Breaking (the New) Iron Triangle: Corruption, Voters, and Politicians
Summary and Keywords
Corruption—the misuse of public office for private or political gain—has a detrimental effect on a variety of economic and political outcomes. Unfortunately, reducing corruption is a difficult task. Persistent differences exist across and even within countries, which unfortunately appear to be quite sticky, which scholars have referred to as the “corruption trap.” This trap can be understood as an equilibrium arising from the inability—and unwillingness—of key stakeholders to coordinate on actions that would reduce corruption. A rich literature has focused on coordination challenges among bureaucrats or between bureaucrats and private actors. We argue, however, for the importance of considering political factors in perpetuating these corruption traps. From this perspective, corruption traps can arise from coordination challenges and breakdowns among and between three key sets of political actors: incumbent politicians, the pool of possible political entrants, and voters. There are challenges faced by each set of actors, their interactions, and ways in which these challenges could potentially be overcome. Three particular processes may help or hinder the ability to break out of corruption traps: (1) collective action and coordination among voters, (2) strategic obstruction by incumbents, and (3) mechanisms of political selection and the availability of non-corrupt challengers.
Corruption—the misuse of public office for private or political gain—has for many years been a subject of great interest to both social scientists and national and international policymakers. Corruption has been shown to exert a detrimental effect on a variety of economic and political outcomes. It has been linked to lower levels of economic growth and development (Gyimah-Brempong, 2002; Mauro, 1995; Rothstein, 2011) and decreased provision of public goods and services (e.g., Del Monte & Papagni, 2001; Gray & Kaufmann, 1998). Furthermore, it depresses levels of political trust (Anderson & Tverdova, 2003; Chanley, Rudolph, & Rahn, 2000; Maier, 2011; Seligson, 2002) and electoral turnout (Chong, De La O, Karlan, & Wantchekon, 2015; Kostadinova, 2009; McCann & Dominguez, 1998; Simpser, 2004). Due to this highly negative influence, corruption has been identified as one of the most important problems of our times, and the fight against it has been at the core of global policy.1
Unfortunately, reduction in corruption is a goal that is difficult to achieve, mainly due to its complex nature. Levels of corruption vary significantly across different contexts, both cross- and subnationally. These differences are observed in both developing and developed countries (Banfield & Banfield, 1958; Glaeser & Saks, 2006; Golden & Picci, 2005; Menes, 2006; Treisman, 2007) and tend to be persistent (Becker, Boeckh, Hainz, & Woessmann, 2016; Damania, Fredriksson, & Mani, 2004). This phenomenon has come to be known as a “corruption trap.” Solving the corruption trap remains a paramount question for policymakers the world over but also represents an opportunity for scholars of political economy to play an important role in rigorously characterizing its nature and, in particular, its causes.
In this article we focus on one plausible conceptualization of corruption traps that has received significant scholarly attention in recent years: the existence of multiple corruption equilibria. While the idea that countries can get stuck in high- or low-corruption equilibria is almost tautologically an explanation for why we see persistence of high and low corruption in different countries, the value of these arguments is that they can illuminate particular strategic complementarities between key actors that make corruption traps difficult to escape.
While previous work on corruption traps has highlighted the possibility of coordination in expectations among a single set of actors—say, bureaucrats or politicians—as a way out of these traps (e.g., Andvig & Moene, 1990; Cadot, 1987; Lui, 1986), our own theoretical work (co-authored with Andrew Little and described in more detail in the following section) on “political corruption traps” suggests that such approaches may be underestimating the perseverance of corruption traps by failing to more fully account for the complex interactions among three key sets of actors: voters, politicians, and aspirants to politics (Klašnja, Little, & Tucker, 2017). A useful analogy here is to think of an existence of a marketplace for anti-corruption policies: low-corruption equilibria are only likely to be played if there are both elites (current politicians and political entrants) willing to supply such policies and voters who demand them.
