About Matthew Stephenson

Professor of Law, Harvard Law School

New Podcast Episode, Featuring Oz Dincer

A new episode of KickBack: The Global Anticorruption Podcast is now available. This week’s episode features an interview with Professor Oguzhan “Oz” Dincer, the Director of the Institute for Corruption Studies at Illinois State University. In the interview, Professor Dincer and I discuss a range of topics, including new approaches to the challenges of measuring corruption, the concept of “legal corruption,” the role of cultural factors in influencing corrupt behavior (both internationally and within the United States), and troubling developments related to political corruption in Turkey.

You can find this episode, along with links to previous podcast episodes, at the following locations:

KickBack is a collaborative effort between GAB and the ICRN. If you like it, please subscribe/follow, and tell all your friends! And if you have suggestions for voices you’d like to hear on the podcast, just send me a message and let me know.

Corruption Is Not (Mainly) an Assurance Problem

The study of corruption these days is often heavily empirical, involving the close analysis of case studies or quantitative data. But sometimes it’s helpful to take a step back and think about the nature of the corruption phenomenon in more abstract, theoretical terms—not because this sort of abstract thinking translates neatly and directly into specific policy recommendations (it usually doesn’t), but rather because it helps us organize the otherwise overwhelming mass of particular information in a way that facilitates thinking, in broad strategic terms, about the kind of problem we’re dealing with and what kinds of interventions might be most promising.

It’s in that spirit that a range of contributions have suggested that our conventional ways of thinking about and responding to corruption are flawed, or at least incomplete, because they fail to recognize the extent to which the problem of corruption is a manifestation of the bad equilibrium in what game theorists would call an “assurance game.” The basic idea behind an assurance game is often traced back to Rousseau’s parable of the “Stag Hunt,” in which two hunters are chasing a stag when a hare runs by; if both hunters continue to pursue the stag, they’ll catch it and both will be better off (half a stag is better than a whole hare), but if one hunter chases after the hare, that hunter will get something while the other ends up with nothing. The key feature of this game is that it captures a setting where there are two stable outcomes (“equilibria”)—either both hunters hunt the stag or both chase the hare—and one of those (the stag) is clearly better for both of them. If both hunters go after the stag, and expect the other to do so as well, neither has an incentive to get distracted chasing the hare. But if both hunters expect the other to go after the hare, then both hunters will go after the hare themselves, because hunting the stage alone (in this parable) guarantees one will go hungry, while chasing the hare at least yields something. In that sense, the assurance game differs from the more famous “Prisoners’ Dilemma” game (and from other so-called “free rider” problems), because in the latter class of games each player has an incentive to take the “anti-social” action regardless of what everyone else is expected to do, even though everyone would be better off if they all cooperated.

What does this all have to do with corruption? Well, a number of scholars have advanced quite explicit arguments that the corruption is basically the equivalent of the hare-chasing equilibrium in the Stag Hunt: Everyone does it because everyone expects everyone else to do it, but if everyone could be assured that everyone else would act honestly, nobody would have an incentive to behave corruptly. The earliest scholarly paper of which I’m aware that argued that corruption is more like an assurance game than a prisoners’ dilemma is Professor Philip Nichols’ 2004 article, but the idea has been developed further by other scholars. For example, Professors Persson, Rothstein, and Teorell interpret the results of interviews in Kenya and Uganda as suggesting that corruption in those societies is more like an assurance game than a principal-agent problem, and in a 2019 follow-up paper these scholars argue more generally that systematic corruption “resemble[s] an assurance game…. Within this collective-action framework, unlike the single-equilibrium ‘prisoners dilemma,’ … what action is taken by any individual depends on expectations regarding how others will act.” And Professor Avinash Dixit, though more agnostic as to whether systemic corruption more closely resembles a prisoners’ dilemma or an assurance game, suggests that the latter is an important possibility. And for these and like-minded scholars, seeing corruption in these terms has important implications for how we might fight it. Professors Nichols and Dixit, for example, each independently argue for (somewhat different forms of) certification systems, which, in the assurance game context, can induce a shift from the “bad” (corrupt) equilibrium to the “good” (honest) equilibrium even without material sanctions. Professors Persson, Rothstein, and Teorell are somewhat less specific in the policy proposals that flow from seeing corruption as primarily an assurance problem, but they argue that understanding the problem in this way implies that “rather than ‘fixing the incentives,’ the important thing will be to change actors’ believes about what ‘all’ other actors are likely to do,” and that this in turn requires “a more revolutionary type of change,” though they acknowledge that we still don’t have a clear sense of what can induce successful “equilibrium shifts” of this type.

