Government of the day’ (Cabinet Office, 2001: 3). 7 See chapter 4, notes 2, 3 and 4. 8 Discussed in more detail in chapter 9. 9 A ‘partial agreement’ is one that makes it possible for some proportion of the members of the Council of Europe to agree on rules for their interaction in a given area and that therefore binds them, but not all members, through a form of ‘variable geometry’ unusual for an international organisation but which – through ‘enlarged partial agreements’ – makes it possible, in the area concerned, also to bring non-members within the purview of the organisation’s activities.

References Allen, Scott (1992), ‘Halon Threat to Ozone Reported Leveling Off’, Boston Globe, 6 October, p. 3. BBC News (2004), ‘Katharine Gun’, 26 February, news.bbc.co.uk/1/hi/ programmes/newsnight/3489568.stm, accessed 2 February 2018.

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Cabinet Office (2001), ‘Report of the Quinquennial Review of the Committee on Standards in Public Life’, http://webarchive.nationalarchives.gov.uk/​2008​ 10​23​140925/http://www.cabinetoffice.gov.uk/~/media/assets/www.cabinetoffice.​gov.​uk/​propriety_and_ethics/quinreport%20pdf.ashx, accessed 19 February 2018. Council of Europe (nd), ‘What is GRECO?’ https://www.coe.int/en/web/greco/ about-greco/what-is-greco, accessed 7 February 2018. Council of Europe (2013), ‘Finland encouraged to further sharpen its tools to prevent corruption’, https://www.coe.int/en/web/greco/-/finland-encouragedto-further-sharpen-its-tools-to-prevent-corruption, accessed 7 February 2018. della Porta, Donatella and Alberto Vannucci (1999), Un paese anormale: Come la classe politica ha perso l’occasione di Mani Pulite, Rome and Bari: Laterza. Geddes, Barbara (1991), ‘A Game-Theoretic Model of Reform in Latin American Democracies’, American Political Science Review 85(2): 371–92. Geddes, Barbara (1994), Politician’s Dilemma: Building State Capacity in Latin America, Berkeley: University of California Press. Holmes, Leslie (2003), ‘Political Corruption in Central and Eastern Europe’, pp. 191–206 in M. J. Bull and J. L. Newell (eds), Corruption in Contemporary Politics, London: Palgrave Macmillan. Lewis, David (2010), ‘Ten Years of Public Interest Disclosure Act 1998 Claims: What Can We Learn from the Statistics and Recent Research?’, Industrial Law Journal, 39(3): 325–8. Nelken, David (1996), ‘The Judges and Political Corruption in Italy’, Journal of Law and Society 23(1): 95–112. Nelken, David (2003), ‘Political Corruption in the European Union’, pp. 106–119 in M. J. Bull and J. L. Newell (eds), Corruption in Contemporary Politics, London: Palgrave Macmillan. Newell, James (2005), ‘Corruption-mitigating Policies: The Case of Italy’, Modern Italy, 10(2): 163–86. Newell, J. L. and M. J. Bull (2003), ‘Political Corruption in Italy, pp. 37–49 in M.  J. Bull and J. L. Newell (eds), Corruption in Contemporary Politics, London: Palgrave Macmillan. Rose-Ackerman, Susan (1994), ‘Reducing Bribery in the Public Sector’, pp. 21–8 in D. Trang (ed.), Corruption and Democracy, Budapest Institute for Constitutional and Legislative Policy. Rose-Ackerman, Susan (1999), Corruption and Government: Causes, Consequences and Reform, Cambridge: Cambridge University Press. Vannucci, Alberto (2012), Atlante della corruzione, Torino: Edizioni GruppoAbele. Verschoor, Curtis C. (2011), ‘UK Bribery Act offers best practices for preventing corruption’, Business Finance, 10 September, http://businessfinancemag. com/risk-management/uk-bribery-act-offers-best-practices-preventingcorruption?page=1, accessed, 2 August 2016.

8 Corruption in liberal democracies: a case study of Italy

Introduction This chapter takes Italy as a case study of corruption in liberal democracies. A case study is the study of an entity – a country, a person, an institution or whatever it happens to be – that is carried out not for its own sake but because ‘it has significance beyond its boundaries’ (Hague, Harrop and Breslin, 1998: 275). It is carried out because the entity in question is taken to be an example of some larger category of entities so that studying it can help us to throw light on – develop general theories and hypotheses about – the larger category. In terms of its levels of corruption, Italy seems somewhat untypical. For example, in 2015 its CPI score of 44 put it in penultimate position among the EU28 and below such third-world countries as Rwanda and such non-democracies as Saudi Arabia – places where we would expect poverty and/or a relative lack of due process and transparency in government to translate into higher corruption levels than are to be found in a wealthy democracy. However, although apparently untypical in its levels of corruption, Italy is most certainly not untypical in terms of the democratic character of its institutions: it comes nowhere near to being what one would call an authoritarian regime, and in some respects has democratic safeguards above those to be found in the most robust of its fellow democracies.1 As we shall see, much of the corruption that has come to light in Italy over the years, as in other democratic regimes, has been connected with the illegal funding of political parties, reflecting the fact that the potential for corruption, as mentioned in chapter 2, is inherent in these societies because the political parties that link citizens and the state are private entities that must obtain their funds from somewhere. Moreover, when corruption does come to light in Italy, citizens, far from being resigned, are apt to be as scandalised as citizens anywhere, so that,

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paradoxically, corruption scandals actually bear witness to the strength and vitality of Italy’s democratic institutions rather than their weaknesses. The fact, then, that corruption appears relatively more widespread in Italy than in other democracies actually makes it a very good case for understanding the conditions under which corruption will arise in such regimes. The extent and varieties of corruption in Italy As elsewhere, so in Italy, numerical data about the presence of corruption can be derived from prosecutions and convictions, surveys of people’s reported experiences of corruption, perceptions surveys and media reports. The resulting figures are based only on what has been perceived or has come to someone’s attention; therefore, as reflections of reality they are highly imperfect. Data for prosecutions and convictions, for example, are a product of legal definitions of corruption, of the resources available to investigators and of investigators’ abilities and motivations, as much as they are a product of corruption itself. In the face of these limitations, however, although reliance on such data will involve considerable error, this is better than relying on the only alternative, namely, our subjective impressions and unsubstantiated beliefs. The point is to be aware of the limitations of the data and, while refusing to take them as a direct reflection of reality, to be willing to draw ­conclusions by interpreting them appropriately. Figure 8.1 shows the extent of corruption in Italy in 2015 as compared with other regimes as measured by the CPI. We see that corruption appears to be somewhat more widespread in Italy than in the democracies generally speaking; but, as we would expect, Italy and the democracies generally perform better than non-democracies. The CPI has problems, as discussed in chapter 2. Confidence in data taken from any one source is increased to the extent that they are confirmed by the data available from other sources. Figure 8.2 shows the correlation for the 102 countries for which data are available between their 2013 CPI scores and the percentage of respondents who responded affirmatively in 2013 to the Global Corruption Barometer (GCB) question, ‘Have you ever been asked to pay a bribe?’ The two do not capture exactly the same thing: the GCB is based on sample surveys and reflects the experience of ordinary citizens (or what they say about their experience) whereas it is likely that CPI scores are more sensitive to the presence of corruption of a higher-profile kind among political and administrative elites. Still, the fact that the perceptions on which the CPI is based appear to be reflected by citizens’ reported experience of corruption (there is a negative correlation between the two measures of ‑0.63) provides some reassurance about the

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Figure 8.1  CPI score for Italy and mean CPI scores by regime type, 2015 Note: ‘Democracies’ are countries scoring 6–10 on the Economist Intelligence Unit’s index of democracy. The scale runs from 0 to 10 and scores are based on 60 indicators grouped into five categories: electoral process and pluralism; civil liberties; the functioning of government; political participation; political culture. ‘Hybrid regimes’ are countries scoring 4.0–5.9. Authoritarian regimes are countries scoring less than 4.0. Sources: Transparency International 2015 CPI scores from www.transparency.org/cpi2015 and Economist Intelligence Unit 2015 Democracy Index scores from www.yabiladi.com/img/content/ EIU-Democracy-Index-2015.pdf.

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index itself and makes it seem worthwhile to use it to assess how the presence of corruption might have changed over time in Italy (Figure 8.3). The impression is that little has changed over the two decades 1995–2015: there are fluctuations from year to year and an overall improvement if one takes 1995 as the starting point, but a small ­ deterioration if one considers the period since the turn of the century.

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Meanwhile, there has been a sharp decline in the number of convictions for corruption-related crimes, which fell from 1,279 in 2000 to 206 in 2008, with even more dramatic falls since the mid-1990s (Vannucci, 2012: 76). The number of media reports has fallen likewise: at the height of the Tangentopoli scandal between 1992 and 1994, la Repubblica, one of Italy’s largest circulating dailies, published details of 220 corruption cases a year, on average. By the period 1997–2000 the number had fallen to 44, and for the period 2009–11 it fell again, to 25 (Vannucci, 2012: 99). These figures could be interpreted to mean that corruption has spread quite significantly in Italy in recent years. If the trends in media reports and convictions imply that there has been a decline in the number of cases of corruption exposed and successfully prosecuted, then the fact that over the same period perceptions of corruption as measured by the CPI have increased suggests that corrupt networks may have become more robust. In other words, the chances of being caught and punished, as well as the chances of being found out in the first place, seem to have gone down, and thus it seems reasonable to think that corruption has become more widespread simply because the risks involved in it have decreased. The fact that there appears to have been no obvious and significant improvement in the corruption situation in Italy since Tangentopoli is a major curiosity requiring explanation, since the scandal led to significant institutional changes, and scandals often create the conditions for significant reforms.2 First, we consider the varieties of corruption to be found in Italy. Asking about the sectors ‘most at risk’, we can consider the extent to which respondents perceive various categories to be affected by

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c­ orruption. Not surprisingly, the results of the 2013 GCB survey show that the proportion of respondents who think that the political parties are ‘extremely corrupt’ (89%) is much higher than the proportion who think that the education system is so (29%). The problem is that these results correlate very highly with the results that are obtained when respondents are asked about their levels of trust in various public institutions, as is apparent from Figure 8.4, showing a near perfect correlation of –0.92, so there is need for caution. People could be relatively mistrustful of Parliament (say) either because they perceive a great deal of corruption there or because they are tapping into the conventional wisdom that parliamentarians are not to be trusted and so ‘must’ be corrupt. The suspicion that this is the case is reinforced by the even higher correlation of 0.93 between the percentages of Italian respondents perceiving institutions as more and less corrupt and the corresponding percentages for the other countries of the EU.3 What we want to know is what, if anything, is distinctive about Italy in terms of the sectors most prone to corruption or most likely to be perceived as corrupt. Figure 8.5 is designed to offer some clues about this. It has been constructed by calculating the mean percentages (across all countries for which we have Democracy Index and 2013 GCB data) of those perceiving the various institutions as corrupt or extremely corrupt. The vertical bars represent the percentage deviation, positive or negative, from these means of the corresponding means for Italy, for democracies, for hybrid regimes and for authoritarian regimes.4 The downward pointing bar farthest to the left showing a score of –24

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Figure 8.5  Institutions perceived as corrupt in different regime types Sources: own elaboration of data taken from Transparency International’s Global Corruption Barometer 2013 and the Economist Intelligence Unit 2015 Democracy Index scores

for Italy shows that the proportion of Italians regarding their political parties as corrupt or extremely corrupt (89%) is larger than the overall mean proportion (65%) by 24%. What stands out is that, with only two exceptions, the institutions more likely to be perceived as corrupt in Italy than in the rest of the world are also more likely to be perceived as corrupt in the democracies generally than in the rest of the world. So Italy is no anomaly among the democracies: the institutions that the citizens of democracies generally see as corrupt are also seen as corrupt by Italians, only more so. In democracies, the institutions most prone to (perceptions of) corruption are those – like political parties, the legislature and the media – that act as channels of communication, linking civil society and the state. State agencies themselves – the military, schools, the judiciary, the police – are all relatively clean, and are (perceived as) much more corrupt in the non-democracies. The impression that the corruption to be found in Italy is quantitatively, though not qualitatively, different from the corruption to be found in other democracies is confirmed when we look at Figure 8.6. Like the previous graph, this one too is constructed by subtracting the mean score for each regime type (the actual score in the case of Italy) from the overall mean so that the bars show the extent to which the proportions paying a bribe, having come into contact with the service, are

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above or below the mean. The upward pointing bar furthest to the left, for instance, shows that the proportion of Italians coming into contact with the education services who report having paid a bribe to someone in that sector (3%) is lower than the overall mean (16%) by 13%. What we can clearly see is that in every case the proportions of citizens paying bribes in democracies, including Italy, are significantly lower than the corresponding proportions in non-democratic societies. What seems to distinguish Italy among the democratic countries, then, is quite simply that corruption is widespread. The data presented to Parliament by the Anti-corruption and Transparency Service in its 2010 report suggested that corruption was present in a large variety of sectors;5 but the attempt to construct a ‘map’ of Italian corruption that will reveal where it is concentrated encounters large obstacles, as the anti-corruption High Commissioner has noted.6 GRECO’s evaluation report on Italy published in 2009 seems to reflect the most widely held view among the best-informed commentators: ‘corruption is not confined to a single area of activity or territory; in Italy, numerous sectors are affected by the problem’ (GRECO, 2009: 7): corruption is deeply rooted in different areas of public administration, in civil society, as well as in the private sector: the payment of bribes appears to be common practice to obtain licenses and permits, public contracts,

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financial deals, to facilitate the passing of University exams, to practice medicine, to conclude agreements in the soccer world, etc. (GRECO, 2009: 3)

Why, then, does corruption appear to be so widespread in Italy? Explaining Italian corruption Italian corruption has been explained at various times as the effect of variables many of which we have already encountered in this book: administrative inefficiency; the relative absence of a civic culture; burdensome regulations; the presence, in some areas, of organised crime; a lack of confidence in the working of public institutions. All these undoubtedly have a part to play (as well as being very much bound up with one another). The ones that we wish to emphasise here are those that are linked with the nature of the country’s institutions, especially its party system, because in order to understand why, among the democracies, corruption seems so peculiarly widespread in Italy, we have to appreciate what were the distinguishing features of Italian party politics during the period from the end of the Second World War until the early 1990s, thus using the past to understand the present. A great deal has changed since the early 1990s, but the period prior to that is important for our purposes because, we would argue, of the phenomenon of path dependency. This is the idea that behaviour tends to persist long after the conditions responsible for its initial emergence have ceased to be operative, because it involves fewer risks and/or lower costs than the available alternatives. The classic example is the ‘qwerty’ keyboard, originally introduced in the days of typewriters to reduce typing speeds and prevent the keys jamming. Nowadays, with computers, there is no such danger; but, rather than introduce more efficient keyboard layouts, computer manufacturers persist with ‘qwerty’: no single manufacturer is willing to take the risks and bear the costs involved in attempting to market an alternative, knowing that consumers will not want the inconvenience of learning a new layout and other manufacturers may not follow the lead. So it is with behaviour generally, including behaviour that is corrupt, especially if everyone else is doing it: we persist with the established patterns because refusing to conform or to continue doing things in the established ways is costly. Italian party politics as it emerged at the end of the Second World War was dominated by two large parties, the Democrazia Cristiana (Christian Democrats, DC) in the centre and the Partito Comunista Italiano (Italian Communist Party, PCI) on the left. These two parties

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together commanded the support of about two-thirds of the voters most of the time, and acquired their position of dominance largely because, after the fall of Mussolini in 1943, they played a central role in the resistance to Nazi occupation at a time when Italians had no other authorities to turn to except the Church and the Fascists. At the war’s end, therefore, the two parties were able to establish more or less hegemonic positions for themselves in different parts of the country – in the case of the DC, in the North-East (where, under the Austrian empire before unification, the local clergy had defended Italian nationalism); in the case of the PCI, in the central regions (where oppressive rule under the Papal States meant that the movement for unification had been driven by anti-clerical sentiments, thus favouring the subsequent rise of socialism). In these areas in particular the parties were able to penetrate the interstices of civil society and the state, capturing interest groups and becoming the main channel for the transmission of resources from the centre to the periphery. Interest-group ties both shored up popular support for the parties and became a favoured channel through which groups sought to communicate with decisionmakers. Consequently, instead of aggregating demands, the parties often acted as the instruments of interest groups, transmitting sectional demands to government and thus helping to sustain a tendency for power to be managed in clientelistic ways. Clientelism is a hierarchical relationship involving mutual obligations whereby a person in a position of power (for example, a politician) visà-vis another provides the weaker party with goods and services and other forms of protection in exchange for service, loyalty or support. Clientelism is not synonymous with corruption but can overlap with it because they both generate private benefits for the parties involved and the practice of clientelism may involve the abuse of his position by a public office holder. For example, a politician might use his influence, improperly, to obtain a building permit for a construction firm in exchange for the firm’s agreement to provide jobs for a number of the politician’s clients (who provide the politician with their own voting support together with that of their friends, relatives and so on). So, where clientelism and corruption are found together, they are likely to reinforce each other. Clientelism has roots going back to the failure of Italian unification in 1861 to produce an effective nationally integrating ideology, and therefore to the difficulties of the state in asserting its authority against unofficial power centres and local elites, which sought to manipulate public institutions to their own advantage. In the period following the Second World War southern poverty – by sustaining mistrust and thus

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undermining the potential for collective action – also played a role, as did the dependence on the state for the implantation and development of economic activity in the South. By enhancing rivalry between politicians, the new institutions of representative democracy ensured that politicians would retain power only to the degree that they successfully supplied the clientelistic favours that their voters sought. In more detail: southern Italy, where economic and social development was much more limited than in the rest of the country, was dominated by the DC, which was able to use infrastructure projects designed to kick-start economic growth – notably those associated with the Cassa per il Mezzogiorno (or Fund for the South) established in 1950  – to exercise a powerful claim on the support of activists and voters by distributing resources through patronage networks. Given the levels of economic deprivation, such networks were very effective as means of power maintenance because they created relations of individual dependency that undermined the possibilities of collective action to challenge existing power structures. Extending upwards to the arena of Parliament and the national government, the networks and associated clientele practices were self-reinforcing because they created large numbers of veto players, each with power to obstruct major policy initiatives. This had the effect of obliging the DC (and the parties it chose to co-opt to a share in government) to continue to rely on the clientelistic distribution of resources for electoral support. By preventing the effective exercise of rights of citizenship and equality, clientelism weakened commitment to concepts of legality, thus strengthening groups such as the Mafia as sources of protection and enforcement alternative to those of the public authorities (Bevilacqua, 1997: 187–202).7 A decisive contribution to the maintenance of clientelism was made by the Cold War, which led to the conventio ad excludendum, or the permanent exclusion, of the PCI from any possibility of joining the government, and its ghettoisation in permanent opposition, where it was joined by the neo-fascist Movimento Sociale Italiano (Italian Social Movement, MSI, formed in 1946 by former junior officials of the Republica di Salò), also regarded as a pariah party. Under these circumstances, the DC emerged at every election until 1994 as the largest party, able to attract votes from both left and right as the main bulwark against the extremes. The DC was thus the mainstay of all feasible governing coalitions. Because the exclusion of the left and right rendered bipolar party competition and alternation in office impossible, the DC found itself permanently in office, governing in coalition with shifting combinations of the parties to its immediate left and right – social democrats, r­epublicans, liberals and, from 1963, socialists.

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The impossibility of bipolar alternation reduced the pressures which might otherwise have been exerted on governing coalitions to pursue coherent legislative programmes, and thus their capacity to maintain the discipline of parliamentary followers that would have been required to make coherent policy-making possible in the first place. The result was considerable government instability (there were forty-six changes of government between 1948 and 1994), as parties unable to take decisive initiatives were reduced to arguing over the distribution of offices, which were used to maintain electoral followings by being exploited for clientelistic purposes. This situation had two consequences of crucial importance for our present concerns. First, entrepreneurs were dependent on the favour of politicians for a range of routine business matters, from town-planning decisions to those concerning the award of public works contracts, while being deprived of the legislative certainty needed for sound investment decisions. Consequently, they sought to establish stable relationships with politicians whereby, in exchange for financial support, they would obtain more of the certainty needed for investment to be managed and planned rationally. Hence, a whole series of improper relations developed between economic and political power, including concomitants like the infamous Propaganda Due (P2) Masonic lodge, exposed in 1981, which was implicated in numerous crimes and is sometimes described as ‘a state within a state’. This gave rise to veritable clans whose purpose was nothing other than to lend mutual assistance in the management and enhancement of their members’ power. Second, clientelism was accompanied by partitocrazia – the governing parties’ control of nominations to public positions, from minister to the humblest of local government officials – which weakened the parties organisationally. It provided fertile ground for factional competition for control of resources and undermined the quality of the grass-roots membership, shifting the predominant motives for joining from the ideological to the venal, such that political parties became organisations which people joined as vehicles for upward mobility and personal advancement. Against this background, corruption received further encouragement from the decline of Cold War ideological conflict and the growing costs of politics. Because Italy’s main opposition party was a communist party (the largest in the West), the country was contested terrain between the two world power blocks. Under these circumstances, the DC and its governing partners, on the one hand, and the PCI on the other, received generous funding from the US and the Soviet Union, respectively. This allowed the two parties to develop strong and costly apparatuses, with

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networks of local headquarters, publications, paid personnel and so forth (della Porta and Vannucci, 1999: 14). However, with the declining intensity of the Cold War and the emergence of détente during the 1970s, funding from the superpowers began to dry up. Meanwhile, the costs of politics, already relatively high in Italy, were increasing. On the one hand, Italy’s OLPR system, allowing the voter to express preferences among their chosen party’s slate of candidates, raised the cost of campaigning by ensuring competition for the coveted parliamentary or local council seats between candidates of the same party (Newell, 2000: 49). At the same time, the media and office revolutions were pushing up information and propaganda costs, and making large investments necessary in order to provide party offices with the necessary equipment (Rhodes, 1997: 65–6). While funding from abroad was only one source of party finance, for a variety of reasons it was difficult to compensate for its loss and meet the increased costs by raising the flow of income from other sources. For example, the very decline in ideological conflict that reduced the flow of funds from abroad also reduced the flow of less venal donations from private organisations within Italy. The 1974 party finance law, introduced in the wake of the oil scandal of that year, outlawed donations from public-sector companies and thus banned a source of funding that had previously been legal.8 The reduced flow of funds was met by a corresponding increase in the propensity of parties and individual politicians to seek funding by offering to sell their services and decisions. The already abundant opportunities for doing this – by virtue of parties’ and career politicians’ entrenchment in the interstices of Italy’s large public sector through partitocrazia –were increased by the expansion of the Italian welfare state in the 1970s (Rhodes, 1997: 66). In short, Cold War conflict and the absence of Westminster-style alternation in government served to underpin a clientelistic mode of managing power and significant policy-making inefficiencies. This, ­ in turn, created powerful pressures that sustained corruption and ­encouraged its expansion as the post-war years rolled by. Corruption has a significant self-generating mechanism built into it: the more widespread it is, the more widespread it is likely to become as networks of connivance become increasingly solid and the resources available to combat it have to be spread ever more thinly, thus reducing the potential costs and raising the potential benefits as it expands. Perhaps unsurprisingly then, by the mid-1990s corruption was said to be ­ systemic – that is, routine and taken for granted – in the interaction between the parties and private business in a large number of areas of public life.

