For all the effort development agencies invest to help developing states combat corruption, recent reports of corruption in Japanese and Norwegian development aid projects along with an earlier paper on corruption in World Bank projects remind that the development community does little to attack corruption in the one area where it has the most control: the projects it funds. Continue reading
We’ve spent a fair amount of time, in the early days of this blog, talking about the challenges of measuring corruption cross-nationally. The well-known perception measures are useful to a point, but suffer from well-known drawbacks, chief among them concerns about how accurately perceptions capture reality. A recent working paper by Laarni Escresa and Lucio Picci, “A New Cross-National Measure of Corruption,” tries to get around these difficulties. Using data on enforcement of foreign anti-bribery laws like the U.S. Foreign Corrupt Practices Act (FCPA), Escresa and Picci they derive a new index, which they call the Public Administration Corruption Index (PACI), to make more objective cross-country comparisons in corruption levels. The paper is really clever and creative—but in the end I think it doesn’t work. Let me first say what I think is so cool about the idea, and then explain what I think are the biggest flaws. Continue reading
Is it possible for violations of the Foreign Corrupt Practices Act (FCPA) and other domestic anti-corruption regimes to influence the outcomes of international investment arbitrations? In my last post, I showed how allegations of corruption could be relevant in investment treaty arbitration, both as a “sword” wielded by investors, and as a “shield” used by sovereign states. In this post, I consider how evidence from domestic anti-corruption proceedings could be used in arbitration, and what effects its use might have on the international system. Continue reading
The U.S. Supreme Court’s decision last week in McCutcheon v. Federal Election Commission – which struck down limits on the aggregate amount any one individual could contribute to multiple candidates during a single electoral cycle – has attracted a great deal of attention. Indeed, it has already generated so much discussion that I’m not sure I have much to add (particularly given that I’m not a campaign finance expert). But one piece of commentary on the decision caught my eye: on the Wall Street Journal’s blog, Jacob Gershman argues that McCutcheon is not just about the clash over the value of political speech and the effect of money on political integrity, but “at a more basic level” the decision is about “how to define the concept of ‘corruption.’” Many of my colleagues in the legal academy – several of whom are quoted in Mr. Gershman’s post – agree with that assessment, as does Justice Breyer in his dissenting opinion in McCutcheon. But I don’t think it’s quite right—or at least it’s only partly right.
Two weeks ago I wrote about the growing disparity between transnational prosecutions for paying bribes and those for receiving bribes. The number of cases where OECD countries have prosecuted their nationals or firms subject to their jurisdiction for bribing developing country officials has been growing steadily, but there are disappointingly few cases where a developing state has gone after its nationals for accepting bribes. Last week I suggested one way to increase the number of cases against bribe-taking officials is to publicize whenever a firm or individual has been convicted of paying a bribe in a developing state. For every payer, there is a taker, and if the details of the case are widely publicized, my contention was that civil society, the media, and the political opposition would then press the authorities to prosecute the taker.
The World Bank has tried something similar when an investigation reveals corruption in one of its projects, and the experience suggests that, though not a silver bullet, the effort is worthwhile.
I recently came across a couple of interesting blog posts about corruption and the “revolving door” in the U.S. government (the cycling of individuals from the private sector to government and back again—often as representatives of the same industries they used to regulate while in government).
First, last month Chandu Krishnan (who served as Executive Director of Transparency International UK from 2004-2012) published an insightful post on the Safra Center’s blog, noting how the revolving door—and in particular the promise of lucrative post-government employment—may lead government officials to make laws that reflect the preferences of “industry lobbies” rather than the “will of the people.” Mr. Krishnan adds his voice to the chorus of calls for reform; in particular, he recommends lengthening the legally-required “cooling off” period (during which former government officials are prohibited from lobbying) from one to three years (or longer for positions involving especially high risk, such as procurement).
Around the same time, Mike Koehler, who runs the FCPA Professor Blog, posted a comment on Charles Duross’s recent departure from his position as head of the DOJ’s FCPA enforcement division to take up a position at the law firm Morrison & Foerster. In this post, Professor Koehler reiterated his earlier calls for extending and expanding the “cooling off” period, so that former government FCPA lawyers could not provide any FCPA defense or compliance services for five years after leaving government service.
