Tag Archives: Latin America

Top-Notch Advice from the Inter-American Development Bank on Combatting Corruption

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To say I opened a copy of Report of the Expert Advisory Group on Anticorruption, Transparency and Integrity in Latin America, the Inter-American Development Bank’s latestadvice to Latin American and Caribbean governments on fighting corruption, with low expectations would be an overstatement. What specific, detailed, actionable and therefore useful measures could a report directed at 45 governments contain? Particularly given the diversity of the region’s governments, which range from prosperous, thriving middle-income democracies to desperately poor, repressive authoritarian regimes.  I thus assumed the report would follow the tiresome formula of so many previous attempts to spur developing nations to take meaningful steps to curb corruptions: a hodgepodge of obvious but vague generalizations wrapped around pleas for greater political will.

My subterranean expectations were only lowered given its institutional sponsor. Like the other regional development banks and the World Bank, the IDB exists to loan money and therefore strives to stay on the good side of the region’s governments to ensure they will continue to borrow.  In reports past from other development banks that consideration has often ruled out even the hint of politically controversial measures or criticism levelled at any government’s faltering anticorruption efforts.

The third strike against the report is its authors.  A distinguished collection of mostly Latin American “names” in the anticorruption field, all are busy experts whose main job is delivering high-profile lectures, authoring academic papers, and advising private sector entities and governments.  Devoting time and effort to an IDB publication that neither burnishes one’s academic credentials nor services clients was probably not high on their list of priorities. Most likely, I thought, they were asked to bless a precooked series of bromides assembled by interns and junior staff.

Boy, were my expectations off base.  Rather than a strike out, the report is a home run.  Or at least a stand-up triple. Continue reading →

When Justifiable Anger Leads to Bad Policy: The Unintended Consequences of Colombia’s Anticorruption Referendum

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Last August, Colombia held a national referendum on seven anticorruption measures. Despite the fact that six of these measures had previously been proposed in, but failed to pass out of, the lower house of the legislature, popular support for the measures was overwhelming: each measure received 99% “Yes” votes. The referendum did not pass, however, because even though more people voted “yes” on the referendum than voted for the current President, under Colombian law the referendum would only pass if a quorum of 12.1 million citizens voted, and the 11.6 million voters who turned out fell short of that number. Nonetheless, proponents of the referendum declared it a success because it has put public pressure on Colombia’s political leaders to implement these measures. And indeed, President Duque has convened an anticorruption roundtable and vowed to implement all seven measures by December 2018.

Is this a good idea? It’s certainly the case that Colombia needs to do more to combat corruption, which is estimated to cost Colombian taxpayers at least $17 billion a year. But it’s not clear that all of the proposed solutions, though doubtless well-intended, are good public policy. I won’t attempt a comprehensive review of all seven measures here. I’ll put to one side discussion of those measures that focus on improving transparency (for example, by publicizing government budgets, legislators’ voting records, and public officials’ tax returns and asset declarations) or on making penalties more severe (for example, requiring those convicted of corruption to serve their full sentences, and nullifying government contracts with parties convicted of corruption). Rather, I want to address two measures that target Colombian legislators: one of these measures would impose a three-term limit, while the other would substantially cut legislators’ pay.

These two measures appear to reflect understandable public anger at how legislators have abused their positions for private gain. But this retributive impulse may produce bad policy. Indeed, both term limits and salary cuts are likely to prove counterproductive in the fight against corruption in Colombia.

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Guest Post: What To Make of Latin America’s Wave of Anticorruption Prosecutions?

