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The Quality of GovernmentThe Quality of Government
What you get?What you get?
What it is?What it is?
How to get it!How to get it!
Bo RothsteinBo Rothstein
The Quality of Goverment InstituteThe Quality of Goverment Institute
Department of Political ScienceDepartment of Political Science
University of GothenburgUniversity of Gothenburg
The Quality of Government (QoG) The Quality of Government (QoG) Institute at University of Institute at University of
GothenburgGothenburg Started in 2004 (minor grant to build Started in 2004 (minor grant to build
database)database) Indepentent academic research instituteIndepentent academic research institute Major funding for research from 2007 Major funding for research from 2007
(about 8 mil. Euro). About 20 researchers(about 8 mil. Euro). About 20 researchers Aim: To carry out and promote research Aim: To carry out and promote research
about the importance of trustworthy, about the importance of trustworthy, reliable, competent, non-corrupt, non-reliable, competent, non-corrupt, non-discriminatory, and competent discriminatory, and competent government institutions = QoGgovernment institutions = QoG
QoG ResourcesQoG Resources
Two open access major cross-country Two open access major cross-country and over time databanks and over time databanks
Largest survey so far of QoG (34000 Largest survey so far of QoG (34000 n)n)
QoG expert survey for 126 countriesQoG expert survey for 126 countries About 200 workings papers, About 200 workings papers,
published articles, books, etc.published articles, books, etc. Just ”google” QoGJust ”google” QoG
ANTICORRPANTICORRP Anticorruption policies revisited: Global Anticorruption policies revisited: Global
trends and European Responses to the trends and European Responses to the Challanges of CorruptionChallanges of Corruption
Large-scale integrative project funded by the Large-scale integrative project funded by the European Union Seventh Framework programEuropean Union Seventh Framework program
Started in 2012 and will last for 60 monthsStarted in 2012 and will last for 60 months Involves 21 research groups in 16 EU Involves 21 research groups in 16 EU
countries countries Total budget about 10 mil. EuroTotal budget about 10 mil. Euro Largest EU-funded research project in the Largest EU-funded research project in the
social sciences social sciences www.anticorrp.euwww.anticorrp.eu
ANTICORRP:ANTICORRP:Background and goalsBackground and goals
Goal: To investigate factors that promote or Goal: To investigate factors that promote or hinder the development of effective hinder the development of effective anti-anti-corruption policiescorruption policies
Interdisciplinary project Interdisciplinary project
While the detrimental effects of corruption on While the detrimental effects of corruption on many central aspects of human well-being are many central aspects of human well-being are by now well-knownby now well-known
knowledge about how knowledge about how corruption can be corruption can be successfully fought by political means is much successfully fought by political means is much less less developed developed
The failure of the international anti-corruption The failure of the international anti-corruption regimeregime
The Quality of Government: The Quality of Government: Corruption, ineguality and social trust in a Corruption, ineguality and social trust in a
comparative perspective (University of Chicago comparative perspective (University of Chicago Press 2011)Press 2011)
QoG - An example: IMF QoG - An example: IMF 20062006
“promoting good governance in all its aspects, including by ensuring the rule of law, improving the efficiency and accountability of the public sector, and tackling corruption, as essential elements of a framework within which economies can prosper”
But…. how important is But…. how important is QoG compared to other QoG compared to other
political variables? political variables?