I want to push back (gently but firmly) against the notion that it’s helpful to think of corruption as (primarily) an assurance problem. But before I pursue my critique of this idea, let me start out by acknowledging that the scholars who have framed corruption as an assurance problem are almost certainly correct in highlighting that corruption is one of those social phenomena for which pervasiveness correlates with attractiveness. In other words, the more people who (are expected to) engage in corruption, the more people who (have an incentive to) engage in corruption. That insight is hardly unique to corruption, but it is certainly important in the corruption context, and may have a range of significant implications for anticorruption policy. My beef with the “corruption is an assurance problem” is not with that key insight, but with what seems to me to be a substantial exaggeration of the importance of that factor relative to other factors. Continue reading

New Podcast Episode, Featuring Daria Kaleniuk

A new episode of KickBack: The Global Anticorruption Podcast is now available. This week’s episode features an interview with Daria Kaleniuk, a leading Ukrainian anticorruption activist and the executive director of the Anti-Corruption Action Center (ACAC) in Kyiv. In the interview, she and I discuss a range of issues connected to the fight against corruption in Ukraine in the post-Maidan period, including institutional reforms and the creation of new anticorruption bodies (some of which seem to have been more successful than others), the importance of the media and civil society, and the role of the international community.

You can find this episode, along with links to previous podcast episodes, at the following locations:

KickBack is a collaborative effort between GAB and the ICRN. If you like it, please subscribe/follow, and tell all your friends! And if you have suggestions for voices you’d like to hear on the podcast, just send me a message and let me know.

Reflections on the Recent Dismissal of One of the Emoluments Clause Suits Against Donald Trump

One of the issues we’ve been following (on and off) over the last couple of years concerns the lawsuits (three in total) that various plaintiffs have brought against President Trump for alleged violation of the U.S. Constitutions “Emoluments Clauses” (see here, here, here, here, and here). In brief, Article I, Section 9 prohibits officers of the United States from accepting “any present, Emolument, Office or Title, of any kind whatever, from any … foreign state” unless Congress consents, while Article II, Section 1 prohibits the President specifically from receiving (during his or her term in office) “any other Emolument [other than the President’s official salary] from the United States, or any of them.” Critics of President Trump have argued that, because President Trump has not fully divested himself from his various businesses, and foreign governments have purchased goods and services from those businesses (or granted them other advantages, such as regulatory approvals or tax breaks), President Trump is in violation of the Foreign Emoluments Clause. Similar sorts of transactions between state governments and Trump-owned businesses give rise to alleged violations of the Domestic Emoluments Clause. And these various lawsuits have sought a judicial remedy for these alleged violations—presumably an injunction requiring either divestment, or else a transfer of any proceeds or profits from prohibited transactions to the U.S. Treasury or some third party (though the plaintiffs in these suits have been a bit vague on exactly what sort of relief they’re seeking).

A potential hurdle for these suits, though, is whether these plaintiffs are allowed to bring them in the first place—a question independent of, and prior to, the merits of their claims. Under U.S. law, a plaintiff bringing a challenge in federal court must have “standing” to bring the claim, a requirement that has been interpreted (pursuant to an aggressive extrapolation from Article III of the Constitution) to require the plaintiff to demonstrate that the defendant’s unlawful conduct causes the plaintiff a direct, concrete injury that is fairly traceable to the defendant’s conduct and that could be remedied by a court order. In addition to this standing requirement, the plaintiffs must also show that they have a valid “cause of action”—in other words (and simplifying the legal complexities a bit) they must show that the legal provision under which they’re suing (here the Constitution’s Emoluments Clauses) allow plaintiffs like them to sue to enforce those legal requirements. This in turn typically requires the plaintiffs to show that they have at least a colorable argument that their interests fall within the “zone of interests” protected by the law in question. Even some people (me included) who were sympathetic to the merits of the plaintiffs’ claims worried that, under existing doctrine, the plaintiffs in these cases might lose on standing and/or cause-of-action grounds, especially because federal courts might be anxious to make these cases go away without having to reach the merits.

Three weeks ago, the U.S. Court of Appeals dealt a serious blow to one of these Emoluments Clause cases, ruling that the plaintiffs (Washington D.C. and the state of Maryland) lacked standing to bring the case. In doing so, the appeals court reversed—and chastised—a district court judge who had concluded the plaintiffs had standing, and who later rejected the defendant’s other arguments for dismissing the suit before discovery could proceed. It’s taken me a while to read the opinion carefully, but now that I have, I figured it might make sense to offer some quick reactions. (The delay means that this can’t count as a “hot take.” Perhaps we can call it a “lukewarm take”?)

My main reactions—what the kids today would call the “TL;DR” version—are as follows: (1) The appeals court’s standing ruling is badly flawed as a matter of law. (2) That doesn’t mean the suit should have been allowed to proceed, because there are other preliminary barriers that might have been harder to overcome. (3) Despite the serious legal flaws in the Court of Appeals’ ruling, I think it significantly reduces the odds that these cases might proceed to discovery and trial, notwithstanding the fact that the litigation isn’t technically over. (4) The political consequences of the dismissal, though not great, are likely not as significant as people like me had worried, but nonetheless this case is a troubling and unnecessary abdication of a potentially important judicial check on (unconstitutionally) corrupt behavior. Let me elaborate each of these points: Continue reading

Anticorruption Bibliography–July 2019 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.

