Featured Articles — June 20, 2010

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by Ali Moeen Nawazish / Political Science & Intl. Relations / University of Cambridge

Winston Churchill said in the House of Commons in 1947: “Many forms of government have been tried, and will be tried in this world of sin and woe. No one pretends democracy is perfect or all wise. Indeed it has been said that democracy is the worst form of government, except all those other forms that have been tried from time to time.(including dictatorship)”

Intuitively democracy is seen as perfect and without corruption. However, Churchill and the question seem to pose a contrary notion. Corruption can persist in democracies, and a glance at the news proves that it does, but why? Corruption is perhaps part of human nature, at times, or a failure of the system. I do not condone dictatorship in this article. I cannot see a valid argument for a pro dictator regime and would put to pen a qualification of that statement but not now. The purpose of this article is to enable a discussion on why there is corruption in democracies.

Before even beginning to address this question, there are three conceptual issues that need to be resolved: what exactly is a democracy, what is corruption, and what is the relation between them if any. The last one is important, as its purpose is to legitimize the question. If democracy has no impact on corruption then the mention of democracy becomes irrelevant, as corruption would exist without it, so a link (positive or negative) between democracy and corruption is needed to begin presenting a theoretical reasoning for the existence of corruption.

Starting with defining what democracy is, Joseph Schumpeter (1943 p.271) describes democracy as a “free competition for a free vote”. The first condition of democracy is that adult citizens have a right to vote, and the second is the presence of free and fair elections that are competitive. The focus in this account is on the holders of office and their elections, not necessarily the actions of the office bearers. The actions of the office bearers are kept in check by accountability measures within the government, as the United States Government Accountability Office (US GAO) does in the United States, auditing government actions and is the investigative arm of the US Congress.

Yet, there also exist broader definitions of democracy that extend beyond elections, and equality of voting, to an active participation by adults. Elections alone are not a singular dimension of democracy and even if elections are free and fair, coercion outside the electoral process can render elections useless. Active participation is both direct in terms of standing for election and voting, and indirect in terms of joining political groups or voicing opinion, protesting and engaging office bearers or politicians on specific issues.

The definitions of democracy as proposed by Dahl and Schumpeter range from minimalist to maximalist extremes. Therefore, the question arises whether democracy is a matter of degree. Giovanni Satori (1987), maintains that political systems are ‘bounded wholes’ and democracy should be classified as either present or not- democracy is a ‘sortal’ measurement. On the other hand, Hyland (1995) has argued that a more ‘scalar’ view to democracy is more appropriate and just describing it as a ‘sortal’ concept is not compelling.Robert A. Dahl in Democracy and its Critics (1989 p.106-31) defines democracy as having five base criteria: effective participation, voting equality, enlightened understanding, control of the agenda, and inclusiveness. But, Dahl, regards ‘a regime that is completely or almost completely responsive to all its citizens’ as an unattainable ideal or a theoretical utopia. So, for him politically advanced countries are ‘polyarchies’ which feature a ‘representative system with a widely inclusive adult electorate.’ The defining features of ‘polyarchies’ are free and fair elections, inclusive suffrage, rights to run for office, freedom of expression and availability of alternative information and associational autonomy. So while Dahl’s theoretical utopia is unattainable and ‘polyarchies’ are the closest a state can be, Dahl’s definition can be considered as the gold standard against which the degree and quality of democracy of any state can be measured.

For the purpose of this article, democracy is considered both a ‘sortal’ and a ‘scalar’ concept. Where a state would be judged to be democratic based on the minimalistic idea of democracy, investigated whether the degree of democracy has had an impact on the presence of corruption within that democracy.

There is relatively less consensus on how to define corruption. than there is on the definition of democracy. The most common definition of corruption is by J. S. Nye (1967), who argues that corruption is, “behavior which deviates from the normal duties of a public role because of private-regarding (family, close private clique), pecuniary or status gains; or violates rules against the exercise of certain types of private-regarding influence. This includes such behavior as bribery (use of reward to pervert the judgment of a person in a position of trust); nepotism (bestowal of patronage by reason of ascriptive relationship rather than merit); and misappropriation (illegal appropriation of public resources for private regarding uses).”