The huge and impressive success of democracy The huge and impressive success of democracy and democratization since the 1970sand democratization since the 1970s
More countries than ever are now considered to More countries than ever are now considered to be democraticbe democratic
More people than ever now lives in More people than ever now lives in democraciesdemocracies
But …. the effect of democracy on human well-But …. the effect of democracy on human well-being is so far not impressive being is so far not impressive
Syria
Bosnia and Herzegovina
Papua New Guinea
ArgentinaS. Arabia
Nor
Croatia
JapanSwe
South Korea
Egypt
BahrainArmenia
Macedonia
ZimbabweSwaziland
Malaysia
AzerbaijanTurkmenistan
Mongolia
Israel
Georgia
Singapore
South Africa
Belarus
USA
Russia
Nigeria
Burundi
Equatorial Guinea
Kuwait
EthiopiaKenyaDjibouti
RwandaCameroon
Afghanistan
Senegal
Lesotho
Mozambique
Laos
BotswanaLiberia
Iraq Gambia
Honduras
Angola
Maldives
Tanzania
Cambodia
TuvaluBangladesh
Brunei
Sierra Leone
Mali
Tajikistan
Cuba
HaitiChad
Pakistan
IranLebanon
China
3040
5060
7080
He
alth
y L
ife Y
ea
rs
0 1 2 3 4 5 6 7 8 9 10
Level of Democracy
R²=0.01
Sources: WHO (-), Freedom House/Polity (2002-2006)
Healthy Life Yearsvs. Level of Democracy
Low High
Data runs by: Richard Svensson
Low
High
Albania
ArgentinaBahrain
Bangladesh
BoliviaSolomon IslandsMyanmar
Burundi
CambodiaCameroon
Cape Verde
Dem. Rep. Congo
Eritrea
Estonia
Gabon
Gambia
Ghana
Iran
Israel
Japan
Kazakhstan
Lebanon
Lesotho
MalaysiaMaldives
Mali
Morocco
Mozambique
Vanuatu
Nigeria
Norway
QatarRussia
Rwanda
Sao Tome
Saudi Arabia
Seychelles
Sierra Leone
Singapore
Vietnam
Swaziland
Swe
Egypt
USA
Burkina Faso
.2.4
.6.8
1
Hu
ma
n D
eve
lop
me
nt
Ind
ex
0 1 2 3 4 5 6 7 8 9 10
Level of Democracy
R²=0.22
Sources: UNDP (2002), Freedom House/Polity (2002-2006)
Human Development Indexvs. Level of Democracy
Low High
Data runs by: Richard Svensson
Low
High
Albania
ArgentinaBahrain
Bangladesh
BoliviaSolomon IslandsMyanmar
Burundi
CambodiaCameroon
Cape Verde
Dem. Rep. Congo
Eritrea
Estonia
Gabon
Gambia
Ghana
Iran
Israel
Japan
Kazakhstan
Lebanon
Lesotho
MalaysiaMaldives
Mali
Morocco
Mozambique
Vanuatu
Nigeria
Norway
QatarRussia
Rwanda
Sao Tome
Saudi Arabia
Seychelles
Sierra Leone
Singapore
Vietnam
Swaziland
Swe
Egypt
USA
Burkina Faso
.2.4
.6.8
1
Hu
ma
n D
eve
lop
me
nt
Ind
ex
0 1 2 3 4 5 6 7 8 9 10
Level of Democracy
R²=0.22
Sources: UNDP (2002), Freedom House/Polity (2002-2006)
Human Development Indexvs. Level of Democracy
Low High
Data runs by: Richard Svensson
Low
High
Azerbaijan
ArgentinaBahamas
Belgium
BhutanBotswana
Solomon Islands
Chile
Dem. Rep. Congo
Eq. Guinea
Eritrea
FinlandFrance
Djibouti
Ghana
Grenada
Haiti
India
IsraelItaly
JapanSouth Korea
Lesotho
Mali
Mexico
Oman
Namibia
Niger
Nigeria
Norway
Russia
Sierra Leone
SingaporeSweden
USA
Burkina Faso
Venezuela
.2.4
.6.8
1
Hu
ma
n D
eve
lop
me
nt
Ind
ex
-2 -1 0 1 2 3
Control of Corruption
R²=0.47
Sources: UNDP (2002), World Bank (2002-2008)
Human Development Indexvs. Control of Corruption
High Corruption Low Corruption
Data runs by: Richard Svensson
Low
High
Bangladesh
Brazil
Bulgaria
China
Colombia Denmark
Ethiopia GeorgiaIndia
Iran
Iraq
Mexico
Nigeria
Romania
Russia
Saudi Arabia
Zimbabwe
Sweden
Egypt
Tanzania
USA
45
67
8
Life
Sa
tisfa
ctio
n
0 2 4 6 8 10
Level of Democracy
R²=0.28
Sources: World Values Survey (1996-2008), Freedom House/Polity (2002-2006)
Life Satisfactionvs. Level of Democracy
Azerbaijan
Argentina
Austria
Bangladesh
Brazil
Chile
China
Colombia Denmark
Estonia
Finland
GeorgiaIndia
Indonesia
Iran
Iraq
Ireland
JapanKorea, South
Kyrgyzstan
Lithuania
MaltaMexico
Nigeria
Romania
Russia
S. Arabia Singapore
Zimbabwe
Sweden
Egypt
United Kingdom
Tanzania
USAUruguayVenezuela
45
67
8
Life
Sat
isfa
ctio
n
-2 -1 0 1 2 3
Control of Corruption
R²=0.46
Sources: World Values Survey (1996-2008), World Bank (2002-2008)
Life Satisfactionvs. Control of Corruption
High Corruption Low Corruption
High
Low
Data runs by: Richard Svensson
AfghanistanAngola
Antigua and Barbuda
Azerbaijan
Bahrain
Bangladesh
Bosnia and Herzegovina
Botswana
Brazil
Myanmar
Burundi
Cambodia
Cameroon
China
Comoros
Cuba
Benin
Ethiopia
Eritrea
Estonia
Djibouti
Gabon
Ger
KiribatiHaiti
India
Iran
IsraelJapan
Kenya
Kuwait
Lebanon
Madagascar
Malawi
Mali
Mongolia
MozambiqueNigeria
PakistanRussia
Rwanda
San Marino
Saudi A.