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Finally, no account of corruption in Italy would be complete without some mention, however brief, of the shortcomings of the judicial system. Although recently there have been some improvements in the efficiency and effectiveness with which justice is administered in Italy (Piana, 2017), traditionally, judicial proceedings have been very slow. This, combined with the automatic right of defendants to access two stages of appeal beyond the courts of first instance has reduced prosecutors’ chances of securing convictions, thanks to the statute of limitations and the likelihood that trials will be timed out. A number of other features of the judicial system have given high-profile defendants with political connections both the incentives and the means to apply informal pressures to judicial processes, of the kind described in chapter 5. Among these are the constitutional obligation on prosecutors to investigate all allegations of wrong-doing that come to their attention. This, given the practical obstacles in the way of meeting it, amounts to a discretionary power to investigate offences that prosecutors think may have been committed. Other features include a tendency, apparent from the 1970s, for new generations of prosecutors to use their discretion as a means of tackling social issues; the ideological colouring (though falling short of explicitly party-political alignments) of factions within the judiciary’s self-governing and professional bodies; and the power of the heads of judicial offices to assign investigators to specific cases. These shortcomings are significant in explaining the persistence of corruption, despite Tangentopoli and the institutional changes that came in its wake, thanks, in all probability, to the two side effects of judicial investigations, as suggested by Alberto Vannucci (2009: 242–3): First, there has, over the long term, been an increasingly widespread ‘sense of impunity’ due to the ineffectiveness of attempts at prosecution, as former justice, Gherardo Colombo, has pointed out … A second factor has been described by justice Piercamillo Davigo: ‘The repression of criminals has the same effects as those typically exerted by predators in processes of natural selection, namely, improvement of the abilities of the prey. We caught only the slowest prey, leaving free those who ran fastest’ … At the same time, ‘new’ agents have learned the lessons, adapting their operations to the conditions of risk revealed by previous enquiries, thanks to which they have acquired knowledge and skills which make it more difficult to discover and punish their illegal activities.

The impact of corruption and the effects of its exposure Widespread corruption, then, has had a number of pernicious consequences in the post-war period, not the least of which is its economic

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Table 8.1 Corruption and extortion-related crimes per 100,000 inhabitants reported in the Italian regions, 2011 Region

Corruption

Extortion

Piemonte Valle D’Aosta Liguria Lombardia Trentino Alto Adige Veneto Friuli Venezia Giulia North: regional average

0.00 1.56 1.11 0.79 0.48 1.11 0.89 0.85

0.02 0.00 0.74 0.78 0.00 0.57 0.16 0.32

Emilia Romagna Marche Toscana Umbria Central regions: regional average

0.81 1.79 1.20 0.77 1.14

0.59 1.34 0.48 0.33 0.69

Lazio Campania Abruzzo Molise Puglia Basilicata Calabria Sicilia Sardegna South and islands: regional average

1.59 3.05 2.53 0.31 1.22 1.36 1.94 1.09 0.48 1.51

0.98 1.23 0.22 0.63 1.22 0.68 0.60 0.91 0.24 0.75

Italy

1.24

0.72

Source: Autorità Nazionale AntiCorruzione (nd), Corruzione Sommersa e Corruzione Emersa in Italia: Modalità di Misurazione e Prime Evidenze Empiriche, Table 2, p. 17.

damage. Corruption actually seems to vary quite considerably (and to a far greater extent than in other European countries (Vannucci, 2012: 94)) from region to region in Italy, as is implied by Putnam’s (1993) analysis (see chapter 3). Table 8.1 shows the number of c­ orruption-related crimes reported in the Italian regions in 2011. We know from the work of authors like Vannucci (2012: 96–7) that such data correlate well with survey data reflecting regional variations in citizens’ personal experiences of the phenomenon. These variations have helped to perpetuate the significant north–south divide in Italy that has endured ever since unification, with the southern regions lagging behind the northern ones in terms of rates of growth, infrastructural facilities and quality-of-life

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indices, with consequent difficulties in attracting inward investment and so on, resulting in a vicious circle (Newell, 2015). Corruption has been central to this because firms will not invest in areas where bribery undermines the productivity of their investments through perpetuation, in myriad ways, of general climates of insecurity and inefficiency. The so-called ‘Southern Question’ has been a problem for Italy for two reasons. The first is regional disparity. In Italy the growth of the Lega Nord (Northern League, LN) from the late 1980s reflected widespread perceptions among northern Italians that the condition of the South was a brake on their prosperity. Many felt that the problem would have to be met by greater autonomy, if not outright secession, for the North. Second, therefore, the north–south divide has played a significant part in dragging down rates of economic growth for Italy as a whole to below what they would otherwise have been since the early 1990s. From the early post-war years to the end of the 1980s growth rates were relatively high, and in the 1950s and 1960s spectacularly so, thanks to the opportunities of post-war reconstruction and the advantages of starting from a low base. Since then, Italy has lagged significantly behind her competitors in world markets and this is a major problem for at least two reasons (Newell, 2010, ch. 8). First is the danger of becoming caught in a low-growth cycle, where low productivity makes it difficult to compete on the world stage, with consequent declining standards of living, falling tax revenues, growing infrastructural deficiencies, low investment, low growth and so on. Second, when a large country like Italy suffers from low growth the potential exists for it to have major consequences beyond its borders. It becomes increasingly difficult for the country not only to import goods from elsewhere but also to pay down its public debt (in Italy’s case standing at a record 134% of GDP in 2015).This perpetuates the threat of an eventual financial crisis with potential repercussions, in the case of Italy, for the whole of the eurozone and beyond (Newell, 2012). More visibly, corruption has had occasionally dramatic, if not to say tragic, consequences in terms of its effects on the quality of public services. Italy is a country with a high level of seismic activity, and when earthquakes happen there is frequently media speculation about the quality of construction. In 2009 an earthquake in Acquila cost the lives of 309 people, besides the injuries of about 1,600 others and infrastructural damage to an estimated value of €10 billion. This gave rise to a number of controversies surrounding the management of the crisis, the reconstruction measures and what had caused buildings to collapse. Criminal investigations were initiated to ascertain who and what had been responsible for the disintegration of a number of public buildings

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which appeared to have been constructed using inferior-quality cement, in contravention of building regulations. Such events, and suspicions that corruption is more than likely involved, serve to sustain public cynicism and mistrust towards the authorities and public officials. Over the years these have been manifested in growing anger towards mainstream parties and politicians who seem unable or unwilling to do anything to improve the situation. This in turn has been expressed, as in other democracies, in declining election turn-outs, increasingly widespread anti-political sentiments and growing support for populist formations such as the LN, Silvio Berlusconi’s Forza Italia (FI) and, most recently, the Movimento Cinque Stelle (Five-star Movement, M5s) led by the comedian Beppe Grillo. This last is a ‘catch-all’ party that has managed to make innovative use of the internet to mobilise support, that attracts support from across the political spectrum from left to right and that has reaped its success through strident attacks against what it portrays as an unaccountable elite which it claims to want to sweep away in favour of more participatory forms of democracy. Coming from nowhere to capture nearly a third of the vote in the 2013 general election, it held up the formation of a government for sixty-two days, and seemed to have brought the entire political system to a state of paralysis. However, the most dramatic consequences of corruption in Italy have come through its exposure and the resulting scandal. While the periodic exposure of corruption has given rise to scandals of greater or lesser magnitude throughout the post-war period in Italy, by far the most tumultuous was the so-called Tangentopoli (or ‘Bribe City’ scandal) of the early 1990s. As scandals go, there are few to rival it, and it might even qualify as Europe’s ‘greatest scandal’ of the twentieth century. It resulted in the break-up of Italy’s main governing parties and led eventually to the transformation of the entire party system and the onset of a process of regime transition. Tangentopoli therefore demonstrated, perhaps more strikingly than any other scandal could have done, the sheer profundity of the political consequences that scandals often have. It all began on 17 February 1992 when Mario Chiesa, the head of a Milanese old people’s home called the Baggina, was arrested in the act of taking a 7 million lire bribe from the owner of a cleaning company. A member of the Partito Socialista Italiano (Italian Socialist Party, PSI), Chiesa had made little effort to hide the ambition that he might one day become mayor of Milan. A member of the faction headed by Paolo Pilittieri, brother-in-law of party leader and one-time Prime Minister Bettino Craxi, Chiesa had begun his political career as the secretary of a party branch in a remote suburb of Milan. From there he had

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moved up in the party. Taking advantage of the established system of g­ overning-party control of large parts of the state apparatus for patronage purposes, he had first been an administrator at the Sacco hospital in Milan, then a provincial councillor and, from 1986, head of the Baggina. By 1990 he had his own modest electoral following of about 7,000 votes which he expected to place at the disposition of whomsoever, further up the party hierarchy, could help him to advance further. Normally the clientelist system was such that when members got into trouble with the judicial authorities the party would quickly erect a large protective  wall around them. One of the things it had done in the past was to get members accused of accepting bribes elected to Parliament; MPs had then voted against the judicial authorities’ requests for the lifting of their parliamentary immunity. But Chiesa had been caught ‘with his hands in the till’, a general election was due on 5 April and the party, frequently the object of media satire for its shaky grasp of probity, abandoned him to his fate. Chiesa was, in Craxi’s words, ‘a little rascal’ who had thrown ‘a shadow over the entire image of a party which’, he said, ‘in fifty years in Milan … [had] never had an administrator convicted for grave crimes against the public administration’. Faced with the evidence that his political career was in ruins, Chiesa decided to empty the sack. What came to light was a massive network of ‘mutually beneficial linkages’ (Waters, 1994: 170) between the political parties and powerful economic groups in the city: a situation in which ‘those who had to give money, no longer wait[ed] for it to be asked of them but rather [knew] that in that particular environment the payment of bribes or back-handers was normal and so conformed to the system’ (di Pietro, 1991). ‘Normal practice’ though it may have been, it was none the less illegal, and because of this it required a trust among those involved that, as we have seen, would have been very difficult to establish – but very easy to break in the event of the slightest suspicion that the wall of silence surrounding the network had been breached. Public prosecutors interviewing Chiesa and those whom he implicated turned this to their advantage in using preventative custody laws to create a kind of ‘prisoner’s dilemma’ for suspects, as explained in chapter 7. This let to a veritable rush on the part of politicians, administrators and entrepreneurs to confess the parts they had played in networks of corrupt exchange. Thus it was that the scandal spread. By the end of 1993 it had reached the highest levels of the state, and by 1995 the annual number of accusations of corruption and extortion had reached 1,065 cases involving 2,731 persons, as compared to an average of 252 cases involving 365 persons per year between 1984 and 1991 (della Porta and Vannucci, 1999: 3).

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The effect of the exposure of corruption on this scale was to bring about a complete disintegration of the traditional parties of government and a complete restructuring of the party system through four related impacts: financial, organisational, electoral and institutional. The financial impact was straightforward. For the reasons mentioned earlier, during the 1970s and 1980s the parties had become increasingly dependent on corrupt forms of funding, while facing mounting accumulated debts. Therefore, by reducing the funds available from illegal sources to just a trickle, the investigations pushed all the traditional parties fairly quickly towards bankruptcy. The organisational impact led to the parties’ virtual disintegration, because the spread of corruption had considerably weakened parties’ organisation by favouring the recruitment of individuals whose motives were venal, while penalising policy and ideological commitments. This had been a self-reinforcing process: a gradual decline in the numbers of ideologically committed members tended to reduce the attractiveness of membership for those with similar ideological beliefs, while growth in the numbers of members with instrumental motives tended to make membership more attractive for the like-minded and weakened the parties organisationally by virtue of the concomitant decline in reserves of member loyalty and commitment. Hence, when Tangentopoli destroyed the basis for instrumental relationships by effectively cutting off the flow of resources that sustained them, it left parties vulnerable to complete collapse. The sudden collapse of political parties is reflected in the dramatic decline in membership figures, which, according to one estimate, fell from 3,804,000 in 1991 to 1,330,000 in 1993, when Tangentopoli was at its height (Follini, 1997: 250). The electoral impact was a haemorrhage of support for all the traditional parties of government, and the downfall and humiliation of so many powerful figures delighted public opinion. Italians had always had a particularly low opinion of politicians and the parties they represented, and if they continued to vote for them in high numbers year after year, it was less because of any positive commitment than because of the negative feeling that they had little choice. That is, voters supported them either for reasons of clientelism – which, by turning citizens’ rights into favours, bred cynicism and resentment – or because they were frightened by the prospect of the communists taking power, or both. Following the collapse of the Berlin Wall in 1989, the communists had transformed themselves into a non-communist party with a new name – the Partito Democratico della Sinistra (Democratic Party of the Left, PDS) – with the result that the power of politicians to blackmail voters by raising the spectre of communism disappeared. Voters turned

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their backs on the governing parties in droves, and the parties that had governed the country continuously since the war soon realised that they were ­undergoing a process of electoral meltdown. It was partly because of this tidal wave of indignation that the scandal also had an important institutional effect. The sense of public outrage provided the popular backing needed by a range of cross-party groups and organisations that now tried to bring about a change in the electoral law for the Italian Parliament. The Italian constitution makes it possible to hold referenda on laws and parts of laws when they are requested by the signatures of at least half a million voters, and so a number of reformers from across the political spectrum now managed to gather the number of signatures required to force the holding of a referendum designed to change the electoral law from one of proportional ­representation to one based largely on the first-past-the-post system. Reformers were driven to their action by the thought that a largely first-past-the-post system might put an end to the corrupt, inefficient administrations of the past. First-past-the-post systems put parties that are close on the ideological spectrum under pressure to reach a series of mutually agreeable stand-down arrangements across constituencies in order to eliminate the possibility that parties further away on the spectrum can take seats at their joint expense with less than 50% of the vote. On this basis, reformers thought that a changed electoral law would put parties under pressure to organise themselves into two broad electoral coalitions, one of the left and one of the right, whose leaders would be  natural candidates for the premiership. Voters, meanwhile, would be under pressure, unless they were willing to waste their votes, to confine their choices to the two best-placed candidates in each constituency, voting for whichever of the two they disliked least. For the first time since the Second World War, coalitions formed in advance of the election and competing for overall majorities would be able to take office with a direct mandate from voters. In virtue of this, and in virtue of competition from the opposition, prime ministers would enjoy sufficient authority to be able to impose discipline on their followers and thus ensure coherent policy-making and clean government as the means of maximising the coalition’s chances of being returned to office at the next election. The referendum held on 18 April 1993 was successful. Eighty-three per cent of those voting supported the proposed change, and Italian party politics since then have been very different, as compared to what went before. In common with their counterparts in other democracies, Italian voters have been much less strongly attached to parties, and parties, as a result, have collectively been subject to kaleidoscopic changes. But, in broad outline, until the election of 2013 the overwhelming majority of

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voters lined up either behind coalitions led by the entrepreneur Silvio Berlusconi – who took to the electoral arena in 1994 with a new party, FI, to further his personal ambitions and bring together the forces of the centre right – or behind coalitions of the centre left whose leading players have been former communists and left-leaning former Christian Democrats, most of whom now find themselves together in the Partito Democratico (Democratic Party, PD) formed in 2007 and led by Matteo Renzi. General elections from 1994 to 2008 led to clear although not always very decisive majorities for one side or the other, and there has been some increase in the durability of governments, whose average number of days in office has risen from 315 before 1994 to 641 since then. Given these very dramatic changes, and especially considering the circumstances that brought them about, we would have expected some improvement in the corruption situation in Italy as alternating governments sought reform as a means of reinforcing their hold on power against the claims of the opposition parties. Yet, as we saw earlier, the expected improvement does not seem to have taken place. In order to shed light on this seeming puzzle, we need to consider what has been done and is now being done in Italy in the field of corruption prevention and control. Corruption prevention and control Corruption is a significant economic problem for Italy, and the National Audit Office (la Corte dei Conti) has estimated that it costs the public purse something in the region of €60 billion per year (Transparency International, 2012: 1). In principle, the persistence of the problem can be explained as the result of a failure to introduce measures to combat corruption, or as the result of the ineffectiveness of those measures that have been introduced, or as a combination of the two. Considering what has been attempted, it is necessary first to take account not only of measures explicitly designed to tackle corruption but also of reforms – for example, freedom of information legislation  – that might be expected to have the effect of reducing corruption even if this is not their main driver. For this reason a ‘broad-brush’ approach is needed, and a convenient conceptual framework is the National Integrity System (NIS) developed by Transparency International (TI). This is essentially a list of thirteen public and private institutions (what TI calls ‘pillars’) which, TI claims, are essential to the prevention and suppression of corruption and that will keep it in check when they ­function ‘well’.9 TI carries out a series of periodic NIS Assessments involving groups of experts who evaluate each of the pillars10 and give them a score out of 100. The most recent assessment for Italy was carried out in 2011 and

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published early in 2012. By reference to its recommendations we can use it as a basis for assessing the extent to which efforts have been made to plug gaps in the country’s defences against corruption as identified by anti-corruption experts. The authors of the 2012 report argued that there was a lack of transparency, accountability and integrity among the political parties, in the public sector and among the institutions of government generally, and that the government should: establish a genuinely independent anti-­ corruption authority; ensure full implementation of the recommendations of GRECO and the OECD; institute more effective codes of ethics, monitoring and sanctions for those in public life; ensure the establishment of meritocratic appointments criteria and protection for whistleblowers. Besides these specific recommendations they made a number of further recommendations, the sheer scope of which is revealing of the depth and the extent of the corruption problem in their view.11 We would expect governments of the most recent period to have been especially active in the anti-corruption field. In November 2011 Berlusconi’s centre-right government fell, at the end of a period marked by a continuation of corruption-related scandals great and small. The 2013 general election, with its explosion of support for the M5s, made clear that Italian voters were as dissatisfied as ever with the state of their country’s politics. Moreover, the pressures generated by the NIS report came in the context of additional pressures that were being generated from abroad: in 2009, Italy had ratified the UNCAC; in 2011, GRECO published its so-called ‘compliance report’ on Italy, concluding that fewer than half of the twenty-two recommendations in its 2009 ­evaluation report had been implemented satisfactorily. Measures have clearly been taken in response to these pressures. The so-called Severino law (named after its principal sponsor, the justice minister) of 6 November 2012 takes steps to implement a number of the principal NIS recommendations. Thus, there is now an autonomous anti-corruption authority, because the ANAC (Autorità Nazionale Anticorruzione), which used to be part of the Civil Service Department (Dipartimento della Funzione Pubblica), is now an independent regulatory authority with supervisory powers in the areas of public contracts and public appointments, as well as powers to promote transparency in the public administration.12 There is a new code of ethics for public employees, together with relevant sanctions, including an obligation to register outside interests and a ban on accepting gifts of over €150 in value. There are a range of measures to promote transparency and guarantee freedom of information, including a guaranteed right of access, for anyone asking for it, to all information held by the public administration

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except when legislation expressly authorises the information’s withholding (for example, on security grounds). There are measures to provide employment protection and other guarantees to whistle-blowers. More recently, law no. 69 of 27 May 2015, besides increasing the penalties for corruption, has also increased the amount of time that must pass before the statute of limitations applies to corruption offences, thus reducing the size of a loophole that defendants have been able to take advantage of in the past in Italian criminal proceedings. Not insignificant measures are clearly being taken in the field of Italian anti-corruption. However, they are all very recent: some time will have to pass before any effects are felt and most commentaries on the Italian case tend to continue to emphasise the shortcomings of anticorruption efforts, stressing how few and ambiguous they have tended to be in recent years.13 Prior to the most recent reforms there had been no comprehensive reform in the anti-corruption field since 2000, when Italy ratified the OECD’s Anti-bribery Convention, and 2001, when legislative decree 231 made companies responsible for corruption-related and other crimes committed by employees on their behalf. Some of the most high-profile measures in the field – such as law no. 61 of 2002, which until the introduction of law no. 69 of 2015, decriminalised false accounting – were arguably such as to enhance, rather than reduce, the likelihood of corruption taking place.14 Other measures – such as the so-called ‘Brunetta’ civil-service reform of 2009 – if they had any anticorruption effects, did so as unintended consequences, having actually been aimed at solving other problems such as administrative inefficiency. This legislative inactivity, which partly explains why corruption appears to remain widespread in Italy,15 looks odd in the light of the dramatic party-system changes, described above, which one would expect to have led to more concerted efforts. The most likely solution to the conundrum is the following. Bi-polar competition and alternation in government of the kind that characterised Italian party politics in the 1990s will lead to vigorous efforts to combat corruption and increase the probity of those in public life only if the votes to be gained from doing so outweigh those that will be lost thereby. With Silvio Berlusconi in office as prime minister for much of the time from 1994 onwards, this was not really the case. The conflict of interests involved in his position as head of the executive and the head of Italy’s three largest private television stations meant that he had little interest in moralising public life. As he was attacked by the centre left for his pursuit of legislation designed to benefit him personally, and was investigated by the judiciary for corruption-related offences, he was able to portray himself as a victim. Consequently, among his supporters he managed to convert the

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popular indignation against the establishment that was so vigorously expressed at the time of Tangentopoli into indignation against the judicial investigators and the parties opposed to him. When the centre left was in office, it was difficult to pursue clean-up reforms without being seen as attacking Berlusconi personally. For most voters, reform was of relatively modest importance: the costs of lack of probity in public life are difficult assess, and in any case are widely spread, and therefore difficult for voters to perceive as making a ­significant difference to them personally. Conclusion In this chapter we have seen how important political parties and party systems are to the presence of corruption and to attempts to contain it in liberal democracies. The Italian case shows that democratic arrangements, despite being based on rule-of-law principles and the separation of public and private interests, offer no guarantees against corruption. It also provides material for reflection on the conditions under which the exposure of corruption and institutional reform can lead to more concerted efforts to combat it. What we have seen in the Italian case has been disappointing for many. The period since the early 1990s has witnessed a huge scandal followed by dramatic party-system change – and yet little, until very recently, by way of attempts to combat corruption more energetically. Since, in a democracy, parties and their leaders are by definition responsive to the wishes and moods of voters, this failure is necessarily due, to a degree, to popular attitudes; and it illustrates well that popular dissatisfaction does not necessarily translate into effective pressure for anti-corruption reform. With the outcome of the 2013 ­election and the emergence of the M5s, this may change. Just before the start of Italy’s upheavals in the early 1990s, Russia and the countries of Eastern Europe began a period of even more dramatic upheaval. What impact, if any, it has had on corruption and attempts to combat it in that part of the world is one of the main issues to be ­considered in the next chapter. Notes  1 According to the Economist Intelligence Unit’s 2015 report, ‘Democracy in an Age of Anxiety’ (Economist Intelligence Unit, 2015) Italy ranks higher than the United States in terms of civil liberties, higher than the UK in terms of political participation and higher than the United States and Denmark in terms of pluralism and the electoral process.

