Category Archives: Commentary

Too Much of a Good Thing? Moderation and Anticorruption Strategies in Greece

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This past month’s headlines have been dominated by the Greek debt crisis and how it has been handled (or mishandled) by the EU and IMF. The Syriza party, which rose to prominence due in large part to its opposition to the austerity measures imposed upon Greece by its creditors, first rejected a deal offered by its European creditors to procure additional funds and then, following the resignation of its finance minister and a hotly contested vote in Parliament, accepted the imposition of additional restrictions, including “consumer tax increases and pensions cuts” in anticipation of another round of negotiations to receive a bailout “worth about 85 billion euros.” It is impossible to predict what the final terms of any deal reached during the course of these negotiations may be; once the dust has finally settled and Greece has either acquiesced to the demands of its European creditors in order to secure needed funds or undertaken the “Grexit” from the Euro that many commentators fear, its government will be forced to once more take stock of its economic position and determine the best path forward to meet both the obligations imposed upon it by its creditors and its people’s desire for a brighter economic future.

Given this ongoing macroeconomic and political crisis, measures to address corruption in Greece–both domestically and abroad–may seem like a secondary concern at best. Yet there are those (especially those sympathetic to Greece’s international creditors) who believe that Greece’s troubles are due at least in part to its failure to adequately address corruption, and that Greece could bolster its faltering economy if it reined in the rampant corruption that has perennially placed Greece amongst the most corrupt nations in the European Union. And while Syriza and its creditors may agree on very little, Syriza in fact also made anticorruption a major part of its campaign platform, though its attempts to implement more robust anticorruption measures are at best in their nascent stages and have been overshadowed by the recent contentious negotiations over a new bailout.

So while this may seem premature, perhaps we should consider how the Greek government ought to approach its anticorruption struggle in the coming years. And here, strategic prioritization is likely to be essential: If we presume (reasonably) that Greece is unlikely to be able to commit considerably greater resources to its anticorruption efforts in the near term, the Greek government will have to make some difficult choices regarding how best to allocate its finite resources when deciding if and how to target different forms of corruption.

One such choice will be how much to prioritize the fight against foreign bribery (that is, bribes paid by Greek citizens and firms in other countries). Last March, the OECD released a report chiding Greece for not having “given the same priority to fighting foreign bribery as it has to domestic corruption,” a decision that, according to the OECD, “sends an unfortunate message that foreign bribery is an acceptable means to…improve Greece’s economy during an economic crisis.” This may well be true. Yet to the extent that Greece is able to renew its focus upon combating corruption in the aftermath of its current bailout negotiations, Greece would be better off if it (temporarily) ignores the OECD’s advice and instead focuses primarily on domestic rather than foreign corruption. There are several reasons for this:

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

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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. Continue reading →

Rooting Corruption out of the Courts: The Use of Undercover Sting Operations

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No anticorruption policy can succeed if the courts themselves are corrupt.  If those tempted to offer or accept a bribe or otherwise rob the public can buy their way out of trouble, laws against corruption are meaningless.  Ensuring judges decide cases honestly is thus the keystone of any broader effort to control corruption.  The best defense against judicial corruption is, as a recent U4 paper stressed, a rigorous process for selecting judges, one which screens out those willing to sell their integrity for a price.

Character tests are not foolproof, however, and so even with the most thorough screening a few crooked apples can slip through.  When they do, rooting them out is especially difficult, for proving a judge has taken a bribe to fix a case is extremely difficult.  A judge may acquit the defendant for any number of reasons, and even if the reason given seems obviously wrong, that alone is not enough to establish corruption.   Moreover, bribery is a consensual crime.  Neither the judge taking a bribe, nor the defendant paying it, nor a go-between facilitating the transaction will have any reason to reveal the crime and every reason to keep it secret.

