Anticorruption Bibliography–February 2016 Update

An updated version of my anticorruption bibliography is available from my faculty webpage. A direct link to the pdf of the full bibliography is here, and a list of the new sources added in this update is here. As always, I welcome suggestions for other sources that are not yet included, including any papers GAB readers have written.

Legal Strategies for Anticorruption Litigation by Civil Society

GAB is pleased to welcome this guest post by Ken Hurwitz, Senior Legal Officer, Anticorruption, the Open Society Justice Initiative, announcing the publication of a series of papers on civil society and anticorruption litigation sponsored by the Initiative:

Those of us working with civil society groups that seek to combat transnational grand corruption have what might be called a love-hate relationship with the law. Yes, sometimes we can push magistrates and prosecutors to hold perpetrators to account, provided the right conditions are met. But at the same time we too often see existing law and law enforcement mechanisms protecting those responsible for high-level corruption:  bribing business actors, self-dealing kleptocrats, and the financial, legal and business intermediaries who often profit from and facilitate the crime.

This post introduces a series of papers the Open Society Justice Initiative  commissioned to explore how civil society can see that the law holds the corrupt to account rather than protects them from any sanction. Continue reading

Is Sunlight Really a Good Disinfectant? The Equivocal Evidence on Freedom of Information Laws and Corruption

Government transparency is widely considered to be one of the most important means for combating public corruption, a sentiment nicely captured by U.S. Supreme Court Justice Louis Brandeis’s famous observation (in a somewhat different context) that “sunlight is said to be the best of disinfectants.” For this reason, many anticorruption activists lobby for the adoption of strong freedom of information (FOI) laws—laws that not only obligate the government to regularly publish certain types of information, but also to respond promptly to citizen requests for a wide range of government records and documents. The thinking is that government corruption is easier to detect when citizens, civil society organizations, and the media can scrutinize information about government operations.

I count myself firmly in the camp of those who tend to believe that FOI laws are useful anticorruption tools, especially given the strong evidence that citizen and media access to government information can indeed help reduce corruption and hold officials accountable (see, for example, here, here, and here). And because of this, I would expect the evidence to indicate that when a country (or sub-national jurisdiction) adopts a stronger FOI law, corruption should decrease afterwards. But I’ve been looking into the research on this recently, and most of the results don’t fit well with my expectations. Long story short, the (admittedly limited) quantitative empirical evidence does not find a strong correlation between the adoption of a strong FOI law and a subsequent decrease in corruption; if anything, the evidence actually seems to suggest that the adoption of a strong FOI law may be followed by an increase in (perceived or detected) corruption.

Does this mean that FOI laws are ineffective or even counterproductive? I don’t think so, for reasons I’ll lay out in a moment. But I do think it’s worthwhile—especially for those of us who are inclined to support broad FOI laws—to consider the evidence carefully and reflect a bit on what it might mean. Continue reading

A Modest Proposal for Improving Supervision in World Bank Infrastructure Projects

Infrastructure funding is a massive component of international development—in 2014, the World Bank alone allocated $24 billion to infrastructure, amounting to roughly 40% of its total lending. Yet as has been widely documented (see here, here and here), infrastructure construction and development projects are particularly susceptible to corruption. Compared with other areas of development lending, such as education and public administration, large construction projects require more specialized contractors and consultants, increasing the points of access for corruption or collusion schemes. Furthermore, labor-intensive industries like construction are often captured by organized crime, which increases their susceptibility to corruption.

Corruption schemes in infrastructure projects often take the following form: a contractor pays government officials a bribe to secure a contract, and in an effort to preserve profits, the bribe-paying contractor compensates for the expense of the bribe by failing to build the project to specification. The supervision consultant—the person or entity responsible for evaluating whether the project has in fact been built to specifications—therefore plays a critical role in stopping or enabling infrastructure construction.

However, when the World Bank funds an infrastructure project, whether through a grant or a loan, the recipient country’s government is responsible for hiring the project’s contractors and consultants—including supervision consultants—subject only to arm’s length World Bank supervision. While this process is also subject to the World Bank’s procurement guidelines, these have been criticized as ineffective in addressing corruption (as previously discussed on this blog). Under the current system, if a project has not been adequately completed because of a corruption scheme, government officials have every incentive to retain inspectors willing to mask the abuse of funds. And if the Bank does discover fraud or corruption after the fact, its remedies are limited: the Bank can suspend or bar contractors from future contracts, and can refer matters to national prosecuting authorities, but successful convictions amount to fewer than 10% of sanctioned parties.

