Author Archives: Matthew Stephenson

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About Matthew Stephenson

Professor of Law, Harvard Law School

Guest Post: A Proposal for an Online Practical Politics Platform

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Today’s guest post is from Peter Evans, who recently stepped down as Director of the U4 Anticorruption Resource Centre, and who previously led the Anti-Corruption Evidence (ACE) program at the UK’s Department for International Development.

All too often, approaches to anticorruption reform—like mainstream approaches to growth, development and governance more generally—frame the issue as a technical problem. In development agencies, multilateral organizations, and civil society organizations working on corruption issues, it is not uncommon to hear people say, “We don’t do politics,” or to mention politics only in the context of blaming the failure of a project, or non-receptiveness to technically sound advice, on a “lack of political will.” But as Stefan Dercon emphasized in his influential recent book Gambling on Development: Why Some Countries Win and Others Lose, understanding and addressing development challenges requires engaging seriously with the political economy constraints and opportunities related to power and elites. While Dercon’s book is not about corruption specifically, it is chock-full of corruption examples. And, in fairness, an increasing number of anticorruption specialists have gotten the message that “technical only” approaches often fail, and that making real progress often requires us to understand, and be brave enough to talk about, politics—and in particular the way power is distributed and used in the relevant country or sector.

But while recognizing that politics matters—and that serious anticorruption work requires serious political economy analysis—is a necessary first step, actually putting this idea into practice turns out to be hard, even for people who want to do it—because political economy analysis is hard, and much of the available information is obscure, difficult to locate, or difficult for busy practitioners to digest. Some country- and sector-specific political economy research is published, though not all of it is written in an accessible way. And some research that is highly relevant to political economy analysis doesn’t include terms in the title or abstract that would make its relevance obvious to a busy professional trying to find useful information. Some agencies pay consultants to deliver bespoke political economy analysis, or build skills through training courses, but the utility of these efforts may be limited to that particular agency. SOAS ACE takes an explicit political economy framed approach to understanding and tackling corruption, and there have been a few efforts to provide more general information, such as the U4 Centre’s a workstream on the politics of anticorruption and the UK-based Governance and Social Development Resource Centre, but global coverage of relevant political economy research remains patchy.

To address this problem, I advocate the creation of a “Practical Politics Platform” where good quality, clearly explained political economy research is collected, curated, and presented in a form that is easy to search and freely available as a public good. It would be something like Our World in Data, but for practical political economy research. (To be clear, while corruption and anticorruption would be an important element of such a platform, the platform should more broadly integrate research on related issues, such as accountability, transparency, and public sector governance.) To increase user-friendliness, the platform could include clickable maps that allow users to focus on a country, and disaggregate the information, if desired, by sector and sub-unit. Continue reading →

Guest Post: The Odebrecht Ruling and Prosecutorial Transparency in Brazil–A Rejoinder

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Two weeks ago, we published a guest post is from Professor Gregory Michener and Breno Cerqueira, based on an op-ed they had originally published (in Portuguese) in the Folha de São Paulo newspaper, concerning an important decision last by Justice Toffoli of the Brazilian Supreme Court. That decision nullified the evidence that Brazilian prosecutors had acquired from the Odebrecht firm as part of the agreement to settle the corruption charges against that firm; Justice Toffoli’s decision thus called into question ever subsequent corruption conviction that had relied on this evidence. That guest post prompted a response, which we published last week, from a Brazilian lawyer who took issue with many of the assertions that Professor Michener and Mr. Cerqueira had made in their piece. (The author of that post asked to remain anonymous. While GAB does not usually publish anonymous pieces, after considering the reasons for the anonymity request, I decided to grant it in that case.) Today’s guest post is from Professor Michener and Mr. Cerqueira, who offer a rebuttal to last week’s criticisms of their piece.

I realize that some readers may find this a bit excessive, especially since the issues here involve some fine technical points of Brazilian law. But in my view the issues are so important—going to the heart of one of the largest and most important anticorruption investigations in the world over the last decade (the “Car Wash” Operation)—and the legal issues are sufficiently difficult even for attentive outsiders to understand, that a thorough debate about what the most recent decision does and does not mean, that this exchange serves a useful purpose. I am grateful to all the parties involved for being willing to engage in this important conversation..