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 2 Like many other observers, Italy’s High Commissioner for the Prevention of Corruption has argued that the emotive power generated by Tangentopoli seems, in subsequent years, to have been lost and therefore to have failed to result in effective measures to combat the phenomenon. ‘The dramatic fall in the number of reports [of corruption] should not therefore be taken as an indicator of a reduction in the level of corruption but rather perhaps reflects inurement to a culture of corruption that runs from petty demands for money to higher levels of conditioning’ (IRPA, 2012: 122).  3 Correlation calculated on the basis of GCB 2013 data and the remaining 21 EU countries included in the survey.  4 See the note attached to Figure 8.1 for an explanation of how these categories have been derived.  5 Governo italiano, Servizio Anticorruzione e Trasparenza (2010: 159): corruptionrelated crimes reported by operational sector, for the period 1 October 2009 to 31 December 2010, are given as: agriculture 2; contracts 14; absenteeism 6; appointments and consultancy 45; dispersal of public money 8; construction 8; fraud related to national and EU subsidies 2; justice 3; public administration 6; refuse collection 1; health 5; schools 6; scholastic appointments 3; public services 12; security 6; taxation 2; universities 4; university appointments 2; other 30.  6 ‘[T]he data resulting from police investigations are liable to be inconsistent for a number of reasons such as the possibility that information is not recorded in real time, that it is not inserted correctly because, for example, the agent fails to record the sector of employment of the public official accused of the crime or because the offence is subsumed by another, more serious one’ (IRPA, 2012: 23–4).  7 This was besides providing the Mafia with a range of business opportunities enabling it, in the areas where it was strong, to consolidate its control by infiltrating local administrations and private enterprises, so bringing about the effective destruction of boundaries separating economic and political power. For details see Arlacchi (1983).  8 Prior to 1974, party funding had been unregulated in Italy. The oil scandal arose when it emerged that oil derivatives producers, including the state-owned electricity company, Enel, had been paying large back-handers to the parties to influence energy policy the wake of the oil-price hike brought about by the Yom Kippur War.  9 The pillars are: ‘legislative branch of government’; ‘executive branch of government’; ‘judiciary’; ‘public sector’; ‘law enforcement’; ‘electoral management body’; ‘ombudsman’; ‘audit institution’; ‘anti-corruption agencies’; ‘political parties’; ‘media’; ‘civil society’; ‘business’ (https://www.transparency.org/­ whatwedo/nis, accessed 2 February 2018). 10 The evaluation is with regard to (1) their overall capacity, (2) their internal governance systems and procedures and (3) their role in the overall integrity system, and taking account of their formal framework and their functioning. 11 For example, there needed to be a review of the statute of limitations with respect to corruption-related offences; measures to reform the funding of parties and ensure their greater transparency, accountability and independence  from

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lobbyists; greater independence of the media from centres of economic and political power; the protection and promotion of investigative journalism. 12 Moreover, its head, Justice Raffaele Cantone, has been noteworthy in his management of the authority for his crusading style, reflecting his conviction that, to be effective, anti-corruption measures must be underpinned by the mobilisation of public opinion in the service of cultural change. His book, Il male italiano (Cantone, 2015), has become a best seller. 13 The NIS report, referred to above, judges legislative activity in the area to be ‘insufficient’ (Transparency International, 2012: 17); Raffaele Cantone, in presenting ANAC’s annual report to parliament in July 2015, argued that the Severino law was central to the prevention of corruption but that further legislative intervention was needed for its provisions to have a real impact (la Repubblica, 2015). 14 There were many others and they were very controversial, having seemingly been introduced to serve the financial interests of Prime Minister Berlusconi as a private individual. For details see Vannucci (2009). 15 Additional factors included the effects of Tangentopoli itself: although many were put on trial, few were convicted, thanks to the inefficiencies of the justice system and the statute of limitations, leading to the increasingly widespread perception that the risks of punishment are limited (Vannucci, 2009: 242).

References Autorità Nazionale AntiCorruzione (nd), Corruzione Sommersa e Corruzione Emersa in Italia: Modalità di Misurazione e Prime Evidenze Empiriche, www. anticorruzione.it/portal/rest/jcr/repository/collaboration/Digital%20Assets/ anacdocs/Attivita/Pubblicazioni/RapportiStudi/Metodologie-di-misurazione. pdf, accessed 10 February 2018. Bevilacqua, Piero (1997), Breve Storia dell’Italia Meridionale, Roma: Donzelli. Cantone, Raffaele (with Gianluca Di Feo) (2015), Il male italiano. Liberarsi dalla corruzione per cambiare il paese, Milano: Rizzoli. della Porta, Donatella and Alberto Vannucci (1999), Corrupt Exchanges: Actors, Resources and Mechanisms of Political Corruption, Berlin and New York: de Gruyter. Di Pietro, Antonio (1991), ‘Criminalità mafiosa e tessuto economico produttivo’, paper presented to the SAP Conference, Milan. Economist Intelligence Unit (2015), ‘Democracy Index 2015: Democracy in an Age of Anxiety’, www.yabiladi.com/img/content/EIU-Democracy-Index2015.pdf, accessed 2 February 2018. Follini, Marco (1997), ‘Il ritorno dei partiti’, Il Mulino 370 (March–April). Governo italiano, Servizio Anticorruzione e Trasparenza (2010), Relazione al Parlamento, www.irpa.eu/wp-content/uploads/2012/03/10.-Anticorruzione_ rapporto-SAET_2010.pdf, accessed 2 February 2018. GRECO [Group of States Against Corruption] (2009), Evaluation Report on Italy, https://rm.coe.int/16806c692a, accessed 10 February 2018.

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Hague, Rod, Harrop, Martin and Shaun Breslin (1998), Comparative Government and Politics: An Introduction, 4th edn, Basingstoke: Macmillan. IRPA [Istituto di Richerche sulla Pubblica Amministrazione] (2012), Il fenomeno della corruzione in Italia (la mappa dell’Alto Commissario Anticorruzione), p. 122, www.irpa.eu/wp-content/uploads/2012/03/Mappa-corruzione-Italia. pdf, accessed 2 February 2018. La fiducia dei citadini nelle istituzioni (nd), ‘Rapporto Italia 2013’, Eurispes, www.eurispes.eu/content/la-fiducia-dei-cittadini-nelle-istituzioni-rapportoitalia-2013, accessed 10 February 2018. Newell, James L. (2000), Parties and Democracy in Italy, Aldershot: Ashgate. Newell, James L. (2010), The Politics of Italy: Governance in a Normal Country, Cambridge: Cambridge University Press. Newell, James L. (2012), ‘Down but Not Out: Understanding the Berlusconi Resignation and Its Significance’, Italian Politics and Society: Review of the Conference Group on Italian Politics and Society 70: 30–41. Newell, James L. (2015), ‘Falling Trees on an Uninhabited Island: To What Extent Is There Still a Southern Question in Italy?’, paper presented to the symposium, ‘Change, Resistance, and Collective Action in Southern Italy’, University of Kent, 4 September. Piana, Daniela (2017), ‘Who Wins in the “Quality of Justice”? The Redistributive Effects of Two Waves of Judicial Reform in Italy’, Contemporary Italian Politics, 9(2): 185–200. Putnam, R. (1993), Making Democracy Work: Civic Traditions in Modern Italy, Princeton, NJ: Princeton University Press. la Repubblica (2015), ‘Corruzione, la relazione di Cantone: “Piani ancora insufficienti, cambiare legge Severino”’, 2 July, www.repubblica.it/politica/ 2015/07/02/news/corruzione_la_relazione_di_cantone_piani_ancora_insuf​ ficienti_intervenire_su_legge_severino_-118142627/, accessed 19 February 2018. Rhodes, Martin (1997), ‘Financing Party Politics in Italy’, pp. 54–80 in M. J. Bull and Martin Rhodes (eds), Crisis and Transition in Italian Politics, London: Frank Cass. Transparency International (2012), National Integrity System Assessment: Corruzione e Sistema di Integrità in Italia, https://www.transparency.it/wpcontent/uploads/2012/03/NIS_ITALIA_2011.pdf, accessed 2 February 2018. Vannucci, Alberto (2009), ‘The Controversial Legacy of ‘Mani Pulite’: A Critical analysis of Italian Corruption and Anti-Corruption Policies’, Bulletin of Italian Politics 1(2): 233–64. Vannucci, Alberto (2012), Atlante della corruzione, Turin: Edizioni Gruppo Abele. Waters, Sarah (1994), ‘“Tangentopoli” and the Emergence of a New Political Order in Italy’, West European Politics 17(1): 169–82.

9 Political corruption in Central and Eastern Europe

Introduction There is likely to be something distinctive about corruption in the postcommunist states of Central and Eastern Europe (CEE) and the former Soviet Union. Political scientists have conventionally made a distinction between advanced liberal democracies, the so-called second world of communist and post-communist states, and third-world countries. These categories (especially the ‘third world’ category) are used less frequently than was once the case; but they, or similar categories, are distinguished for two reasons: first, if we want to draw general conclusions about the nature of political life, then we have to categorise in order to compare countries; second, broadly speaking, the categories are usually conceived as marking broad distinctions in patterns of government and levels of economic development in the countries concerned, and these features tend to correlate with a range of the variables that political scientists are typically interested in, including political corruption. If we place the liberal democracies of Western Europe in one category and the former communist countries of Europe, plus Russia, in another and calculate the mean CPI score for each we can see immediately that corruption appears to be a larger problem in the latter category than in the former (Figure 9.1). Corruption seems also to have been a persisting problem in these countries, as Figure 9.2 suggests. While there has been slow improvement – and some dramatic improvements, especially among countries that have joined the EU (e.g., Poland, whose score increased by 26 between 2003 and 2015) or are being drawn into its orbit (e.g., Montenegro, up 21) – elsewhere (notably Russia, up by just 2 since 2003) there has been little or no change, and in one or two cases even reversals (e.g., Belarus, down 10). Persisting corruption, as we shall see, derives principally from the transition and crisis that these states have been u ­ ndergoing,

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and the communist legacy, and all of this occurring at a time when Western states themselves have acted as poor role models for development. In this chapter we first look at the historical context of corruption  during the communist era, emphasising the systemic nature of corruption in these systems. We then take an overview of the extent of corruption in the post-communist era and of the variations in its extent

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between the states concerned. We attempt to explain the distinctive reasons for the development of levels of corruption in the CEE countries, before assessing their impact and looking at what is being done and needs to be done to reduce levels of corruption. Corruption in the communist era If drawing firm conclusions about the presence of corruption in liberal democracies is problematic, the difficulties are multiplied for the authoritarian regimes of the communist era, where information could not circulate freely, where it might be placed in circulation for political reasons and where the potential distortions to which any data are subject are therefore even greater than would otherwise be the case. If reliance on circumstantial evidence is necessary in any case, this is even more true when it comes to the states of the communist era. To our knowledge, the only sustained attempt at quantifying corruption using primary source material is that of Holmes in 1993. He looked at the USSR alongside the People’s Republic of China, gathering data from the Current Digest of the Soviet Press for the period 1966–87 and, for China, from Renmin Ribao for 1966–83 and Summary of World Broadcasts for 1966–86. He found a total of 272 reports involving 462 individuals for the USSR and 387 reports involving 351 individuals for China. The problem is whether this is ‘a lot’ or ‘a little’. For a long time, the assumption was widespread that corruption was likely to be low in the communist countries, and for several reasons. First, the assumption chimed with the communists’ own ideological beliefs that, because their society had progressed beyond private property and the profit motive, the communist official ‘was a dedicated public servant who would never pursue private gain to society’s detriment’ and political corruption was something to be found only among public officials ‘in decadent capitalist systems’ (Kramer, 1977: 213). Second, from the point of view of communist orthodoxy corruption was not merely a potential nuisance, a potential practical problem, but something that posed an implicit ideological challenge and so, for the ‘true believer’, it had the potential to be deeply shocking. Third, totalitarian regimes – such as Stalin’s Russia and Mao’s China – by their very nature render not only illegal behaviour but even behaviour that is merely unorthodox extremely risky.1 Fourth, part of the risk is linked to a lack of rule-of-law principles – meaning that rules are subject to sudden change and that your fate, if you are accused of doing something wrong, is subject to considerable uncertainty.2 Finally, at times the chance was fairly strong that, if you were found guilty, the punishment meted out would be draconian. For example, in the young communist state of Mozambique in

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1983 a businessman was accused of having paid large bribes to customs officials to enable him to smuggle prawns from Swaziland. He was tried in camera, found guilty and executed after legislation, which was passed only after he had committed the crime, was rushed through to enable the offence to be punished in that way (Holmes, 1993: 105). In the People’s Republic of China a party official and manager of an energy company, one Wang Shouxin, was found guilty of having embezzled over 500,000 yuan in cash and goods from 1971 to 1978. She too was executed (Holmes, 1993: 113). Following the death of Stalin in 1953, and of Mao Tse Tung in 1976, the totalitarian colouring of Soviet and Chinese societies began to fade. Although they remained authoritarian, the scale of coercion diminished; control from above was less intrusive into people’s everyday lives. Consequently, as is clear from academic and journalistic accounts, the impression took hold that corruption was much more widespread in these societies than had first been thought. This seemed to be partly a consequence of an at least marginally freer flow of information in these societies. Thus, John Kramer noted in 1977: an Izvestiia article in 1974 acknowledged that ‘instances of embezzlement and irresponsible attitudes toward material goods are still quite common,’ while a plenary session of the U.S.S.R. Supreme Court noted that bribery ‘represented a major social danger and required decisive measures to eradicate it.’ In 1970 a Soviet criminologist reported that economic crimes such as bribery and embezzlement accounted for almost one quarter of all crime in the country, and in Georgia … almost 40 percent of all reported criminal offences. (1977: 214)

Eighteen years later, reflecting on the situation in what was by then the former Soviet Union, Marie Mendras (1995: 186–7) wrote that once the grip of centralised control was relaxed, after Stalin’s passing, there was a flowering of crimes of all kinds, great and small, among the large caste of state functionaries, such that, according to Muscovite writer and jurist Arkadii Vaksberg, the Soviet Union of the 1970s was above all the golden era of the communist party mafia. Corruption under Breznev was no longer limited to the abuse of power of the junior apparatchik or the factory section head. Networks of corruption, developed everywhere, in all provinces at every level and extended upwards, in almost every case towards Moscow. (Mendras, 1997: 187, my translation)

Finally, in 2000, Richard Sakwa argued that communist Russia had been characterised by ‘metacorruption’, which he defined as ‘a system which is corrupt in its very essence’. ‘The communist system was metacorrupt

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in that it never subordinated itself to the rule of law (although of course it ruled by and through the law), because of its lack of accountability, and because of the systematic enjoyment of privileges granted its leadership from the common ownership of the means of production’ (Sakwa, 2000: 123). In short, most informed commentators have been of the view that corruption in communist CEE and Russia was widespread (whatever ‘widespread’ might amount to in quantifiable terms), and they have pointed to a number of features of these countries’ political and economic systems that would explain why this was the case, namely: the communist legacy, the weakness of public institutions, the difficulties of establishing robust legal frameworks and a sense of economic injustice and insecurity. In the first place, they were systems organised along socialist lines, with public ownership of the means of production and an absence of private property – meaning that for ordinary people personal enrichment on any scale was not really possible unless through the search for petty privileges and the exploitation of contacts with appropriately placed officials within the party-state machine. Second, they were systems characterised by centralised economic planning, through which primacy tended to be given to heavy industry, with a consequent scarcity of consumer goods, the more or less only channel of access to many of these being through the state functionaries, who had access to them as privileges of their positions. Third, authoritarian leadership and the absence of the rule of law meant that mechanisms of accountability were weak. Consequently, officials with few scruples could effectively embezzle public property, since they were by definition responsible for it, while at the same time having monopolistic control over it. Ordinary citizens, on the other hand, had recourse to very few, if any, mechanisms to obtain redress for abuses of power by a functionary, other than by suitable ‘approaches’ to the functionary’s boss. Fourth, the absence of the rule of law and of norms of due process meant that social capital was thin on the ground, so that public officials were more likely to lack scruples than they otherwise would have been. Given the system of public ownership – which meant that officially, everything belonged to everyone, and thus nothing belonged to anyone – the lack of social capital undermined incentives to treat public property as anything other than a resource to be ­plundered for one’s own advantage. Fifth, the historical context in which the Bolsheviks took power in 1917 was one in which corruption appeared already to be widespread – this because the large dimensions of the country meant that local administrators could be only weakly controlled from the centre. In many if not most cases administrators were unpaid: they were expected to feed themselves through their own business dealings,

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and therefore bribes and ‘supplementary taxes’ imposed by administrators were perceived not as corruption but as ‘the normal state of things’ (Mendras, 1997: 185). Against this background, in the decades following the Bolshevik revolution Communist Party functionaries’ access to consumer goods enabled them to maintain power over ordinary citizens through the management of scarcity. The provision of corrupt access to goods could be used to reduce levels of popular dissatisfaction; it has even been suggested (by Holmes, 1993) that in Czechoslovakia in the post-1968 period corruption was actually encouraged by the regime’s leaders. By humanising relations between citizens and officials, minor corruption helped to alleviate the estrangement of officialdom from ordinary people. Corruption in the post-communist era These features of the communist era have a not insignificant part in explaining the contrast depicted in Figure 9.1, thanks to the phenomenon of path dependency (see chapter 8), which has ensured the persistence after communism’s collapse of many of the attitudes nurtured during the communist era. For instance, the relative absence of attitudes of personal responsibility and of respect for formal laws and rules-based procedures impeded the development of freedom of information legislation (Poland, for example, provided guarantees of public access to information only in 2002), and made it difficult for politicians and public officials to grasp such basic concepts as conflicts of interest. This was most apparent in connection with the massive privatisation process and the efforts to establish a market economy that ensued in the wake of communism’s collapse. In the immediate aftermath of the collapse there was no bourgeois class to assist in the process of privatisation, in terms of providing demand for the purchase of shares. This meant that the nomenklatura (former elites) were well placed to be directly involved in the sell-off of state assets, and in a position to work bribes and kickbacks from those to whom they sold assets at knockdown prices, as well as becoming share-holders themselves. Few of the post-communist states had conflict-of-interests legislation to prevent this (Holmes, 2006: 192). Thus, a second factor, things might have been different if there had been robust public institutions in place, enjoying ordinary citizens’ respect. But again, the phenomenon of path dependency intervened, with the result, in the initial post-communist years, that the traditional lack of respect for the rule of law and norms of accountability was reflected in the absence of well-functioning states with efficient judicial systems

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capable of delivering consistently sound and publicly acceptable verdicts. It is not surprising, then, that massive corruption appears to have been associated with the privatisation process. In the early years conflicts relating to property ownership would often be passed from one jurisdiction to another, with no guarantee that they would end with a fair judgment (Mendras, 1997); at the same time, conflicts took place between different parts of the public administration over who had the right to decide what should be sold, how and on what terms. A third and closely related factor in the post-communist political landscape that is relevant for understanding Figure 9.1 has to do with party finance. The transition from communism to democracy entailed the creation of new legal systems, and the early post-communist years were characterised by an especially high degree of legal uncertainty in a number of areas, including party finance, where laws were either ambiguous or non-existent. At the same time, the emergence of competing political parties provided power bases for new and recycled politicians, who faced the need to strengthen their positions and undermine those of their rivals, all in a context of great uncertainty. The introduction of effective party-finance laws has proved to be extremely difficult. Political parties can be viewed either as quasiagencies of the state and therefore subject to all the rules of financial transparency to which any other public body is subject, or else as private civil-society organisations, entitled to degrees of discretion and privacy in the management of their finances. Given the communist heritage, the tendency has been for the latter model to predominate; therefore, for the purposes of preventing corruption, the implementation of effective rules on the reporting and the auditing of party accounts has been understood to be essential. However, where auditing has been carried out by state audit offices, there have tended to be problems of bureaucratic inefficiency; where auditing has been done by parliamentary commissions, problems of conflict of interest have tended to arise; and where by the judiciary, perceptions of the judiciary’s corruptness have tended to stand in the way of confidence in the impartiality of its findings (Smilov, 2007: 7). The lack of a clear understanding of what separates legitimate and illegitimate forms of lobbying has often reduced the obstacles in the way of the giving and receiving of government favours. In the case of the Russian State Duma, for instance, the existence of informal price lists for the performance of a range of legislative services from questions to ministers to the introduction of bills has been suggested (Smilov, 2007: 13). The relative novelty of party competition has created uncertainty about where to set limits on campaign expenditures, and the enforcement of limits has been obstructed by the economic problems caused by the