In terms of bribery, Jacob Van Klaveren (1957) argues that a bureaucrat views his or her public office as an enterprise from which he or she can earn extra-legally. These forms of income occur more in economies heavily under government regulations. Civil servants or public office bearers may devote most of their time and effort in assisting entrepreneurs or enterprises in evading state laws or statues, in exchange for extra legal income or special benefits given to the officials.

The defying of public interest can also be classified as corruption, as argued by Carl Friedrich (1990): “the pattern of corruption may therefore be said to exist whenever a power holder who is charged with doing certain things, that is a responsible functionary or office holder, is by monetary or other rewards, such as the expectation of a job in the future, induced to take actions which favor whoever provides the reward and thereby damage the group or organization to which the functionary belongs, more specifically the government.”

Lobbying too falls under this category, because for personal benefit the office bearer chooses not the interest of the government, or the people but of a particular special interest group.

Whether processes common in democracies, such as vote buying, campaign financing or statistical manipulation of elections results are corruption, can be classified as corruption is debatable. While these may not be direct forms of corruption they implicate it. The candidate buying votes would see his or her action as an investment to be profited from or remade through extra-legal income, so indirectly it becomes a form of corruption. Similarly with campaign finance, it can be seen as an early bribe given to candidates for services required by the donor in the future. Statistical manipulation is generally done by present governments to retain their power, so if a government is able to carry out indirect corruption there is a high chance it will carry out direct corruption too.

These aspects of corruption are neither perfect nor complete, each has its limitations. Nye’s definition extends to the personal benefit of the office bearer, and so the Watergate abuses in the US might be excluded as they were for the benefit of the Republican party, and not President Nixon personally. Similarly the normative rules that Nye talks about raise the problem that as different countries criteria for corruption varies, a benchmark for corruption can not be defined universally. Donating money to political candidates by large corporations is legal in countries like the US (although requiring disclosure), but illegal in France. Yet, the above discussion is a good starting point for analyzing corruption, and why these aspects of corruption are present in democracies.

Corruption is also a matter of public perception and acceptance, and the degree of the corruption relates to how it is perceived and whether it is accepted. Arnold Heidenheimer (2001), emphasizes the differences between, ‘black’, ‘white’ and ‘grey’ corruption. ‘Black corruption indicates that in that setting that particular action is one which a majority consensus of both elite and mass opinion would condemn and would want to see punished as a matter of principle.’

Whereas ‘grey corruption’ indicates that only particular elements of society, usually the elites, would see it as corruption, but most would not and the majority would possibly be ambivalent. Lastly, ‘white corruption‘ refers to forms of corruption that both the elite and mass opinion would not vigorously support to get punished.

Before analyzing the factors responsible for the persistence of corruption, the statistical relationship of democracy with corruption needs to be established. Ades and Di Tella (1999 p.987) and Fisman and Gatti (2002 p.336-338) do not find any association between the political and/or civil rights associated and corruption.  Goel and Nelson (2005 p.127 and 130) find that corruption declines with the degree of civil liberties associated, Chowdhury (2004 p. 96 and 98) finds that corruption declines with Vanhanen’s (1992) democracy index, while Triesman (2000 p.417) finds that the duration of democracy, defined as the number of uninterrupted years in which a country is democratic, reduces corruption. Michael Rock (2007 p.32), found a link between corruption and durability of democracy occurs at a relatively young age—between 4 and 15 years, ‘‘these conclusions suggest that at least some low income countries have been able to reduce corruption in the early years of their democratic transitions”. He finds a inverted U – shaped relation between democracy and corruption. The different research and findings, shows the complicated nature of the problem. For instance, India has been a democracy for 63 years now, and its ranked score in the Transparency International’s Corruption Perceptions Index has improved consistently from 2.7 in 2002 to 3.4 in 2007. Why the improvement after some fifty odd years, and why now? But, perhaps the more important question is why does corruption still exist in India, despite the fact that it has been classified as a democracy and has been for 63 years?