Senegal
Sierra Leone
Singapore
South Africa
Zimbabwe
Swaziland
Swe
TajikistanThailand
United Arab Emirates
Ukraine
USA
Uzbekistan
Zambia
4050
6070
80
Life
Exp
ect
an
cy a
t B
irth
(Y
ea
rs)
0 1 2 3 4 5 6 7 8 9 10
Level of Democracy
R²=0.19
Sources: World Bank (2000-2006), Freedom House/Polity (2002-2006)
Life Expectancy at Birthvs. Level of Democracy
Low High
Data runs by: Richard Svensson
Low
High
Afghanistan
AlbaniaArgentina
Australia
BahamasBarbados
Bhutan
Botswana
Solomon Islands
Cape Verde
China
CubaDenmark
Equatorial GuineaEthiopia
Eritrea
Estonia
Finland
Ghana
Greece
HaitiIndia
Iraq
ItalyJapan
Liberia
Liechtenstein
Malawi
MongoliaRussia
Sierra Leone
Singapore
South Africa
Zimbabwe
Swaziland
Sweden
Ukraine
USA
Burkina Faso
Venezuela
Zambia
4050
6070
80
Life
Exp
ect
an
cy a
t B
irth
(Y
ea
rs)
-2 -1 0 1 2 3
Control of Corruption
R²=0.41
Source: World Bank (2000-2008)
Life Expectancy at Birthvs. Control of Corruption
High Corruption Low Corruption
Data runs by: Richard Svensson
Low
High
Albania Argentina
Brazil
Belarus Cambodia
Cameroon Cape Verde
China
Colombia
Fiji Georgia
Greece
India
Israel
Jamaica
Japan
Kenya
Kuwait
MalaysiaOman
Nor
Qatar
Russia
Saudi Arabia
Singapore
Vietnam
Swe
ThailandTunisia
Turkey
Uganda
Ukraine
Egypt
USA
Uruguay
VenezuelaZambia
24
68
10
Fo
reig
n C
red
it R
atin
g
0 1 2 3 4 5 6 7 8 9 10
Level of Democracy
R²=0.13
Sources: Standard & Poor's (2011), Freedom House/Polity (2009)
Foreign Credit Ratingvs. Level of Democracy
Low High
Data runs by: Richard Svensson
Low
High
Albania
Chile
China Taiwan
France
Greece
Grenada
IcelandIreland
IsraelItaly
Japan
Kazakhstan
Jordan
Lithuania
Malaysia
New Zealand
Norway
Papua New Guinea
Peru
Poland
Russia
Saudi Arabia
SwedenSwitzerland
Uganda
Macedonia
Egypt
USA
Uruguay
24
68
10
Fo
reig
n C
red
it R
atin
g
-2 -1 0 1 2
Control of Corruption
R²=0.62
Sources: Standard & Poor's (2011), World Bank (2002-2008)
Foreign Credit Ratingvs. Control of Corruption
High Corruption Low Corruption
Data runs by: Richard Svensson
Low
High
Antigua and BarbudaBahrain
Bangladesh
ArmeniaBosnia
Brunei
Belarus
Cambodia
Cameroon
Taiwan
Fin
Gabon
Gambia
IsraelJapan
Kazakhstan
North Korea
Luxembourg
Malaysia
Monaco
Mongolia
NorwayQatar
Russia
Saudi ArabiaSeychelles
Singapore
Vietnam
Swe
United Arab Emirates
Turkmenistan
Tuvalu
USA
Uruguay
Venezuela
025
000
5000
0
GD
P /
Ca
pita
0 1 2 3 4 5 6 7 8 9 10
Level of Democracy
R²=0.16
Sources: Gleditsch (2002), Freedom House/Polity (2002-2006)
GDP / Capitavs. Level of Democracy
Low High
Data runs by: Richard Svensson
Low
High
Afghanistan
Barbados
Belgium
Bhutan
Brunei
Belarus
Cape Verde
Chad
Chile
Equatorial Guinea
Estonia
FinlandGermany
Ireland
IsraelItaly
Japan
Luxembourg
Mauritania
New Zealand
Niger
NorwayQatar
Russia
Sao Tome
S. Arabia
SingaporeSweden
Trinidad
United Arab Emirates
Turkmenistan Ukraine
USA
Uruguay
025
000
5000
0
GD
P /
Ca
pita
-2 -1 0 1 2 3
Control of Corruption
R²=0.71
Sources: Gleditsch (2002), World Bank (2002-2008)
GDP / Capitavs. Control of Corruption
High Corruption Low Corruption
Data runs by: Richard Svensson
Low
High
QoG versus DemocracyQoG versus Democracy
For all standard measures of human well-For all standard measures of human well-being, QoG measures clearly outperforms being, QoG measures clearly outperforms measures of democracymeasures of democracy