Our model suggests that all three sets of actors—among themselves and in interactions with other actors—face coordination challenges that may strongly favor a high-corruption status quo, even when there is a clear incentive for society as a whole to move to a low-corruption equilibrium. The purpose of this article is therefore both to review what we know about these coordination challenges and to survey insights from related literatures useful for addressing these challenges in the context of political corruption traps. Thus, we begin in the section “Political Corruption Traps” by laying out our model of political corruption traps and characterizing the nature of these coordination challenges among voters and political elites. With these challenges in hand, we then survey the extant efforts to better understand how these challenges might—or might not—be overcome. The section “Voter Coordination to Enhance Accountability” begins with voters and reviews the literature on the challenges voters face in coordinating to ensure accountability from elected representatives. One insight from this literature is the crucial role played by information dissemination and transmission in facilitating voter coordination, so we focus on this topic in particular in the subsection “Provision of Information and Voter Coordination.” The section “The Supply Side” turns to the supply-side dimension to escaping political corruption traps: the evidence on the strategic efforts by corrupt incumbents to preserve the corrupt status quo (subsection “Strategic Behavior of Corrupt Incumbents”), and the factors that influence the availability of clean alternatives (i.e., non-corrupt politicians willing to run for office; subsection “Political Selection”). We conclude with a brief discussion of what we believe to be the value of thinking about corruption from this vantage point—that is, as a discussion of strategic complementarities both among and across voters and politicians—as a means of better understanding the essentially political nature of corruption traps, as well as opportunities for future research that follow from this approach.
Political Corruption Traps
In this section we summarize a theoretical model of political corruption traps based on strategic complementarities in expectations of voters, incumbent politicians, and potential entrants to politics that we have formalized and presented in much greater detail elsewhere (Klašnja et al., 2017). The key takeaway from the model is that if we want to take seriously the political dimensions of corruption traps, we need to understand the coordination challenges faced by all three sets of actors simultaneously.
The model illustrates how rational decisions made by all of these actors, both individually and collectively, can lead to political corruption traps. First, we assume that politicians vary based on their predisposition to engage in corrupt behavior (as well as ability) and choose a level of corrupt activity where the benefits from doing so are a function of the degree to which other politicians choose to engage in similarly corrupt behavior. In our analysis, the relative value of holding office for a politician is higher for those predisposed to corruption, and, in line with the other work on multiple equilibria of corruption (Andvig & Moene, 1990; Cadot, 1987; Lui, 1986), the size of this “politician corruption differential” is increasing in the level of corruption. This implies that a given politician benefits from more corrupt behavior as politics more generally becomes more corrupt. We subsequently show (drawing on the analysis by Caselli & Morelli, 2004) a similar complementarity between potential entrants, where those predisposed to corruption are more apt to run when they expect others to be corrupt as well.
Furthermore, voters face similar challenges of coordinating expectations and actions. It is possible that if voters in one region of the country replace a corrupt politician with a clean one, benefits from corrupt practices may increase for voters in other regions. This follows if one thinks of corruption in terms of procuring a set of goods that is split between the representative and her constituents. If the sum total of these goods across all districts is fixed, then even if the vast majority of all benefits are going to the representative, a district represented by a corrupt representative could be better off than a district with a clean representative if enough other representatives are corrupt. In such cases, in order for it to be rational for voters in one constituency to replace a corrupt politician with a clean one, those voters must expect voters in other constituencies to do the same. Therefore the coordination demands among voters—even independent of the question of whether clean politicians will run in the first place—can be considerable!2
Importantly, we find that the incentives of the various actors—incumbent politicians, potential entrants, and voters—interact with one another in ways that can exacerbate corruption traps and make them even harder to escape. For example, if behaving in a corrupt manner is less likely to lead to voter punishment, then candidates predisposed to corruption will be more apt to run for office. If voters are less apt to punish corrupt behavior, then politicians will be freer to engage in corruption. And if voters think all entrants will be corrupt, they will have no incentive to vote based on corruption. Thus escaping a corruption trap becomes exceedingly difficult because it depends not only on the behavior of one fixed set of agents but also on interactions between them and the feedback loops from such interactions.
