The Australian Government Shows Us How Not To Create an Anticorruption Agency

Two recent polls of the Australian public make two things quite clear: the Australian people have little trust in their federal politicians, and they want a federal anticorruption agency to investigate misuse of public office. This is perhaps not surprising given the string of scandals that have come to light in the past few years (see, for example, here, here, and here). And ordinary citizens are not alone: a survey of government workers found that thousands believed they had witnessed acts of corrupt behavior, particularly cronyism and nepotism. And a group of 34 former Australian Judges, including a former Chief Justice of the High Court, have published an open letter to Prime Minister Scott Morrison stating that Australian trust in federal politics is at an all-time low due to perceptions of corruption, and that a federal anticorruption agency is the necessary response. 

It is therefore unsurprising that the proposed creation of a federal anticorruption agency has emerged as a salient issue in the upcoming federal elections, to be held on May 18 (one week from tomorrow). The Morrison government initially dismissed the idea, but in December 2018 changed its tune and announced that, if the Liberal Party (Morrison’s party) wins the election, the government would create a Commonwealth Integrity Commission with two separate divisions: a law enforcement integrity division and a public sector integrity division. The former would have the power to investigate police officers and other law enforcement personnel, while the latter would have the power to investigate politicians.

Unfortunately, while a federal anticorruption agency is an idea whose time has come, the Morrison government’s proposal suffers from four key shortcomings: Continue reading

Presidential Power Grab: Corruption and Democratic Backsliding in Mongolia

Mongolian democracy is in trouble. On March 26, President Khaltmaa Battulga proposed emergency legislation that would grant the presidency unprecedented powers to dismiss members of the judiciary, the prosecutor general, and the head of the state anticorruption agency (the Independent Authority Against Corruption, or IAAC). One day later, parliament approved this legislation by a vote of 34-6 (with 36 members of parliament either absent or abstaining), despite the fact that President Battulga hails from the Democratic Party (DP) while the rival Mongolian People’s Party (MPP) controls parliament. Technically the law doesn’t grant the dismissal powers directly to the president, but rather to a three-member National Security Council (NSC) composed of the president, prime minister, and speaker of parliament, and an oversight body called the Judicial General Council. But President Battulga dominates the NSC and personally appoints the members of the Judicial General Council, giving him effective authority to remove Mongolia’s judges and chief law enforcement officials at will. Sure enough, promptly after the law was passed, Battulga dismissed the head of the IAAC, the Chief Justice of the Supreme Court, and the prosecutor general.

This new legislation, a crippling blow to Mongolian democracy, has its origins in corruption, and corruption is likely to be its effect. President Battulga induced parliament to grant him such extraordinary powers by claiming that he alone can really take on Mongolia’s severe corruption problem. In his statement to parliament introducing the new legislation, Battulga alleged that the country’s law enforcement leaders were “part of a conspiracy system” that “fabricat[ed] criminal cases with a political agenda” while covering up others. The president pointed to Mongolia’s numerous unresolved corruption scandals to argue that the institutions of justice were “serving the officials who nominated and appointed them” rather than the public, and he argued that reducing the independence of the judiciary, the prosecutorial apparatus, and the IAAC would make those institutions more responsive to the popular will to fight corruption.

President Battulga is correct when he asserts that Mongolia has a corruption problem of serious, perhaps epidemic, proportions. Mongolians regularly list corruption as one of the country’s biggest issues (second only to unemployment in a 2018 survey) and political institutions such as parliament and political parties as among the most corrupt entities. The past few years have been especially scandal-plagued. During the 2017 presidential campaign, all three candidates faced accusations of corruption; most egregiously, the MPP candidate—who, until January 2019, served as speaker of the Mongolian parliament—was caught on video discussing a plan to sell government offices in a $25 million bribery scheme. Further, late in 2018, journalists discovered that numerous politically-connected Mongolians, including somewhere from 23 to 49 of the 75 sitting members of parliament, had been treating a government program designed to provide funding for small- and medium-sized enterprises (SMEs) as a personal piggy bank, taking out over a million dollars in low-cost loans. Beyond these scandals, Mongolia’s poor enforcement record compounds its corruption problem. For example, in 2015, only 7% of cases investigated by the IAAC resulted in convictions, and in 2018 public approval of the IAAC reached an all-time low.

But is there any reason to believe that President Battulga is right that giving him greater personal control over law enforcement and the judiciary will lead to less corruption? All the evidence points to no:

Continue reading

India’s Political Party Finance Reform Falls Short of Ensuring Complete Transparency—But Is Still a Step in the Right Direction

On March 1, 2018, India began its latest effort to clean up the financing of political parties and elections. This efforts involves the sale of so-called “electoral bonds” at select state banks across the country. The term “electoral bonds” is a misnomer, for these “bonds” are not linked to elections, nor do they involve paying back a loan or yielding interest. Rather, these instruments are simply a new means to facilitate financial donations to political parties, and are intended to displace the undocumented cash transfers that form the lifeblood of Indian politics. As India’s Finance Minister argued, this cash-based system causes two problems: First, “unclean money from unidentifiable sources” facilitates corruption and money laundering. Second, the reliance on cash allows parties to underreport both their budgets and spending. These concerns led the government last year to reduce the limit on anonymous cash donations from $300 to $30. Electoral bonds intend to further disrupt the system and achieve at least some increases in transparency of political spending.

