Guest Post: Monitoring as a Democratic Imperative

Professor Paul Lagunes of the Columbia University School of International and Public Affairs contributes the following guest post:

The fact the bureaucrats who populate the ranks of the public administration do not run for office poses a significant challenge to electoral democracy—a challenge that is accentuated by citizens’ inability to properly monitor their own government. Citizens, after all, dedicate a majority of their time to private affairs and are often confused, if not repelled, by the complexities of public administration. Given this principal-agent problem, what can be done to improve monitoring, fight corruption, and hold governments accountable?

I recently had the opportunity to evaluate the efficacy of anticorruption monitoring in Mexico. This research indicates that independent audits over sensitive governmental processes can boost the levels of discipline, stringency, and honesty among civil servants. Indeed, even when communities find it difficult to overhaul their governing institutions and renew and professionalize their bureaucracies, they can rely on independent experts to raise bureaucrats’ level of accountability. But the improved monitoring associated with independent audits is only when accompanied by robust oversight and accountability.

It’s sometimes difficult to use rigorous experimental methods to study public administration. But in my case, a series of New York Times articles on corruption in construction permits across Mexico (see here and here) brought the issue to the forefront of people’s minds. The Buildings Secretary of one of Mexico’s most important cities gave me unfettered access to his agency’s staff, documents, and computer databases. Under these favorable conditions, I targeted the city’s Permits Office, which is responsible for granting building permits for the construction of restaurants, malls, hospitals, houses, and so on. The considerable financial investments at stake in most building projects and the level of bureaucratic discretion embedded in the permit review process make the Permits Office vulnerable to bribery, influence, and other forms of corruption.

With the cooperation of the Office, I randomly selected a set of newly-submitted and not-yet-reviewed permit applications into a “treatment group”; I made sure that the Plan Examiners (the low-level officials responsible for reviewing building permit applications) and the Permits Office Director knew that I would be reviewing all the physical documentation (e.g., title deeds, blue prints, and tax receipts) for applications within this group. What these officials did not know, however, was that I also conducted the same sorts of reviews for another set of randomly selected applications. This latter set served as a “control group,” and by comparing the two groups, I could evaluate the extent to which the bureaucrats modified their behavior when they knew they would be subject to additional oversight (in this case, by me).

The results indicate that monitoring spurs greater diligence and stringency among civil servants. However, these findings are not driven by the external monitoring mechanism alone—transparency by itself proved inadequate. The independent review of applications became effective only after the city’s Buildings Secretary received a midway report of the study’s findings and called on his subordinates in the Permits Office to be more careful with how they conducted their work. The watchful eye is an effective anticorruption mechanism, but only when it is accompanied by a cracking whip.

Of course, skeptics might question whether the results I observed would hold when the outside auditor is another agency, rather than an academic researcher. After all, the auditors themselves might be corrupted. This is a valid concern, but it is a risk that can be minimized. For one, the individual implementing the audit should be hired based on a competitive public examination that avoids nepotism and ensures the employment of worthy professionals. The recruited auditor should also face tangible rewards for remaining honest and steep penalties for engaging in corruption. Importantly, another way to keep auditors honest is to ensure that they enjoy independence from the agency being monitored.

7 thoughts on “Guest Post: Monitoring as a Democratic Imperative

  1. This sounds like a great study opportunity with important findings. But I wonder about the implications of the point regarding internal oversight and enforcement (“cracking the whip”). A common narrative about bureaucratic corruption is that, for a variety of reasons, it is driven from the top (e.g. unpaid salaries, payment for positions, nepotism, etc.). Thus, it seems that, for government-funded procurement, an independent audit would depend upon a leader willing to bring the auditors in and act upon the results (or, at least, manage employees who believe s/he will act upon the results). In an extreme situation, audit findings give an office head even more leverage over employees, which could pave the way to extortion or reinforce corrupt relationships (i.e. if employees pay to keep their jobs). Of course, the employees are far from blameless in this scenario, but my point is that it is likely difficult to bypass uncooperative internal enforcers with external oversight. In your experience, is the Building Secretary representative of many public officials in Mexico? If not, how might proponents of external audits – which certainly seem like a good idea – address this problem?

  2. Hmmm, this study sounds like it may help answer some questions I’ve been struggling with in relation to some studies on oversight in the DRC (post forthcoming, probably). There, being told about oversight wasn’t enough to curtail corrupt behavior–it just pushed people to get smarter about hiding it. Maybe the missing piece was this mid-point check-in you mention. It would be useful to know more about what the Building Secretary said: was there an actual statement about the consequences of the behavior if it continued, or was it solely a “we know this is going on” comment? The former seems more likely to be effective, but if in fact it was the latter, there might be something interesting going on in regards to interpersonal dynamics (something about levels of power or closeness of relationship, perhaps).

    Liz’s points are all valid concerns (and I’d be interested to hear the answers to her questions as well), but if the results of this study hold out, there’s at least a glimmer of hope for the select number of cases where an individual wants to try to cut down on corruption within her/his purview–and, given how large and near-insurmountable the task of fighting corruption can sometimes seem, that would be something.

    • Katie and Liz have hit on something crucial here: If transparency isn’t enough, what kind of stick is needed and under what kinds of conditions are we likely to find it? I imagine Liz is right that the weakness inherent in any monitoring scheme that relies on some threat of penalty is in trying to find some authority willing and able to wield the stick. But this raises, as Katie’ suggests, a whole host of questions ripe for further study: Does it matter if the person wielding the stick is internal or external to the agency being monitored? Is the beneficial effect of monitoring amplified or diminished when there is a personal relationship between the supervising authority and the bureaucrats being monitored? What kind of penalty is most effective in drawing out the benefits of such audits? A professional punishment, a criminal charge, or a civil fine? A demotion or a pay cut? What about rewards for exemplary behavior when audited? Does only the stick work, or might dangling the carrot also draw out the net benefits of monitoring? I imagine that it will quite difficult to answer these questions, especially given that real world experiments like your fascinating effort are quite rare, but your post suggests that it might be worth trying.

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