The answer to the question is divided into four parts. The first two focus on democracy itself, on how the quality of democracy and features of democracy effect corruption. The second two focus on factors outside democracy, namely the economy and economic model of a state, and the attitudes and perceptions of the civil of society.

In terms of the quality of democracy, a good democracy is based on fundamentals as outlined by Dahl, and the pillars of democracy the executive, the legislature, the judiciary and the press keep checks and balances on one an other to ensure there is accountability, and corruption does not occur. However, if the pillars or the inherent features of a democracy are not present, or not functional in spirit, then corruption is bound to exist.

The judiciary, public accounts committee or accountability organizations, and the media in particular are important in terms of reducing corruption as they directly investigate and prosecute cases of corruption within states. The media and accountability organizations bring issues of corruption to light and the judiciary delivers justice. A weakness in these pillars increases corruption, as it is easier to not get caught. Ce Shen (2005 p.336-337) argues that, “a poor legal system characterized by a lack of power to monitor the actions of high ranking government officials and economic elites, incomplete laws, and a lack of transparency is easily exploited by corrupt government officials.” Theobald (1990) and Ali and Isse (2003) have found that efficient legal systems have a positive effect on corruption control.

Corruption is widespread in a low quality or immature democracy. Empirical Analysis by Pellegrini’s and Gerlagh’s (2008) findings suggest that a long exposure (30 years) to uninterrupted democracy is associated with lower corruption. The relationship between democracy and corruption, as discussed in the relation of corruption to democracy also supports the same. It can be argued, that even in the most developed democracies corruption still exits. However, the important thing to note is that the degree of corruption changes. For instance, in India over the past two years one of the biggest corruption scandal was the laundering of USD 90 million by Madhu Kodas, a provincial chief minister. Whereas in the UK it was the MP expense cases, where MPs were exploiting their allowances to “subsidize their homes and lifestyle.”

The second part of the answer thus considers the very nature of democracy itself. Democracy requires voting, and participation. This opens up the possibility of campaign finance or lobbying, and vote buying and statistic manipulation. These forms of corruption are unique to democracy. Susan Rose-Ackerman, writes “Democratic elections are not invariably a cure for corruption.” She argues that there is great pressure on the politician in terms of campaign finance in democratic elections, and wealthy interests are willing to foot the bill. This leads to the agenda of such interests being put forward, whether or not it is of public interest and benefit. In addition, some politicians try to make up the money they have spent, and in Japan politicians who assist local companies in obtaining government contracts expect a percentage of the price in return (Qui 1996 p.231). The same principle can also be applied to the executive and legislature, wanting to earn using their power in an attempt to make up the spent money on campaigns. Special interest groups may also influence office bearers or public officials to vote on or enact certain policy in a certain fashion.

In terms of vote buying and statistical manipulation, the election candidates typically either seek to secure votes by giving monetary bribes to the electorate or the candidates, particularly those up for re-election, use their power to manipulate the final statistic. Rose-Ackerman argues that voters benefit from direct pay-offs, but the limitation is not just to pay offs but also to promises of government sector jobs. Patronage and votes based on association can also be said to be vote buying, because the voting decisions are not made on policy or manifestos. This is a common practice, as in Italy political ‘bosses‘ also make use of public funds to sponsor vote buying (della Porta 1996). Similarly in Spain (Heywood 1996 p.125-127) and Thailand vote buying is common, and in Thailand there was even a promise of a post-election bonus if the candidate won.

Statistic manipulation is typically used by those in power, and is often done with the aid of intelligence agencies and government agencies among others. An instance of statistic manipulation happened during the Iranian elections of 2009. BBC Iranian affairs analyst Sadeq Saba found abnormalities in the manner the results were announced – in millions and not by province. This suggested that Mahmoud Ahmadinejad did equally well in rural and urban areas, while his three opponents did equally badly in their home regions and provinces as in the rest of the country. This was unusual of Iranian politics, as Ahmadinejad’s popularity was concentrated in the rural areas and he was unpopular in the urban areas. There has been no definitive evidence of fraud, but there were reasons for suspicion which led to the mass protests.

