Corruption Is a Systems Failure, But Not All Systems Failures Are Corruption

As regular readers of this blog are probably aware, I try to avoid extended discussions about the definition of corruption (see here, here, and here). Of course it’s important to have a sense of what one is talking about, if only to avoid misunderstandings, but I tend to find extended definitional debates arid and unproductive. (As I’ve remarked before, when academics run out of ideas, they start arguing about definitions.) In my view, there isn’t a single “true” or “correct” definition of corruption—only definitions that are more or less useful, depending on the context. I’m generally perfectly happy with the fairly standard “abuse of entrusted power for private gain” definition. There’s some inherent vagueness (and perhaps some normative/legal judgment) built into concepts like “abuse” and “private gain,” but so what? There are lots of other open-textured concepts that researchers are able to study even though their boundaries are not completely sharp and clear (and where we must sometimes make do with arbitrary cut-off points).

Still, I do think one of the hazards of a term like “corruption” is the occasional tendency to define it so capaciously that it loses any specific meaning. There is an associated tendency to confuse or conflate the somewhat distinct meanings that “corruption” can have in different contexts (for example, legal versus non-legal contexts). So I think, despite my usual aversion to definitional squabbling, it’s occasionally useful to push back against the attempt to define corruption so broadly as to swallow up every way that an institution or organization can go wrong.

I came across an illustration of this in an opinion piece in last week’s Boston Globe (based on an associated post on the MIT Sloan Management Review blog) by George Mason Professor Gregory Unruh. Professor Unruh frames his piece using the recent arrests of various FIFA officials, but suggests that the focus on the personal moral failures of these individuals “muddles executives’ understanding of what corruption is and how it can be managed.” Rather than defining corruption in terms of the “dishonest abuse of power or moral depravity,” Professor Unruh advocates what he calls “the engineer’s definition”:

Any organized, interdependent system in which part of the system is not performing duties as originally intended to, or performing them in an improper way, to the detriment of the system’s original purpose.

This definition, Professor Unruh claims, makes “[i]dentifying corruption in … social systems [like businesses] straightforward.” I don’t think it does. Or if it does, it does so only by defining corruption so expansively as to make the concept essentially useless.

I basically agree with Professor Unruh that corruption usually can be characterized (at least at in the abstract) a systems failure in which part of a human system (that is, a human being, or group of human beings) performs his, her, or their duties in an improper way. The problem, though, is that there are lots of ways a “part of a system” (meaning here, again, one or more people) can perform duties “improper[ly] … to the detriment of the system’s original purpose,” and many of these possible failings would not, in my view, be usefully characterized as “corruption.” People can simply be incompetent, for example, or misunderstand their role in the organization, or the misconstrue the organization’s purposes. We usually, and helpfully, think of corruption as also involving additional elements—precisely the ones Professor Unruh wants to reject (“dishonest abuse of power”)—which is why the standard definition of corruption entails the abuse (not merely the improper exercise) of entrusted power for private gain (rather than out of a misguided sense of what would be best for the organization or society).

Again, we add these additional elements not because they are “correct” in some abstract sense (although I do think they more closely approximate the contemporary connotations of the word “corruption”), but because they are useful in helping us distinguish a particular class of phenomena, which may require a distinctive sort of response.

One other difficulty with Professor Unruh’s definition: There’s a sense in which all Professor Unruh has done is re-described, in systems engineering language, the standard principal-agent problem, which everyone who studies corruption in any kind of serious way already knows very well. (Under the standard definition of corruption, basically all corruption involves a principal-agent problem, though not all principal-agent problems are corruption.) The only possible difference I see is that while the standard economist’s agency problem focuses on the agent’s deviation from the principals’ objectives (where the principals might be conceived broadly as an organization’s members, or society more broadly), Professor Unruh focuses on the organization’s “original purpose.” But to the extent that the organization’s original purpose diverges from what would most benefit its members and/or society, why should we favor the former over the latter? And how do we determine this “original purpose” anyway? From a mission statement? By intuition? This makes little sense to me, and we might as well stick to the classic principal-agent framework, rather than re-inventing the wheel using new jargon.

Bottom line here, at least for me, is that what I said at the outset is still in my view basically right: We’ve got a serviceable, rough-and-ready general definition of corruption (“abuse of entrusted power for private gain”) that serves adequately to summarize the larger category, while differentiating corruption from other sorts of principal-agent problems. That general definition is not sufficiently precise for many purposes, and so we may need to adopt more focused definitions in specific contexts, or dispense with discussions of “corruption” and focus instead on specific forms of corrupt conduct. (The legal context is an obvious example. Although Professor Urruh uses the FIFA arrests as an example of “corruption,” these FIFA officials were not arrested for “corruption” – they were arrested for a number of specific crimes, including wire fraud, embezzlement, and racketeering.) Trying to come up with new general definitions of corruption, or to expand the concept so as to sweep in all sorts of undesirable conduct, are by this point no longer helpful, and mostly a waste of time.

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