The analysis highlights several points that are essential to consider when analyzing political corruption traps, which we focus on in the rest of this article. First, collective action and coordination between voters is key. Even when individual voters are willing to replace corrupt incumbents, if they expect corrupt incumbents to be retained by others (e.g., in other districts), they may choose to retain the status quo. This is particularly likely when they receive side payments from corrupt activities that could be potentially captured by other voters if coordination is missing. Therefore if we want to understand the possibility of escaping political corruption traps, we need to investigate factors that may make collective action more likely. Second, we also need to pay close attention to the “supply side,” that is, the pool of potential candidates for office, and particularly the availability of clean alternatives. Collective action problems cannot be solved if there is a lack of non-corrupt entrants who could replace corrupt incumbents. It is hence necessary to study the motivation of entrants to run for an office as well as obstacles that honest candidates may face, possibly resulting from strategic actions of corrupt incumbents. We turn to the extant research on these topics in the following two sections.
Voter Coordination to Enhance Accountability
Our theoretical framework outlined above suggests that coordination among voters is crucial. At the basic level, voters have to agree that corruption is an important factor in their voting decisions. If even in the face of corruption the majority of voters privilege some other aspects of politician performance, policy positions, or character, corrupt politicians will find it easier to win reelection—and consequently have greater incentives to engage in corruption in the first place.
Scholars have examined a number of context-specific and behavioral factors that may make this type of coordination around corruption as an important driver of vote choice more difficult. In developing countries, where economic growth is essential in helping many escape poverty, voters may forgive corrupt incumbents so long as they improve the state of the economy (Klašnja & Tucker, 2013; Zechmeister & Zizumbo-Colunga, 2013). In contexts where public goods provision is lacking, voters may care more about constituency service and “getting things done” than about corruption or other forms of venality (Chauchard, Klašnja, & Harish, 2017; Vaishnav, 2017).
In polarized environments, voters may value more that a politician belong to their preferred group than their record on corruption. For example, unless there is an ideologically proximate clean alternative available, it may be difficult for voters to agree to focus mainly on corruption rather than candidates’ ideological promises (Anduiza, Gallego, & Muñoz, 2013; De Geus, De Vries, & Solaz, 2017; Peters, Rundquist, & Strom, 1977). For similar reasons, in ethnically divided societies, ethnicity may trump honesty (Banerjee & Pande, 2010).3 Others have further identified how electoral institutions affect this type of coordination challenge. For example, Myerson (1993) highlights that in majoritarian systems, the ideological cost of voting out corrupt co-partisan politicians is higher than in proportional representation systems, making coordination around corruption as a key aspect of voting in the former systems less likely (see also Däubler & Rudolph, 2016).
Even in the best of circumstances, when the majority of the electorate agrees to act electorally against corruption, what may be required is persistent coordination, as it may take several rounds to oust an entrenched corrupt elite. Existing theoretical and empirical research, however, does not lend too much cause for optimism. Voters seem to be myopic and with relatively short collective memories, focusing disproportionately on events closer to the election (Achen & Bartels, 2004; Healy & Malhotra, 2009). A corruption scandal early in a government’s term may be forgotten by the time of the election. In new democracies, where much is unknown about the quality of the pool of political candidates, a few initial “bad apples,” even if unrepresentative of the entire political elite, may discourage voters from exercising electoral sanctioning and seeking better governance (Meirowitz & Tucker, 2013; Svolik, 2013).
Moreover, certain institutional arrangements may require more voter patience than others. For example, it is possible that the wholesale replacement of the corrupt political elite in Italy, following the “Clean Hands” investigations of the early 1990s, would have been more difficult had all of the representatives in the two chambers of the Italian parliament been up for election not in one snap election in 1994 but in a staggered fashion, as in many other bicameral systems. On the other hand, when there are sequential elections over a cycle (such as local elections followed by national elections, or national elections for parliament followed by those for president), early displays of discontent about corruption may help voters coordinate more effectively against corrupt politicians in later elections and signal more clearly their future intentions (Meirowitz & Tucker, 2007). These questions are yet to be explored in the context of voter coordination and persistence in addressing corruption.
Provision of Information and Voter Coordination
Arguably, one of the most frequent challenges to electoral sanctioning of corrupt politicians is the scarcity of information about corruption. A vibrant and varied literature has examined the role of information dissemination on political accountability. Broadly, information provision may improve accountability through two channels: a direct channel whereby dissemination informs the individual and a societal channel that informs individuals what others may have learned (Arias, 2017). While the two channels are related, and we review the evidence for both channels, we pay special attention to the smaller and emerging literature explicitly examining the second channel, which should more directly affect prospects for voter coordination.