What struck me about reading these two posts in rapid succession was the fact that although Mr. Krishnan and Prof. Koehler seem in agreement on the problem and the solution, in fact their hypotheses about the effect of the revolving door on government officials’ incentives are not only different, but polar opposites. Mr. Krishnan worries that the prospect of future employment at private sector firms will cause government officials to go too easy on those firms—leading to overly passive or timid enforcement of U.S. law. (He views this as a kind of “institutional corruption.”) Prof. Koehler worries that the prospect of future private sector employment causes government officials to be too aggressive in their enforcement of the law—creating or augmenting the demand for the defense & compliance services these ex-government officials then provide.
Is social media the next great tool in fighting corruption, or is its role more limited? As Matthew noted in his last post, some anticorruption activists have used blogs and other online platforms to circumvent traditional media, and there’s some limited evidence they may have had an effect. Perhaps even more exciting, the launch and the early successes of the website I Paid A Bribe, started by an Indian nonprofit, suggested that the egalitarian internet could take advantage of “crowdsourcing” approaches to provide information on corrupt activities, disincentivize bribe-taking, and educate the public. Anticorruption reformers in other countries took note of I Paid A Bribe’s achievements, launching their own country-specific spinoff websites.
But those websites have not been universally successful. One of the most notable recent disappointments has been in China, where I Paid A Bribe and similar crowdsourced antibribery platforms failed, and ultimately folded. Recent research by Yuen Yuen Ang examines the short-lived existence of China’s crowdsourced antibribery platforms and offers some explanations for why the Chinese efforts failed to accomplish their objectives. While she stops short of offering broader takeaways on the role of social media in combating bribery, we can draw some conclusions using her work as a starting point. Broadly speaking, her conclusions suggest that social media is only effective in combating bribery where an adequate educational, social, and political framework exists to support its use. Continue reading
We usually imagine that democratic accountability serves an important anticorruption function: since voters presumably do not approve of corruption, a benefit of democracy is the ability to give untrustworthy pols the boot. Yet in a recent op-ed in the Washington Post, Hilary Krieger provocatively claims that American voters don’t really care if a politician engages in corrupt acts, so long as “a political leader has otherwise furthered the public good.” In addition to this descriptive claim, she also makes the normative argument that Americans voters are right not to reflexively vote out politicians tainted by corruption.
Although both her descriptive and normative claims have some truth to them–elections are multi-faceted, and corruption is not the end-all-be-all issue–both the descriptive and normative arguments have serious flaws.
Last week I wrote about the gap between prosecutions for transnational bribe paying and transnational bribe taking. Even after a bribe payer in one state has been convicted or pled guilty, most countries where the bribe was paid have shown little interest in investigating who took the bribe – an often easy inquiry given the evidence unearthed in the bribe payer case. I also noted that in almost every instance the bribe was paid by a firm in an OECD country to a government official in a developing state.
Some blogs, including this one, are devoted to analysis and discussion of anticorruption policy issues. But a number of anticorruption bloggers are more like investigative journalists—finding and exposing instances of (alleged or apparent) corruption. Do these blogs make a difference?
This question is related to the more general question of whether the modern communications revolution—particularly the spread of internet access—will be helpful in fighting corruption. There’s reason for optimism: there’s already lots of evidence that the spread of traditional media (newspaper and radio) were crucial in the fight against corruption in the 20th century, and the internet (along with other communications technologies, like mobile phones) lowers the cost of both disseminating and accessing information about corrupt activities. In addition to individual anticorruption bloggers and websites, platforms like I Paid a Bribe and Bribespot are emerging that may enable much larger numbers of people to disseminate information. These new technologies have gotten a lot of press, but do they make a big difference?
There’s surprisingly little systematic evidence on the impact of internet on corruption, but a recent paper on the Russian anticorruption blogger (and opposition figure) Alexei Nevalny, co-authored by Ruben Enikolopov, Maria Petrova, and Konstantin Sonin, suggests that this sort of anticorruption blogging may have a real impact. Nevalny is a well-known (and controversial) figure in Russia, and he got a lot of international press last month for his exposé on corruption in the Sochi Winter Olympics. But he got his start blogging about corruption in Russian state-owned companies. And, according to Enikolopov, Petrova, and Sonin, Navalny’s posts made a difference: when he posted about a company on his anticorruption blog, that company’s value took a significant hit. What can we learn from this? Continue reading
GAB | The Global Anticorruption Blog 