Not Corrupt, Not a Thief, But Not the Answer: Jimmy Morales and Corruption in Guatemala

Last month, Guatemalans went to the presidential runoff polls and elected former comedian Jimmy Morales in a landslide over former first lady Sandra Torres. Morales ran as an anticorruption candidate; his slogan, “not corrupt, not a thief,” says it all. Not being a thief might seem like a low bar for a presidential candidate, but Morales’s election shows that such qualifications are apparently and alarmingly sufficient in Guatemala. Despite never having held public office or having been involved much in politics as a private citizen (unless racism and cultural insensitivity count), Morales was a well-known and available outsider in the right place at the right time. Indeed, Morales seems to have gotten elected not despite but rather because of his lack of experience and prior political involvement—characteristics that were valuable assets against the backdrop of widespread public outcry against corruption in Guatemala over the last several months, culminating in the resignations and arrests of President Otto Perez Molina and Vice President Roxana Baldetti in September.

Many hail Morales’s victory as an indication that the anticorruption movement reached a tipping point and created change in Guatemala. But there are at least three reasons to worry that far from an anticorruption success, electing Morales may be a setback or at least a non-event for anti-corruption and democracy in Guatemala. Continue reading

Putin’s “Power Vertical”: Blanchard and Shleifer Revisited

In 2000, Olivier Blanchard and Andrei Shleifer wrote a seminal paper comparing the impact of federalism on economic development in Russia and China. Blanchard and Shleifer aimed to solve the puzzle of why federalism–and, in particular, inter-jurisdictional competition–fostered economic growth in China but hampered it in Russia. Simplifying somewhat, their key conclusion was that the absence of political centralization in Russia was the culprit. With no strong national government to act as a disciplinarian, Russian localities were prone to a particular form of corruption–capture by local special interests–and localities competed for rents instead of competing for firms by making improvements we associate with open governments and economies. In Meng’s recent post about political decentralization in China, she endorses Blanchard & Shleifer’s analysis, and advises against granting Chinese regional and local governments more autonomy from the center. Implicitly, her post is a caution against moves that would make China in 2014 look like Russia looked in 2000.

But what about Russia? Fourteen years after Blanchard & Shleifer wrote their paper, political centralization is a reality in Russia — in terms of the strength of the ruling party, Russia resembles China much more closely now than it did in 2000.  So one might expect, if Blanchard & Shleifer’s analysis were correct, that local corruption in Russia should have abated, and competition between Russia’s different regions should now be growth-promoting rather than growth-retarding.  Alas, Russia’s experience over the past 14 years suggests that this has not come to pass.

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Do Anticorruption Blogs Matter? Alexei Navalny’s Example

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

Politically Motivated Anticorruption Enforcement: What Russia Can Show Us

The recent focus on the unchecked corruption in the Sochi Olympics made me reflect on what Russia can teach us about the costs and benefits of politically-motivated corruption prosecution, discussed in Matthew’s February 18 post. Businesspeople with close ties to Putin won and abused lucrative Olympic contracts with no repercussions from the state. Ironically, opposition blogger Alexei Navalny, who publicly exposed the rampant corruption in Olympic construction projects, was the target of a fabricated corruption prosecution in July of last year, and placed under house arrest (allegedly for violating the terms of his earlier suspended sentence) just last week–perhaps not coincidentally, right after the conclusion of the Sochi Olympics.

Navalny’s prosecution is just one example of the fraught landscape of corruption prosecution in Russia. In a 2008 paper entitled “Law as Politics: The Russian Procuracy and its Investigative Committee,” Ethan Burger and Mary Holland provide excellent background on the politicization of the Russian Procuracy, as well as the vivid examples of the Procuracy’s politically motivated activities described in this post. The Russian experience demonstrates that the costs of targeted corruption prosecutions may be higher and the benefits much more elusive than Matthew suggests. Continue reading