Where Should U.S. State Governments Put Their Anticorruption Agencies?

As other contributors on this blog have argued, U.S. states should assume a greater role in investigating and prosecuting corruption crimes, rather than leaving anticorruption enforcement efforts entirely to the federal government. But the call for a greater state role in anticorruption naturally invites a follow-up question: which office or unit within the state government should have principal responsibility for anticorruption? For starters, should the state have a specialized unit dedicated to investigating or prosecuting corruption crimes? And if so, where within the state government should that unit be located?

There are a range of potential answers to these questions. A 50-state survey from the Center for the Advancement of Public Integrity (CAPI) finds that although the vast majority of states have some kind of anticorruption commission, roughly half have no specialized anticorruption unit dedicated to investigating or prosecuting corruption crimes. States that do have such units house them in one of three places: (1) the state attorney general’s office, (2) local prosecutors’ offices, or (3) the state police.

State Unit Dedicated to Prosecuting Corruption?

Source: Center for the Advancement of Public Integrity at Columbia Law School

Having a specialized unit to prosecute corruption promotes the development of the expertise critical to successfully prosecuting corruption cases. Maintaining specialized anticorruption units also ensures resources are dedicated specifically to combating corruption, fosters norms of (and a reputation for) impartiality, and enhances deterrence by increasing officials’ perception that they’ll get caught if they do something wrong. But where a specialized anticorruption unit is located within state government affects the degree to which these benefits will be realized. In this respect, the three models of current state practice, as discussed in the CAPI survey and illustrated in the above map, differ along two dimensions: (1) the level of government (state or local); and (2) the nature of the law enforcement agency (prosecutors or police). An examination of both dimensions indicates that state-level prosecutors—state attorneys general—are best-equipped to house specialized anticorruption units.

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State-Level Anticorruption Commissions: What the U.S. Can Learn from Australia’s Model

Australia does not currently have a dedicated national-level anticorruption agency (ACA), though the question of whether to create one has been on the table since 2014 (see here, here, and here). Yet Australia has plenty of experience with ACAs—at the state level. Australia’s first, and still most prominent, state-level ACA was the Independent Commission Against Corruption (ICAC) in New South Wales (the state including financial capital Sydney), which will mark its thirtieth anniversary next year. The ICAC, led by an independent commissioner, has independent investigatory powers over almost all state-level government officials and is charged with both exposing public sector corruption and educating the public about corruption. Queensland and Western Australia followed suit with their Corruption and Crime Commissions, established in their current forms in 2001 and 2003 respectively. The states of Victoria, South Australia, and tiny Tasmania all instituted independent agencies in recent years as well. Even the 250,000-strong Northern Territory resolved to start its own ACA after several high-profile scandals, and the Australian Capital Territory (the Canberra-sized equivalent of Washington, DC) has discussed creating its own anticorruption body. The permeation of Australia with state-level agencies is essentially complete.

Thus, in true laboratories-of-democracy fashion, Australian states have tried, solidified, and publicized the model of creating an independent investigatory group focused on the issue of corruption. Could U.S. states do the same? Easily. Should they? Yes, for at least three reasons:

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When Should We Put Anticorruption Agencies in the Constitution?

To fight corruption more effectively, many countries have created specialized government institutions that focus primarily on corruption issues. Most common are specialized anticorruption agencies (ACAs) with investigative and/or prosecutorial functions, although some countries have also created specialized anticorruption courts, special coordinating bodies, or other entities. This trend has generated a great deal of debate, both about whether to create such specialized bodies at all and about how they should be designed (for example, whether ACAs should combine prosecutorial and investigative power). Absent from much of this debate, however, is a discussion of the means countries should use to create these specialized bodies—in particular, whether these specialized anticorruption bodies should be enshrined in the nation’s constitution, or should be created by ordinary law.

Anticorruption bodies vary quite a bit on the extent to which they are constitutionalized. Most existing ACAs and other anticorruption institutions—including many considered highly successful—are not mandated by the constitution. For example, Indonesia’s anticorruption agency (the KPK) and its anticorruption courts (the Tipikor courts) were created by ordinary legislation, as was Belgium’s anticorruption investigation body and Spain’s anticorruption prosecutor’s office. However, in other countries specialized anticorruption bodies are explicitly established (or required) by the constitution. For example, the Philippines’ anticorruption court, the Sandiganbayan, is enshrined in that country’s 1987 constitution. Indeed, the trend (if one can be discerned) seems to be in the direction of constitutionalization. Tunisia’s new constitution, adopted in 2014, includes a specialized anticorruption investigation body. Egypt’s 2014 constitution similarly includes a specialized anticorruption prosecutor. Mexico’s 2015 amendments constitutionalized three types of anticorruption agencies (investigative, prosecutorial, and judicial), as well as a coordinating body.

