* Any views expressed in this opinion piece are those of the author and not of Thomson Reuters Foundation.
Are democracies more susceptible to corruption than authoritarian regimes?
I sometimes hear arguments that democracies are more susceptible to corruption, while semi- and fully authoritarian governments are much better at controlling it.
One example people bring up are transitions to democracy in Eastern Europe, where corruption became synonymous with the process of transferring ownership rights from states into private hands. Another example are countries like Singapore, where a semi-authoritarian government successfully clamped down on runaway corruption over the past several decades amid claims that democratization has led to lower levels of integrity in countries like Taiwan.
A paper published by the UN argues that there is an inverted U-shape relationship between democracies and corruption: corruption rises at the early stages of democratic development and decreases as democracies mature and consolidate.
Despite some exceptions to the rule, it’s hard to debate the fact that consolidated democracies are less corrupt – various anti-corruption indices, whether by Transparency International or Global Integrity, show that countries with lower levels of corruption are mostly consolidated democracies while highly corrupt countries are often failed states.
However, while there is a relationship, causality is unclear – are countries less corrupt because they are democratic or are they democratic because they are less corrupt? Policy implications of the answer are immense: should reformers focus on curbing corruption by all means – even if quite authoritarian - which may lead to an eventual development of democracy. Alternatively, should they focus on building democratic institutions in order to eventually curb corruption?
Dani Kauffman, who for a long time led the work on governance indicators at the World Bank, provides some insights in his writings from more than a decade ago. Based on empirical studies and personal experiences he argues that improvements in protection of civil liberties lead to lower levels of corruption. More importantly, however, is the point that is often lost in many debates on corruption – that in highly corrupt countries corruption is not a problem in and of itself, rather it is “a symptom of fundamental institutional weaknesses.”
In other words, successful efforts to curb systemic corruption must balance the punishment of corrupt behavior with initiatives that address the underlying reasons for that behavior. In countries where corruption takes over the daily life, it is not enough to throw people in jail for taking or accepting bribes, without taking a closer look at the system that creates incentives to be corrupt.
And once you begin to look at the institutional causes of systemic corruption, the argument for democratic institutions as a means of controlling it becomes more clear. Among those causes are weak rule of law, high discretion of public officials, over-regulation of business and other activities that create opportunities for extortion, lack of transparency in public and private sectors, and absence of independent and free media.
And what about Singapore? In many ways, Singapore is an exception to the general rule. Although many would like to replicate the country’s success in establishing an ever-powerful anti-corruption investigation agency, in most cases, such initiatives fail to live up to the expectations and can, in fact, become a source of corruption. Nathaniel Heller, the Managing Director of Global Integrity, makes this point clearly in his recent blog post.
Also worth noting is one of the recent books by Anders Aslund, where he disputes the notion that privatization processes in Eastern Europe led to higher levels of corruption. The reality is that the public perception of increased corruption because of democratization does not correspond to the facts. As Aslund documents, by transferring property into private hands, reformers were able to reduce a lot of the hidden corruption, driven by misuse and misappropriation of resources within state-owned enterprises by public officials who were overseeing them.
There are often temptations to strike down corruption with a strong hand. Ruling with a strong hand, however, is not the same as leadership and inspiration. Unchecked power at the root source of corruption can only be controlled by democratic institutions, transparency, and checks and balances within the political system. There is no way around it.