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Today’s guest post is from Professor Manuel Balan of the McGill University Political Science Department:

There seems to be a surge in corruption prosecutions of current or former presidents throughout in Latin America (see, for example, here, here, and here). In the last year we have seen sitting or former presidents prosecuted for corruption in Brazil, Guatemala, El Salvador, Honduras, Colombia, Costa Rica, Ecuador, and Panama. In Peru, Pedro Pablo Kuczynski resigned from the presidency amid corruption probes, and the last three former presidents are either facing trial or serving time for corruption. Argentina may soon join this list as a result of the so-called “Notebook Scandal,” which has triggered a fast-moving investigation that has already snared 11 businessmen and one public official, and is getting closer to former President, Cristina Fernández de Kirchner. (Argentina’s former vice-president Amado Boudou was also sentenced to almost six years in prison for corruption in a separate case.) Indeed, it now seems that Latin American presidents are almost certain to be prosecuted for corruption at some point after leaving office, if not before. My colleagues and I have documented the growing trend of prosecution of former chief executives in the region since democratization in the 1980s: Out of all presidents who started their terms in the 1980s, 30% were prosecuted for corruption. Of those that entered office in the 1990s, 52% were or are being currently prosecuted for corruption. In the group of presidents that began their terms in the 2000s, 61% underwent prosecution for corruption. And, remarkably, 10 out of the 11 presidents elected since 2010 who have finished their mandates either have been or are currently being prosecuted for corruption.

The explanation for this trend is not entirely clear. It’s probably not that Latin American presidents have become more corrupt. Some have suggested that the uptick in corruption prosecutions is a reaction, by the more conservative legal establishment, against Latin America’s “Left Turn.” But the trend towards increased prosecution is hardly limited to the region’s self-identified leftist leaders; in fact, left and non-left leaders are nearly equally likely to be prosecuted for corruption. Part of the explanation might have something to do with changes in prosecutorial and judicial institutions, media, or public expectations—the reasons are still unclear, and likely vary from country to country. Whatever the explanation, is this trend something to celebrate? Some observers say yes, arguing that the anticorruption wave sweeping Latin America is the result of Latin American citizens, fed up with corruption and taking to the streets in protest, putting pressure on institutions to investigate and punish corrupt politicians.

While I wish I could share this optimism, I think it’s likely misplaced. Continue reading →

Announcement: Academia against Corruption in the Americas Conference (Call for Proposals)

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GAB is happy to welcome back Bonnie J. Palifka, Associate Professor of Economics at Mexico’s Tecnológico de Monterrey (ITESM), who shares the following announcement:

The first Academia against Corruption in the Americas (ACA) conference, which I am organizing, will be held June 22-23, 2018 in Monterrey, Mexico. The purpose of this conference is three-fold:

  • First, to share research (working papers or already published) from all fields on corruption in the Americas, or general research on corruption by scholars based in the Americas;
  • Second, to share anticorruption teaching experiences (courses, activities, approaches) and so inspire others;
  • Third, to create an anticorruption academic network specific to the Americas.

I would like to encourage all academic researchers interested in participating in this conference to submit proposals to me at bonnie@itesm.mx.

  • Proposals for the research sessions should be full papers on any corruption or anticorruption topic, with preference for those studying corruption or anticorruption in any part of the Americas.
  • Proposals for the curriculum sessions should be the syllabus, teaching notes, or Power Point presentations relating to your experience teaching (anti)corruption.

Proposals are due by March 1, and decisions will be made by March 15. Proposals will be accepted and reviewed in English, Spanish, Portuguese, or French, but presentations at the conference must be in English or Spanish.  Please share the calls for proposals with other corruption scholars, and I hope to see some of you in Monterrey this June.

“Petty” Corruption Isn’t Petty

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Grand corruption attracts plenty of attention—from activists, the mainstream media, and other commentators (including on this blog)—and for good reason. While the media may simply be riveted by the decadent lifestyles of corrupt actors, the anticorruption community has increasingly recognized the devastating impact that kleptocrats and their cronies can have. No doubt, this attention to grand corruption is welcome and recent successes in fighting it are laudable. At the same time, though, this increased focus on grand corruption carries with it the risk of making smaller, more everyday forms of corruption—sometimes called “petty” corruption—seem less consequential.

Yet so-called “petty” corruption remains widespread, and its aggregate impact should not be underestimated. By way of example, consider the most recent results from the Transparency International (TI) Global Corruption Barometer (GCB) survey of citizens in Latin America and the Caribbean, which found that one-third of people who used a public service paid a bribe in order to do so. In other words, for these 90 million people, their ability to access a government service to which they were entitled was conditioned upon an extralegal payment—and that’s just accounting for this one region.