The second part of the answer is concerned with factors outside the construct of democracy. In terms of the economics and economic model of a particular democratic state, and its impact on corruption there are two perspectives. But, it is more straight forward, and the literature more conclusive.  The first is that the underdevelopment which forces people to resort to corruption out of poverty, and the second is that rapid development or modernization provides avenues for corruption.

Daniel Triesman (2000 p.5) argues that, “Both the demand for and the supply of corrupt services may be greater in less developed societies. Social mores regarding corruption are often thought to vary with the level of economic development.” Lower economic development could then account for why people sell votes, or why public officials due to low salaries would need to accept bribes – possibly for a better standard of living for their family or even to make ends meet.

The second perspective is that its not underdevelopment but rapid modernization, that becomes a cause for corruption. Huntington (1968) argues that abuse of public office for private gain becomes prevalent when there are sources of wealth and power seek to influence the political sphere. In terms of enterprise corruption, rapid modernization leads to more companies being formed or working in the state, and hence public officials or office bearers are bribed to facilitate these new activities. Modernization also disrupts political and regulatory institutions; sometimes the institutions are unable to keep up with new developments.

In fact it is not just about modernization and underdevelopment. Government interventions via regulations and licenses increase the incidences of corruption. So, while it is to some extent a matter of economic development, it is also a matter of how the economy and markets are managed and regulated. For instance in India’s case there has been a reduction in corruption in the past decade, and market liberalization around the same time can also help account for that. Therefore, more regulations whether in rapidly modernizing states or underdeveloped states result in more corruption.

However, the corruption due to rapid modernization or underdevelopment (Xin and Rudel 2004) is mostly phenomenons from the underdeveloped world. Even in democracies in countries with higher income corruption does exist in the absence of other interventions (Kaufmann and Kraay 2001). Ce Shen (2005) argues that Corruption is in no way confined to developing countries; it is widespread in many developed countries as well. In fact, most African countries rank low in corruption control, but Botswana is actually ranked higher than would be expected given the level of economic development it has (Theobald and Williams 2000; Transparency International 2004). Again, the explanation is in market regulation, Ce Shen (2005 p.9) argues that even economically stronger or developed states, “usually measured by government expenditure over GDP, are associated with corruption…” The stronger states usually have larger bureaucracies, and there is evidence of a positive association with the size of bureaucracy and level of corruption (Ali and Isse 2003).

The last part of the answer relates to the civil society, which effectively is the largest stakeholder in a democracy. The factors under consideration with regards to the civil society are the perceptions of the public, culture or tradition of a society, the literacy or awareness within the society about corruption, maturity in terms of exposure to democracy, and what effect society segmentation has on corruption.

As mentioned that corruption has shades defined by peoples’ perception, as democracy is in theory a system of governance focusing on the people until or unless the people raise their voice against corruption it will continue. The reason for grey and white corruption can also be attributed to culture and tradition.  According to Guy Wint: “In nearly all Asian countries there has always been a tradition of corruption.”

Triesman (2000) argues that in “traditional societies” bribery transactions are not clearly held as bad, and public and private spheres are less clearly defined in less developed countries. Gunnar Myrdal argues that in developing countries “a bribe to a person holding a public position is not clearly differentiated from the ‘gifts,’ tributes, and other burdens sanctioned in traditional, pre-capitalist society or the special obligations attached to a favor given at any social level.” (Myrdal 1970, p.237; also Ekpo 1979).

Yet the question arises that why do such traditions keep being accepted? The answer lies in the lack of awareness, or in the developing world in the illiteracy of the public, which is oblivious to what is right or wrong. In the developing world there is also a case of the public not getting any time to engage in eradicating corruption, because of their own poverty. It is an ironic cycle, but for instance the average per capita income in Pakistan is 1,044 USD, or 2.9 USD a day which is barely enough to meet day to day expenses. The public has no time to indulge in an effort to eradicate corruption, or fulfill their responsibilities as citizens fully. The lack of awareness can also pertain to the lack of press freedom, Chowdry (2004) argues that press freedom does not bring a substantial change in corruption levels; however, in terms of spreading awareness to the masses it is important. Awareness amongst people about elections, democracy and corruption would also increase, perhaps more so with press freedom.