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transition to post-communism. ‘An example is Bulgaria in 1997, when hyperinflation had rendered meaningless the legal limits governing contributions and expenditure’ (Smilov, 2007: 15). Elsewhere, enforcement of contribution and disclosure requirements has been obstructed by fears on the part of donors to opposition parties that they might be subjected to administrative harassment by the government. To the communist legacy, the weakness of public institutions and the difficulties of establishing robust legal frameworks should be added a fourth factor, the sense of economic injustice and insecurity that for many ordinary citizens was part and parcel of their experience of the post-communist transition process. Their lives under communism had been dull and austere, but for the most part secure. All that was now changed. Systemic unemployment had been almost unknown in the communist world (Holmes, 2006: 190), but now there were rapidly rising unemployment rates, coupled with extremely high rates of inflation ‘at a time when many officials’ salaries were either not being increased at a commensurate rate, or in extreme cases not being paid at all’ (Holmes, 2006: 191). The collapse of communism coincided with the onset of an international economic recession and the growing popularity, among Western policy-makers, of the application of neoliberal assumptions to the management of the economy and public institutions. This, while bringing growing job insecurity, served as a model of change for the post-communist countries. The ethically questionable way in which processes of privatisation were carried out, and the new concentrations of wealth that they produced, led many ordinary people to believe that the wealth had been acquired improperly, to experience a new form of the ‘us’ and ‘them’ divide which they had experienced under communism and to perceive themselves as the losers in the transition. Witnessing the apparent de facto (and occasionally de jure) immunity of many high-level, corrupt officials produced a sense of frustration that in some cases translated into an attitude of ‘if you can’t beat ’em, join ’em’, and therefore exacerbation of the corruption problem (Holmes, 2006: 193). To explore post-communist corruption further, we have to come to terms with the fact that early expectations that communism’s collapse would everywhere result in the emergence of more or less stable democracy have so far been confounded, and that there appears to be considerable variation (to which we have already alluded) in the extent of the corruption found in the post-communist countries. As Thomas Carothers (2002) has argued, looking at events and trends around the world, many Western observers of the 1990s believed that they were witnessing the unfolding of a global trend away from authoritarian forms of government and towards democracy. Since then, while the political

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systems of some countries have indeed become democratic, others have established themselves in a grey zone with some attributes of democracy but significant democratic deficits. According to the transition paradigm popular among academics, countries emerging from dictatorship would pass through phases of ‘opening’, ‘breakthrough’ and ‘consolidation’, when regular elections would allow genuine opportunities for political participation, provide genuine accountability and generate other democratic reforms. Instead, some countries that have experienced the first two phases (cracks in the former regime followed by its collapse) have consolidated regimes that are themselves authoritarian (as in the case of Belarus). Alternatively, they have had elections between elites widely perceived as corrupt, self-interested and ineffective; weak states; and governments incapable of significant reforms (as in the cases of Moldova, Bosnia, Albania and Ukraine). Or else they have consolidated dominant political groupings that are able to manipulate elections, undermine the independence of the judiciary and ensure that opposition parties remain ineffective and lacking in credibility (as in the case of Russia). Figure 9.3 shows, for the CEE states and Russia in 2015, the relationship between their scores on the Democracy Index described in the note to Figure 8.1, and their CPI scores. The correlation is 0.8. Exploring the variation in these countries’ experiences as democracies or as inhabitants of the grey 9

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Figure 9.3  CPI and Democracy Index scores, CEE countries and Russia, 2015 Sources: Transparency International 2015 Corruption Perceptions Index scores taken from http:// www.transparency.org/cpi2015 and Economist Intelligence Unit 2015 Democracy Index scores taken from http://www.yabiladi.com/img/content/EIU-Democracy-Index-2015.pdf Key to country codes: AL, Albania; BA, Bosnia and Herzegovina; BG, Bulgaria; BY, Belarus; CS, Czech Republic; EE, Estonia; HR, Croatia; HU, Hungary; LT, Lithuania; LV, Latvia; MD, Moldova; ME, Montenegro; MK, Macedonia; PL, Poland; RO, Romania; RS, Serbia; RU, Russia; SI, Slovenia; SK, Slovakia; UA, Ukraine

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zone may help to shed light on the considerable variation between them (CPI scores from 27 to 70) in the perceived levels of corruption. On the one hand, there are countries like Russia where many of the democratic features widely thought of as posing barriers to corruption are weak or missing. Formally a semi-presidential regime, with presidential elections having taken place at four-year intervals from 1996, Russia in fact has a presidency that is hegemonic in that its position is legally superior to that of other institutions and it can draw on vast organisational resources to exercise overwhelming power in the system. Legally, the president has extensive leeway, granted by the 1993 constitution, to issue decrees having the force of law. In doing so he can be overridden only by two-thirds majorities in both branches of the legislature. At times the effectiveness of this power of veto is further diminished, as in December 2003 when a two-thirds majority of presidential supporters emerged in the State Duma. ‘[T]he Duma can be dissolved by the president if it does not approve his prime minister designate’ (Willerton, 2005: 28). Organisationally, the president is supported by a vast array of agencies and executive bodies in the exercise of the supervisory p ­ rerogatives granted to him in the 1993 constitution to ‘[define] the basic directions of the domestic and foreign policy of the state’ and to manage centre–periphery relations. ‘The reality of Russian ­decision-making’, therefore, is that much occurs behind the scenes and involves more informal relationships among both governmental and private actors. Such informal operations are nearly impossible to observe and evaluate definitively … The high-level political intrigues and hidden manipulation of resources and ideas that were at the heart of the Soviet system have found resonance in the Yeltsin–Putin era. (Willerton, 2005: 33).

So, accountability and the separation-of-powers principle are only weakly established in the Russian system, where presidential elections also function poorly as mechanisms of accountability. This is not just because of ballot-rigging and electoral fraud, although that does go on, but also because the media find it difficult to act as an effective ‘fourth estate’: although freedom from censorship is enshrined in article 29 of the 1993 constitution and there is a mixture of state-run and commercial TV stations, those with the greatest reach are under the control of the government and heavily biased towards the presidency. The power of commercial stations to challenge and criticise has been limited by legal subterfuges as when, in 2001, the Russian authorities charged Vladimir Gusinsky, head of the NTV channel, with fraud and tax evasion, using the charges to wrest from him financial control of his media empire.

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Troublesome journalists have suffered violence and even murder. In elections there has been ‘hidden advertising’ ‘in which candidates bribe journalists into writing positive articles about them that appear as regular articles rather than advertisements’ (Oates, 2005: 125). At other times, contenders for public office have been subjected to black propaganda campaigns involving the broadcast of kompromat (or compromising materials) about them. Such deficiencies might not have been present, or might have been less in evidence, had there been a vibrant civil society with autonomous pressure-group activity and extensive political participation. But these qualities have been lacking thanks to the very features of the system just described and Vladimir Putin’s efforts to integrate groups into the regime’s support base. These have been pursued in a variety of ways, notably through offering groups privileged access to government officials and other state benefits, implicitly in exchange for foregoing independent and critical stances towards government policy (Evans, 2005: 109). Against this backdrop, Putin has remained popular and has succeeded in winning large majorities (53.4%, 71.9% and 63.6%, respectively) at each of the three elections he has contested. This is because voters deeply mistrust public institutions – parties, representative bodies, the judiciary, the police – and their personnel; but precisely for that reason they have considerable confidence in the president, who is viewed as a strong man with charismatic authority.3 ‘In the turbulent times since the collapse of the Soviet system’, which has seen widespread hardship and an enormous increase in inequality, ‘much of the Russian public looks … for stability and reassurance rather than criticism of the regime’ (Oates, 2005: 127). At the other end of the spectrum are CEE states like Poland, Hungary, the Czech Republic, Slovakia, Slovenia, Estonia, Latvia and Lithuania. In these countries we find stable democracies which, in terms of the rule of law, accountability and the separation of powers, all bear comparison with the democracies of Western Europe. Key in this respect has been these countries’ accession to the EU in 2004. In the aftermath of communism their political elites were drawn to the EU by their history: for them, the end of communism meant the recovery of genuinely independent statehood. Their political elites were aware that, prior to the twentieth century, they had been under the control of large, multi-national empires; that the rigidity and conservatism of these empires’ political and social institutions had prevented them from achieving the economic dynamism of their West European neighbours; that the post-First World War settlement ‘had failed to provide an overarching security framework and structures to promote regional coopera-

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tion without which “national self-determination” was’, as the run-up to the Second World War showed, ‘to be precarious and short-lived’ (Batt, 2007: 13). After 1989, joining the EU and NATO (the North Atlantic Treaty Organization) seemed to offer the prospect both of catching up with Western Europe and of obtaining shelter within an overarching framework without which their effective independence could not be guaranteed. For the then EU member states, enlargement and the political stabilisation and economic revival in CEE that would come with it offered security guarantees for Western Europe too. The prospect of accession to the EU was a powerful driver of democratic consolidation in the eight states because it was a matter of consensus among their political elites, thus moderating conflict among them, and because of the accession criteria. These included the achievement of ‘stability of institutions guaranteeing democracy, the rule of law, human rights and respect for and protection of minorities’. Moreover, the political elites were under pressure to ensure that these conditions were in place some time before applying for membership; they were aware that the EU member states required reassurance that they would not be politically and economically burdensome to the existing EU, and they knew that the member states ‘are easily scared by a country that says it wants to join, but is far from having the basic requirements … in place’ (Grabbe, 2007: 113). This is not to say that corruption has become insignificant as a problem in these countries, which have in fact been rocked by a number of high-profile cases. For example, in June 2013 it came to light that Jana Nagyová, one of the closest collaborators of Czech Prime Minister Petr Necˇas, had misused the Intelligence Service to monitor Necˇas’ wife without the official approval of the defence minister, but supposedly to counter security risks connected with Necˇas’ role as prime minister  – although Necˇas and Nagyová got married in September of the same year. At the same time a number of lobbyists and members of Parliament were arrested and charged with abusing public contracts in order to enrich themselves – an incident that led to the resignation of the prime minister and the entire cabinet. In January 2016 the Lithuanian health minister, Rimante Salaseviciute, admitted having bribed a doctor a few years previously and was forced to resign; and in May 2016 the leader of the opposition Liberal Movement, Eligijus Masiulis, resigned also after allegations that he had taken a bribe of €106,000 from MG Baltic, one of the largest business groups in the Baltic countries. In April 2016 it was revealed that the Hungarian Central Bank had transferred some $1 billion to a series of foundations that it had established in 2014, to be spent on a range of projects and enterprises spearheaded by a

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number of the bank chief’s friends and relatives. The scandal threatened to engulf the government, which had tried unsuccessfully to secure the passage of legislation stipulating that the bank’s transfers did not ­constitute public spending and were therefore exempt from the transparency rules to which public outlays are normally subject. Not even Estonia, a country whose CPI score is higher than those of many of the old-established democracies in the West, has been immune. In September 2015 police detained former acting Prime Minister and Mayor of Tallin Edgar Savisaar on allegations that he had accepted properties and discounts worth hundreds of thousands of euros for himself and his Estonian Centre Party. As a result, he was suspended from the mayoral office. Even before the scandal broke, Savisaar had been a controversial politician accused of having secret ties to Vladimir Putin’s United Russia party, of illegal surveillance of other politicians and of having acquired property at many times below market value from a firm that had long been a financial sponsor of his party. The impact of corruption and the effects of its exposure Despite the consolidation of democracy in many CEE countries, corruption remains a significant problem, as we can see in more detail when we consider some of its impacts. Earlier chapters have discussed the potential impact of corruption generally. Here we are interested in what, if anything, is distinctive about the effects of corruption in the CEE states and Russia. The feeling that there probably is something distinctive is prompted by the argument in Michael Johnston’s book Syndromes of Corruption, which makes the case that, cross-nationally, it is possible to identify ‘four distinctive corruption syndromes that reflect and perpetuate deeper problems of democratic and economic participation and institutions’ (Johnston, 2005: 2). Johnston’s argument is that there are four corruption syndromes whose characteristics arise, on the one hand, from variations in the ways in which people use, retain and relinquish wealth and power, and on the other hand, from variations in the strength of the institutions sustaining these activities. Of the four syndromes, two are relevant here: what Johnston calls ‘Elite Cartels’ and ‘Oligarchs and Clans’. Elite Cartels corruption and its impact Elite Cartels corruption, which is the kind most distinctive of the CEE countries (and also, according to Johnston, of Italy), takes place in a context in which public institutions are moderately strong (i.e., they are viewed as legitimate and are able, by and large, to protect people’s rights) but where established procedures are not always rigidly adhered

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to. At the same time, economic dealings, the acquisition and management of wealth, are not entirely confined to a private sector that is kept rigidly separate from the public sector and the state. Consequently, there is some collusion between economic and political elites, which will sometimes, if not often, use corruption to shore up their respective positions. In other words, the relative novelty of democracy and the rule of law makes the outcomes of political competition and policy-making relatively unpredictable, and the protection of the rights associated with property ownership at least somewhat uncertain. In face of this insecurity, political and economic elites collude as a means of creating an orderly environment for the pursuit of their interests and staving off challenges from competing groups of elites. First, one of the most straightforward and obvious impacts of corruption is that it has figured much more often and to a far greater degree in election campaigns in the CEE countries than in the campaigns of the older-established democracies. This is in part to be understood in terms of the roles that allegations of corruption and investigations against rivals perform for competing elites in contexts in which corruption sustains both widespread popular cynicism towards political parties and politicians (Millard, 2007: 51) and popular demands for reform. In such contexts, where political parties have shallow roots – ‘often e­ mbodying contending elite followings rather than representing major segments of society’ (Johnston, 2005: 89) – there is often ‘no shortage of official anti-corruption proclamations and campaigns, though often they will be used to punish dissidents or rivals rather than to pursue reform as such’ (Johnston, 2005: 90). Meanwhile, opposition parties, led by elite figures who are excluded from power, come and go on anti‑corruption platforms. For example, in 2001 the National  Movement, led by the former king of Bulgaria, Simeon II, won 42.7% of the vote at its first electoral outing by building on its leader’s reputation as an honest man who would clean up Bulgarian politics and transform the country economically. But new and protest parties railing against ‘the system’ are just as likely to find themselves being absorbed by it as they are to transform it once they experience the pressures of office. ‘[D]odgy deals with the Bulgarian telephone company, a tobacco enterprise and a highways concession scheme all led to a drop in support for the [National Movement] at the 2005 elections’ (Haughton, 2007: 68). Second, therefore, corruption in the CEE states appears since the late 1990s to have had an unusually dramatic impact on the lives of those individuals who have been in some way touched by it. Journalists have suffered violence when their reporting activities have been inconvenient.

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Politicians have sometimes been forced to relinquish office peremptorily on the strength of allegations alone and/or simply because they have been associated with others against whom accusations have been made. Andris Škeˉle, Latvian prime minister from December 1995, is one such example. He resigned in January 1997, following criticisms of his appointment as finance minister of a businessman who was accused of corrupt practices, and suggestions that he was being too soft in the application of conflict-of-interests legislation among members of his own entourage. His resignation was rejected, but he resigned for a second time later in the year, following criticisms that his application of the law was now too draconian. He then faced allegations that he had accepted a kickback from a German company in 1992, yet he was never ­prosecuted (Holmes, 2006: 58–9). Third, corruption has played a significant part in delaying achievement of the EU accession ambitions of some countries, with potentially serious consequences for the region as a whole. For example, Albania, the poorest and arguably the most corrupt country in Europe,4 was drawn to EU membership for many of the same reasons as the other CEE countries, but was unable to achieve candidate-member status until June 2014. In the meantime it suffered from a huge trade imbalance with the EU and faced the risk of becoming ‘an isolated island in the heart of an integrated continent, behind a wall of visa restrictions blocking a desperate population from seeking a better life and work elsewhere’ (Bogdani and Loughlin, 2007: 92). Elite Cartels stood as a significant obstacle in the way of progress. Because of the links between organised crime and corruption, on the one hand, and political elites, on the other, the rule of law has not been effectively applied and this has led Albania to fall foul of numerous EU and international warnings. In 2005, the EU Commission concluded that Albania had gone far in the adoption of anti-corruption legislation and action plans, without this being reflected in implementation and action on the ground. Understandably, this was attributed to a lack of political will. Fiercely competitive political parties, with close ties to more or less legitimate rival businesses, and even to organised crime, have been under pressure to use the prospect of EU membership as a device to prolong their hold on office, while in practice bending to the demands of those less lawful entities ‘that are interested in keeping Albania out of European Union control’ (Bogdani and Loughlin, 2007: 147). In July 2016 the EU, disappointed with the conflict between the governing Socialists and the opposition Democratic Party (DP) and the consequent lack of progress against corruption, issued an ultimatum on a promised

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reform of the judiciary, without which it seemed that progress to accession negotiations would be unlikely. The problem was that the reform required ­constitutional change and therefore needed the support of the DP in order to pass; but, since it required candidates for the judiciary to be vetted by an international committee of EU and US officials, the DP argued that it compromised Albania’s sovereignty. EU member states are aware that failure to achieve the accession of Albania and of those Balkan states that suffer from analogous corruption problems carries significant risks. These are the risks of the region slipping back into political instability, thereby presenting the EU with a large bill for military, policing and peacekeeping missions, and depriving it of unrestricted access to potential markets and cheap labour through which it might – populist, anti-immigrant parties permitting – sort out ‘the twin problem of Western Europe’s labour shortage and the Balkans’ surplus working age population’ (Bogdani and Loughlin, 2007: 89). Oligarchs and Clans corruption and its impact Oligarchs and Clans corruption, according to Johnston (2005), is most likely to be found in contexts of rapid economic and political change like that characterising Russia in the initial post-communist years. Thus, if Elite Cartels corruption is about control, then Oligarchs and Clans corruption is about protection (Johnston, 2005: 121): the rapidity of change and the sheer weakness of public institutions creates a scramble for wealth, together with a recourse to private armies and organised crime to protect it; a breakdown of discernible distinctions between the public and the private, between politicians and entrepreneurs; election rigging; ineffective tax collection; and infrequent payment of official salaries. A first distinctive consequence of corruption in post-communist Russia (although it was as much cause as consequence) was a situation of poverty and insecurity which facilitated recruitment to contending clans and extended ‘across business, state agencies, law enforcement, the communications media’ and so on (Johnston, 2005: 121), depriving the state of much of its autonomy. One such clan was Boris Yeltsin’s ‘family’, consisting of relatives and political insiders, which was granted criminal immunity by Vladimir Putin in his first presidential decree, widely seen as a quid pro quo for Yeltsin’s support in his bid to win the presidency. Second, Russian corruption has been associated with unusually high levels of violence, as the inability of public institutions to protect property rights and enforce contracts has prompted recourse to private protection. Violence has also been encouraged by its potential as a tool to discipline clan followers, whose loyalty can otherwise be bought only by money and material rewards.

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Third, thanks to the foregoing, the Russian economy went into freefall in the period following the end of communism, its GDP falling for seven years in a row and bringing about a cumulative decline of 40 per cent from the 1990 level (Rutland, 2005: 187). Multiple factors were involved, but there can be little doubt that the type of corruption will have been a contributory factor. For one thing, it seemed to encourage levels of capital flight (put by the Russian authorities at $11 billion per year between 1994 and 1998) far higher than those experienced by such CEE countries as Poland, Hungary, the Czech Republic, Slovakia and Slovenia (Loungani and Mauro, 2000: 5–7). This was due both to weaknesses in the institutions for protecting property and to lack of economic confidence, with consequent uncertainty about future returns on investment within Russia. Here we see the likely operation of a vicious circle, with corruption undermining institutions, this leading to an export of capital and still more corruption, a further erosion of confidence in the economy, more capital flight and so on. It also discouraged foreign direct investment (FDI), which, despite the opportunities offered by marketisation and privatisation following the fall of communism, hardly changed at all, going from $2.1 billion in 1995 to $2.7 billion in 2000.5 Compare this with the much more successful case of the Czech Republic, which saw FDI increase from $2.6 billion to $4.9 billion over the same time period, or that of Poland, which saw an even larger increase, from $3.7 billion to $9.3 billion. Finally, corrupt businesses were not very likely to pay their taxes, nor were corrupt officials very likely to be good at collecting them, thus depriving the state of resources with which to promote economic reinvigoration. In 1998 ‘Russia’s inability to collect taxes’ was, according to Daniel Treisman (1998: 55), ‘rapidly becoming the greatest threat to its economic and political stability’. Corruption prevention and control On 15 November 2016 Russia’s economy minister, Alexei Ulyukayev, was arrested on charges that he had taken a $2 million bribe to approve the acquisition by the state-owned oil giant, Rosneft, of a 50 per cent stake in the mid-sized oil producer Bashneft. Ulyukayev was the highestranking politician to be arrested since 1991. At the time, it was impossible to know whether the arrest had any broader significance or was merely part of an internal Kremlin power struggle. On the one hand, it followed the arrest, in September 2016, of Dmitry Zakharchenko, an anti-corruption official, after police found $120 million in cash in his Moscow flat (Telegraph, 2016); the apprehension, in July 2016, of Investigative Committee officials accused of having accepted a bribe;

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and the launching, in May 2016, of investigations into accusations of widespread misappropriation and embezzlement in the space industry. On the other hand, Ulyukayev’s arrest was ordered by the Investigative Committee, which reports directly to the president, and using the legal system to deal with political opponents is common in Russia. In light of the country’s record in combatting corruption, it seems unlikely that the event was an indicator of any major new departure. In fact, the government’s efforts in the anti-corruption sphere appear contradictory. On the one hand, it is clearly aware of the pressures  – deriving from public opinion, the drain on public resources and Russia’s standing in the world – to do something. The dangers posed to the government by corruption are real ones: according to Mark Galeotti, corruption ‘has become one of the relatively few rallying cries able to unite the disparate opposition’ and it ‘provides an issue that middle class, metropolitan radicals might be able to use to stir up and mobilize support’. Moreover, in a context in which large numbers of highprofile  figures seem to have guilty secrets, moves against them can serve as a useful assertion of presidential authority (Galeotti, nd). This may help to make sense of the anti-corruption drive announced by Putin after he was re-elected as president in 2012, of the various highprofile arrests of which the above-mentioned remain, in 2018, the latest examples and of the measures taken in recent years to meet the recommendations and requirements of international bodies such as GRECO and the UN. These measures include a ban on public officials holding foreign bank accounts; a new offence of attempted bribery (hitherto only actual bribery was criminalised); legislation on access to information; a tightening of regulations on conflicts of interest; and the adoption of a code of ethics for public officials.6 According to this view, a serious ­anti-corruption campaign is underway in Russia. On the other hand, President Putin is aware that a vigorous anticorruption effort has its downsides. Just as under communism corruption could be used to reduce the estrangement of ordinary people from officialdom, so now can it be used as a tool of power maintenance, because the possession of compromising information allows officials to be controlled from above. Too vigorous a pursuit of corrupt elites might weaken their loyalties and, by raising popular expectations, strengthen demands for radical change that threaten the president’s own position. There are those who argue that anti-corruption and the high-profile arrests that have gone with it are to be understood less as indicators of serious clean-up intentions and more as a political marketing campaign. They are ‘a reality show’ (Borik, 2016) in which carefully selected attacks on the powerful are designed to shore up Putin’s power