Provision of information about politicians’ malfeasance can directly affect individuals by either informing them about previously unknown corrupt behavior or, alternatively, by raising the salience of corruption in voters’ minds (Klašnja, Tucker, & Deegan-Krause, 2016). Scholars have shown the effectiveness of media revelations of corrupt practices in limiting the electoral success of corrupt incumbents in a variety of democracies, developed and developing (Besley & Prat, 2006; Brunetti & Weder, 2003; Chang, Golden, & Hill, 2010; Ferraz & Finan, 2008; Larreguy, Marshall, & Snyder, 2017; Snyder & Strömberg, 2010; Strömberg, 2004). Others have shown that means other than traditional media can also impact political participation and behavior, including dissemination of incumbent performance scorecards and leaflets (Arias, Larrequy, Marshall, & Querubin, 2017a; Banerjee, Kumar, Pande, & Su, 2011; Chong et al., 2015; Humphreys & Weinstein, 2012), local information campaigns (Reinikka & Svensson, 2005), innovative personalized text-messaging platforms (Grossman et al., 2017), smart-phone monitoring technologies (Bhatti et al., n.d.), and potentially social media (Enikolopov, Petrova, & Sonin, 2016).4
These direct benefits of public revelation of information may, however, accrue only if the information is precise and unbiased. Media may be captured or intimidated by politicians, thus being less likely to out corrupt deals, increasing the moral hazard among them (Besley & Prat, 2006; Di Tella & Franceschelli, 2011; Stanig, 2015). Media independence is therefore important but it is by no means a panacea. Independent but partisan media have been shown to cover corruption cases involving the opposition party more frequently and more closely than cases involving their preferred party’s politicians (Puglisi & Snyder, 2011).
Capture and media bias can be lessened by competition among media (Galvis, Snyder, & Song, 2016; Gentzkow, Shapiro, & Sinkinson, 2011), particularly if some media specialize in providing locally relevant information (Larreguy et al., 2017; Snyder & Strömberg, 2010). However, media competition and proliferation of news sources need not always be beneficial. With rapid changes in patterns of news consumption by the public, such as social media being increasingly used as the main source of news, the scope for the spread of misinformation, biased information, and even outright “fake news” may be widening at the same time as it is increasingly more challenging to differentiate such information from credible news (Allcott & Gentzkow, 2017; Bakshy, Solomon, & Adamic, 2015; Gottfried & Shearer, 2016).
Even if dissemination of information about corruption informs voters privately or raises the salience of corruption in their minds, for it to be an effective tool of sanctioning corrupt politicians, it needs to engender an organized response by the electorate—that is, it needs to facilitate coordination. This process is not necessarily automatic, even when information dissemination leads to the creation of common knowledge (i.e., a voter is not only privately informed of corruption but also knows that others know a politician is corrupt, who in turn know that others know that they know, and so on). Going from common knowledge to coordination may be particularly challenging in contexts where collective action problems among voters are prominent, such as where side payments from corruption or clientelism are pervasive (Chang & Kerr, 2017; de Sousa & Moriconi, 2013; Gottlieb, 2016; Manzetti & Wilson, 2007) or when voters hold especially grim priors, so that even quite negative information is not surprising enough to engender voters’ response (Arias et al., 2017a).
Scholars have therefore recently begun examining how information provision may explicitly affect voter coordination. Based on a nine-country survey experiment, De Vries and Solaz (2017) find that providing information about incumbent malfeasance is only effective in increasing the importance of corruption in intended vote when accompanied by a positive coordination signal—that others are willing to act on corruption. Using survey experiments in laboratory settings in Australia, Singapore, and the United States, Yap (2017) similarly demonstrates the importance of coordination signals, as well as clearly identifiable rewards from collective action. Adida, Gottlieb, Kramon, and McClendon (2017) demonstrate that in a clientelistic setting in Benin, where targeted benefits are valued more than programmatic promises, voters are only willing to reward good policy performance when performance information is accompanied by a signal that the information was widely disseminated to others. Scholars have also reported similar benefits of mobilizing signals for issues other than corruption, such as reducing electoral violence (Collier & Vicente, 2014) and improving the delivery of health services (Nyqvist, de Walque, & Svensson, 2017). Arias, Balán, Larreguy, Marshall, and Querubín (2017b) find that information about incumbent corruption can foster voter coordination in favor of cleaner challengers in Mexico (in contrast to the results of a similar study by Chong et al., 2015) when voters are connected into dense networks, suggesting that networks are an important facilitator of coordination.