Without further adieu, here is Professor Michener and Mr. Cerqueira’s rebuttal to the criticism of their post on Justice Toffoli’s ruling:

The Odebrecht case spanned twelve countries and involved nearly a billion dollars of elaborate payments made from Odebrecht’s in-house bribery department to corrupt governments on three continents. (Perhaps the best way to understand the case is through the documents posted with the US Department of Justice press release about the settlement of the US Foreign Corrupt Practices Act charges in the case.)

The primary objective of our editorial was to discuss the deficient transparency of corruption cases in Brazil, an understudied aspect of corruption that should be of concern to citizens everywhere. Transparency of corruption cases can assign responsibility and promote accountability, deter graft among businesses and public officials, identify institutional weaknesses that need to be fixed and, perhaps most importantly, provide an important historical archive to keep the record straight – not only of crimes committed but of retributive government efforts in favor of the public interest. In the case of Brazil, we argued, a lack of transparency worked in favor of corruption and impunity, which is currently on the upswing.

We find it ironic that the critic of our article, a Brazilian lawyer (“Anonymous”), would ask for anonymity if his or her critiques were squarely fair handed and factual. (As an aside, anonymity is illegal as per the Brazilian Constitution (Article 5 IV – “the expression of thought is free, and anonymity is forbidden”). As a leading anticorruption specialist and friend commented on the Anonymous post a day after it appeared, it attempts to “muddy the waters.” Rather than “setting the record straight” it simply creates doubt where little should exist. The following explains why: Continue reading →

When Do Partisans Turn on One of Their Own? Reflections on the New Menendez Case

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The biggest corruption-related political news in the United States over the past couple of weeks is the decision by the Department of Justice (DOJ) to indict Senator Bob Menendez (Democrat of New Jersey) for allegedly taking bribes (including cash, gold bars, and a luxury car) from several businessmen, in exchange for using his influence to help these businessmen in various ways. If you’re having a sense of déjà vu, it’s because we’ve seen this movie (at least the beginning) before: Back in 2015, the DOJ indicted Senator Menendez for accepting lavish gifts from a wealthy friend and campaign donor, allegedly in exchange for using his influence to help advance that donor’s personal and business interests. That prosecution was unsuccessful: The DOJ pursued the case, but although the prosecutors prevailed on some important issues of law, the trial, which took place in 2017, ended in a hung jury—presumably because some of the jurors did not think that prosecutors had proved, beyond a reasonable doubt, that the luxury trips and gifts bestowed on Senator Menendez were bribes, rather than personal hospitality offered by a close friend.

It remains to be seen whether the legal outcome will be different in this case (and of course, it should go without saying, Senator Menendez is entitled to the presumption of innocence in a court of law, though he is entitled to no such presumption in the court of public opinion). But there is already one notable difference between the current case and the 2015 case: the reaction of Senator Menendez’s colleagues in the Democratic party. As I write this (several days before the post will likely be published, so forgive me if this is a bit out of date), a number of prominent Democrats, including New Jersey Governor Phil Murphy, several Democratic Senators, and numerous Democratic House Members, including former Speaker Nancy Pelosi, have called on Menendez to resign. To be sure, as a critics have noted, several leading Democrats—including President Joe Biden and Senate Majority Leader Chuck Schumer—have not called on Senator Menendez to resign. But this is still a marked contrast from 2015, when to the best of my recollection (and readers should feel free to correct me if I’m wrong) no prominent Democrats called on Senator Menendez to resign. Why the difference? Continue reading →

Guest Post: The Recent Brazilian Ruling on Use of Evidence from the Odebrecht Case—Setting the Record Straight

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Last week, this blog featured a guest post from Gregory Michener and Breno Cerqueira on the recent decision by Justsice Toffoli of the Brazilian Supreme Court, which concerned the settlement that Brazilian prosecutors had previously reached with the Odebrecht company—and the evidence against other defendants that Odebrecht had provided prosecutors as part of that settlement. A Brazilian lawyer with first-hand knowledge of the case submitted the following guest post, which takes issue with a number of the claims made in the previous post. Although it is not GAB’s usual practice to publish anonymous posts, in this case the sensitivity of the matter and the importance of raising these issues led me to exercise my editorial judgment to publish the post below without the author’s name.