Purging the judiciary of corrupt judges will thus almost always require an undercover operation, one where law enforcement personnel or informants pretend to be dishonest to elicit incriminating statements or conduct from the investigation’s target.  Such “stings” are often controversial and are fraught with risks, those targeting judges even more so.  Yet given the great harm judicial corruption causes, the risks will often be worth taking.  When they are, designers of a sting may find it useful to review how U.S. authorities minimize the risks of undercover operations in the judiciary. Continue reading →

A Victory for the Government, Justice, and Common Sense, in the Bob McDonnell Appeal

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Over the past year, we had a few posts (from Jordan, Rick, and myself) about former Virginia Governor Bob McDonnell’s appeal of his federal bribery convictions. All of us took the position that McDonnell’s main argument on appeal—that his actions on behalf of a local businessman were not “official acts” (and that the loans and lavish gifts this businessman provided were merely for “ingratiation and access”)—was inconsistent both with the governing law and with the facts as presented in the trial record. (Lots of people, though, including two distinguished criminal law experts on my faculty, took the contrary position.) The issue is important not just for U.S. political and legal junkies, but also because the McDonnell appeal raises more general issues about how we think about the line between illegal corruption and legal (though perhaps sleazy) political wheeling & dealing.

As many readers are no doubt aware, the Court of Appeals for the Fourth Circuit decided the case earlier this month. And while courts don’t always get it right, this time they did: The three-judge panel unanimously rejected all of McDonnell’s arguments, and cogently explained why in this case the evidence was more than sufficient to support a corruption conviction. Indeed, while there are indeed hard questions about the appropriate line between legal and illegal forms of private influence on public officials, the McDonnell case was not even particularly close to that line.

A few quick observations about the Court of Appeal’ opinion: Continue reading →

EU Anticorruption Policy and Due Process: An Inconsistent Approach?

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Advocates have been pushing for a European Union version of the Magnitsky Act for a number of years now (see, for example, here and here). Such legislation for targeted sanctions (including visa restrictions and asset freezes) against alleged human rights abusers in Russia would be much more powerful in Europe than it is in the U.S. Yet, despite support from some member states, proposals in the European Parliament have met with opposition. Much of the concern is, doubtless, geopolitical. Dependent upon Russia for oil, the EU is likely loath to instigate retaliation from its imposing neighbor (as the Magnitsky Act has). Yet, as a previous post on this blog has argued, the EU also objects to the US approach on more principled grounds: namely, the Magnitsky Act runs afoul of due process and presumption of innocence principles in the EU Charter on Fundamental Rights and the European Convention on Human Rights. However, while the EU is busy debating what the right hand should do with respect to targeted sanctions, it may have ignored the left hand’s effect on due process in anticorruption enforcement, as in reflected other areas of EU efforts against graft.

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Borrowing Integrity in the United States: Federal Prosecution of State and Local Corruption

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In recent posts I described how developing nations bedeviled by endemic corruption have “borrowed” integrity by contracting out the inspection of imports, the management of public finances, and even the investigation of grand corruption cases to private firms or international agencies.  But it is not just poorer countries where corruption is so ingrained that government must turn to outsiders for help.  The leaders of Mississippi, New York, Louisiana, the City of Chicago, and other state, county, and municipal governments have done so as well.  History and politics have created conditions in these jurisdictions where local officials have been unable to effectively control bribery, nepotism, bid rigging, and other corruption crimes.  Either the police won’t investigate or the prosecutors won’t charge or the courts won’t convict.

Beginning in the nineteen seventies, governors, mayors, and other local officials have either sought, or acquiesced in, help from the federal government.  Agents of the Federal Bureau of Investigation examine allegations of corruption by state and local public servants; the United States Attorney for the region, a Presidential appointee, prosecutes the cases developed by the FBI, and the cases are tried in a federal district court presided over by a judge named by a President.  Although the U.S. Attorney and the judge may have ties to the area where the case has arisen, neither they nor the FBI agents, nor the assistant prosecutors that actually handle the cases, are beholden to local interests.  Not only are they free to pursue cases whatever the local political implications, they often win kudos from their superiors in Washington for nailing a corrupt local official.