In terms of social segmentation, Triesman (2000) also discusses ethnic polarization. ‘Members of ethnic groups may feel that demanding favors from co-ethnics in office is the only effective way to obtain government services. At the same time, the supply of corrupt services may be increased by the social leverage that ethnic leaders have over officials of their ethnicity: fear of social ostracism may make them reluctant to refuse their co-ethnics’ demands.’ Easterly and Levine (1997) also found a relationship between ethnic fragmentation and growth-retarding public policies. In such cases ethnic identity supersedes national identity, and the focus of the ethnicity or even any other group is for its own benefit not that of the state. This effectively leads to corruption because the norms and standards of the public office are not upheld with such biases.

It is important to note that the identified factors do not work independently. They are inter-related; as for instance vote buying is supported by low economic conditions, and lack of a strong democracy with institutions to control such actions. So, the persistence of corruption can be attributed to these factors, not independently but also in the way that they complement each other.

This theoretical analysis, gives a basis for the existence of corruption within and despite democracy, but now looking at a case study will help in understanding its real world application. Pakistan, founded as a democracy in 1947 in the partition of British India, ranks  139th in the Corruption Perceptions Index (CPI) in 2009, it also ranks poorly in other measures of corruption. It has been ruled by both democratic and military governments, although military governments have put up parliaments for show. In ‘sortal’ terms, the Islamic Republic of Pakistan currently is a democracy with a popularly elected government, but as shown by the index it does exhibit corruption. Can the four reasons identified as the answer explain why corruption exists in Pakistan despite it being a democracy?

The quality of democracy in Pakistan is not high. Elections in Pakistan have been subject to rigging throughout the past forty years with high levels of pre and post poll rigging, Gillani (2008 p.9). Inclusive suffrage does not exist, as in a statement by the Asian Human Rights Commission stated that in the 2007 elections, which were subsequently postponed to 2008, ‘at least 88 million voters should be eligible to vote,’ in the ‘2002 elections there were 71.86 million voters” and it was impossible that ‘in 2007 the numbers dwindle to a mere 56 million.’ Only the rich elite and feudal lords run for office, as it is impossible for the ordinary man to run due to financial constraints. Press freedom in Pakistan has seen a great rise in the past decade, although the press freedom has been under military rule as opposed to a democratic rule, the press is still strong in Pakistan according to Khan (2009), but he does say that there have been crackdowns against the media in the military government of General Pervez Musharraf who shut it off completely in November 2007 as he declared emergency rule.

Pakistan has had interrupted exposure to democracy in its 63 years, with not even a single elected government completing its term. Military rule has been common, so there is limited analysis that can be done in case of Pakistan, and limited data is available to form any conclusion about effects of exposure of democracy, although there are suggestions according to the CPI that Pakistan has shown an improvement in corruption from 2004 to 2009, a change from military to democratic rule. At the same time corruption was even less than 2009 in 2002 under a full military rule.

So with a low quality democracy or weak democracy in scalar terms corruption has been able to take root in Pakistan and the judiciary in Pakistan provides an example. The judiciary in Pakistan has generally been under the influence of the executive, and decisions passed in favor of the ruling civil or military government. Pakistan’s supreme court has thrice approved a military coup and declared it legal, and similarly government corruption has been accepted and approved by the judiciary. Iftikhar Chaudry became the Chief Justice of Pakistan in 2005, and according to Hamid Khan (2009) made efforts to strengthen the judiciary. He took a Suo Moto action against the privatization of Pakistan Steel Mills citing irregularities in the process. There were similar important verdicts, and the judiciary was even deposed by General Musharraf, but was reappointed after massive public protest. Today, the higher judiciary in Pakistan is seen as a symbol of hope, and regularly keeps regular checks on the current government. Recently, it curbed an attempt to assign rental power projects in Pakistan citing kickbacks and a corruption of USD 557 million. This shows how institutional strength due to a stronger or higher quality of democracy lowers corruption.