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by ­conveying the message that no one can be considered untouchable, whatever their connections, and by broadcasting to the public ‘the message that no problem can be solved in Russia without the Kremlin’ (Borik, 2016). This impression is reinforced when it is borne in mind that the anti-corruption measures taken in response to international pressure have sat alongside measures working in the opposite direction, such as restrictions on the activities of non-governmental organisations (Transparency International, 2013); that the measures are, arguably, of less relevance to the ‘grand corruption’ that is the distinguishing feature of the Russian case than to corruption at lower levels of the hierarchy; and that many of the measures might in any case remain dead letters in the absence of effective ‘auxiliary provisions’ in such broader areas as accountability, the rule of law and the separation of powers. So, in the Russian case it must be inferred that, in terms of the seriousness and likely effectiveness of official efforts to combat corruption, the jury is still out. Anti-corruption efforts can be discussed with somewhat more confidence with regard to the CEE states for which NIS scores are also available. As was explained in chapter 8, the NIS is conceptualised as an ensemble of public and private institutions which are periodically assessed in terms of their capacity, their internal governance and their role in the overall integrity system in order to arrive at conclusions about what the country in question needs to do in order to address the corruption problem. For this reason, interrogating NIS provides a convenient framework for comparing countries in terms of the robustness of their anti-corruption efforts. Table 9.1 shows the scores, out of 100, attributed to each of the institutions (or ‘pillars’ as they are called) comprising the NISs of Latvia and Albania in 2011 and 2016, respectively, the choice of these two countries being dictated by the contrast in their CPI scores as shown in Figure 9.3, the contrast in their EU membership statuses and the availability of recent NIS assessment reports on them in English. After 2011, the number of pillars included in NIS assessments was raised from thirteen to fifteen. For comparability, Table 9.1 includes only the original thirteen. Comparisons must be treated with extreme caution, ‘due to differences in data sources across countries applying the assessment methodology and the absence of an international review board tasked to ensure comparability of scores’ (Transparency International, 2016: 19). The latter are arrived at by having teams of researchers assess each pillar in terms of its resources and independence (capacity), its transparency, accountability and integrity (internal governance), and the extent to which it fulfils its role in preventing and fighting corruption. In making their assessments, researchers evaluate both legal frameworks and actual

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Table 9.1  NIS scores for Albania (2016) and Latvia (2011) Pillar

Albania

Latvia

Legislature Executive Judiciary Public sector Law enforcement agencies Central election commission Ombudsman Supreme audit institution Anti-corruption agencies Political parties Media Civil society Business

51.3 50.0 36.1 37.5 38.8 40.9 57.6 59.0 40.9 40.9 37.5 34.7 40.2

69.0 78.0 75.0 61.0 72.0 89.0 54.0 92.0 76.0 73.0 67.0 75.0 62.0

Sources: Transparency International (2011, 2016).

practice, relying on legislation, secondary reports, interviews with key informants and other sources. They then rate each indicator (resources, independence etc.) in law and in practice on a five-point scale: 0, 25, 50, 75, 100. Scores are then averaged to provide an overall score out of 100 for each pillar. Not surprisingly, the scores for Latvia are (with one exception) higher than those for Albania. As vehicles for assessing the effectiveness of anti-corruption efforts, the scores suffer from the problem of circularity, in that corruption is lower in Latvia than in Albania in large part, presumably, because its NIS is more robust, but part of the evidence that corruption is lower will be that it has a more robust NIS. Also, as vehicles for telling us about the efforts the authorities are making to combat corruption, the scores are vulnerable to the problem of cause and effect: is a NIS weak because the authorities are not serious about reform, or does a weak NIS preclude serious reform efforts? Where the scores are valuable is in prompting questions about what is actually being done in specific areas that appear to be ineffective. In the case of Albania this appears above all to be the judiciary, widely perceived as corrupt, subject to strong political pressure and cronyism in appointments, and with inadequate resources, according to the NIS researchers. For example, the researchers noted that the judiciary’s budget was not protected against arbitrary decisions by the executive, since it was determined as part of the overall state budget – which required only a simple vote of Parliament, where the executive always commands a majority. Appointments to the High Court were

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likewise made on the basis of simple parliamentary majorities. Thus, important safeguards of judicial independence were missing. Alongside this, judicial salaries were pegged to official salaries in general, but by international standards they were set at a low level, and there were no mechanisms for adjusting official salaries to inflation. Hence there were no mechanisms in place to minimise the risk of judicial personnel succumbing to temptations to supplement their earnings by illegitimate means. With the constitutional reforms adopted in July 2016, measures were taken to address these issues, for example, by removing the power from Parliament to make High Court appointments and placing it in the hands of the judiciary’s self-governing body, the High Judicial Council, and by stipulating that the appointment of judges would be subject to an ‘evaluation of their assets’. However, the actual impact of these reforms would depend on the subsequent passage of the ordinary legislation ­necessary to give effect to them. In the case of Latvia, the main weakness appeared to be in the area of the Ombudsman, that is, the official tasked with investigating individual complaints against institutions and promoting the protection of individual rights and good administration. The NIS researchers were concerned about the low public profile of the Ombudsman’s Office, the questionable personal authority of the Ombudsman himself and the lack of a proactive attitude to the work of the office. At least the first and third of these issues appear to have been dealt with fairly promptly: in February 2012 the European Commission Against Racism and Intolerance had recommended that budget cuts introduced in the wake of the 2008 financial crash should be reversed and the accessibility of the Office be improved. In 2014 it reported that funding had increased from €794,355 in 2010 to €1,007,911 in 2012, that the Ombudsman’s website had been made available in various languages and that staff had ‘visited various regions to meet with interested persons and groups’ (European Commission Against Racism and Intolerance, 2015: 5). The two countries present contrasting reactions to corruption, then. When the two examples are looked at in the context of the countries’ pasts, the impression is that current responses are heavily conditioned by past experiences. Latvia had adopted a democratic constitution in 1922. Having been forcibly incorporated into the Soviet Union in 1940, it had developed an independence movement that was successful in achieving its objective in 1991 as a concomitant of the collapse of the Soviet Union. In the run-up to independence it had seen the emergence, within the Latvian Communist Party, of a pro-independence faction that split to become the social-democratic Democratic Labour Party of Latvia.

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The country therefore fitted Vachudova’s (2005) model of those CEE countries that had relatively smooth transitions to democratic party competition and the rule of law because, at the moment of the change of regime, they had an opposition to communism that was strong enough to take power, and a reforming communist party. These circumstances, together with the subsequent external pressures deriving from the prospect of membership of the EU, would ensure the rapid development of comprehensive programmes of anti-corruption reform. Albania’s experience was completely different. It had no tradition of democracy or of urban, industrial capitalism. The collapse of the communist regime was not brought about by an organised opposition led by intellectuals, but by the spontaneous demonstrations of workers and students. The leaders of both the main parties that filled the space left vacant by the Communist Party were themselves former communists. Therefore, underlying the institutional changes there was a significant degree of continuity in terms of personnel, with the result that the transition that took place was a transition to what Vachudova (2005) refers to as an illiberal, rather than a liberal, democracy, in which democracy was ‘procedural’ rather than ‘substantive’ (Bogdani and Loughlin, 2007:  38).7 Consequently, when, after four decades of total isolation from the outside world, Albania opened its borders, and when, after forty years of totalitarian rule, the regime relaxed its grip on civil society, the state was left exposed to capture by competing private interests which, precisely because they were involved in an unfettered competition for power and resources, had little or no interest in the comprehensive anti-corruption reforms of the kind seen in Latvia. Under these circumstances, any prospect of the country’s one day joining the EU would be insufficient to act as an effective external driver of reform, because the prevailing conditions both undermined domestic elites’ commitment to it and for a long time undermined the country’s eligibility for candidate status in the first place. Conclusion Once again, we see the clear operation of the phenomena of path dependency and vicious circles, where extensive corruption to a large degree precludes its own solution. We will encounter further, even more dramatic, examples of these phenomena when we discuss corruption in the so-called developing and newly industrialised states. In this chapter we have seen that the communist past has left a significant legacy which it is essential to understand in order to comprehend the corruption situation in the CEE states and Russia today. These

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countries have been grappling with problems whose entity has been broadly proportional to the degree to which the states have managed to remain impermeable to the private sector and to command the allegiance of their citizens. In an integrated world economy, the implications of the corruption within these countries have extended far beyond their borders. All this is also true of the developing and newly industrialised states, as we shall see in the next chapter.

Notes 1 A totalitarian regime is one in which management of the state and society is informed by an all-embracing ideology of which the party in power is the only recognised interpreter and which legitimises the party’s total control of every aspect of the public and private lives of the populace, a control that is reinforced  through intensive propaganda (typically through state-run media) and extreme coercion (made possible, typically, through mass surveillance and a secret police). 2 The ‘rule of law’ refers to the idea that governmental authority can be exercised only in accordance with written, publicly disclosed laws that have been enacted according to accepted procedures, so that no one, not even the rulers themselves, is above the law. 3 The attitude is exemplified by the observations, cited in a Guardian report (Walker, 2016), of Nadezdha, a 47-year-old housewife in the town of Kimry, about 100 miles from Moscow: ‘She had not heard of the allegations in the Panama Papers, which suggested members of Vladimir Putin’s family, and those close to him, had benefited from dubious cash flows. Instead, she insists the Russian president is part of the solution, not the problem. “Poor Putin is trying to fight these bloodsucking bureaucrats, but he can’t clean up everything on his own.”’. 4 In Albania in 2015 GDP per capita was 30% of the EU average (Eurostat, http://ec.europa.eu/eurostat/statistics-explained/index.php/File:Volume_indices_per _capita,_2012–2015_(EU-28%3D100)vJune.png, accessed 15 September 2016); its CPI score was 36, placing it well below the EU’s lowest scorer, Bulgaria on 41. 5 World Bank data, http://data.worldbank.org/indicator/BX.KLT.DINV.CD.WD? end=2015&start=1970&view=chart, accessed 3 February 2018. 6 For details see the ‘Addendum to the Compliance Report on the Russian Federation’ adopted by GRECO at its 58th plenary meeting in Strasbourg, 3–7 December 2012, available at: https://rm.coe.int/16806c7d08, accessed 10 February 2018. 7 ‘The difference between “procedural” democracy and “substantive” democracy is that the former follows democratic forms, e.g. multi-party electoral systems and an elected parliament, but may lack a democratic culture of obedience to the rule of law, political responsibility on the part of politicians and citizens, and accountability. A “substantive” democracy must be “procedural”, but the latter may exist without the former’ (Bogdani and Loughlin, 2007: 38).

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References Batt, Judy (2007), ‘Introduction: Defining Central and Eastern Europe’, pp. 1–19 in Stephen White, Judy Batt and Paul G. Lewis (eds), Developments in Central and East European Politics 4, Basingstoke: Palgrave Macmillan. Bogdani, Mirela and John Loughlin (2007), Albania and the European Union: The Tumultuous Journey Towards Integration and Accession, London and New York: I. B. Tauris. Borik, Anastasia (2016), ‘Government reshuffle, corruption crackdown and athletes head to Rio’, Russia Direct, 1 August, www.russia-direct.org/russianme​dia/​government-reshuffle-corruption-crackdown-and-athletes-head-rio, accessed 3 February 2018. Carothers, Thomas (2002), ‘The End of the Transition Paradigm’, Journal of Democracy 13(1): 5–21. European Commission Against Racism and Intolerance (2015), ‘ECRI Conclusions on the Implementation of the Recommendations in Respect of Latvia Subject to Interim Follow-up’, https://www.coe.int/t/dghl/monitoring/ ecri/country-by-country/Latvia/LVA-IFU-IV-2015-005-ENG.pdf, accessed 3 February 2018. Evans, Alfred B., Jr (2005), ‘A Russian Civil Society?’, pp. 96–113 in Stephen White, Zvi Gitelman and Richard Sakwa (eds), Developments in Russian Politics 6, Basingstoke: Palgrave Macmillan. Galeotti, Mark (nd), ‘How far will the Kremlin’s corruption crackdown go?’, European Dialogue, www.eurodialogue.eu/how-far-will-kremlins-corruptioncrackdown-go, accessed 10 February 2018. Grabbe, Heather (2007), ‘Central and Eastern Europe and the EU’, pp. 110–26 in Stephen White, Judy Batt and Paul G. Lewis (eds), Developments in Central and East European Politics 4, Basingstoke: Palgrave Macmillan. Haughton, Tim (2007), ‘The Other New Europeans’, pp. 56–71 in Stephen White, Judy Batt and Paul G. Lewis (eds), Developments in Central and East European Politics 4, Basingstoke: Palgrave Macmillan. Holmes, Leslie (1993), The End of Communist Power: Anti-corruption Campaigns and Legitimation Crisis, Cambridge: Polity Press. Holmes, Leslie (2006), Rotten States? Corruption, Post-communism and Neoliberalism, Durham, NC and London: Duke University Press. Johnston, Michael (2005), Syndromes of Corruption: Wealth, Power and Democracy, Cambridge: Cambridge University Press. Kramer, John M. (1977), ‘Political Corruption in the USSR’, The Western Political Quarterly 30(2): 213–24. Loungani, Prakash and Paolo Mauro (2000), ‘Capital Flight from Russia’, IMF Policy Discussion Paper 00/6, Washington, DC: International Monetary Fund. Mendras, Marie (1995), ‘La Russia: amministrazioni senza fede né legge’, pp. 183–200 in Donatella della Porta and Yves Mény (eds), Corruzione e democrazia: Sette paesi a confronto, Naples: Liguori.

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Mendras, Marie (1997), ‘Rule by Bureaucracy in Russia’, pp. 118–31 in Donatella della Porta and Yves Mény (eds), Democracy and Corruption in Europe, London: Continuum. Millard, Frances (2007), ‘The Czech Republic, Hungary and Poland’, pp. 37–55 in Stephen White, Judy Batt and Paul G. Lewis (eds), Developments in Central and East European Politics 4, Basingstoke: Palgrave Macmillan. Oates, Sarah (2005), ‘Media and Political Communication’, pp. 114–29 in Stephen White, Zvi Gitelman and Richard Sakwa (eds), Developments in Russian Politics 6, Basingstoke: Palgrave Macmillan. Rutland, Peter (2005), ‘Putin’s Economic Record’, pp. 186–203 in Stephen White, Zvi Gitelman and Richard Sakwa (eds), Developments in Russian Politics 6, Basingstoke: Palgrave Macmillan. Sakwa, R. (2000), ‘Russia: From a Corrupt System to a System with Corruption’, pp. 123–62 in R. Williams (ed.), Party Finance and Political Corruption, Basingstoke: Palgrave Macmillan. Smilov (2007), ‘Introduction: Party Funding, Campaign Finance and Corruption in Eastern Europe’, pp. 1–31 in Daniel Smilov and Jurij Toplak (eds), Political Finance and Corruption in Eastern Europe, Aldershot: Ashgate. Telegraph (2016), Russia’s Anti-corruption Boss Arrested with $120 million in Cash’, 13 September, www.telegraph.co.uk/news/2016/09/13/russias-anticorruption-boss-arrested-with-120-million-in-cash/, accessed 19 February 2018. Transparency International (2011), National Integrity System Assessment Latvia 2011’, https://www.transparency.org/whatwedo/nisarticle/latvia_2011, accessed 10 February 2018. Transparency International (2013), ‘Two sides of fighting corruption in Russia’, 5 April, www.transparency.org/news/feature/two_sides_of_fighting_corrup​ tion_in_russia, accessed 3 February 2018. Transparency International (2016), ‘National Integrity System Assessment Albania 2016’, https://www.transparency.org/whatwedo/publication/ national_integrity_system_assessment_albania_2016, accessed 3 February 2018. Triesman, Daniel (1998), ‘Russia’s Taxing Problem’, Foreign Policy 112: 55–66. Vachudova, Milada Anna (2005), Europe Undivided: Democracy, Leverage and Integration After Communism, Oxford: Oxford University Press. Walker, Shaun (2016), ‘“So what if Putin is corrupt?”: Russia remains unmoved by offshore revelations’, Guardian, 13 April, https://www.theguardian.com/ world/2016/apr/13/vladimi-putin-russia-unmoved-by-offshore-revelations, accessed 3 February 2016. Willerton, John P. (2005), ‘Putin and the Hegemonic Presidency’, pp. 18–39 in Stephen White, Zvi Gitelman and Richard Sakwa (eds), Developments in Russian Politics 6, Basingstoke: Palgrave Macmillan.

10 Political corruption in the developing and newly industrialised states

Introduction This chapter explores corruption in what used commonly to be referred to as the ‘third world’, a term whose meaning and implications must first be discussed. Traditionally regarded as covering a large number of ‘less developed’ or what were called ‘emerging’ states, such as Brazil, Kenya and Thailand, the term ‘third world’ is nowadays regarded by many, if not most, political scientists as misleading in a number of important respects. First, the states concerned display far more economic and political variety than the use of a single category warrants. Second, the term fails to reflect anything very much by way of how the states put into this category see themselves. During the Cold War several of them saw themselves, as members of the Non-Aligned Movement, as having some common interests and goals (McCormick, 1995: 5), in particular that of resisting the pressures that might draw them into the spheres of influence of one or other of the superpowers. However, they have otherwise had highly varied ideological and other agendas (and in the post-Cold War world the Non-Aligned Movement has struggled to find a clearly defined role for itself). Third, the term can be criticised on the grounds that it is value laden, ‘implying that states in the ‘third’ rank are inferior to those in the ‘first’. Therefore, in recent years political scientists have made somewhat more subtle distinctions and broken down the old ‘third world’ category into more informative groupings. This is what I shall do for the purposes of this chapter, distinguishing between newly industrialised countries (NICs), on the one hand, and less-developed or developing,  countries, on the other. As we shall see, the problems of corruption in the two types of country are of somewhat different orders of magnitude.

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The terms ‘newly industrialised’ and ‘less developed’ or ‘developing’ are not ideal. ‘Less developed’ also has evaluative connotations. ‘Developing’ is not ‘theory neutral’ but assumes that all the countries in the category are evolving, and evolving in the same direction. It also assumes a degree of homogeneity between countries in terms of things like per capita income, education and life expectancy that are not borne out by the facts. For example, both Peru and Liberia are regarded by the International Monetary Fund as developing countries, but whereas the former has a GDP per capita of $5,726 and a life expectancy of 73.7 years, the latter has a GDP per capita of $478 and a life expectancy of 59.0 years. When I use the term ‘developing’ I am using it to point to the fact that most of the countries belonging to the category are the world’s least wealthy countries – a circumstance that derives from the fact that they tend to be predominantly agricultural economies with limited manufacturing sectors. This means that they tend to depend on raw materials or agricultural commodities for export earnings and are therefore unusually heavily dependent on world markets over which they have little control. The category of NICs, on the other hand, consists of countries undergoing rapid industrialisation and urbanisation such as to lead them, in terms of (what is often export led) growth, to outpace their developing-country counterparts. Countries such as Hong Kong, South Korea, Taiwan and Singapore (the so-called ‘Asian Tigers’), whose rapid growth began in the 1960s, were regarded as NICs when the category first began to be used round about 1970. Since then, they have established a manufacturing capability and living standards to rival those of many of the traditional developed countries (Hague, Harrop and Breslin, 1998: 18). The chapter is divided into three parts looking at, first, the extent and causes of corruption in the newly industrialised and less-developed countries; second, the effects of corruption there; and third, attempts to combat corruption. The extent and causes of corruption Turning to extent and causes, we have first to specify precisely which countries we are talking about. Depending on the methods of economic analysis that they use, authors differ in terms of the countries to which they assign NIC status.1 However, there is enough overlap between them for us to list the following as the members of the NIC category: Argentina, Brazil, Chile, China, Egypt, India, Indonesia, Malaysia, Mexico, Philippines, South Africa, Sri Lanka, Thailand and Turkey. For convenience of exposition, and so as to control to a degree for variations

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NICs

41 0

5

10

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Figure 10.1  Mean CPI scores, Sub-Saharan African countries and NICs, 2015 Note: NICs = Argentina, Brazil, Chile, China, Egypt, India, Indonesia, Malaysia, Mexico, Philippines, South Africa, Sri Lanka, Thailand, Turkey. Sub-Saharan African Countries = Angola, Benin, Botswana, Burkina Faso, Burundi, Cameroon, Cape Verde, Central African Republic, Chad, Comoros, Congo (Brazzaville), Congo (Democratic Republic), Côte d’Ivoire, Djibuti, Eritrea, Ethiopia, Gabon, The Gambia, Ghana, Guinea, Guinea-Bissau, Kenya, Lesotho, Liberia, Madagascar, Malawi, Mali, Mauritania, Mauritius, Mozambique, Namibia, Niger, Nigeria, Rwanda, Sao Tome and Principe, Senegal, Seychelles, Sierra Leone, Somalia, Sudan, Tanzania, Togo, Uganda, Zambia, Zimbabwe. 2015 CPI scores unavailable for Equatorial Guinea and Swaziland which are consequently not included in the calculation.