This is not a problem that is related only to This is not a problem that is related only to developing countries or former communist developing countries or former communist countriescountries
An overwhelming part of human misery in An overwhelming part of human misery in today’s world is caused by low QoGtoday’s world is caused by low QoG
This should have implications for researchThis should have implications for research
Why are definitions Why are definitions important?important?
In order to study it, we have to know what In order to study it, we have to know what we are speaking aboutwe are speaking about
Terminology can be very confusingTerminology can be very confusing If we do not have a clear definition, we If we do not have a clear definition, we
cannot operationalize and measurecannot operationalize and measure If we cannot measure, we cannot explain If we cannot measure, we cannot explain
variatonvariaton If we cannot explain variation, we cannot If we cannot explain variation, we cannot
combat corruptioncombat corruption
TerminologyTerminology
Good GovernanceGood Governance State CapacityState Capacity Government effectivenessGovernment effectiveness CorruptionCorruption State captureState capture Rule of lawRule of lawQuality of GovernmentQuality of Government
What it is: The many What it is: The many problems of defining QoGproblems of defining QoG
The ”too broad” definitionsThe ”too broad” definitions The relativistic definitionsThe relativistic definitions The simply wrong definitiionsThe simply wrong definitiions Definitions that include what we want to Definitions that include what we want to
explainexplain The confusion around ”governance”The confusion around ”governance” Functionalist definitionsFunctionalist definitions Definitions that are disconnected from Definitions that are disconnected from
normative theorynormative theory
Too broad definitions of QoG:Too broad definitions of QoG:
World Bank: “World Bank: “the traditions and institutions the traditions and institutions by which authority in a country is exercisedby which authority in a country is exercised””
““(1) the process by which government are (1) the process by which government are selected, monitored and replaced, (2) the selected, monitored and replaced, (2) the capacity of the government to effectively capacity of the government to effectively formulate and implement sound policies, formulate and implement sound policies, and (3) the respect of citizens and the state and (3) the respect of citizens and the state for the institutions that govern economic for the institutions that govern economic and social interactions among them” and social interactions among them” (Kaufmann, Kraay, and Mastruzzi 2004, 3)(Kaufmann, Kraay, and Mastruzzi 2004, 3)
ProblemsProblems
If QoG is everything, than maybe it is If QoG is everything, than maybe it is nothingnothing
If QoG is just ”good democracy”, then why If QoG is just ”good democracy”, then why do you need another conceptdo you need another concept
QoG can not be just Democracy because QoG can not be just Democracy because the curve between D & QoG is J-shapedthe curve between D & QoG is J-shaped
We would like to know if democracy We would like to know if democracy increases QoG and if democracy is increases QoG and if democracy is included in the definition this is not included in the definition this is not possilbepossilbe
Should policies be included?Should policies be included?