From the second part of the answer, elections in Pakistan have not been fair as mentioned with rigging of polls common as shown by Gillani (2009). In terms of corruption specific to democracy this is one in which generally the ruling party rigs polls to favor itself or other parties, and this is and example of the statistical manipulations that occur. Secondly, in terms of campaign finance, in Pakistan elections are generally contested by people with the resources to contest them, there is no concept of fundraising and the rich elites contest for elections and they have to make the money spent or ‘invested’. The current Prime Minister Yousuf Raza Gillani talked about selling family land to fund politics[interview to Sohail Warraich Aik Din Geo]. Nawaz Sharif, the Prime Minister of Pakistan in 1998 was issued notifications of duty exemption on import of industrial products and raw materials when the imports were for industries owned by the him and the Sharif Family. Pakistan is different as campaign finance stems from personal wealth rather than wealth of donors, but again it is not implausible that donors finance campaigns with agendas in mind.

In terms of vote buying in Pakistan, Khurram Dastagir (Member of National Assembly of Pakistan 2008) argues that vote buying exists in Pakistan at the rural levels. Empirical evidence on the matter is not available, but according to him vote buying in Pakistan constitutes of either of association to a tribe or family(the voter prefers to vote for members of the his tribe or family) or by force from feudal lord, who forces workers on his land to vote for him and this is widespread due to the agricultural nature of Pakistan’s economy and the majority of citizens being employed on farm. Poverty also has a direct impact on the same associations as laborers and farmers who are afraid of being removed from the feudal’s lands. There is little direct monetary transfer.

In economic terms, under-development, rapid modernization and development models can be seen at work in Pakistan. Salaries in Pakistan are very low; civil service salaries in 2008 ranged from about 30 USD for a clerical worker to about 120 USD a month for a grade 18 officer (equivalent to a superintendent of police), and is insufficient for basic necessities. Normal schooling for a child in primary costs about 50 to 60 USD a month. This results in widespread corruption amongst these civil servants. Survey results for 2002 indicated that a remarkable 100 percent of the respondents who had any type of contact with the police over the previous year were confronted with corruption. In terms of rapid development and modernization, the privatization of state owned companies such as the Pakistan Steel Mill gives an example of how corruption takes root in such scenarios. However, as Pakistan has not yet seen political stability, the case cannot support an argument for political stability leading to longer trends of corruption.

In terms of the last part of the answer, the perception of people is open to corruption where most corruption is seen as white or grey. 44% of Pakistanis paid bribes to access electricity by paying a bribe, and 99% had encountered corruption when dealing with tax authorities. However, it is not just a matter of acceptance, as said people feel powerless, and with low salaries across the country corruption is not the priority for most.

Pakistan also gives examples of other reasons for corruption suggested in this essay, which includes Ethnic Polarization (Farhat Haq 1995), the awarding of government contracts in exchange for benefits (u4 Report), and lobbying by foreign power against public opinion and consensus (Pkpolitics Survey Shows 88% of Pakistanis believe that the majority of politicians and top generals in reality facilitate foreign meddling into Pakistan’s internal affairs).

It can be concluded that corruption exists in democracies because of factors that are both present in democracies and factors outside democracy. Corruption persists because of a low quality of democracy which means institutions aren’t able to operate, as they need to curb corruption. It also persists because the democratic process opens avenues for corruption, which if not rigorously monitored, allow exploitation such as vote buying, campaign finance and lobbying. Economic factors also fuel corruption, where underdevelopment, or even rapid development provide avenues for corruption. Lastly the persistence of corruption in democracies is also attributed to the maturity of the civil society, their experience with democracy, their awareness about corruption, and the perceptions towards corruption.

However, it is important to acknowledge that the answer given is not complete or absolutely comprehensive. The problem with analyzing corruption is that it is not obvious, and intended to be hidden. The case does support the theoretical model described in the first half, and does not at points where it is not applicable. This brings another point to light that corruption and its reason for existence also vary from situation to situation or state to state. The answer gives part of the picture that low quality democracy attributes to weak institutional strength leading to corruption; features common in democracies provide additional avenues for corruption; factors outside democracy also provide avenues for corruption- the most important of which is perhaps the way people perceive democracy.

“TO BRING CHANGE PERCEPTIONS HAVE TO CHANGE”

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