If It Looks Corrupt, It Is Corrupt

In combatting corruption, how much conduct should be prohibited? This lively issue, implicated in the U.S. Supreme Court’s recent controversial decision in McCutcheon, is relevant to those drafting reform legislation worldwide. There are two different starting points for analysis. The first approach (call it the traditional view) aims to eliminate only “actual” corrupt behavior: the FCPA, for example, requires that to violate its anti-bribery provision, an act must be done “corruptly.” The second method bans acts that create the appearance of corruption: in the United States, for example, this standard governs the behavior of federal employees and federal judges (except the Justices of the Supreme Court).

My position is that anticorruption law should adopt appearance-based rules that prohibit behavior and relationships giving rise to a (reasonable) appearance of corruption. Under traditional thinking, these laws might be deemed too over-inclusive. However, this post highlights two crucial insights missing from the traditional calculus:

(1) The appearance of corruption creates a real harm to society, independent of the harm from “actual” corrupt behavior; and

(2) Recent empirical work shows that maintaining appearances is important: a decline in the public’s trust in government brings forth an array of nasty behavior from citizens.

Continue reading