””Sound policies”: Do we really know?Sound policies”: Do we really know? ””Sound policies” – will there by Sound policies” – will there by
consensus?consensus? Epistocracy: The Problem from Plato Epistocracy: The Problem from Plato
and Leninand Lenin It is problably easier to get broad It is problably easier to get broad
based concensus about the based concensus about the procedures than about policies procedures than about policies (substance)(substance)
Definitions that are simply Definitions that are simply wrong wrong
Leading economists: Small government = Leading economists: Small government = High QoGHigh QoG
Alberto Alesina: ”Alberto Alesina: ”a large government increases corruption and rent-seeking”
Gary Becker: ”To Root out Corruption, Boot Out Big Government”
But what about Northern Europe? Data: High corruption equals small
governments ”Big Government” is ”Good Government”
Functionalist definitions of QoG:Functionalist definitions of QoG:
La Porta et al. (1999, 223): “good La Porta et al. (1999, 223): “good governance” = “good-for-economic-governance” = “good-for-economic-development”development”
The Economist The Economist ((June 4th, 2005June 4th, 2005)): : ““What is required for growth? What is required for growth?
−− Good governance. Good governance. And what counts as good governance? And what counts as good governance?
−−That which promotes growth.”That which promotes growth.” But then what promites growth?But then what promites growth? - Good governance- Good governance And so on….And so on….
Relativistic definitions of QoGRelativistic definitions of QoG
Absence of corruption, Absence of corruption, But….Corruption in itself difficult to defineBut….Corruption in itself difficult to define Low QoG not only about corruptionLow QoG not only about corruption Corruption = ”the abuse of public power Corruption = ”the abuse of public power
for private gain”for private gain” But was should be considered ”abuse”? But was should be considered ”abuse”? The problem with relativism The problem with relativism These definitions lack a normative These definitions lack a normative
baselinebaseline Cannot be used for comparative researchCannot be used for comparative research
Definitions that includes Definitions that includes what you want to explainwhat you want to explain
QoG as efficiency/effectivenessQoG as efficiency/effectiveness But, we want to explain efficiency/ But, we want to explain efficiency/
effectivenesseffectiveness QoG as efficiency lacks a normative QoG as efficiency lacks a normative
baseline for how the state should baseline for how the state should treat citizenstreat citizens
Acemoglu & Robinson: Why Acemoglu & Robinson: Why Nations FailNations Fail
What is required is ”inclusive institutions” What is required is ”inclusive institutions” defined as system that defined as system that “allow and encourage participation by the great mass of people in economic activities that make best use of their talents and skill and enable them to make the choices they wish” + rule of law etc.
Well, big news: The good society produces the good society
Arguments for a Arguments for a normative definition of normative definition of
QoGQoG Should we accept a relativistic understanding of Should we accept a relativistic understanding of
democracy, human rights , gender equality?democracy, human rights , gender equality? If not, why should we accept a relativistic def. of If not, why should we accept a relativistic def. of
QoG?QoG? If we accept a relativistic definition, we can If we accept a relativistic definition, we can
forget the ambitions to meausere to compareforget the ambitions to meausere to compare And we will not be able explain variation in QoG And we will not be able explain variation in QoG
by any general theoryby any general theory The empirical arguments for a relatvistic The empirical arguments for a relatvistic
definition of QoG are not convincing?definition of QoG are not convincing?
The Two Worlds of The Two Worlds of GovernanceGovernance
Governance 1 Governance 1 as understood by public as understood by public adminstation & public policy scholars adminstation & public policy scholars studying western liberal democraciesstudying western liberal democracies
Non-normative, functionalist critique of Non-normative, functionalist critique of hierarchial and rule-of-law administration hierarchial and rule-of-law administration (Weberianism). (Weberianism).