The recent guest post on this blog regarding the recent judicial ruling on the settlement in the Odebrecht case is inaccurate in certain respects.

  • The first and most important inaccuracy is that, in contrast to what the post indicates, Justice Toffoli’s ruling did not annul the settlement in the Odebrecht case. Rather, the ruling held that the evidence included in certain important Odebrecht databases contained in hard drives, obtained by the Brazilian prosecutors from Swiss authorities, may not be lawfully used in criminal or civil investigations. The guest post properly states this aspect of the ruling—that it prohibited the use of this evidence —but the suggestion that the ruling annulled the settlement itself is not accurate.(A potentially important issue is whether the ruling would apply with the same force to the evidence turned over directly to the Brazilian prosecutors by Odebrecht, rather than obtained by the Brazilian prosecutors from the Swiss authorities. But the guest post fails to make that distinction.)
  • Second, the guest post seems to treat Justice Toffoli’s decision as a surprise, or at least unanticipated. But in fact, several prior decisions by other Brazilian Supreme Court Justices (particularly Justice Lewandowsky) had reached essentially the same conclusion, though with regard only to particular defendants. Justice Toffoli’s ruling extends and generalizes those prior decisions, ruling that the evidence in question cannot be used at all, thus obviating the need for individual defendants to obtain a similar ruling by the court in their individual cases.
  • Third, the post seems to imply that Justice Toffoli decided this case because he was appointed by President Lula, and previously served in senior positions in Lula’s first administration. But this is a gross simplification, especially when one remembers that Justice Toffoli handed down several decisions that went against against Lula’s interests (including rulings against prominent members of Lula’s party in the Mensalao case, and during Lula’s time in jail). Notably, Justice Toffoli apologized for some of those earlier decisions in the more recent decision currently being discussed. Therefore, rather than favoring Lula and his party consistently, a more plausible hypothesis, based on Justice Toffoli’s record, is that he seems inclined to decide cases in favor of the interests he sees as commanding the current political agenda. This may be at least as objectionable as guest post’s suggestion that he is decides cases systematically out of loyalty to Lula, but as a matter of empirical analysis of judicial trends, it is importantly different. (And Lula himself is, or should be, attentive to that.)
  • Fourth, another inaccuracy in the post, though admittedly a less important one, is the claim that prosecutors had not made public the Odebrecht agreement’s legal framework until last week. This is not true. The agreement has been publicly available for more than five years on the Ministry of Federal Prosecution’s website, which provides easy access to several of the resolutions that the federal prosecutors have concluded.
  • Finally, it is worth addressing the suggestion at the end of the post that transparency regarding the facts reported by Odebrecht under the settlement agreement might have reduced the chance of a decision such as Justice Toffoli’s. This cannot be characterized as a factual inaccuracy, as it is inherently a speculation about what might have happened under different conditions. Nevertheless, that assertion seems too rudimentary. There may be good reasons why prosecutors (and other control agencies, such as, in the case of Brazil, the Comptroller General and the Attorney General’s office) elect not to disclose all of the facts contained in the evidence turned over by the company right away. The most obvious reason for not publicly disclosing this evidence right away is that the evidence may be relevant to ongoing investigations. And it is not true that the U.S Department of Justice (DOJ) would make public comparable factual material, if doing so would jeopardize ongoing investigations. (Some also claim that the DOJ decides on the degree of disclosure of facts in statements of facts attached to Foreign Corrupt Practices Act negotiated resolutions based more on, or at least with an eye to, strategic or geopolitical considerations than transparency concerns.) Again, though, the claim that more transparency about the settlement and the associated evidence would have helped seems reasonable, and is not strictly speaking inaccurate. There is certainly room for reasonable disagreement about the prosecutors’ approach to disclosure. But the issue is far more nuanced than the post suggests.