in historical and cultural background, I shall use the terms ‘developing’ and ‘less developed’ countries to refer to the fifty (geographically contiguous) states, minus South Africa, Réunion and Western Sahara,2 listed by the Library of Congress as making up sub-Saharan Africa.3 So this category comprises almost one third of the countries included in the group of 152 emerging market and developing economies listed in the IMF’s World Economic Outlook report (IMF, 2015: 151–3). Figure 10.1 shows the mean CPI scores for the two groups. We can see from the figure that the countries of sub-Saharan Africa appear to have a bigger corruption problem than the NICs. When we compare it with Figure 9.1 we can see that they also appear to have a bigger problem than the former communist states, and a much bigger problem than the advanced democracies of Western Europe. In fact, the overall mean obscures the depth of the problem slightly, because it is calculated by taking into account a handful of countries that, exceptionally score better than a few EU member states such as Bulgaria, Greece, Italy and Romania. When we exclude these countries – Botswana, Cape Verde, Namibia, Rwanda, Seychelles, all of which score over 50, and three of which (Botswana, Cape Verde and Namibia) are stable liberal democracies – the CPI score goes down to 29. With regard to causes, as a discrete act corruption in both the NICs and sub-Saharan Africa can be explained by many if not all of the factors we have discussed in previous chapters – factors that provide motivations and opportunities for corruption and determine the risks

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associated with it. The issue we are concerned with here is that of why there appears to be more corruption in these two categories than, for example, in Western Europe. Or what is distinctive about these societies that would make the motivations and opportunities higher and/or more numerous, and the risks lower, in these parts of the world as compared to others. From this perspective, at the most abstract level there is complete overlap between the countries belonging to the two categories: corruption is relatively widespread, thanks to weaknesses of greater or lesser magnitude in the capacity of the state, political organisations and civil society to keep the pursuit of wealth and power within consensually established boundaries. However, this does not so much explain the problem as restate it. We need to work at lower levels of abstraction. Referring to Michael Johnston’s (2005) work, it can be argued that at these levels, although there is a lesser degree of overlap, nevertheless a significant amount remains. For example, Botswana, Brazil, Chile, Namibia, South Africa and Zambia all have corruption which, in Johnston’s terms, is of the ‘Elite Cartels’ variety, where economic and political participation take place in a context of only moderately strong democratic institutions and where bribery and patronage therefore serve the purpose of enabling competing but established political and economic elites to shore up their positions. ‘Official institutions that are only moderately strong will both facilitate and (from the elites’ standpoint) necessitate such linkages’ (Johnston, 2005: 44). Benin, Ghana, India, Madagascar, Malaysia, Mali, Mexico, Niger, the Philippines, Senegal, Sri Lanka, Thailand and Turkey offer, according to Johnston, examples of ‘Oligarchs and Clans’ corruption, where the pace and scope of political and economic change have given rise to new but insecure elites, together with institutions which are unable to ensure accountability and the enforcement of contracts. In the resulting context of political and economic uncertainty, bribery and violence are induced as means of compensating for the absence of solid frameworks for the legitimate pursuit of wealth and power. Finally, Cameroon, the Central African Republic, Chad, China, the Democratic Republic of Congo, Egypt, Gabon, Guinea-Bissau, Indonesia, Ivory Coast, Kenya, Malawi, Nigeria, Rwanda, Tanzania, Togo, Uganda and Zimbabwe, to varying degrees, fit the ideal-type of ‘official moguls’ corruption, where civil society is weak or non-existent, where the absence of accountability is likely to mean that rulers are unrestrained save by the threat of violence by potential alternative rulers, and where, therefore, the search for economic advantages takes place through the pursuit of political power. In such contexts corruption is thus a reflection of the exploitation of p ­ olitical

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power as the primary vehicle for the pursuit of wealth, and much, in terms of actual outcomes, may depend on the agendas of those in office. Some may be able and willing to pursue reform with the achievement of high levels of growth, others not, with the result that their countries are unable to escape a vicious circle of poverty and corruption. This last suggestion invites more detailed discussion of the causes of corruption in those states of sub-Saharan Africa where, once the aforementioned exceptions of Botswana, Cape Verde, Namibia, Rwanda and Seychelles are excluded, corruption appears to be systemic; that is, where it ranges from petty to grand corruption, where it is the rule rather than the exception and where it therefore shapes the interests and strategies of both public officials and citizens on a daily basis (Znoj, 2007: 53). Poverty is clearly central in such cases. The countries remaining after we exclude the five with CPI scores above 50 have an average GDP per capita of $3,384 – as compared to $27,780 and $47,359 for, respectively, the former communist and Western European countries included in Figure 9.1.4 The nature of the connection was explained some time ago by Stanislav Andreski in his book, The African Predicament (1968). First, ‘[t]he greater and more general the poverty’ (Andreski, 1968: 31) in a society, the more likely it is that one will find predatory behaviour in violation of the rules and regulations nominally in force. For example, ‘[I]n an opulent country a person who is thrown out of office can usually find decent employment elsewhere, but in a poor country full of paupers a loss of office usually means ruin for anybody who has no private wealth; … In consequence, the fight for office becomes a matter of life and death … and assumes the form of a struggle for existence fought with every available means and without regard for law or convention’ (Andreski, 1968: 31). The less widely observed are laws and norms of due process, the more likely is it that one will find corruption, because, as we have already seen, whatever else it is, corruption typically involves ‘the breach of laws and regulations nominally in force’ (Andreski, 1968: 98) for the purposes of making private gain. Widespread corruption and other forms of predatory behaviour, then, have two interrelated effects. First, they make it impossible for the individual to ‘opt out’ and refrain from indulging in such behaviours, for, ‘[o]nce a society is pervaded by predacity, one has no other choice than to skin or be skinned’ (Andreski, 1968: 31). For example, customs officers have plenty of scope for the extraction of bribes: ‘in exchange for bribes they [can] pass goods without levying the duty or at least reducing it substantially’. In poor countries, precisely because they are poor, ‘people who give [customs officers] nothing may

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have to face interminable delays with the added danger that their goods will be damaged or stolen’ (Andreski, 1968: 98) – a very high price to pay in a context of generalised poverty. Second, therefore, another effect of widespread corruption and other forms of predatory behaviour is that they help to perpetuate that very state of lawlessness and insecurity which acts as a brake on economic development. For, again selfevidently, ‘[e]conomic progress requires peace and order. Planning, saving and investment become unprofitable if nothing is secure’ (Andreski, 1968: 31). A second factor bound up with systemic African corruption appears to be patrimonialism. Patrimonialism refers to a type of rule where there is no distinction between public officials’ personal property, on the one hand, and public property, on the other. In other words, under patrimonial rule the holders of public offices see such offices as their personal property. For example, Macias Ngema, the president of Equatorial Guinea, ‘stored all the bank notes of his country in his house in his village. To a journalist who asked him why, he answered: “I am the chief of my people, everything belongs to me”’ (Médard, 2002: 384). In Africa, in particular, patrimonialism is deeply rooted due to the significant influence in social relations of two phenomena. One is kinship, the norm that one has special duties of assistance towards those known or recognised as kin. The other is the very low legitimacy of the postcolonial state, which is widely viewed as ‘an artificial creation of … foreign masters imposed on [Africans] by force only a few decades ago’ (Andreski, 1968: 101). The result is that many African administrations are staffed by people ‘who have been brought up under … vigorous systems of extended kinship’ and who ‘feel deeply about obligations to their kinsmen’ but who have no sense of duty towards ‘the ideal of impersonal public service’ (Andreski, 1968: 101). Consequently, they tend to see their offices as their own personal property, to be used to help relatives, even if doing so means that ‘this behaviour might require bending, or even breaking, administrative rules and departing from “universalistic principles”’ (Tanzi, 1995: 165). Because of what such behaviour has in common with corruption – namely, a public agent’s betrayal, in favour of a third party, of the trust placed in him by his principal – so do we find that corruption is more widespread than in contexts where patrimonialism is less deeply rooted because of the lower significance of kinship and greater loyalty to the state. Moreover, where official salaries are extremely low, as is typically the case in less-­ developed countries, the obligation to do numerous favours for kinsmen can often lead directly to corruption simply because the obligations cannot be met out of the official’s salary alone – thus forcing them to use

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their position ‘to squeeze bribes, embezzle public funds, take rake-offs and so on’ (Andreski, 1968: 102). Not dissimilar cultural factors appear to be in play in the East Asian countries (accounting for five of the fourteen cases identified as belonging to the NIC category), where the tradition of gift-giving is deeply rooted. Where gift-giving is an accepted social tradition it is often difficult to distinguish between a gift and a bribe, especially when it is accompanied by a norm of reciprocity – in which case it might easily hide a request for a favour beneath the mask of what would otherwise be merely a gesture of respect. Perhaps not surprisingly, ‘giving gifts to officials in Thailand for services rendered is not considered as bribery but as sin nam jai or gifts of good will. Thais also do not view bribes as a form of corruption as long as no one is hurt’ (Quah, 2011: 21). Returning to African corruption, the fact that political office tends to be the primary means of gaining access to wealth (Nye, 2002: 282) is a third significant factor. On the one hand, given countries’ small or almost non-existent manufacturing bases, alternative roads to enrichment, independent of the state, hardly exist. On the other hand, because countries are dependent on the export of raw materials, the state typically has a large stake in their exploitation. In Nigeria, for instance, although most of the exploration and production of oil has been undertaken by foreign companies, the state has ‘kept a majority shareholding in the oil industry through the state-owned Nigerian National Petroleum Corporation’ (McCormick, 1995: 379–80). At the same time, the state gives access to wealth by virtue of its role in the management of imports and exports and the dependence of its budgets ‘on receipts derived from import tariffs’ (Bayart, Ellis and Hibou, 1999: 4). Thanks to poverty, patrimonialism, the illegitimacy of the post-­ colonial state and the state’s significance as an avenue of access to wealth, there are some countries where corruption and related phenomena appear to be so deeply rooted and widespread as to amount to what Bayart, Ellis and Hibou (1999) have called the ‘criminalisation of the state’. The criminalised state is one whose power and resources have, in effect, been completely privatised in the sense that they are under the unrestrained and entirely arbitrary control of its rulers, who, ‘in their desperate search for survival, rely mostly on violence and criminality to stay in power’ (Médard, 2002: 391). Criminalisation of the state has spread in recent years, thanks, first, to the political and economic marginalisation of Africa that has occurred since the collapse of communism and the end of the Cold War. On the one hand, the removal of the supposed ‘Soviet threat’ meant that an area such as sub-Saharan Africa, where the Soviet Union had once been

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a significant geopolitical player, became less important for the Western powers, which, as a consequence, became much stricter in terms of the conditions they imposed on the granting of financial aid. On the other hand, the period since the mid-1980s has seen sharp declines in the prices of many African countries’ main export commodities, as well as sharp declines in these countries’ shares of world markets in the commodities. Hence, overall, there has been a decline in the opportunities available to political leaders to maintain and consolidate their power by legitimate means through participation in legal markets. Second, ‘the international economy has undergone a number of profound changes, such as in the globalization of trade, the deregulation of markets and the growth of certain lucrative smuggling trades’ (Bayart, Ellis and Hibou, 1999: 8), offering new opportunities to corrupt the rulers of ­less-­developed countries. Hence, we have witnessed a growth in the number of less-developed states whose rulers seek to maintain their power by forging links with international criminal networks, in the process turning their states into what Médard (2002: 391) refers to as ‘“narcostates” like Nigeria or Equatorial Guinea … money forgering [sic] States, like [the former] Zaϊre, “gemmocracies” like Sierra Leone’ and, as a consequence, destroying their states as assemblages of institutions based on any semblance of the rule of law. As Médard (2002: 391) puts it, ‘[t]he States, or what is left of them, exist only because their international sovereignty is recognized by international law and the United Nations’. In summary, then, the systemic corruption to be found in much of sub-Saharan Africa appears to be associated with a combination of interrelated factors, among which are poverty and extreme inequality in the distribution of wealth, conflict between different moral codes, low levels of legitimacy and therefore weakness of state institutions, and ‘political office as the primary means of gaining access to wealth’ (Nye, 2002: 282). But there is a more radical perspective that one can take on the problem. This is the argument that, when placed in the context of a globalised world economy, the above factors are themselves the product of another, deeper-level cause, which would place ultimate responsibility for the sheer scale of corruption in many sub-Saharan African countries beyond their borders, in the activities of Western governments and financial institutions. The reason is that these institutions, by facilitating foreign investment of the proceeds of the grander forms of corruption, encourage capital flight. Ndikumana and Boyce (2008: 35), for example, argue that for a sample of forty African countries over the period 1970–2004, ‘real capital flight amounted to $420 billion (in 2004

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dollars)’, which they describe as evidence of a ‘dramatic financial haemorrhage of African economies … over the past four decades’. This in turn deprives many of the sub-Saharan countries in question of the resources that would otherwise enable them to overcome the poverty and related phenomena that perpetuate corruption, given the absence of those resources. From this perspective, there is nothing unusual about African corruption: the wholesale theft of resources that has been a feature of some of the more corrupt countries in this part of the world was also a feature of economic development in earlier times in other parts of the world. One thinks, here, of the English privateers who robbed Spanish galleons during the reign of Elizabeth I. Driven by economic competition with Spain, the activities of the privateers enriched the Crown while enabling the monarch herself to deny any complicity in them. One thinks too of the robber barons, the nineteenth-century American business leaders who were said to have ‘habitually cheated and robbed investors and consumers, corrupted government, fought ruthlessly among themselves, and in general carried on predatory activities comparable to those of the robber barons of medieval Europe’ (Bridges, 1958: 1). And one thinks of the more recent activities of the so-called oligarchs in the aftermath of the collapse of the Soviet system. The privateers, the robber barons and the oligarchs, like the ruler of a criminalised state in Africa, accumulated vast amounts of wealth on the basis of illegal activities. The difference was that they, by and large, invested in the domestic economy, enabling a process of productive development that eludes the criminalised state because the immediate-term incentives generated by international financial institutions in the globalised world economy encourage the investment of accumulated wealth in financial instruments and property abroad. Hence, the country in question remains locked in a vicious circle of poverty and corruption, and while the features referred to above are all part of a syndrome of corruption, they are not fundamental to it.5 The effects of corruption This throws a spotlight on the effects of corruption; for if it appears, in most of the sub-Saharan African cases, to have acted as a break on economic development, this is not the case everywhere. The NICs have largely managed to escape the high corruption/low development trap. While their perceived levels of corruption do not differ much from those of the sub-Saharan African countries (their CPI scores for 2015 are 9 points above those for the sub-Saharan African countries, but 33 points below those for Western Europe: see Figures 9.1 and 10.1), they have a GDP per capita which, at $15,155, is five times that of the sub-Saharan

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African countries,6 and higher rates of growth. For example, while their economies grew at an average annual rate of 4.7 per cent between 1991 and 2015, those of the sub-Saharan African countries grew by 4.4 per cent over the same period.7 Corruption in the NICs has not, by and large, acted as a brake on development to the same extent that it has in sub-Saharan Africa, and some of the NICs appear to have combined relatively high levels of corruption with quite spectacular growth. For example, despite having a mean CPI score of just 39 in 2015, the East Asian countries of China, Indonesia, Malaysia, the Philippines and Thailand grew by an average of 5.8 per cent per annum over the twentyfive years from 1991.8 This appears to be because the nature of corruption has tended to differ in this part of the world, as compared to most of Africa. In the first place, it has tended to be much more organised, thanks to the greater strength of the state, as Alice Sindzingre explains. ‘Throughout their short history the states of Africa, unlike those in East Asia, have been characterized by illegitimacy, unstable leadership and weak credibility’ (Sindzingre, 2002: 448), which means that political elites have lacked the capacity to take the kinds of economic decisions that are conducive to long-term growth.9 In East Asia, on the other hand, the relative legitimacy and credibility of the state has given governments a capacity to take economic policy decisions that are relatively autonomous of short-term political constraints, and thus to embark on long-term economic development programmes. Countries such as South Korea have been characterised by very close corrupt and clientelistic ties between the state and large private enterprises which have been organized and centralized to a far greater extent than is true of Africa. To a greater degree in the former than in the latter context, power and authority overlap in the state machine. Authority has to do with ‘the formal roles conferred upon individuals in their official capacities’ (Hutchcroft, 2002: 469), while the exercise of power occurs when the incumbents of these roles pursue values, interests and goals of their own choosing which may conflict with those of the administrative structure. In some contexts, therefore, the exercise of power coincides with the formal distribution of authority in the sense that power is effectively wielded by the incumbents of formal positions and there are no informal power networks offering competing inducements and thus tending to undermine formal structures of authority. In other contexts, power and authority may fail to coincide in this way. Given these two possibilities – that the exercise of power coincides with formal lines of authority, or that the existence of informal power networks ensures that the two diverge – Hutchcroft argues that ‘[h]igher degrees of coincidence … are likely to

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yield more predictable forms of corruption; conversely, the greater the degree of divergence between power and authority, the more variable is the form of corruption that is likely to emerge’. Where power and authority overlap, ‘business persons are likely to have a good sense of whom to approach and what to expect from one transaction to another’. Where they fail to overlap, it will be unclear whom to approach for given tasks and services; the real, as opposed to the formal, chain of command will be unclear, and hence firms will find it very difficult to predict how much they will need to bribe state officials, with what frequency and what the likely outcome of their bribery will be. Under these circumstances ‘corruption will have a more obstructive impact on the process of capitalist growth’ than it will when it takes place in the context of an overlap between authority and power (Hutchcroft, 2002: 497). ‘[I]f bribery is a calculable element of a business firm’s environment, its impact is no different than a tax; to the extent that a firm must devote major effort to negotiating each bribe, on the other hand, there is a degree of unpredictability in the amount of time and resources to be expended’ (Hutchcroft, 2002: 496). In large parts of Africa the weakness of the state has both fuelled corruption and prevented the emergence of stable economic-development plans and policies. In East Asia, on the other hand, the greater strength of the state has allowed such plans to be formulated and implemented, thus bringing about the growth of a flourishing private sector despite high levels of corruption – and thus confirming that ‘advanced forms of capitalism [rely] upon “the rational, predictable functioning of the legal and administrative agencies”. [Therefore] a major obstacle to the development of more sophisticated forms of capitalist accumulation is not corruption per se, but highly variable corruption’ (Hutchcroft, 2002: 496). In Africa the variable and unpredictable, as well as systemic, corruption that is widely found there adversely affects the development process ‘at the administrative, economic, political and social levels’ (Hope and Chikulo 2000: x), and in doing so confirms that the effects of corruption are bound up with its causes in a series of seemingly unbreakable vicious circles. At the administrative level, experience has shown that where poorly paid public officials, working in a context of vague and restrictive laws, seek to abuse their positions for private gain, efforts to combat c­ orruption – through the traditional strategies of commissions of enquiry, codes of conduct, judicial sanctions and anti-corruption ­agencies – are likely to fail. This is for the obvious reason that those whose behaviour the reforms seek to change are the very people

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r­ esponsible for ­implementing the reforms in the first place. For example, after taking power in Ghana in a coup on 31 December 1981, Jerry Rawlings established a number of appraisal and sanctioning institutions designed to bring the corrupt to trial and to ensure the monitoring of public officials. He then found that some of the institutions’ members were engaged in personal vendettas, while others became channels for interpreting government policies rather than agents of accountability. In one case, among several similar instances, officials abused their positions to obtain ‘illegal access to essential commodities such as sugar, cookingoil and rice, the embezzlement of funds, and impersonation’ (Ayee, 2000: 187). In Cameroon in 1994, Public Service Rules and Regulations containing a list of sanctions to be taken against corrupt civil servants could not be effectively enforced by the minister of education, following a public outcry against extortion by head teachers, because those involved in the complex system of patronage were either the minister’s ‘own’ people or else people with powerful political connections whom he could not afford to antagonise (Fombad, 2000: 250). At the economic level, corruption in Africa has effects on infrastructural facilities and business services that are commensurate with its scale: Roads are poorly constructed and wash away at the first drop of rain. Telephones refuse to work, postal services are non-existent, and the entire communications systems are in shambles … Institutions such as the civil service, the judiciary, parliament and the police disintegrate … Says a Kenyan scholar, Tom Ochieng, based in the United States: ‘Today in Kenya there is no rule of law … Your lawyer will even tell you to take something to the judge presiding over your case and the case will be delayed and eventually thrown out’ (African News Weekly, 4 August 1995: 6) … Nigerian cities have fire departments, but often there is no equipment. When a threestorey apartment building and a bakery were destroyed by fire in Umuahia ‘one volunteer, Mr Timothy Nwachukwu, said that the fire service did not help because they had no working vehicles’ (African News Weekly, 24 February 1994: 12). (Ayittey, 2000: 105–6)

Under such circumstances the security of persons and property cannot be guaranteed, hence the costs and the risks of doing business increase enormously. The threat this poses to economic development can be illustrated by the case of Liberia. There, corruption-related deficiencies in the education sector – with ‘[a]buse of resources, teacher absenteeism, and sex for grades’ entrenched in a culture of silence that ‘prevents reporting of problems and hence any constructive reform’ – are said to be ‘putting the sustainability of Liberia’s transition under threat’ by failing to educate students to the necessary standards. ‘Beyond huge a­ gricultural

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potential and large deposits of iron ore, rubber, gold, diamonds, and timber, significant amounts of oil were recently found off Liberia’s coast’. Yet, in 2012, of 3,000 engineering students across the country, just 30 were able to graduate. The deficiencies of the education system result in a country that is failing to develop the capacity to manage its resources effectively, with the possible consequence that ‘Liberia’s wealth will turn into a curse’ (Glencorse, 2012). At the political level, corruption in Africa enables autocratic rulers, through the use of patronage, to achieve their political objectives (foremost among which is maintaining themselves in power). These, in turn, perpetuate corruption by destroying mechanisms of accountability and the rule of law. Essentially, patronage and corruption are used to buy loyalty. This requires rule of a particularly arbitrary and ruthless nature in order to ensure the continued flow of resources necessary to sustain it. To the extent that this is successful, ‘by integrating top state and private sector individuals into the ruling coalition, patronage-based relations can ensure that these elites become unavailable to provide leadership and organization to opposition parties’ (Tangri and Mwenda, 2013: 15). As a means of winning support, corruption sits alongside the provision of services – education, health, infrastructures and so on – to ordinary people. ‘But service provision is costly and organizationally demanding to implement. On the other hand, the provision of official positions and privileges to influential elites, including opportunities to profit through corruption, is much cheaper’ (Tangri and Mwenda, 2013: 15). The two are, in effect, combined: an influential individual might be appointed to head a development project from which they can profit personally while using it to build and sustain support on the ground. Thereby the regime is able to maintain itself by serving both the elites and the masses. At the social level, systemic corruption increases inequality (Gupta, Davoodi and Alonso-Terme, 2002) and blights the lives of ordinary people on a daily basis, thereby becoming a form of oppression. In a 2008 film, Africa: Living with Corruption,10 the presenter, Sorius Samura, goes to live with Eric and Janet Atino in Kibera – a slum district where robbery and violence are common – on the outskirts of Nairobi. Janet tells Sorius that they have to bribe for almost everything; and indeed, we then follow her to the hospital, where she has to pay the receptionist 100 shillings – all her food and transport money – to get her sick baby seen. She has to walk two miles back home and her family will have to go without any meals for the rest of the day, Sorius tells us. The following morning, Sorius accompanies Eric as he tries to raise some more cash by looking for work on one of the construction sites around Nairobi. The guard on the gate takes his ID, which he will return at the

