If It Looks Corrupt, It Is Corrupt

In combatting corruption, how much conduct should be prohibited? This lively issue, implicated in the U.S. Supreme Court’s recent controversial decision in McCutcheon, is relevant to those drafting reform legislation worldwide. There are two different starting points for analysis. The first approach (call it the traditional view) aims to eliminate only “actual” corrupt behavior: the FCPA, for example, requires that to violate its anti-bribery provision, an act must be done “corruptly.” The second method bans acts that create the appearance of corruption: in the United States, for example, this standard governs the behavior of federal employees and federal judges (except the Justices of the Supreme Court).

My position is that anticorruption law should adopt appearance-based rules that prohibit behavior and relationships giving rise to a (reasonable) appearance of corruption. Under traditional thinking, these laws might be deemed too over-inclusive. However, this post highlights two crucial insights missing from the traditional calculus:

(1) The appearance of corruption creates a real harm to society, independent of the harm from “actual” corrupt behavior; and

(2) Recent empirical work shows that maintaining appearances is important: a decline in the public’s trust in government brings forth an array of nasty behavior from citizens.

Prohibitions on conduct that leads to the appearance of corruption serve two functions, only the first of which is widely recognized. The familiar reason for a broad prohibition is to prevent truly corrupt conduct. Under this analysis, bans on activities giving rise to the appearance of corruption are over-inclusive, but perhaps justifiably so. This reasoning is analogous to the reasoning implicit in the assertion that measures of public perceptions of corruption are useful only insofar as they correlate with actual corruption (Matthew and Rick have discussed this topic previously).

Dennis Thompson, in his seminal 1995 book on institutional corruption, elucidates a second function of these standards: maintaining public confidence in government institutions. Here, the standards aren’t necessarily over-inclusive: maintaining the perception of integrity (independent from actual integrity) is an ultimate object. As Thompson explains:

“Representatives must avoid acting under conditions that give rise to a reasonable belief of wrongdoing. When they fail to avoid doing so, they do not merely appear to do wrong, they do wrong. Appearances matter ethically, not just politically.”

Why should the appearance of corruption matter, independently of actual corrupt behavior? Thompson argues that citizens should not have the burden of investigating every suspicious-looking activity. And it turns out, citizens around the world agree with him: in countries with higher perceptions of corruption, citizens trust their governments less. Instead of spending their non-working hours determining whether something that looks corrupt actually involves corrupt intent, citizens simply disengage. More precisely, empirical work shows that decreased public trust correlates with a “reduction in political participation, [increased] support for violent means of political expression, and [increased desire to emigrate.]” (This argument suggests that Transparency International’s Corruption Perceptions Index, although inconsistent with what it means by “corruption,” is a source of valuable data.)

Reformers should note the importance of (objectively-grounded) appearances, and promote broader prohibitions on conduct that raises red flags. Such prohibitions are not merely instrumental towards catching true corruption; they promote trust in government, which leads to a host of beneficial actions (or, conversely, prevents a host of detrimental actions).

1 thought on “If It Looks Corrupt, It Is Corrupt

  1. Pingback: Corruption Currents: From PlayStation Hacked to Two Centuries of Secrecy | Guess Who Leads the Bribery World?

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