I want to emphasize that these comments are not meant to contradict the importance of making pointed critical assessments of judicial decisions in general and Justice Toffoli’s ruling in particular. Nor do I wish to offer any further opinion on these fraught, highly controversial legal and political issues. But given the intensity of the discussion in Brazil, and the unfortunate tendency for all sides in these debates to hurry over or oversimplify key facts, I thought it was important to advocate for subtlety and raise these problems about the recent guest post on this blog.

Has Russia’s Invasion Empowered President Zelensky in His Fight Against Corruption?

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A national crisis can have a wide range of effects on a country’s commitment to fighting corruption. Sometimes, the sense of crisis leads countries (for better or worse) to de-prioritize corruption, out of a sense that other matters are higher priority, or even out of a sense that tolerance for a certain degree of corruption is a price worth paying to achieve other more pressing objectives. But in other situations, a sense of national crisis can strengthen a government’s resolve to crack down aggressively on corruption. There seem to be at least two closely related reasons why this may sometimes occur. First, corruption might be seen as directly and significantly impeding the country’s ability to tackle the emergency at hand. Second, a time of crisis can strengthen the position of the nation’s chief executive (the president or prime minister)—both in the formal legal sense (in that during times of crisis the chief executive may be able to wield extraordinary emergency powers) and in the softer more political sense (in that the chief executive may enjoy a surge in popularity if the country is under threat, and the public perceives the chief executive as providing strong leadership in the crisis). If that chief executive is genuinely committed to fighting corruption (a big if), then he or she may be able to leverage this unusual power to move aggressively against corruption, in a manner that would be politically difficult or impossible in “normal” times.

My impression, based on news stories and informal conversations with actual experts (which I am not!), is that the latter characterization is more apt for what is happening in Ukraine right now. It was not obvious that things would go this way initially—particularly given that, shortly after Russia’s full-scale invasion, the Ukrainian parliament suspended the asset declaration requirement for public officials, which though justified at the time as a way to keep potentially sensitive information from the Russians, was viewed with understandable concern. But a series of developments since then has demonstrated what looks to an outsider (at least to this outsider) like a consistent and quite aggressive effort to crack down on corruption, even at the risk of some (temporary) disruption to aspects of the war effort.

At least for me, one of the most notable and encouraging signs was the arrest, earlier this month, of Ihor Kolomoisky, one of Ukraine’s most powerful oligarchs, on fraud charges. Continue reading →

Guest Post: The Judicial Annulment of the Odebrecht Settlement Evidence in Brazil, and Its Implications

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Today’s guest post is from Professor Gregory Michener, Brazilian School of Public and Business Administration, Getulio Vargas Foundation (FGV-EBAPE) and Breno Cerqueira, a Brazilian public official. The post is based on an op-ed originally published (in Portuguese) in the Folha de São Paulo newspaper.

Earlier this month, a single Justice on Brazil’s Supreme Court invalidated, on dubious procedural grounds, the plea bargain that prosecutors had reached seven years ago with the Odebrecht firm, which resolved serious corruption charges that the prosecutors had brought against the firm. The alleged impropriety concerned how the Brazilian prosecutors had interacted with their counterparts in the United States and Switzerland, which had also brought cases against Odebrecht, which ultimately pled guilty and paid penalties in all three jurisdictions. According to Justice Toffoli (who, incidentally, had been implicated in Odebrecht’s wrongdoing when he was Solicitor General, though he succeeded in suppressing reports about his alleged wrongdoing), the Brazilian prosecutors from the Lava Jato (“Car Wash”) Task Force had engaged in discussions of the case with their U.S. and Swiss counterparts without those foreign prosecutors having first filed a formal official request for international legal cooperation, and without including representatives from the Brazilian Ministries of Justice and Foreign Affairs in the discussions. Strikingly, Justice Toffoli ruled that none of the evidence obtained from Odebrecht in the plea deal—and which was used in hundreds of other cases—could lawfully be used. Tofolli’s decision thereby threatens to undo the vast majority of the convictions that the Car Wash prosecutors had secured before the task force was disbanded.