Announcement of the new system has generated significant commentary, with the few admirers crowded out by the numerous detractors (see, for example, here, here, and here). The main focus of criticism is the new scheme’s guarantee of donor anonymity: Electoral bonds will carry no name and nobody, other than the bank and donor, can know who made the donation unless the donor willingly discloses her identity. The government has defended the anonymity guarantee as a way to prevent reprisals against donors, but critics understandably argue that the lack of transparency means that much political financing will continue to come from “unidentifiable sources,” allowing big business to keep lobbing money in exchange for policy favors while the public remains in the dark. (Moreover, the government’s emphasis on fear of reprisals as the rationale for anonymity suggests the government is unduly concerned with protecting the only class of donors for whom this would be a significant concern, namely large capitalists.) The electoral bond scheme has thus been painted as a move that potentially strengthens the crony capitalism responsible for India’s dire economic situation.

This strong negative reaction to the electoral bond scheme is, in my view, overwrought. True, the new policy does not solve the deep and serious problems with political finance in India. But it does have some notable advantages over status quo. Additionally, critics of the electoral bond system sometimes seem to treat donor transparency as an unalloyed good, when in fact donor transparency may have some drawbacks as well (even if one doesn’t take too seriously the government’s official line on political reprisals). Let me elaborate on each of these points: Continue reading

Corruption’s Gendered Double Standard

On November 8, 2016 the United States almost elected Hillary Clinton as its first female president. But, if Donald Trump and many of his supporters were to be believed, Secretary Clinton was also one of the most corrupt politicians of all time. This argument appears to have swayed many American voters, who ended up electing Donald Trump (who might actually be the most corrupt person recently elected to the presidency, see here, here, and here). That Trump’s unprecedented accusations of corruption were leveled against the first female presidential candidate nominated by a major political party was not a coincidence.

A great deal of commentary has considered whether women (and especially female politicians and public officials) behave less corruptly than men. (For some prior discussion on this blog, see here.) But I’d like to focus on a different question: Are female politicians accused of corruption treated differently—and judged more harshly—than male politicians? Existing research suggests that they are, which in turn may explain both why allegations of corruption can be more damaging to female politicians, and why female public officials are on the whole less corrupt. Continue reading

Order from the Court: Judiciaries as a Bulwark Against Legislative Corruption in Vanuatu

Imagine that one-third of the members of your national legislature were convicted of bribery, and then decided to pardon themselves, and you’ll only begin to appreciate the scope and oddity of Vanuatu’s current political drama.

On October 9, Vanuatu’s Supreme Court convicted 14 of the 33 members of the ni-Vanuatu Parliament of bribery. The politicians, who at the time of their unlawful conduct included the deputy prime minister and four other members of the cabinet, had last year accepted around US$9,000 each to support a vote of no confidence in the prime minister—that is, to kick him out of office. Though the prime minister discovered the scheme and suspended the participants, they successfully sued for an end to their suspension, and promptly followed through on their plan to eject the sitting government.  Now holding Parliament’s top-ranked positions themselves, the bribe-takers nevertheless fell under police investigation, and a trial against them began this September.

After the bribe-takers were convicted but before they were sentenced, the president, who was not a member of their coalition, took a trip abroad. Under Vanuatu’s constitution, that left the Parliament speaker in charge. The problem? That Parliament speaker was one of the people convicted of bribery—and he promptly decided to use his temporary power to suspend the Ombudsman (the officer charged with investigating corruption) and pardon himself and his co-conspirators. The president quickly returned to Vanuatu and revoked the pardons, but it’s not clear that he had the legal authority to do so. With the Court of Appeals having recently rejected the appeals of the members of Parliament (MPs), the MPs are now kicked out of the legislature, and new elections may have to be held.

As idiosyncratic as this story may seem, it still speaks to some deeper truths about the problem of corruption in the Pacific Islands—and may yet resolve itself in a way that provides some clues about effective ways to fight it. So, what went wrong in Vanuatu, and what can still go right?

Continue reading

The Corruption Is Too Damn High: Reforming Albany by Creating Additional Parties

New York state politics appears to be rife with systematic corruption, a truth underscored by the fact that two of New York’s most powerful politicians—Former Assembly Speaker Sheldon Silver and former State Senate Majority Leader Dean G. Skelos–will soon be headed to trial for corruption. What can be done about this? Federal government involvement may do some good, as the federal prosecutions of Silver and Skelos demonstrate; U.S. Attorney Preet Bharara is conducting many other investigations that have sent a chill of fear through Albany’s corrupt actors. Yet the threat of prosecution alone might not be enough, which as led many people, including contributors to this blog, to suggest a range of other reforms designed to reduce the motive or opportunity for New York state politicians to exploit their power for private gain. Such proposals include reducing or eliminating the ability of legislators to receive outside income, pinpointing the problem that Albany is far removed from the cultural and business heart of New York, and introducing term limits for state legislators.

Yet there is another reform possibility that has not been discussed much and might be more practical than it initially seems: activists devoted to fighting corruption could create an additional political party in effectively one-party districts. There are many political activists in New York who care deeply about good governance. For example, State Senator Liz Krueger started a “No Bad Apples” PAC to “recruit, train and support progressive, reform-minded candidates for the New York State Senate.” Enthusiasm and resources that now go to efforts like that within one of the two major parties could instead be channeled to the creation of “No Bad Apples”-type parties in one-party districts. It would make sense for progressive activists to create spin-off parties to contest safe Democratic seats and conservative activists to create spin-off parties to contest safe Republican ones.

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.

Continue reading