Focus on private-public partnerships, Focus on private-public partnerships, pseudo-market solutions, new public pseudo-market solutions, new public management, etcmanagement, etc
Governance as a meta-concept for all types Governance as a meta-concept for all types of social co-ordination. of social co-ordination.
Weak on conceptual precision and Weak on conceptual precision and operationalizations and therefore no operationalizations and therefore no measures.measures.
Governance mode two.Governance mode two. ””Good Governance”Good Governance” Governance as understood in development Governance as understood in development
researchresearch Normative (good) and empiricalNormative (good) and empirical State-centered, rule of law, property rights, State-centered, rule of law, property rights,
meritocracy, competencemeritocracy, competence Strong focus on operationalizations and Strong focus on operationalizations and
measurement measurement This ”same terminology for different things” This ”same terminology for different things”
has created a lot of conceptual confusionhas created a lot of conceptual confusion
Definitions that are not Definitions that are not related to modern political related to modern political
philosophyphilosophy The idea that one could speak of The idea that one could speak of
GOOD governance or the QUALITY of GOOD governance or the QUALITY of government without entering into a government without entering into a dialoque with modern political dialoque with modern political philosophy is …. unjustifiedphilosophy is …. unjustified
May result in utilitarian definitions of May result in utilitarian definitions of QoG by which individuals are QoG by which individuals are sacrificed for some notion of ”the sacrificed for some notion of ”the collective good” (”Leninism”)collective good” (”Leninism”)
Requirements of definition of Requirements of definition of QoGQoG
UniversalismUniversalism PrecisionPrecision Non-functionalismNon-functionalism Connected to democratic theory Connected to democratic theory
(proceduralism)(proceduralism) Resonate with major works in modern Resonate with major works in modern
political philosophy about justice, rights political philosophy about justice, rights and equalityand equality
Resonate with central empirical findingsResonate with central empirical findings
Democratic theory and QoGDemocratic theory and QoG
Input side: Political Equality (Robert Input side: Political Equality (Robert Dahl)Dahl)
Output side: Impartiality (Rothstein & Output side: Impartiality (Rothstein & Teorell)Teorell)
BASIC NORM = In both cases, we should BASIC NORM = In both cases, we should expect considerable variation in the expect considerable variation in the specific institutional configuration specific institutional configuration
The opposite to justice is …..The opposite to justice is ….. ……..favoritism..favoritism
QoG = ImpartialityQoG = Impartiality When implementing laws and policies, When implementing laws and policies,
government officials shall not take government officials shall not take anything about the citizen/case into anything about the citizen/case into consideration that is not consideration that is not beforehandbeforehand stipulated in the policy or the law stipulated in the policy or the law
QoG is about the QoG is about the exerciseexercise of power, not of power, not the the access access to powerto power
Rules out corruption, but also other Rules out corruption, but also other forms of favoritism such as clientelism, forms of favoritism such as clientelism, nepotism, patronage and discriminationnepotism, patronage and discrimination
Rawls two great hopesRawls two great hopes
By arranging fair procedures for By arranging fair procedures for collective decision-making (= liberal collective decision-making (= liberal democracy) the probability of just democracy) the probability of just outcomes will increaseoutcomes will increase
By arranging fair procedures for the By arranging fair procedures for the implementation of these decisions (= implementation of these decisions (= QoG), the probability of just outcomes will QoG), the probability of just outcomes will increaseincrease
In both cases, there can be no guaranteeIn both cases, there can be no guarantee
QoG and Political LegitimacyQoG and Political Legitimacy
““it is notable that democratic rights, it is notable that democratic rights, while certainly qualifying as one of the while certainly qualifying as one of the most important causes of legitimacy, most important causes of legitimacy, turn out to be roughly on par with turn out to be roughly on par with welfare gains, and both of these are far welfare gains, and both of these are far less important than good governance. less important than good governance. This clashes with standard liberal This clashes with standard liberal treatments of legitimacy that give treatments of legitimacy that give overall priority to democratic rights“ overall priority to democratic rights“ (Bruce Gilley)(Bruce Gilley)
Political legitimacy, cont.Political legitimacy, cont.
””It is Quality of Government and the It is Quality of Government and the impartial treatment on the output side of the impartial treatment on the output side of the political system, and not electoral political system, and not electoral democracy, that creates regime legitimacy”democracy, that creates regime legitimacy”
(Torbjörn Gjefsen 2012)(Torbjörn Gjefsen 2012)
How to get it? How to get it? What do we know?What do we know?