This decision is troubling for a number of reasons. For one thing, the decision put the private interests of defendants ahead of the public interest of deterring and prosecuting corruption. No one denies that due process is important. However, preserving indisputable evidence of corruption can be achieved without a wholesale dismissal of charges. The nullification of the Odebrecht case is a nullification of justice and of the public interest.

Perhaps even more troubling, the decision is unsettlingly aligned with President Lula’s promise of revenge against the Car Wash Operation—and the individual judges, prosecutors, and others involved in that operation. Lula himself was jailed for 18 months after he was convicted for taking a bribe (in the form of a luxury apartment)— a conviction that was ultimately overturned on technical grounds (principally that the case was brought in the wrong venue). Lula, his supporters, and many mainstream media outlets have characterized the conviction as a baseless and politically motivated prosecution. That Justice Toffoli, a Lula appointee, issued this sweeping ruling—and also issued a broad and highly political statement condemning the entire Car Wash operation—would certainly seem consistent with the notion that the ruling had more to do with political and personal motivations than the law. Worse still, the ruling not only invalidates the Odebrecht plea deal and all other convictions that relied on the evidence it produced, but the ruling also calls for the investigation of the Car Wash prosecutors and judges for (alleged) misconduct.

Now, it is worth noting that Justice Toffoli’s ruling is unlikely to have any effect on Odebrecht’s plea agreement with the U.S. authorities. U.S. evidentiary standards tend to be more permissive, at least in this context, about barring the use of illegally sourced evidence – especially in cases where the public interest has clearly been aggrieved. And Odebrecht is unlikely to try to use the Brazilian ruling to wriggle out of is plea deal with the U.S., especially since that deal provides that non-compliance can result in further prosecution.

One more observation may be pertinent here: The Brazilian prosecutors may have hurt their cause by not providing sufficient transparency in an official register of the crimes, including their investigation, prosecution, and ultimate plea bargain. In the U.S., the Department of Justice website provides open and transparent information about all Foreign Corrupt Practices Act plea agreements. In the case of Odebrecht, company representatives signed affidavits testifying to US$788 million in bribes to government officials in 12 countries, including US$349 million in Brazil. In all, ill-gotten gains netted Odebrecht US$3.336 billion of construction contracts, including US$1.9 billion in Brazil. By contrast, Brazilian authorities failed to provide the transparency required under Brazilian law. The Federal Public Prosecutor, which handles civil and criminal cases, disclosed nothing until, following last week’s decision, it posted the agreement’s legal framework. The Office of the Comptroller General, which handles administrative crimes, posts all plea bargains on its website but includes few to no specific details about crimes.

The issue of transparency raises a counterfactual question: to what extent would things have been different if the facts of the Odebrecht case had been made transparent, engraving outrageous corruption permanently on the public record from the very beginning? Just maybe Justice Toffoli’s decision might have been different. Transparency affects the legal and political environment in unmeasurable ways, and may have impacted subsequent judicial rulings.

Judicial Integrity and Judicial Independence: A Clash of Values?

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This past spring, the investigative journalism site ProPublica broke a major story about ethically questionable—and previously undisclosed—relationships between ultra-wealthy (and politically active) individuals and Supreme Court justices. The reports focused in particular on Justice Thomas and Justice Alito, two of the Court’s most conservative members. According to ProPublica’s reports, in 2008 Justice Alito accepted a luxury fishing trip—which involved flights on a private jet and a stay at a lodge that charges more than $1,000 a day—from billionaire Paul Singer, whose hedge fund often had cases before the Court, including a 2014 case in which Justice Alito did not recuse himself and voted in the hedge fund’s favor. With respect to Justice Thomas, ProPublica revealed that for years—starting shortly after he joined the Court—Justice Thomas has received substantial benefits from billionaire “friends,” including private plane flights, luxury vacations, VIP passes to sporting events, and private school tuition for his nephew (whom Justice Thomas has raised like a son). Most of these gifts came from right-wing billionaire Harlan Crow, who also purchased from Justice Thomas (in a previously undisclosed deal) the house where Justice Thomas’s mother and other members of his family lived, but Justice Thomas received substantial benefits from other billionaires as well.