The World Bank must therefore prioritize prevention of these situations. Given the existing system, one measure that the World Bank could take to help prevent corruption in infrastructure projects, is to fund independent supervision consultants. Continue reading

The Indian Judiciary on Trial: Tackling Corruption in India’s Courts

Corruption in Indian judiciary is considered pervasive: over 45% of Indians believe the judiciary is corrupt, a view shared by external assessments. Not only is corruption rampant in the lower courts, some have alleged that this corruption reaches the highest levels. In 2010, a former Law Minister declared that eight of sixteen former Chief Justices of India (CJI) were corrupt, and in 2014 a former Supreme Court judge alleged that three former CJIs made “improper compromises” to let a corrupt High Court judge continue in office. Sadly, the Indian judiciary has shown a predilection to treat every call from the executive or the legislature for greater judicial accountability as an attack on the judiciary’s independence. That concern is not altogether unreasonable given the terse history of power battles among the three branches, but it increasingly rings hollow, given the rising reports of corruption in judiciary’s ranks (see here, here and here).

Indian judges may be nowhere near as corrupt as its politicians; but Indian judiciary, like its counterparts elsewhere, relies on its reputation for fairness, impartiality, and incorruptibility. The courts can scarcely afford any loss of public faith. Hence, it must have been a wake-up call for the judiciary to face wavering public support as it battled the executive and legislature during 2014-15 on the National Judicial Accountability Commission Act (NJAC), which sought to expand executive’s say in judicial appointments and make them more transparent. When the Supreme Court finally struck down NJAC in October 2015, citing the need for absolute judicial independence, the judgment was met with both veiled skepticism and open criticism. Although the current appointment system (in which judges appoint their successors) has been relatively free of corruption allegations, the NJAC debate brought forth long simmering concerns of judicial corruption and worries that even judicial appointment was not above suspicion.

How has this come to pass? Why is public confidence in the integrity of the Indian judiciary eroding? Four main issues need addressing in the context of India’s judicial corruption: Continue reading

Guest Post: A Behavioral Science Approach to Preventing Corruption

Johann Graf Lambsdorff, Professor of Economic Theory at Passau University, contributes the following guest post:

Some of our current approaches to corruption prevention perform badly. One reason is that many preventive methods are built on distrust towards officials and employees, who are seen as potentially corrupt actors. Yet research in behavioral science has provided us with impressive evidence that (many) people are (mostly) trustworthy, intrinsically motivated, and responsive to encouragement, praise, expressions of gratitude, and criticism. The problem with assuming that everyone is prone to engage in corruption if not carefully monitored is not only that prevention strategies premised on that assumption are very costly, but also that such approaches can be counterproductive: The atmosphere of distrust that they create can reduce interpersonal trust, intrinsic motivation, and the self-esteem that people get from contributing to public goods and working responsibly.

Economists have labelled these adverse collateral consequences “the hidden costs of control.” In a recent paper entitled “Preventing Corruption by Promoting Trust – Insights from Behavioral Science”, I explain how taking this phenomenon, as well related insights from behavioral sciences about creating positive incentives for good behavior, can help us design more effective policies. The paper illustrates this with the help of six examples: Continue reading

“First thing we do, let’s kill 85 percent of the lawyers.”

Readers of this blog know its commitment to publishing the most reliable, up-to-the-minute data on corruption, and it is in this spirit I urge a revision to the famous line Shakespeare has Dick the Butcher speak in Henry VI, part 2: “First thing we do, let’s kill all the lawyers.”  New research shows not all lawyers are, as Shakespeare and his audience supposed, venal, greedy, and unethical.  When lawyers in 13 New York law firms were approached to help an African official squirrel away funds that screamed “we are the proceeds of corruption,” two passed up the chance to earn the fat fee dangled before them, one on the spot and one after thinking things through.  Advanced econometric analysis thus reveals that only 85 percent (11/13) of those queried were willing to consider assisting an obviously corrupt African politician.  So if the same percentage of Elizabethan-era lawyers were as upright as today’s New York attorneys, Dick would not have needed to off all lawyers to reach the utopia envisioned in Act IV, Scene II. Just 85 percent.    Continue reading