Even as the anticorruption community rightly focuses attention on combatting grand corruption, we can’t forget the real havoc wreaked by smaller-scale corruption. So-called “petty” corruption is not a petty concern. Rather, it’s a serious, pervasive problem that deserves just as much sustained attention as does politicians buying collector cars and oceanfront properties with assets from their secret offshore bank accounts. At the risk of repeating familiar points, it’s worth reviewing the ways in which small-scale corruption has, cumulatively, a range of incredibly destructive effects:

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Lava Jato and Mani Pulite: Will Brazil’s Corruption Investigation End Up a Wash?

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Pop quiz:

Which corruption investigation was preceded by a massive outcry against corruption, was advanced by federal prosecutors making liberal use of the plea bargain, implicated hundreds of politicians (including former and current heads of state), raised serious questions about the role of the independent judiciary, and ultimately resulted in a dramatic political crisis that led to the replacement of a long-standing populist regime with a conservative government bent on reform?

If you guessed Brazil’s Lava Jato (English: Car Wash), you’d be correct.

But if you answered Italy’s Mani Pulite (English: Clean Hands), you’d also be right.

The similarities between the two anticorruption investigations and subsequent prosecutions are no coincidence. In 2004, Brazilian Judge Sérgio Moro, currently responsible for Lava Jato, penned an essay praising the Clean Hands operation, calling it “one of the most impressive judicial crusades against political and administrative corruption,” lamenting Brazil’s failure to engage in a crusade of similar import, and setting a roadmap for the country to do so, based largely on the perceived successful tactics of Italy’s Clean Hands.

Over the last three years, Brazil’s Car Wash operation has followed Moro’s roadmap. But, as Alberto Vannucci has pointed out, Clean Hands was far from an unqualified success—on the contrary, the headline-grabbing, establishment-shaking operation arguably left the country even more mired in corruption than before. Last year, GAB contributor Daniel Binette (channeling Vannucci) predicted that Brazil could face three major challenges in the wake of Car Wash: (1) a collapse of major political parties, (2) the remote possibility of a coup, as occurred in Thailand in 2014, and (3) a loss of public confidence in the anticorruption probe itself. Some of Binette’s predictions have proven prescient, while the accuracy of others remains to be seen.

Continue reading →

A Tale of Two Regions: Anticorruption Trends in Southeast Asia and Latin America

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OK, “best of times” and “worst of times” would be a gross exaggeration. But still, when I consider recent developments in the fight against corruption in Latin American and Southeast Asia, it seems that these two regions are moving in quite different directions. And the directions are a bit surprising, at least to me.

If you’d asked me two years ago (say, in the summer of 2014) which of these two regions provoked more optimism, I would have said Southeast Asia. After all, Southeast Asia was home to two jurisdictions with “model” anticorruption agencies (ACAs)—Singapore and Hong Kong—and other countries in the regions, including Malaysia and especially Indonesia, had established their own ACAs, which had developed good reputations for independence and effectiveness. Thailand and the Philippines were more of a mixed bag, with revelations of severe high-level corruption scandals (the rice pledging fiasco in Thailand and the pork barrel scam in the Philippines), but there were signs of progress in both of those countries too. More controversially, in Thailand the 2014 military coup was welcomed by many in the anticorruption community, who thought that the military would clean up the systemic corruption associated with the populist administrations of Thaksin Shinawatra and his successor (and sister) Yingluck Shinawatra—and then turn power back over to the civilian government, as the military had done in the past. And in the Philippines, public outrage at the brazenness of the pork barrel scam, stoked by social media, and public support for the Philippines’ increasingly aggressive ACA (the Office of the Ombudsman), was cause for hope that public opinion was finally turning more decisively against the pervasive mix of patronage and corruption that had long afflicted Philippine democracy. True, the region was still home to some of the countries were corruption remained pervasive and signs of progress were scant (such as Vietnam, Laos, Cambodia, and Myanmar), but overall, the region-wide story seemed fairly positive—especially compared to Latin America where, aside from the usual bright spots (Chile, Uruguay, and to a somewhat lesser extent Costa Rica), there seemed to be precious little for anticorruption advocates to celebrate.