Many critics denounced these gifts and other transactions as evidence of blatant corruption (see here, here, here, and here). Some even drew a connection  between the Court’s jurisprudence in corruption cases—which has embraced an ever-more-restrictive definition of corruption, often limiting it to quid pro quo deals—and the Justices’ own proclivity for accepting gifts, perks, and other benefits from people with a strong ideological (and sometimes personal) stake in the Court’s decisions (see here and here). Justice Thomas and Justice Alito vigorously defended their conduct (see here and here), though they did ultimately update their financial disclosure forms for 2022 (though not earlier years) to show additional benefits they had received, and to proffer some explanations. And the Justices’ supporters have accused the accusers of using these alleged ethical issues as a pretext for attacking Supreme Court Justices whom they dislike on ideological grounds (and overlooking similar ethical lapses by Justices whose ideology they prefer).

I have my own fairly strong views about this specific controversy, but I don’t want to go into that right now. I’m not sure I have anything to add—and I’m acutely aware that, whether or not one buys the charges of pretext and selective outrage—it is very difficult to talk about this issue without being influenced by (or perceived as influenced by) one’s views on Justice Thomas’s and Justice Alito’s jurisprudence and ideology. But even putting the specifics mostly to one side, I do think the fallout from ProPublica’s reporting implicates a more general issue—one that is very difficult, and that is relevant not only in the United States but in many other countries as well: To what extent can or should the other branches of government (the executive, the legislature, or—in the countries where such entities exist—an independent anticorruption commission) impose and enforce ethical rules on the highest court (the Supreme and/or Constitutional Court)? Continue reading →

Would the Foreign Extortion Prevention Act Help the U.S. Counter China?

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The U.S. Foreign Corrupt Practices Act (FCPA) makes it a criminal offense for U.S. domestic concerns, firms that issue U.S. and any anyone acting in U.S. territory from offering or paying bribes to foreign government officials. The FCPA does not, however, apply to the foreign officials who receive those bribes. (On occasion some prosecutors have advanced the theory that a foreign government official who takes a bribe can be convicted for aiding and abetting, or conspiring in, an FCPA violation, but courts have generally rejected these theories.) Additionally, while U.S. criminal law prohibits domestic government officials from soliciting or accepting bribes, the relevant statutory provisions do not apply to foreign officials who engage in comparable conduct.

Many U.S. anticorruption activists believe that U.S. law ought to target the demand side of foreign bribery transactions (that is, the bribe-takers), not just the supply side, and have therefore advocated for the adoption of the so-called Foreign Extortion Prevention Act (FEPA). These advocacy efforts appear to be paying off: In late July, the Senate adopted FEPA as an amendment to the Senate’s version of the National Defense Authorization Act. This does not guarantee that FEPA will become law, as the House of Representatives has yet to vote on a comparable bill, and there is no guarantee that the FEPA language will remain in the bill after final negotiations conclude. But the odds have gone up significantly.

Would FEPA be a good idea? I think the answer is probably yes, though the impact is likely to be modest, and probably somewhat less than FEPA’s proponents hope. I may post again later about my own assessment of FEPA’s likely impact, should it pass in something like its current form. But for now, I want to focus on a striking argument in favor of FEPA that appeared in an op-ed a couple of weeks ago. That op-ed, coauthored by Elaine Dezenski (Senior Director at the Foundation for Defense of Democracies) and Scott Greytak,(Director of Advocacy at Transparency International’s US office), argued that FEPA would “blunt China’s malign economic influence” by countering the practice of Chinese government or government-affiliated entities using bribes to secure access to valuable resources and to expand China’s political sway over developing countries.