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end of the day for 50 shillings; another 50 shillings go to the foreman. Together, the bribes take two-thirds of the day’s pay of 150 shillings, about £1 sterling. In the inhabitants’ attempts to provide shelter for themselves, and in the work of local taxi drivers, we see a situation depicted in which everyone – from local council officials to the traffic police – appears to use whatever little power they have to survive. In all these cases we see the power of path dependency and the collective action problem, thanks to which individuals are obliged to persist in forms of behaviour which, unless they are able to relinquish them, deprive them of the potential to be significantly better off. What efforts, then, have been made to break out of these vicious circles? Attempts to combat corruption Attempts to combat corruption in less-developed countries and NICs have come from two sources: from within the countries concerned, on the part of their own governments, and from abroad in the form of efforts on the part of international bodies such as the UN, the World Economic Forum and the OECD. Countries’ own efforts stem from the perception that endeavours to eliminate corruption are likely to be effective in attracting the foreign investment needed for economic development. The examples of successful ‘clean-up campaigns’ that are most widely cited in the literature relate to two countries where levels of economic growth have been particularly spectacular: the early NICs of Hong Kong and Singapore. In the case of Hong Kong, corruption was widespread in all branches of government – most notoriously in the police force – with civil servants taking advantage of their positions to supplement low salaries. Following a public outcry in 1973 about a particularly high-profile case of police corruption, the Independent Commission against Corruption (ICAC) was established in 1974, directly appointed by and reporting directly to the then Governor. The ICAC’s three-pronged strategy of investigation, prevention and community education is widely thought to have been highly successful; in the period since the Commission was established, Hong Kong has gone from having a reputation for being one of the most graft-ridden cities in the world to being one of the cleanest. In 2015, for example, it had a CPI score of 75, placing it in eighteenth position out of the 167 countries surveyed. In the ten years after the ICAC was established, annual average GDP growth rose to 8.6%, from 7.4% in the decade before the Commission was set up, while gross capital formation grew by an average of 8.9% per year.11 Singapore also has an independent anti-corruption agency, the Corrupt Practices

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Investigation Bureau (CPIB), which reports directly to the prime minister. Like Hong Kong, Singapore too had a history of widespread corruption, and the establishment of its anti-corruption agency was catalysed by a high-profile scandal. Although the CPIB was established in 1952, the turning point came only in 1960, with the passage of the Prevention of Corruption Act, which has provisions enhancing CPIB’s effectiveness in reducing the opportunities for corruption (through its work of examining practices and procedures in the public service) and increasing (through its investigative powers) the risks associated with it. In 2015 Singapore had a CPI score of 85, placing it in eighth position out of the 167 countries surveyed. GDP has grown by an annual average of 7.5% since 1961, while gross capital formation has grown by an average 6.3% per year since 1976.12 It would not be appropriate to attribute the two countries’ economic performances solely to the successes of their anti-corruption agencies; but it would be equally inappropriate to overlook the contribution of anti-corruption to the general improvement in these two countries’ trading environments, which now places them among the world’s most favoured destinations for inward foreign investment. Elsewhere, and especially among the less-developed countries, the very factors (poverty, weakness of state institutions and so forth) that make corruption so rampant appear to have made anti-corruption efforts much less successful, as was suggested by the examples cited above. Too often, prescriptive discussions of what needs to be done merely restate the problem, drawing attention to the fact that the proposed solutions are undermined from the start by the very conditions they are designed to address: an instance of the reform paradox. For example, Ayittey (2000: 116) suggests that corruption in Africa requires taking the media ‘out of the hands of corrupt and incompetent African governments’, removing ‘the pervasive array of state controls which breed corruption’, ‘reforming the judicial system’ and strengthening civil society. No doubt reforms of these kinds would have a significant impact; but, given that so many African governments are both corrupt and beyond the rule of law, it remains unclear from where the impetus for their effective ­implementation is to come. In the final analysis, the answer appears to lie in the not-very-helpful suggestion that the impetus will come from the presence of the necessary political will at the apex of the political system in question. There are examples suggesting that at least moderate success can be achieved where such a will is present, as in the case of Liberia under Africa’s first female president, Ellen Johnson Sirleaf. Having assumed the presidency in 2006, following fourteen years of civil war and the kleptocratic

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rule of Charles Taylor, Sirleaf announced that she would adopt a zerotolerance policy towards corruption in government, and follow this up with a range of initiatives. These included the creation of the Liberian Anti-corruption Commission (LACC), with the power to investigate corruption cases; strengthening the independence of the General Auditing Commission; requiring officials to lodge disclosure-of-assets forms with the LACC; and the introduction of a Freedom of Information Act, the first of its kind in West Africa. The fact that these initiatives have, to a degree at least, managed to escape the reform paradox seems to be due to strong leadership-by-example – as shown in a willingness to dismiss top-level officials facing allegations of corruption and an insistence that cabinet ministers and presidential appointees should publish lists of their assets. This was made possible by the unusual circumstances that brought Sirleaf to power – generally free and fair elections held in the aftermath of a brutal civil war that had reduced the country to chaos  – and by the administration she established on assuming power, which included opposition leaders as part of an effort to promote national reconciliation. Although the effectiveness of new institutions and governance structures in Liberia remains hampered by things like resource inadequacies and lack of training, and although corruption therefore remains widespread, significant progress has been made. In 2005, the year before Sirleaf came to power, Liberia was ranked 137th out of 158 countries surveyed, with a CPI score of 22. By 2015, Liberia had risen to 83rd place, with a score of 37. Meanwhile, the World Bank’s Worldwide Governance Indicators suggest that significant progress has also made in a number of corruption-related features of governance such as p ­ olitical stability, regulatory quality and the rule of law (Chêne, 2012). A significant feature of Liberia’s anti-corruption efforts has been the involvement of the international community in the reform agenda through the provision of monitoring and technical assistance. Regarding the less-developed countries and NICs more generally, anti-corruption efforts on the part of outside agencies have taken four forms. First, there have been efforts on the part of organisations such as the World Bank and the IMF to use lending and debt as levers to induce reform through conditionality, as embodied for example in the ‘Uganda Plan’. Under the plan, President Museveni of Uganda agreed in the early 1990s to a proposal whereby, in exchange for the presence in Uganda of external auditors tasked with monitoring government-financed programmes, the World Bank and the IMF would agree to write off a proportion of the country’s debts. The discovery of inappropriate payments or other irregularities would, in the absence of corrective action being taken, lead to the re-imposition of the debts (Theobald, 1997: 299). Second have

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been the structural adjustment programmes whereby the aforementioned international organisations make the disbursement of resources contingent upon the implementation of specific economic policies that typically involve privatisation, fiscal austerity, deregulation and free trade, in the belief that reducing the scope of the state’s activities, besides promoting development directly, will have a downward effect on corruption. Third, bilateral aid agencies, increasingly aware of the potential for corruption to compromise the outcomes of development projects, have to a growing degree sought to use assistance as an anti-corruption tool, for example by seeking ways of directly involving those intended as the ultimate beneficiaries in the decision-making and implementation processes (Transparency International, 2007: 9) Fourth, there have been the attempts to eliminate bribery on the part of businesses seeking to win contracts from foreign public officials, the most notable being the OECD’s 1994 recommendation entitled ‘Bribery in International Business Transactions’. This urged OECD member countries to make it a criminal offence for their companies to attempt to bribe the public officials of other countries; ‘to change their tax laws in order to end the tax deductability of bribes payments’; to ‘revise their regulations concerning business accounting systems in order to make it more difficult to create “slush funds”’; and to ‘reconsider their public procurement rules so that they could be used as sanctions against bribery’ (Andvig, 2003: 212). The recommendation ‘culminated in a treaty in which over thirty of the advanced industrialized countries bound their governments to criminalize foreign bribery through the [OECD’s] anti-bribery convention which came into force in the spring of 1999’ (Heidenheimer and Moroff, 2002: 943). Prior to the 1990s, efforts such as these were notable only by their absence. For, although Western governments were aware that large numbers of regimes in Africa and elsewhere were corrupt, they also saw them as potential allies in the struggle against the Soviet Union. For this reason, efforts to reduce corruption were perceived as potentially risky in terms of the global balance of power, since the disclosure of corrupt payments might expose Western-friendly governments to political scandals, and thus to changes of government to the West’s detriment. This appeared to happen in Iran when the Shah was overthrown in the late 1970s by the Ayatollah Khomeini. By the 1990s, the situation was different in two major respects. First, the United States was ‘the only superpower left in the global arena’ (Andvig, 2003: 211), and in 1977 it had introduced the Foreign Corrupt Practices Act (FCPA), which contained a number of provisions not ­dissimilar to those of the OECD’s 1994 recommendation. Mainly

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triggered by the Watergate scandal of 1972, the FCPA was widely perceived in America as putting US firms at a competitive disadvantage as compared to their rivals in other countries who continued to bribe. For this reason it was the Americans who first pushed for the multilateral regulation of corruption through the OECD. Second, there was evidence to suggest that the bribery of public officials by foreign multinationals increased significantly from the 1990s, for the decade saw a striking tendency for enterprises based in the developed countries to expand output and employment in places like Asia, and a larger share of international trade began to take place in areas with higher propensities for corruption, again like Asia (Andvig, 2003: 214). This provoked concern in Western capitals because, if widespread corruption is harmful to the less-developed countries, it is also harmful to Western economic interests in so far as its damage to the less-developed countries makes it more ­difficult and risky for foreign firms to invest there. In answer to the question of how effective international efforts since the 1990s have been in reducing corruption on a global scale, the following can be said. On the one hand, the efforts have been accompanied by an unprecedented growth of interest on the part of publics around the world in the phenomenon of corruption. This is partly because of the coincidental occurrence of sizeable corruption scandals in places like Italy, France and Germany in the 1990s, and partly because of the activities of international pressure groups such as Transparency International, which was founded in Berlin in 1993 and whose lobbying activities have done much to keep the issue at the forefront of the international media’s attention. This means that governments and international bodies like the OECD are under pressure, in a way that they were not in the past, to ensure that their efforts are successful. Patrick Glynn and his co-authors have made this point strongly, using a graphic example. In 1997 they wrote: In late 1995, the government of the Seychelles islands enacted an innocentsounding law called the Economic Development Act. One of its provisions offers foreigners that invest more than $10 million immunity from prosecution on all criminal offenses … It is … an open, official, cynical invitation to money launderers and drug kingpins: come to the Seychelles with your dirty cash. In a different era the world would almost certainly have greeted such a development in a tiny island nation with indifference and inaction. Not so today. Almost immediately, the European Commission, the OECD, the Commonwealth Secretariat, the US State Department, the French and British foreign ministries, Interpol and the Financial Action Task Force all denounced the law, calling for its revision and threatening sanctions. (Glynn, Kobrin and Naίm, 1997: 24)

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On the other hand, some international efforts, of which the OECD’s anti-bribery convention is an example, suffer from the crucial weakness that, built into them, are strong temptations for individual firms and governments to undermine them. In the case of the OECD convention, for example, it is ‘in the interest of each country to contain its own firms’ bribing [only] if the other countries do so’. For the individual firm, ‘even if other firms are not bribing, it will be profitable for a single firm to break the convention and bribe’ (Andvig, 2003: 212) if it can get away with it. Thus, monitoring is crucial to the success of efforts like the convention, and without it they are likely to remain paper exercises. However, monitoring is not easy. As Andvig (2003: 213) puts it, ‘[o]nly a few national secret services have sufficient resources seriously to monitor international corruption’, thus implying that international action against corruption is unlikely to be effective unless its sponsors are willing to invest large sums of money in it. Not surprisingly, therefore, in relation to the OECD convention, Andvig concludes that ‘[t]he lack of plans to develop a central, well-resourced monitoring system makes the prospects that the OECD convention will have a significant long-term impact fairly slim’ (Andvig, 2003: 213).13 Other efforts, such as those of the international financial institutions, have been similarly undermined in some instances, as governments in receipt of loans have set up anti-corruption institutions as means of deflecting criticism, but without any real commitment to the institutions’ effectiveness (Riley, 2000: 148). ‘In other instances, ‘structural adjustment programmes have reduced some possibilities for corruption but also made new corrupt opportunities available in areas such as privatization and the operation of financial services’ (Riley, 2000: 149). In still others, where foreign aid and structural adjustment programmes have been found to be conducive to economic reform and development, the international financial institutions and bilateral aid agencies have been reluctant then to impose anti-corruption conditions, for fear of damaging economic progress as a consequence (Tangri and Mwenda, 2013: 152). Not surprisingly, then, changes in CPI scores over time suggest that much remains to be done and that there are no quick fixes for the problem. In 2000 the thirteen NICs and the eighteen sub-Saharan African countries for which the relevant data were available had scores of 37 and 31, respectively, and 38 and 35 fifteen years later (Figure 10.2). Are these large or small improvements? With all the caution enjoined by the limitations of the data, this does not, on the face of it, look like a huge success.

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35

Sub-Saharan African countries

31

38

NICs

37 0

5

10

15 2015

20

25

30

35

40

2000

Figure 10.2  Mean CPI scores, Sub-Saharan African countries and NICs, 2000 and 2015 Note: NICs = Argentina, Brazil, Chile, China, Egypt, India, Indonesia, Malaysia, Mexico, Philippines, South Africa, Thailand, Turkey. Sub-Saharan African Countries = Angola, Botswana, Burkina Faso, Cameroon, Côte d’Ivoire, Ethiopia, Ghana, Kenya, Malawi, Mauritius, Mozambique, Namibia, Nigeria, Senegal, Tanzania, Uganda, Zambia, Zimbabwe.

Conclusion To summarise, then, the higher levels of corruption which seem to characterise countries outside the so-called ‘first’ and ‘second’ worlds appear traditionally to have been related to poverty and to surviving patrimonial influences – influences that were once characteristic of Medieval Europe, where office-holding was considered as ‘ownership of a source of income, to be exploited for rents or emoluments’ (Weber, quoted by Heidenheimer and Johnston, 2002: 77) in exchange for loyalty and service to the feudal ruler. Gradually, the process of industrialisation from the eighteenth century onwards undermined such ties, as the sheer complexity of industrial societies meant that they could not be effectively administered without the commitment of office-holders ‘to impersonal and functional purposes’ (Weber, quoted by Heidenheimer and Johnston, 2002: 77). But, in addition to poverty and patrimonialism, some countries, particularly those of sub-Saharan Africa, have, largely as a result of the colonial heritage, suffered from the very low levels of legitimacy of their state apparatuses. This has meant that the vicious circles typically found between state weakness and corruption, and between corruption and the difficulties of achieving economic take-off, have been particularly persistent. Elsewhere, and especially in East Asia, higher levels of state legitimacy have meant that economic development has managed to coexist with relatively high levels of corruption largely because the latter has been calculable or predictable.

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If the period since the early 1990s has seen growing international attention to the problems of corruption in newly industrialised and less-developed countries, then there are reasons to be both optimistic and pessimistic that when historians look back on the 1990s they will see them as ‘a decade of irreversible change’ (Glynn, Kobrin and Naίm, 1997: 24) in relation to corruption in these parts of the world. On the one hand, the struggle against the phenomenon appears to be widely supported by international public opinion; on the other hand, there are doubts about the real commitment to the fight on the part of some of the world’s most powerful players. Notes  1 See, for example, Bozyk (2006: 164); Guillén (2003: 126); Mankiw (2006); Waugh (2000).  2 Neither Réunion nor Western Sahara is an independent state. Réunion is an overseas department of France. Sovereignty over Western Sahara is contested  and it is designated by the United Nations as a ‘Non-Self-Governing Territory’.  3 https://www.loc.gov/rr/amed/guide/afr-countrylist.html, accessed 3 February 2018.  4 Calculations based on World Bank data available at http://data.worldbank.org/ indicator/NY.GDP.PCAP.PP.CD?year_high_desc=true, accessed 2016. The calculation for the sub-Saharan African countries also excludes Somalia, for which the GDP data were unavailable, and Equatorial Guinea and Swaziland, for which the 2015 CPI data are unavailable.  5 I owe the ideas expressed in this paragraph to the lecture given by Dr Robert Arnot (British Council) on 7 October 2009 at the University of Salford within the framework of the seminar series, ‘Public integrity and political reform: British and foreign perspectives’.  6 Calculations based on World Bank data available at http://data.worldbank.org/ indicator/NY.GDP.PCAP.PP.CD?year _high_desc=true, accessed 2016.  7 Calculations based on World Bank World Development Indicators available at http://databank.worldbank.org/data/home.aspx, accessed 10 February 2018.   8 Calculations based on World Bank World Development Indicators available at http://databank.worldbank.org/data/home.aspx, accessed 10 February 2018.  9 This could be seen in three ways: first, the tendency of politicians’ resourceallocation decisions to be heavily dominated by their immediate-term political consequences; second, the tendency of such politicians to move large amounts of capital acquired through corruption and other forms of predatory behaviour abroad (in other words, to siphon off, precisely because of their weakness, as much capital as possible as quickly as possible); third, the tendency of such politicians to view private economic activity and entrepreneurship with extreme suspicion. As Sindzingre (2002: 449) puts it, ‘The private sectors in illegitimate states

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are dangerous, by their very nature, due to their possibilities for accumulation independent of the political leadership; the mistrust of the state towards private operators thus continues, in Anglophone as well as Francophone countries, in capitalist as well as Marxist ones, or those which have had a succession of coups’. 10 Directed by Elizabeth Jones (New York, NY: Filmakers Library, 2008). 11 Calculations based on World Bank World Development Indicators available at http://databank.worldbank.org/data/home.aspx. 12 Calculations based on World Bank World Development Indicators available at http://databank.worldbank.org/data /home.aspx. 13 The empirical evidence is mixed. Blundell-Wignall and Roulet (2017) suggest that companies under the jurisdictions of the signatory countries have reduced their investments in high-corruption locations; but the same is not true of companies under the jurisdictions of countries that are not signatories; and in any case, the crucial question concerns less the convention’s impact on investment decisions, as such, rather than its impact on the extent of bribery in those ­decisions.

References Andreski, Stanislav (1968), The African Predicament, London: Michael Joseph. Andvig, Jens Christopher (2003), ‘International Corruption’, pp. 207–19 in M.  J. Bull and J. L. Newell (eds), Corruption in Contemporary Politics, London: Palgrave Macmillan. Ayee, Joseph R. A. (2000), ‘Ghana: The Continuing Search for Cures in the Fight Against Corruption’, pp. 183–97 in Kempe Ronald Hope, Sr and Bornwell C. Chikulo (eds), Corruption and Development in Africa: Lessons from Country Case-Studies, Basingstoke: Macmillan. Ayittey, George B. N. (2000), ‘Combatting Corruption in Africa: Analysis and Context’, pp. 104–18 in Kempe Ronald Hope, Sr and Bornwell C. Chikulo (eds), Corruption and Development in Africa: Lessons from Country CaseStudies, Basingstoke: Macmillan. Bayart, Jean-François, Ellis, Stephen and Béatrice Hibou (1999), ‘From Kleptocracy to the Felonious State?’ pp. 1–31 in Jean-François Bayart, Stephen Ellis and Béatrice Hibou, The Criminalization of the State in Africa, Bloomington, IN: Indiana University Press. Blundell-Wignall, Adrian and Caroline Roulet (2017), ‘Foreign Direct Investment, Corruption and the OECD Anti-Bribery Convention’, OECD Working Papers on International Investment, 2017/01, http://dx.doi.org/10.1787/9cb3690cen, accessed 3 February 2018. Bozyk, Pawel (2006), Globalization and the Transformation of Foreign Economic Policy, Aldershot: Ashgate. Bridges, Hal (1958), ‘The Robber Baron Concept in American History’, Business History Review 32(1): 1–13. Chêne, Marie (2012), ‘Overview of Corruption and Anti-corruption in Liberia’,  Transparency International, https://www.transparency.org/what

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wedo/ans​wer/​overview_​of_​corruption_​and_​anti_​corruption_in_liberia, accessed 3 February 2018. Fombad, Charles M. (2000), ‘Endemic Corruption in Cameroon: Insights on Consequences and Control’, pp. 234–60 in Kempe Ronald Hope, Sr and Bornwell C. Chikulo (eds), Corruption and Development in Africa: Lessons from Country Case-Studies, Basingstoke: Macmillan. Glencorse, Blair (2012), ‘Emerging Voices: Glencorse on Higher Education in Liberia’, Council on Foreign Relations, 20 August, http://blogs.cfr.org/ development-channel/2012/08/20/emerging-voices-glencorse-on-higher-edu​ ca​tion-in-liberia/, accessed 3 February 2018. Glynn, Patrick, Kobrin, Stephen J. and Moisés Naίm (1997), ‘The Globalization of Corruption’, pp. 7–30 in Kimberly Ann Elliott (ed.), Corruption and the Global Economy, Washington, DC: Institute for International Economics. Guillén, Mauro F. (2003), The Limits of Convergence: Globalization and Organizational Change in Argentina, South Korea, and Spain, Princeton, NJ: Princeton University Press. Gupta, Sanjeev, Davoodi, Hamid R. and Rosa Alonso-Terme (2002), ‘Does Corruption Affect Income Inequality and Poverty?’, pp. 458–86 in Sanjeev Gupta and George T. Abed (eds), Governance, Corruption and Economic Performance, Washington, DC: International Monetary Fund. Hague, Rod, Harrop, Martin and Shaun Breslin (1998), Comparative Politics and Government: An Introduction, Basingstoke and London: Macmillan. Heidenheimer, Arnold J. and Michael Johnston (eds) (2002), Political Corruption: Concepts and Contexts, 3rd edn, New Brunswick and London: Transaction Publishers. Heidenheimer, Arnold J. and Holger Moroff (2002), ‘Controlling Business Payoffs to Foreign Officials: The 1998 OECD Anti-Bribery Convention’, pp. 943–59 in Arnold J. Heidenheimer and Michael Johnston (eds), Political Corruption: Concepts and Contexts, 3rd edn, New Brunswick and London: Transaction Publishers. Hope, Kempe Ronald, Sr and Bornwell C. Chikulo (2000), ‘Preface’, p. x in Kempe Ronald Hope, Sr and Bornwell C. Chikulo (eds), Corruption and Development in Africa: Lessons from Country Case-Studies, Basingstoke: Macmillan. Hutchcroft, Paul D. (2002), ‘The Politics of Privilege: Rents and Corruption in Asia’, pp. 489–512 in Arnold J. Heidenheimer and Michael Johnston (eds), Political Corruption: Concepts and Contexts, 3rd edn, New Brunswick and London: Transaction Publishers. IMF [International Monetary Fund] (2015), World Economic Outlook – Uneven Growth: Short- and Long-Term Factors, Washington, DC (April), www.imf.org/external/pubs/ft/weo/2015/01/pdf/text.pdf, accessed 3 February 2018. Mankiw, N. Gregory (2006), Principles of Economics, Mason, OH: Thomson Southwestern. McCormick, John (1995), Comparative Politics in Transition, New York: Wadsworth.