Federalizing the investigation and prosecution of state and local corruption has not been without its critics, however, though the criticism has died away for a quintessential American reason. Continue reading →

Beyond Atlanta: Fixing Corruption in High Stakes Standardized Testing

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Although corruption in educational systems is viewed as a pervasive problem in developing countries, wealthy countries have had their fair share of educational corruption as well. In the United States, for example, the harsh prison sentences in the recent cheating scandal in the Atlanta school system cheating received extensive news coverage this past spring. While it’s true that what happened in Atlanta was particularly wide-spread, involving 44 separate schools (and dozens of principals and hundreds of teachers), this is hardly the first time a significant teacher or administration-driven cheating scandal has come to light. In the last few years, teachers and principals have been caught cheating all over the United States: twenty teachers in Houston were removed from the classroom for cheating on elementary school tests while in Philadelphia, there was a multi-year investigation that involved 138 educators in 27 schools. The National Center for Fair and Open Testing claims that in the last five years, there have been reports of standardized exam cheating in 37 states and the District of Columbia. They have catalogued over fifty different ways that educators helped their students cheat. And although anticorruption efforts in education frequently revolve around the exchange of money or sometimes sex for grades, the sort of cheating involved in these scandals is also a form of educational corruption. Alteration of student tests, even when the students themselves may not benefit from it, is a perversion of the system and a way for teachers and principals to put themselves in line for undeserved awards, given that many educational systems in the U.S. now operate under a high-stakes testing regime in which student performance has a significant impact on teacher and principal evaluations.

Indeed, it is clear that we are not dealing with a few corrupt “bad apples,” but rather with a widespread pattern of teacher and principal corruption. A significant contributor to this problem is the high-stakes testing system described above, which gives teachers and principals to manipulate test results for their own material benefit. Fortunately, there are a few fairly simple steps that would eliminate most of the opportunities for this sort of corruption:

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Singapore and Hong Kong Are Small. So What?

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In my last post, I suggested some reasons why Singapore’s squeaky-clean reputation might not be entirely justified. But nothing I said in that post was meant to deny or disparage Singapore’s extraordinary success in fighting many of the most pervasive and destructive forms of corruption. Indeed, in this post I want to emphasize just how remarkably Singapore—and its fellow Asian city-state Hong Kong—have been in fighting corruption by addressing one of the most common observations raised by those who would either minimize the significance of this achievement, or raise doubts about whether other countries can profitably learn from Singapore and Hong Kong’s experience.

I’m sure many of us who work on international corruption issues have heard something like this from time to time: Whenever we look for success stories or models, someone usually brings up Hong Kong and Singapore as examples of how it is possible, with the right combination of policies and leadership, to get even massive corruption under control within the space of a generation. But, almost as invariably, we hear the skeptical response: “We can’t really learn all that much from Singapore and Hong Kong,” our skeptic intones, “because those are small city-states.”

Now, the skeptics may be right. But what’s always struck me as odd about this exchange (which I’ve heard many times, in one form or another) is that those offering this skeptical view seem to be implicitly assuming that it’s easier to combat corruption in a small city-state than it is in a large country, but they rarely explain why this is true. And at least to me, the case hardly seems self-evident. I’m not saying it’s wrong, but it certainly requires more critical scrutiny than it usually receives. Continue reading →

Sharing Responsibility for Managing the Public Fisc: Another Way to Borrow Integrity

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In two recent posts I wrote about innovative ways to “borrow” or “outsource” integrity.  In Guatemala, the government has delegated responsibility for investigating corruption allegations implicating senior political and military leaders to an independent agency accountable to the United Nations Secretary General.  In a number of countries, governments have hired private firms to oversee the assessment of import duties and fees.  Today’s post describes a third variation on the borrowing or outsourcing of integrity: sharing authority over a government’s spending and revenue collection decisions with an international adviser.

This was the core of the Governance and Economic Management Assistance Program, an initiative the international community “persuaded” Liberia’s government to adopt in September 2005.  And the results were immediate and dramatic.  Revenue collection jumped by 75 percent and travel expenses fell by 65 percent in the program’s first year.  Although the program was a response to the rampant corruption plaguing Liberia in the aftermath of a brutal and long-running civil war, it could be easily adopted by any nation committed to dislodging deeply entrenched corruption in a ministry, agency or state-owned enterprise.

The way it worked in Liberia was like this: Continue reading →