Corruption and Political System

Political Corruption as a Global Issue

HI UGM, 6 March 2012

Why political system?

Corruption “would not exist if the political institutions were able to exert the necessary influences and controls.” (Jain, in Jain, 2001, p. 4)

Corruption is normally resulted from interactionsbetween wealth and power, “interaction that defines the moral codes of the society.” (Jain, p. 6)

“Corruption, thus, will depend upon the combination of the rents that an interest group can see itself earningthrough policy changes, costs (corruption-related payments) it has to incur to change policies, and the enforcement-related costs, that is, the cost of penalties associated with being discovered.” (Jain, p. 7)

Political system leading to corruption

“Corruption depends both on the organization of electoral and legislative processes and on the extent to which wealthy interests seek benefits from the political system. Three factors are central in determining the incidence of political corruption ... The first dimension is the existence of narrow benefits available for distribution by politicians. The second is the ability of wealthy groups to obtain these benefits legally. Third are the constraints imposed on politicians by their desire for re-election.” (Rose-Ackerman, in Jain, 2001, p. 35 – emphasis added)

Issue 1: Political campaign financing

When political corruption is “business as usual”, it is easy to find the politics of corruption. (T.M. Lubis, ‘Lingkaran Setan Politik Korupsi ke Korupsi Politik’, Tempo, 41/33, 6 Desember 2004).

How to reduce political campaign costs? Reducing the length of time for the campaign. Establishing stronger disclosure rules. Limiting individual donations and candidate’s

spending. Finding alternative sources of funds in the public

sector. (Rose-Ackerman, pp. 51-52)

Issue 1: Political campaign financing

A political reform must be imposed to “include both the growth of a privateeconomic sector that includes firms that demand a well-functioning government and the maturation of the political system to the point where politicians see that they can win elections by appealing to voters’demands for a cleaner and more effective government.” (Rose-Ackerman, p. 57)

Issue 2: Why do voters support corrupt politicians?

“If indeed corruption is deemed morally wrongand tends to decrease the average voter’s welfare, why do corrupt politicians and partiesremain in the business of politics?” (Kurer, in Jain, 2001, p. 66)

The “denial thesis”: “A regime that has frequent elections, political competition, active and well-organized opposition forces, an independent legislature and judiciary, free media, and liberty of expression is bound to generate more limits on the scope and frequency of corruption than one that does not have them. (Elliott, 1997, p. 11 as quoted in Kurer, p. 67 – emphasis added)

Issue 2: Why do voters support corrupt politicians?

Clientelism and a desire for corruption were due to “the material extra-bureaucratic benefits it supplies.” (Kurer, p. 68)

Cultural determination: “In many societies no such clear distinction exists. In the private sector, gift giving is pervasive and highly valued, and it seems natural to provide jobs and contracts to one’s friends and relations. No one sees any reason not to carry over such practices into thepublic realm. In fact, the very idea of a sharp distinction between public and private life seems alien to many people.” (Rose-Ackerman, 1999, p.91 as quoted in Kurer, 71 – emphasis added)

Issue 2: Why do voters support corrupt politicians?

Collective action problems: “For most ordinary people in developing countries, achieving increased administrative competence andhonesty is a collective action problem. Consequently, their interest in reform remains latent; it does not spontaneously develop into politically compelling demands.” (Geddes, 1994, p. 35 as quoted in Kurer, p. 73)

Missing alternatives: voters might support corrupt politicians because there is no alternative. (Kurer 74)

Issue 3: Do Higher Wages for Bureaucrats Reduce Corruption?

Sweden’s experience (Lindbeck 1975 as quoted in J.

Svensonn, ‘Eight Questions about Corruption’, 2005, p. 32).

“[W]age incentives can reduce bribery, but only under certain conditions. This strategy requires a well-functioning enforcement apparatus; the bribe being offered (or demanded) must not be a function of the official's wage; and the cost of paying higher wages must not be too high.” (Svensonn, p. 33)