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Index

Africa, Living with Corruption (film) 206 African countries 196–213 aid agencies 210 Albania 177, 183–4, 187–90 Alexander, Claire 84 Al Fayed, Mohammad 26 Allen, Scott 129–30 analytic induction 45–6 Anderson, Annelise 88 Andreotti, Giulio 94 Andreski, Stanislav 198–200 Andvig, Jens Christopher 210, 212 Anechiarico, Frank 51 animals considered ‘clean’ or ‘unclean’ 3 apparatchiks 172 arms trade 76 Ashdown, Paddy 108–9 ‘Asian Tigers’ 195 Atlantic City 126 Audit Commission 49 authority overlap (as distinct from exercise of power) 203–4 Ayee, Joseph R. A. 205 Ayittey, George B. N. 208 ‘back-to-basics’ campaign 24, 26 BAE Systems 26 Baker, Norman 29 Barcenas case 27 Barth, James R. 36 Batt, Judy 179–80 Bayart, Jean-François 200–1 Bayley, David 6

Beckham, David 106 Belarus 177 Bendix, Reinhard 5 Berlusconi, Silvio 14–16, 27, 30–1, 108, 134, 161–4 Berruti, Massimo 14 Blair, Tony 16, 26, 139 Bogdani, Mirela 183–4 Bosnia 177 Boyce, James K. 201–2 Bratsis, Peter 3 Brazil 38, 135–6 Breslin, Brigid 28 Breslin, Shaun 143 Brezhnev, Leonid 172 bribery 2, 5–13, 18, 26, 31–2, 35, 50, 53–5, 58, 65–77, 89, 93–4, 98, 106, 125–31, 148–9, 172, 174, 185, 204, 207, 210–12 Bribery Act (UK, 2010) 28, 134 Bridges, Hal 202 British Aerospace 139 Brunetta reform (Italy, 2009) 164 Bulgaria 176, 182 Bull, M.J. 12, 17–18, 32, 54, 129 bureaucratic corruption 14–15 bureaucratic inefficiency 53 Buscetta, Tommaso 94 Byers, Stephen 29 Cameroon 205 Campbell, Stuart Vincent 38 Canada 38 capital flight 185, 201–2 Carothers, Thomas 176

219

Index cartel agreements 96–7 see also ‘elite cartels’ Carvalho, Edzio 21 cash, transportation of 72–3 cash for questions 26 Catholic Church 112–13 Central and Eastern Europe (CEE) 169–91 impact of corruption and effects of its exposure 181–4 Chiesa, Mario 44, 158–9 Chikulo, Bornwell C. 204 child sex abuse 112–13 China 65, 86–7, 92, 135–6, 171–2 Chirac, Jacques 25 ‘civic community’ ideal 56–8 civil service recruitment 5 Clean Air Act (US, 1990) 129 clean-up campaigns 207 clientelism 50, 88, 151–4, 159–60, 203 Clinton, Bill 25–6, 104 Clinton, Hillary 25 closed-list proportional representation (CLPR) 51–2, 135–6 codes of conduct 31 Cold War 152, 154 Coleman, James 57 collusive arrangements between business firms 97 Colombia 135 Colombo, Gherardo 155 Committee on Standards in Public Life 28 Common Agricultural Policy (CAP) 126 common law 11 communist legacy 169–71, 190 competition, suppression of 96 conditionality 209 Condon, Sir Paul 14 Conservative Party 24, 31–2 ‘constituency service’ 35 contract fixing 96–7 contract types 92–3 Corrupt Practices Act (1854) 4–5 corruption academic attention paid to 21, 32 ‘black’, ‘grey’ and ‘white’ 33–4 in Britain 26 causes of 43–4 circumstantial evidence of an increase in 29–32 in communist regimes 171–4

comparative studies of 5–11, 39 definition of 2–11, 21, 35, 49, 133 in developing and newly industrialised countries 195–202 effects of 17–18, 37 of individuals 44–8 legal forms of 7 links with organised crime 94–7 in local councils 135 measurement of 32–9, 49 media attention to 24–5 ‘old’ forms of 5 political 3–8, 11–19, 21, 103, 114, 171 in post-communist regimes 174–81 potential reduction in 129–30 seen as deviation from the norm 23 seen as a social construct 9, 11 types of 11–16, 74–8 ‘with theft’ and ‘without theft’ 34–5, 67 corruption perceptions index (CPI) 37–9, 144–6, 169, 177, 187, 196, 202–3, 207–8, 212–13 corruption prevention and control 124–40 in Central and Eastern Europe 175, 185–90 conditions for success in 125–34 in developing and newly industrialised countries 209–13 international regimes for 137–40 in Italy 162–5 strenuousness of efforts at 134–6 ‘corruption syndromes’ (Johnston) 181 corruptness, degrees of 35, 38 Cosa Nostra 87–92 costs and benefits of corruption, perceptions of 47 Côte d’Ivoire 127 counterparts to corruption 65–70, 73, 75 Craxi, Bettino 16–17, 158–9 Cressey, Donald 45, 84, 89–91 Cresson, Edith 17, 28 ‘criminalisation of the state’ 200 Cunningham, Andrew 10 Curry, Edwina 107 Czechoslovakia 174 Daily Mirror 16 Daly, Richard 22

220 ‘damage limitation’ exercises 108–9 Davigo, Piercamillo 155 de Graaf, G. 68 della Porta, Donatella 8, 15, 44, 46, 71, 84, 95–7, 134 Democracy Index 177 democratic politics, costs of 49–50 democratisation 176–80, 189–90 deregulation 49 Deripaska, Oleg 89 developing countries 194–6 di Pietro, Antonio 159 discretionary decision-making, scope for 128–30 Doig, Alan 22, 30, 49 Douglas, Mary 3 Draghi, Mario 72 Drayson, Paul 16 drugs trade 86 due process 17–18, 110, 116, 198 Durkheim, Émile 58, 85 earthquakes 157 East Asian countries 200, 203–4 Ecclestone, Bernie 26 economic growth 203–4 Edwards, Geoffrey 76–7 Ekström, Mats 113, 115 election expenses 5–6, 49 electoral malpractice 95–6 electoral reform 136, 161 electoral systems 4, 51–2 ‘elite cartels’ (Johnston) 181, 197 Ellis, Stephen 200–1 Emilia Romagna 56 ‘enforcers’ of corrupt exchanges 82, 87–90, 93 engagement in politics 1 equality before the law, principle of 4, 13, 17 European Central Bank 72 European Commission Against Racism and Intolerance 189 European Union (EU) 1, 10, 25, 126 accession to 179–80, 183–4, 190 Anti-fraud Office (OLAF) 137–8 Commission 28, 137–8, 183 extortion 88, 133–4 Ezickson, Doron 28 ‘facilitation fees’ 75 False Claims Act (US) 131

Index Farrelly, Paul 109 fear 83–4 feudal system 3–4 fidelity bonds 82 Filkin, Elizabeth 12 financial scandals 111–12 Finland 139 first-past-the-post electoral system 161 Five-star Movement see Movimento Cinque Stelle Flying Squad 14 food standards 55 Foot, Michael 23 Foot, Paul 9 Foreign Corrupt Practices Act (US, 1977) 210–11 foreign direct investment (FDI) 185 France 25 fraud 8, 10, 25 freedom of information legislation 50 Fumio, Abe 26 GAL scandal 27 Galeotti, Mark 186 gambling 126 gang culture 84 Garrard, John 9–10, 106–7 Geddes, Barbara 135 Genecon scandal 26 Germany 27–8 Ghana 205 Giglioli, P. P. 114–15 Gilby, Nicholas 76–7 Gladstone, William 16 Glencorse, Blair 206 Global Corruption Barometer (GCB) 144, 147 globalisation 137 Glynn, Patrick 211, 214 Goel, Rajeev K. 59 González, Felipe 17, 27 Goodman, Larry 25 Grabbe, Heather 180 Gragert, Bruce 87, 90 Greece 23, 50 Grillo, Beppe 158 Group of European States against Corruption (GRECO) 28, 137, 139, 149–50, 163, 186 guanxi 73 The Guardian 16, 24

221

Index Gürtel case 27 Gusinsky, Vladimir 178 Hague, Rod 143 Hall, Tom 36 Hamilton, Neil 17 Harrop, Martin 143 Haughton, Tim 182 Heidenheimer, Arnold J. 33, 35 Held, D. 4 Hewitt, Patricia 29 Heywood, Paul 23 Hibou, Béatrice 200–1 Hinduja brothers 12–13, 29 Hine, David 88 Holmes, Leslie 49, 171, 174, 176 Hong Kong 46, 53, 69, 78, 207–8 honours, sale of 16, 26 Hoon, Geoff 29 Hope, Kempe Ronald, Sr 204 horse-meat scandal (2013) 25 housing, access to 53 Howard, Tricia 108–9 Huhne, Chris 105, 111 Human Rights Watch 68–9 Hungary 180–1 Hutchcroft, Paul D. 203–4 immunity from prosecution 95–6 incidence of corruption, variations in 55–9 Independent Parliamentary Standards Authority (IPSA) 6 India 53, 66, 90–1 industrial societies 213 see also newly industrialised countries interest groups 151 International Monetary Fund (IMF) 53, 195, 209 investigative journalism 29, 116 Iran 210 Iran-Contra affair 104 Ireland 25 Italy 11, 22–3, 27, 30, 32, 44, 46, 50–1, 56, 66, 68, 71, 84, 91, 94–7, 114–15, 129, 132–6, 140, 143–65, 181 explanations for corruption in 150–5 impact of corruption and effects of its exposure 155–62 judicial system in 155 levels of corruption in 143–4, 149–50

north–south divide in 157 party politics in 150–4, 158–65 perceptions of corruption in 148 prevention and control of corruption in 162–5 unification of 88 varieties of corruption in 144–50 Jacobs, James 51 Japan 22, 26, 87–92 Johansson, Bengt 113, 115 Johnston, Michael 38, 86–9, 181–4, 197 Jones, Paula 25 judicial corruption 94–5, 188–9 Keeler, Christine 104, 107 Kenya 38, 205 Khomeini, Ayatollah 210 Kiep, Walther Leisler 28 Klitgaard, Robert 69 Kobrin, Stephen J. 214 Kocoras, John 28 Kohl, Helmut 17, 27 Kramer, John 171–2 Kronman, Anthony T. 93 Kunicova, J. 52 Kyôwa affair 26 Lambsdorff, Johann 66 Landman, Tod 21 Lasswell, Harold D. 7 Latvia 183, 187–90 leaks 112, 117 Lega Nord 157 legislation 15, 27, 117, 125, 129, 131, 134 legitimacy 4, 199, 213 Lehman Brothers 104 Lever, Ellis 106 Leviticus, book of 3 Lewinsky, Monica 26, 104 liberal democracies 16–18, 22–3, 28–32, 110, 114–18, 143, 165, 169, 171 liberal internationalism 139 Liberia 195, 205–9 licensing systems 52–3 likelihood of detection 54–5, 130–3 Lloyd George, David 16 local councils 135 Longo, Mariano 93 Loughlin, John 183–4

222 McCormick, John 200 mafia-type organisations 44, 70, 82–98, 152 characteristics of 83–7 conditions for the consolidation of 87–93 Magatti, Mauro 54 Magna Carta 3–4 Major, John 24, 26, 107 Malta 23 Mandelson, Peter 12–13, 31 Mao Tse Tung 172 Markovits, Andrei S. 110–11, 118 Martelli, Claudio 71 Masiulis, Eligijus 180 mass media 113 Maudling, Martin 22–3 Maudling, Reginald 9, 22–3 Médard, Jean-François 200–1 Members of Parliament (MPs) 2, 5–6, 12–13 expenses claimed by 26 register of interests of 9, 23 Mendras, Marie 172 Mény, Yves 49 Merton, Robert 30–1 Messina, Leonardo 96 ‘metacorruption’ 172–3 Metropolitan Police 14 Mexico 129 Milan 86 Mitterand, François 25 Moat, Raoul 105 Moldova 177 Moncrief, Chris 116–17 money laundering regulations 72–3 monitoring the actions of officials 50–1 Morrison, Herbert 2 Movimento Cinque Stelle (M5s) 27, 158, 163, 165 Mozambique 171–2 Municipal Corporations Act (1835) 4 Museveni, Yoweri Kaguta 209 Muszyn´ska, Barbara 11 Mutolo, Gaspare 70 Mwenda, Andrew M. 206 Nagyová, Jana 180 Naim, Moisés 214 Naples 84 ‘narcostates’ (Médard) 201 Ndikumana, Léonce 201–2

Index Necˇas, Petr 180 necessary and sufficient conditions 46, 59 Nelken, David 10 Nelson, Michael A. 59 neoliberalism 49, 125–6, 140, 176 Netherlands, the 68, 96 new public management 117 New York City 86 Newell, James L. 12, 17–18, 32, 54, 129, 135; author newly industrialised countries (NICs) 194–5, 202–3, 207, 209, 214 Ngema, Macias 199 Niger 67, 127 Nigeria 43, 53, 68–9, 200 Nixon, Richard 104, 107 Nolan, Lord 28 nomenklatura 128, 174 Non-Aligned Movement 194 norms, transgression of 105–7, 116–19 North Atlantic Treaty Organisation (NATO) 180 Northcote-Trevelyan Report (1854) 5 Nováková, Petra 11 Nwachukwu, Timothy 205 Oates, Sarah 179 O’Brien, Mike 13 Ochieng, Tom 205 ‘official moguls’ corruption 197 ‘old boy network’ 73 oligarchs 89, 202 ‘oligarchs and clans’ corruption 184–5, 197 one-off corrupt transactions 67, 74–5 onions, trade in 127 ‘opacity index’ (Barth et al) 36–7 open-list proportional representation (OLPR) 51–2, 95, 135–6, 154 Operation Countryman 14, 48 Organisation for Economic Cooperation and Development (OECD) 28, 135, 138, 210–12 Anti-bribery Convention (1997) 28, 212 organised crime 78, 84–97 links with corruption 94–7 Paoli, Letizia 83–5 partitocrazia 153–4

223

Index Passport Office, UK 129 path dependency 150, 174, 190, 207 patrimonialism 199, 213 patronage 50, 52, 136, 206 perceptions of corruption 36–7 personalisation of politics 116 Peru 195 Peters, John G. 35 petty corruption 75 Philippines, the 53 Pilittieri, Paolo 158 Pizzorno, Alessandro 32 Poland 11, 38, 174 police corruption 14–15 political culture 29–30 political parties 51–2, 175–6 engagement with 1 funding of 31–2 membership of 1, 31–2 politicians, distrust of 1–2 pollution rights 129–30 poor societies 22, 198–9, 201–2, 213 post-colonial states 199 Poulson, John 9–10, 12, 22–3 poverty see poor societies power, ‘symbolic’ or ‘coercive’ (Thompson) 10–11 power scandals 111 predatory behaviour 198–9 President’s Commission on Law Enforcement and Administration of Justice, US 90 pressure groups 211 principal–agent relationships 8, 14–15, 34 ‘prisoner’s dilemma’ 132, 159 privacy, maintenance of 29 private sphere 4 privateers 202 privatisation 49, 88, 128, 174–6 Profumo, John 104, 107 Propaganda Due (P2) Masonic lodge 153 proportional representation 51–2, 95, 135–6, 154 protection rackets 70, 82–5, 89 Protestant tradition 59 public administration 5, 50–3 public interest 7 Public Interest Disclosure Act (UK, 1998) 131

public office abuse of 6 buying and selling of 5 Puglia 56 punishment of corruption 133–4 Putin, Vladimir 179, 184–7 Putnam, Robert 55–60, 64 Quah, Jon S. 200 qualitative methods of explaining corruption 44 ‘qwerty’ keyboard 150 Rajoy, Mariano 27 Rawlings, Jerry 205 Reagan, Ronald 29–30, 104, 125 realist school of international relations 139 reasons as distinct from causes 44 Recruit scandal 26 Reddy, Prakash 90 referendum on EU membership 1 ‘reform paradox’ 208–9 ‘regime’, meaning of 137 Regional Anti-corruption Initiative 138 regression analysis 59 regulatory systems 54 Reid, John 16 religious differences 58–9 Renzi, Matteo 162 la Repubblica (newspaper) 146 reputation 66, 70–1, 108 for violence 84 Restelli, Sergio 71 Rifkind, Sir Malcolm 29 Riley, Stephen P. 212 ‘robber barons’ 202 Rogow, Arnold A. 7 Roldán, Luis 27 Rose-Ackerman, Susan 11, 49–54, 126–33 ‘rotten apples’ doctrine 22 ‘rule of law’ index 36 Runnymede Trust 84 Russia 86–9, 165, 169–73, 177–81, 184–7, 190 Sagawa Kyûbin scandal 26 Sakwa, Richard 172–3 Salaseviciute, Rimante 180 Salford gas scandal 106

224 Saudi Arabia 76 Savings and Loans crisis 26 scandal 103–19, 124 causes of 112–13 characteristics of 105–9 consequences of 117–19 definition of 103–5 mediated 113–14 occurrence of the word 117 political 109–12, 117–19 prevalence of 116–17 proneness to 105 in relation to corruption 103–4 unfolding of 113–15 Schreiber, Karlheinz 28 Seagull, Louis M. 112 Serious Fraud Office, UK 139 Severino law 163 sex scandals 111–12 Seychelles 211 Shleifer, Andrei 34–5 Sicily 71–2, 84–5, 88, 92, 94 Sierra Leone 201 Silverstein, Mark 110–11, 118 Simeon II, king of Bulgaria 182 Sindzingre, Alice 203 Singapore 53, 207–8 Sirleaf, Ellen Johnson 208–9 Škeˉle, Andris 183 ‘sleaze’ 24, 26 Smith, T. Dan 9–10 sniffer dogs 73 ‘social capital’ (Putnam) 57 solicitors, unethical behaviour by 7–8 solidarity, ‘mechanical’ or ‘organic’ (Durkheim) 85 South Korea 54, 203 Soviet Union 172 see also Russia Spain 27 Stability Pact Anti-corruption Initiative (SPAI) 138 Stalin, Joseph 172 state weakness 87–8, 93 status contracts 92–3 Straw, Jack 29 structural adjustment programmes 210, 212 structural corruption 77 supply–side factors helping to explain corruption 48–52 symbolic power 110–11

Index systemic corruption 18, 47, 77, 154, 198, 206 ‘talk scandal’ 115 Tangentopoli scandal 27, 32, 114–15, 132–3, 146, 155, 158, 160, 165 Tangri, Roger 206 Tanzi, Vito 90–1 taxation and tax collection 54, 128–9, 185 Taylor, Charles 208–9 Thailand 200 Thatcher, Margaret 29–31, 125 theft associated with corruption 67 ‘thick description’ 47 ‘third world’ 194 Thompson, John B. 105–14 totalitarian regimes 171 transparency 36 Transparency International 28, 139, 162–3, 187, 211 Treisman, Daniel 59, 185 triad groups 86–7, 92 trust, levels of 45, 54–60, 64, 76 trusted professions 1–2 Turin 71 Turkey 54 Turner, Cecil 11 Uganda 209 Ukraine 177 Ulyukayev, Alexei 185–6 ‘uncleanliness’, idea of 3 Unité de coordination de lutte antifraude (UCLAF) 137–8 United Nations 186 Convention against Corruption (UNCAC) 28, 138–40, 163 United States 25–6, 49 universalist principles 4, 11, 90–1 Uruguay 135 user fees 129 Vachudova, Milada Anna 190 Vaksberg, Arkadii 172 Vannucci, Alberto 8, 15, 44, 46, 71, 74, 84, 95–7, 134, 155–6 van Rickegham, Caroline 48 van Rossum, Wibo 11 Varese, Federico 86 Vaz, Keith 12–13 Verschoor, Curtis C. 134

225

Index violence, use or threat of 83–4, 88, 94 Vishny, Robert W. 34–5 Vitalone, Claudio 94 wage levels 48 Wang Shouxin 172 Warren, Earl 90 Washington DC 53 Watergate scandal 104, 107, 211 Waters, Sarah 159 Weber, Max 4, 58, 92, 213 Weder, Beatrice 48 Welch, Susan 35 ‘whistle-blowing’ 112, 131–2, 164

WikiLeaks 117 Willerton, John P. 178 Wilson, J. 30 ‘Wincanton’ 33–4, 98 World Bank 36, 84, 209 Wuhan Court case 65, 78 Yago, Glenn 36 Yakuza groups 87–92 Yeltsin, Boris 184 Zaiwalla, Sarosh 12 Zakharchenko, Dmitry 185 Zampini, Adriano 70–1