There are many good arguments in favor of FEPA, but I’m not sure that this is one of them. I don’t want to dismiss it outright, as it’s entirely possible that I’ve missed something. But it seems to me that FEPA would have little to no impact on corrupt overseas bribery by Chinese entities, and at least in the short term might make that problem (slightly) worse. So let me lay out the source of my confusion: Continue reading →

Some Backlogged (and Very Interesting!) Podcast Episodes

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As our regular readers have probably noticed, I haven’t been posting as much recently–first because I was on sabbatical (a nice perk of academic jobs) and then, most recently, for a bit of summer vacation. But I hope to be back to semi-regular posting soon! In the meantime, I wanted to mention several new episodes of KickBack: The Global Anticorruption Podcast, which came out earlier in the summer. (Sorry for failing to announce these earlier — again, I’ve been on a bit of a break.) For those of you who haven’t already heard them, they’re worth checking out!
  • The June 22 episode features and interview with journalist Michela Wrong, who is perhaps best known for her award-winning book It’s Our Turn to Eat, which tells the story of Kenyan anticorruption activist and whistleblower John Githongo (also featured in a recent KickBack episode!). In the interview, Sam Power interviews Ms. Wong about the issues raised in the book, as well as her other writing, including her most recent book, Do Not Disturb, about the abuses of power by the Kagame regime in Rwanda.
  • The July 6 episode is a bit of a change of pace from the usual episodes. Rather than featuring an interview with an expert, three of the hosts or the KickBack podcast at the Sussex Centre for the Study of Corruption (Dan Hough, Liz David-Barrett, and Sam Power) have a conversation (after some opening banter about British weather) about the leading theories for corruption analysis, including rational choice, collective action, and social norms approaches.
  • The July 28 episode returns to the interview format, featuring a conversation with Huma Yusuf, the Director of Business Integrity at the impact investing firm British International Investment. Tom Shipley interviews Ms. Yusuf about how anticorruption and business integrity fit into the global business agenda and highlighting some of the key concepts and debates in this area.
You can find these episodes and an archive of prior episodes at the following locations: KickBack was originally founded as a collaborative effort between GAB and the Interdisciplinary Corruption Research Network (ICRN). It is now hosted and managed by the University of Sussex’s Centre for the Study of Corruption. If you like it, please subscribe/follow, and tell all your friends!

Public Funding of Political Parties Is Unlikely To Reduce Corruption

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Today’s guest post is from Dr. Sergiu Lipcean of the University of Bergen and Professor Iain McMenamin of Dublin City University.

Does public funding of political parties reduce corruption? Intuitively, there are good reasons to believe that it does. After all, when parties receive a substantial portion of their funding from public sources, they are less dependent on private contributions—both legal and illegal. That straightforward logic has led many scholars and prestigious organizations to recommend higher levels of public funding for parties and candidates. The Council of Europe’s Committee of Ministers, for example, recommends public funding of political parties and electoral candidates as an anticorruption measure, and the OECD, while not explicitly using the language of corruption, recommends public funding as part of a holistic system of political finance regulation to limit policy capture.

But the empirical evidence on the anticorruption impact of public funding for parties is surprisingly thin, and results that initially seem to show the sort of effect described above often turn out to be quite fragile and unreliable. We recently published our own study, which examines how the level of public funding for political parties affects enterprise managers’ perceptions of the impact of payments to government officials, using World Bank survey data from 27 post-communist countries. Although we find an association between higher public funding and lower corruption, this result is extremely sensitive to minor changes in method, and the results are too uncertain to recommend public funding as a policy intervention to reduce corruption.

We suspect that one of the reasons that empirical research has failed to find robust anticorruption effects of public funding is that many of the unlawful payments to politicians are used for their personal consumption, rather than for political purposes. As noted above, the economic logic of the view that public funding reduces corruption is that if parties can rely more on public funding for election campaigns and other legitimate political expenses, they will be less tempted to accept bribes, because they will have less need to fill their campaign coffers with dirty money. But if much of the illegal money given to politicians is used for their personal gratification, rather than for political purposes, than public funding of campaigns will not have much of an effect.

This is not to say that countries should not significantly increase public funding of political parties. Corruption is enormously damaging, and even very high levels of public funding for parties are unlikely to have much impact on most national budgets, so even the possibility that significant public funding might reduce corruption, at least in some contexts, may make this investment of resources worthwhile, even if we lack strong direct evidence of effectiveness. And of course there are many other reasons, besides anticorruption, to favor public funding of political campaigns. That said, an honest appraisal of the existing research compels the conclusion that, to date, the evidence that public funding will substantially reduce corruption is weak and speculative, and we should therefore not get too excited about its potential as a general anticorruption measure.