But now, in the summer of 2016, things look quite a bit different. In Southeast Asia, the optimism I felt two years ago has turned to worry bordering on despair, while in Latin America, things are actually starting to look up, at least in some countries. I don’t want to over-generalize: Every country’s situation is unique, and too complicated to reduce to a simple better/worse assessment. I’m also well aware that “regional trends” are often artificial constructs with limited usefulness for serious analysis. But still, I thought it might be worthwhile to step back and compare these two regions, and explain why I’m so depressed about Southeast Asia and so cautiously optimistic about Latin America at the moment.

I’ll start with the sources of my Southeast Asian pessimism, highlighting the jurisdictions that have me most worried: Continue reading →

Five Things Washington Should Do to Help Latin America Curb Corruption

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The following is based on a March 24 talk I gave at the Washington office of the Council on Foreign Relations.  It is posted in a slightly different form on “Latin America’s Moment,” the Council’s blog on Latin America.

One of the most promising developments in U.S. foreign relations is the all out war on corruption being waged across Latin America.  From “Operation Car Wash” in Brazil to investigations of presidential wrongdoing in Bolivia, El Salvador, Honduras, Guatemala, and Panama, across the region independent, tenacious prosecutors and investigators are out to end the massive theft of state resources that for so long has hobbled political development and throttled economic growth.  Americans should be cheering for these corruption warriors, for we have much to gain if they succeed.  Less corruption translates into more stable, reliable political allies; it means faster, more equitable growth and that means shared prosperity and less northward migration.  Finally, less corruption in government will offer American firms new opportunities. Think what the end of corruption in Brazilian public works would mean for U.S. engineering and construction companies.

But given the stakes in Latin America’s corruption war, America should be doing more than cheering from the sidelines.  It should be doing everything it can – without infringing the sovereignty or sensibilities of Latin neighbors – to see its corruption warriors succeed.  Here are five things to start with: Continue reading →

Guest Post: Brazil Must Fight Corruption, But Preserve the Rule of Law

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GAB is delighted to welcome back Mat Tromme, Project Lead & Senior Research Fellow at the Bingham Centre for the Rule of Law, who (along with research assistant Domenico Vallario) contributes the following guest post:

Across Latin America, the past year has provided reasons for hope that the struggle against grand corruption and impunity is finally making progress. Prosecutors have gone after corrupt elites in Guatemala and Honduras, while political leaders in Mexico and Chile have also been under pressure for their links to corruption scandals. And in Brazil, the investigations into the corruption scandal at the state-owned oil giant Petrobras have led to charges against around 80 people, including high-ranking political figures like the speaker of the Lower Chamber and former President Collor de Mello, and a former treasurer of the ruling Worker’s Party.

The investigation into the Petrobras scandal is being led by Brazil’s Federal Police and by Public Ministry Prosecutor Deltan Dallagnol, under the watchful eye of Judge Sergio Moro. And Judge Moro’s tenacious attitude to pursuing graft stands in sharp contrast to a judicial system that has traditionally been slow and ineffective, especially in corruption cases: out of ten salient scandals between 1990 and 2010, 841 people were implicated, but only 55 were convicted. Yet Judge Moro’s approach may actually be emblematic of a broader shift in the Brazilian judiciary, as corruption cases that are tried in courts have been on the increase over the past few years.

On the face of it, these convictions should be welcomed as a sign that justice is meted out against the corrupt and that the judiciary is playing its part in tackling grand corruption. Yet some critics have raised legitimate concerns about the arguably overzealous approach the authorities (not only the legislature and the executive, but also the judiciary) have taken in tackling corruption, in light of rule of law and human rights commitments. Continue reading →