But should these agencies be constitutionalized? And if so, when? Continue reading

An International Success, Applied in the US: The OECD Law Enforcement Group as a Model for US State Prosecutors

In the United States, the federal government plays a lead role in prosecuting corruption at the state and local level–and many anticorruption advocates and scholars (both in the US and internationally) credit this federalization of anticorruption enforcement with getting rampant local corruption under control. Indeed, the DOJ’s Public Integrity Section was founded in 1976 precisely because it was thought that federal enforcement efforts were required to fill the vacuum created by the inability or unwillingness of state and local law enforcement authorities to bring cases against government officials in their own communities.

Leaving aside for the moment the substantial federalism and sovereignty concerns that have been leveled against this approach, it seems that the federalization of state and local corruption prosecutions worked, and contributed to a significant reduction in corruption across the United States. For this reason, anticorruption advocates frequently suggest that the US experience with federal enforcement should serve as a model for the international community. For example, Judge Mark Wolf’s proposal for an International Anticorruption Court explicitly draws on the US approach, and was likely influenced by Judge Wolf’s personal experience as a federal prosecutor of state and local officials.

I would like to propose the reverse: The United States should take a page out of the international enforcement playbook to improve state-level prosecution of state and local corruption, by implementing something like the OECD Anti-Bribery Convention’s closed-door meetings of law enforcement officials, but for US state-level prosecutors. Here’s why: Continue reading

Guest Post: Countering Corruption in Nigeria with Results-Based Financing

Lauren Abel and Andrew Blackman, recent graduates of the Harvard Kennedy School’s Masters Program in International Development, contribute the following guest post:

The Ebola virus spreading through West Africa has reached Nigeria. While the number of Ebola cases in Nigeria is small, the highly contagious disease can spread quickly, especially in a country with chronically low-quality health services. One might think that the biggest economy in Africa should have the resources and infrastructure to battle the health threat, but despite billions of dollars in annual oil revenues, Nigeria’s poor health services are putting the country at risk of spreading the epidemic. Unfortunately, the problems with public service delivery in Nigeria do not stop with health. Authorities have recognized that Nigeria is unlikely to achieve any of the Millennium Development Goals (MDGs) by 2015 (see the Government’s full review here).

Why the dearth of public services in a booming economy? Corruption. Above all else, pervasive and endemic corruption remains the Achilles Heel of the Nigerian economy. As the Finance Minister recently noted, “Corruption is a serious issue for us because it is destroying our country, eating deep into the fabrics of the economy, we can’t have infrastructure and development with these level of corruption.” In an environment of such endemic corruption, what can be done to help translate huge natural resource revenues into tangible improvements in the lives of the 110 million Nigerians living on less than US$1.25 a day?

In a recent study conducted with the Centre for the Studies of the Economies of Africa – an Abuja-based economic think-tank – we put forward an approach designed to improve the provision of public goods and services that we believe could work within the current Nigerian system. That approach is known as Results-Based Financing (RBF). (For an example of the RBF approach, see this World Bank initiative; the approach is conceptually similar to other ideas such as Pay for Performance, Cash on Delivery Aid and Output-Based Aid.) 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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Can Federalism Curb Corruption in China?

Many commentators have credited China’s political decentralization, and the inter-jurisdictional competition it fosters, with suppressing local corruption and promoting economic growth. Other commentators have been similarly enthusiastic about the prospects for Chinese “federalism” to improve both economic and government performance, and urge China to go even further in embracing a federalist model.  For instance, an op-ed in the New York Times a few months back suggests that “[I]f China’s leaders want to ensure their country’s peace and prosperity over the long run, they would do well to chart a course toward a federal future.”

The main argument for why political decentralization, and the associated inter-jurisdictional competition, can improve governance and growth is straightforward: Local officials compete for mobile capital and labor, and this competition disciplines government officials because bad behavior (such as corruption) can cause voters and firms to move to another jurisdiction. The greater the mobility of firms and citizens, the stronger the disciplining effect. And there’s some rigorous recent academic research substantiating the hypothesis that political competition can improve governance, including an excellent recent paper that examines recent data from Vietnam and finds that economic growth, coupled with political decentralization and competition, has indeed reduced local government corruption.

So does this mean that China’s best hope for improving its governance performance is to decentralize even further, granting provinces and municipalities greater autonomy in setting policy within their jurisdictions?

The short answer is likely to be no.

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