In May last year, David Cameron arranged a summit against corruption, inviting leaders from more than 30 countries. Perhaps the most memorable moment was when the then prime minister was caught on TV telling the Queen and the Archbishop of Canterbury that two of the invited countries, Nigeria and Afghanistan, were “fantastically corrupt”.
This generated an interesting debate about what corruption is, how it can be measured and how the variation in corruption between societies can be explained. In our new book, Making Sense of Corruption, my co-author Aiysha Varraich and I try to find solutions to this difficult problem.
The impact corruption has on human well-being has been made clear by a number of recent studies. While it negatively affects prosperity and almost all measures of a population’s health, it also impacts on people’s perception of how satisfied they are with their lives. Simply put, for most people in societies with high levels of corruption, life will be solitary, poor, nasty, brutish, and short.
The task of reducing corruption has attracted a lot of attention from international development organisations such as the World Bank and the UK Department for International Development. A great many projects and huge amounts of money have been spent during the past two decades. As evaluations of these interventions have piled up they have painted a very bleak picture of the results.
A recent OECD report concluded that not one single aid policy initiative can be shown to have had a significant effect on reducing corruption in recipient countries. One reason for this, we argue, is that what should be understood as corruption has not been clearly defined.
The standard definition of corruption has been a variation on the theme of “misuse of public position for private gain”. The problem with this is that what counts as abuse is not specified, resulting in a definition that is empty of substantial content. Another problem is that it invites relativism, in the sense that what can be considered abuse in one country is not necessarily so in another country.
In our book, we try to solve the problem by a concentrating instead on what should be defined as the “opposite of corruption”. We define this as respect for the principle of impartiality in the implementation of public policies.
It implies that corruption is not only to be connected to bribes, but also to various forms of favouritism in the distribution of public services. If aid programs do not specify what constitutes the opposite of corruption, anti-corruption policies will lack a clear direction.
Such a universal definition of the opposite of corruption has extensive empirical support in current research. People in “fantastically corrupt” societies do not internalise corruption in their moral outlook. Instead, survey results show that a clear majority in, for example, sub-Saharan African countries take a clear stand against corruption. They often participate in corrupt exchanges but that is mostly because they do not perceive that they have an alternative.
If the only way to get healthcare for one’s children is to bribe the doctor, most people will do so. But that does not mean that they think it morally acceptable. This is important, because if corruption is understood as ingrained in a national culture, whether that of Nigeria or Afghanistan, policies must be aimed at changing that culture.
However, saying that their culture is bad is not very far from saying that Nigerians are “bad people”. This is not a good start for achieving change. Our message, therefore, is different – namely that the problem is dysfunctional public institutions, not people.
Another reason policies against corruption have been ineffective is that they have, almost without exception, been built on the wrong conception of what constitutes the problem.
The dominant theory in challenging economic corruption is the “principal-agent” theory. This suggests that corruption occurs because the honest and common-good oriented Principal (eg the president in a developing country) has to make use of another type of actor called Agents (eg civil servants).
Corruption occurs because these Agents are assumed to be self-interested utility-maximisers. As such, they will use their positions to favour themselves rather than loyally implement the Principal’s policies.
The means of solving this problem, as recommended by this theory, is to convince the Principal to change the incentives of the Agents’ behaviour – their fear of being punished becomes stronger than the benefits of their malfeasance.
But if corruption was simply an incentive problem, it would have been resolved long ago since there is no lack of knowledge around how to change incentives. Furthermore, in a systemically corrupt society, the likelihood that the political system will produce an “honest principal” must be seen as minimal.
It is well known that rents from corruption usually “travel up” in a corrupt system. The theory, in other words, rests on the existence of a human type that does not commonly exist in corrupt societies.
Our alternative is that corruption should be subsumed under a very different approach known as the theory of collective action. According to this theory, low corruption is something that is in everybody’s interest, but it can only be achieved if people have the confidence that everyone else is prepared to act honestly.
The actors in this theory are not assumed to be driven primarily by self-interested utility-maximisation. Instead, their actions are strategic in the sense that what they do depends on what they believe most others will do.
That reciprocity, rather than pure self-interest, is the most common driver of corruption has gained considerable support in studies of human behaviour. Actors are prepared to act honestly if they feel they can trust that others in their situation will also be honest.
The implication for policies aimed at reducing corruption is that incremental tinkering with incentives will not work. Instead, institutional changes must be of such a comprehensive nature that they do not only change an individual’s perceptions of “how to play the game” in a corrupt society, but also (and foremost) by creating the perception that others in their situation are also willing to change their behaviour. This, in other words, calls for strong medicine.