Avner Greif in Handbook of Avner Greif in Handbook of Institutional Economics 2005: Institutional Economics 2005: Efficient (i.e., QoG) institutions Efficient (i.e., QoG) institutions ””operate in a few advanced contemporary countries and only in recent times. We know surprisingly little, however, regarding the institutional development that led to these modern successes”
Two theoretical Two theoretical misspecifications of the misspecifications of the
problemproblem The principal-agent theoryThe principal-agent theory Agents as rational utility maximizersAgents as rational utility maximizers Problem can be fixed by incremental Problem can be fixed by incremental
change of incentive structurechange of incentive structure
The public ethics theoryThe public ethics theory Agents are motivated by social normsAgents are motivated by social norms Problem can be fixed by enlightened Problem can be fixed by enlightened
educationeducation
QoG and the Human NatureQoG and the Human Nature
Reciprocity is the central motive that Reciprocity is the central motive that drives human agency. drives human agency.
““if people believe that cheating on if people believe that cheating on taxes, corruption and abuses of the taxes, corruption and abuses of the welfare state are widespread, they welfare state are widespread, they themselves are more likely to cheat themselves are more likely to cheat on taxes, take bribes, or abuse on taxes, take bribes, or abuse welfare state institutions” (Fehr and welfare state institutions” (Fehr and Fischbacher 2006).Fischbacher 2006).
Low QoG/Corruption as a Low QoG/Corruption as a social trapsocial trap
QoG as a problem of collective actionQoG as a problem of collective action Actors strategies based on reciprocityActors strategies based on reciprocity ““What agents do, depends on what they What agents do, depends on what they
think most other agents will do”think most other agents will do” Corruption as a self-reinforcing Corruption as a self-reinforcing
equilibriumequilibrium Rationality is “strategic” or “interactive”Rationality is “strategic” or “interactive” Equilibria about expectations must Equilibria about expectations must
changechange Requires as “big bang” change” Requires as “big bang” change”
QoG as a Social TrapQoG as a Social Trap Everyone knows that if all respect the impartiality Everyone knows that if all respect the impartiality
of institutions, all will winof institutions, all will win But – if people cannot trust that “almost everyone But – if people cannot trust that “almost everyone
else” will respect the impartial institutions they will else” will respect the impartial institutions they will be destroyed because the end is contingent on be destroyed because the end is contingent on honest cooperation by “almost everyone else”honest cooperation by “almost everyone else”
Thus, dishonest behavior may be rational when Thus, dishonest behavior may be rational when people do not trust that others will also be honest.people do not trust that others will also be honest.
Conclusion: Efficient cooperation for establishing Conclusion: Efficient cooperation for establishing impartial institutions will only come about if people impartial institutions will only come about if people trust that most other people will respect themtrust that most other people will respect them
Lacking this trust, the social trap is for real. That is, Lacking this trust, the social trap is for real. That is, we end up in a state of affairs that is worse for we end up in a state of affairs that is worse for everyone, even though everyone know that they everyone, even though everyone know that they would profit from impartial institutionswould profit from impartial institutions
What does it take to break What does it take to break out of a social trap?out of a social trap?
The Ostrom Approach – What is needed ?The Ostrom Approach – What is needed ?
1.1.A minimal set of institutions for decision-A minimal set of institutions for decision-makingmaking
2.2.A general understanding of the seriousness of A general understanding of the seriousness of the problemthe problem
3.3.New ideas that ”another world is possible”New ideas that ”another world is possible”
4.4.And to go for a BIG BANG CHANGEAnd to go for a BIG BANG CHANGE
To summarizeTo summarize1.1. The negative impact of low QoG on The negative impact of low QoG on
human well-being and political human well-being and political legitimacy is hugelegitimacy is huge
2.2. Democracy is no guarantee against Democracy is no guarantee against low QoGlow QoG
3.3. The conceptual/theoritical work in this The conceptual/theoritical work in this area has been quite problematic area has been quite problematic
4.4. The dominant theories about The dominant theories about corruption seem to have mispecificied corruption seem to have mispecificied the problemthe problem