New Podcast Episode, Featuring Elise Bean

A new episode of KickBack: The Global Anticorruption Podcast is now available. This week’s episode features an interview with Elise Bean, who previously worked for U.S. Senator Carl Levin (D-Mich) as staff director and chief counsel of the Senate’s Permanent Subcommittee on Investigations (PSI), which Senator Levin chaired. In the interview, Ms. Bean (who has also written a book about the Permanent Subcommittee’s work) discuss the role of legislative oversight, and the PSI in particular, in addressing money laundering, corruption, and related matters like financial fraud and tax evasion. Ms. Bean also addresses that various weaknesses and loopholes in current U.S. law on these topics and offers suggestions for reforms.

You can find this episode, along with links to previous podcast episodes, at the following locations:

KickBack is a collaborative effort between GAB and the ICRN. If you like it, please subscribe/follow, and tell all your friends! And if you have suggestions for voices you’d like to hear on the podcast, just send me a message and let me know.

The Biggest Beneficiary of the Lava Jato Leaks Is Jair Bolsonaro

As most GAB readers are likely aware, one of the biggest stories in the anticorruption world in the last couple of months has involved the disclosure of private text messages by Brazilian officials involved in the so-called Lava Jato (Car Wash) Operation. Lava Jato, which has been in progress for five years, is one of the largest anticorruption operations ever, not just in Brazil but worldwide. The operation has secured the convictions of scores of high-level Brazilian political and business leaders once thought to be untouchable, including former President Lula of the Workers Party (PT). Lula’s conviction rendered him ineligible to run in the 2018 presidential election—which he likely would have won—and this factor, many believe, helped far-right candidate Jair Bolsonaro win the presidency. The prosecution of Lula, and a number of other PT figures, triggered accusations, mainly from PT supporters and others on the political left, that the Lava Jato Operation was a politically motivated conspiracy against Lula and the PT. That view had not been taken very seriously by Brazilian or international experts outside of a relatively small circle of left-wing activists, though when Judge Moro, who had presided over most of the Lava Jato cases, including Lula’s, accepted a position in Bolsonaro’s cabinet, it certainly fed into that narrative.

Then, last month, The Intercept published a series of stories based on leaked/hacked/stolen private text messages among the prosecutors on the Lava Jato Task Force, and between Task Force prosecutors and then-Judge Moro. According to The Intercept and others reporting on this these revelations (dubbed “VazaJato” on social media), the disclosed texts corroborate the longstanding PT narrative that the Lava Jato prosecutors and Judge Moro were ideologically biased against the PT, especially Lula, and that Lula was denied a fair trial as a result. The Intercept described its own reporting as “explosive,” and while one might quibble with the lack of humility (guys, it’s generally better form to let other people praise the importance of your work), the characterization is accurate. Now, I think the evidence of misconduct is less clear than The Intercept and other commentators have suggested (see a useful debate on the legal and ethical issues here), and I find the claims of ideological bias especially flimsy (see here and here). But there’s no doubt that the revelations have tarnished Judge Moro’s reputation, and have also damaged the credibility of the Lava Jato Task Force prosecutors (though unfairly and excessively so, in my view).

Who has benefited from these stories? The conventional wisdom seems to be that the VazaJato stories hurt not only Sergio Moro, but also the Bolsonaro administration—both because Moro is a senior figure in that administration, and because the VazaJato stories imply, or state outright, that Bolsonaro’s election was illegitimate due to the fact that the strongest alternative candidate was barred, on trumped up charges, from running. And the biggest beneficiaries of the VazaJato stories, the conventional view maintains, are Brazil’s left-wing parties (the PT and its allies), mainly because the VazaJato stories show (allegedly) that the PT activists were right all along when they claimed a right-wing conspiracy against Lula. That view is plausible, and seems widely shared (not least by The Intercept’s reporters and editors, who makes no pretense of journalistic neutrality). But I think it’s wrong.

Indeed, I worry that the biggest beneficiary of VazaJato may be President Bolsonaro, and the biggest loser may be the Brazilian left. I say “worry” because I view Bolsonaro as a dangerous bigot and wanna-be authoritarian, one who is also likely to worsen Brazil’s corruption problem. But my personal political views are not really important for present purposes—I mention them in the interests of full disclosure (much as I have been careful, in previous posts, to disclose my cordial professional relationship with Lava Jato Task Force lead prosecutor Deltan Dallagnol). Rather, my goal here is to explain why I think the VazaJato leaks, and the narrative they have helped to amplify, are likely to help Bolsonaro, while hurting the Brazilian left. There are four reasons for this perhaps counter-intuitive conclusion: Continue reading