The Supply Side
In the section “Voter Coordination to Enhance Accountability,” we examined the importance of voter coordination in facilitating political accountability. As our model of corruption traps indicates, such coordination (and voters’ behavior more generally) is inextricably linked with and depends on the behavior of politicians in office and potential entrants into politics. Therefore, we also need to examine the behavior and motivations of the “supply side.” Here, we review the extant work focusing on two broad aspects of the supply side. First, we examine the strategic attempts of corrupt incumbents to perpetuate themselves in office and hinder efforts to sanction corruption. Second, we review the more general issue of political selection—the motivations to run for office, the characteristics of political entrants, and factors affecting political selection. Needless to say, the two aspects are closely related: strategic behavior of (corrupt) incumbents influences political selection, and vice versa.
Strategic Behavior of Corrupt Incumbents
Before we begin our review of the literature focusing on these aspects of the supply side of political corruption traps, it is useful to distinguish political corruption from personal corruption. While corruption is difficult to define parsimoniously (e.g., Heidenheimer & Johnston, 1970), political corruption is generally understood as the abuse of public office to advance a political goal. By contrast, personal corruption—arguably more commonly invoked when discussing corruption—entails misusing public office for one’s own private benefit or the benefit of those close to the officeholder. The two types of corruption very often go hand in hand, of course, as the distinction between personal and political interests is blurry.5 Nevertheless, the literature focusing on the strategic behavior of corrupt politicians often examines political rather than personal corruption. Accordingly, we mainly focus on political corruption in this part of the review.
Political corruption predominantly manifests itself in illicit financing of political activity—parties’ operating expenses, organizational management, and political campaigns—in order to gain advantage over (or keep up with) political opponents. Some of the largest corruption scandals making headlines, such as Operation Car Wash, which engulfed all major parties in Brazil, or the Clean Hands scandal that brought down almost the entire political elite in Italy, involved elaborate schemes to illegally obtain political financing. These schemes most frequently involve reciprocating illicit funds with preferential treatment of politically connected firms.6 Such firms receive unfair market advantage, as they are more likely to benefit from procurement contracts, enjoy more favorable regulatory treatment, and be bailed out with public funds (Faccio, McConnell, & Masulis, 2006).7 The literature has made considerable progress in documenting unusual economic returns of politically connected firms, from Nazi Germany to modern-day Colombia (Acemoglu, Bautista, Querubin, & Robinson, 2008; Cingano & Pinotti, 2013; Faccio, 2006; Ferguson & Voth, 2008; Fisman, 2001; Johnson & Mitton, 2003; Khwaja & Mian, 2005; Knight, 2006). More recently, studies have also utilized massive amounts of publicly available procurement data to further highlight the varied ways in which such corruption exchanges take place, such as bidding rings, stifling of competition, and the manipulation of eligibility criteria for public procurement contracting (Charron, Dahlström, Fazekas, & Lapuente, 2017; Coviello & Gagliarducci, 2017; Klašnja, 2015).
Opportunities and pressures for illicit funding vary contextually, however. Besides the obvious constraints imposed by the (usually endogenously designed) party financing regulations, opportunities for illegal political financing also often arise from large revenue windfalls, be it from privatization of state-owned enterprises (Shleifer & Treisman, 2000), natural resource booms (Bhavnani & Lupu, 2017), or influx of foreign aid (Alesina & Weder, 2002; Svensson, 2000). On the other hand, pressures for illicit financing often increase with electoral competitiveness (Nyblade & Reed, 2008), and in electoral systems which encourage high levels of intraparty competition, such as open-list proportional representation, producing expensive campaigns (Chang & Golden, 2007; Gingerich, 2013).
Obtaining illicit financing is but one step in corrupt incumbents’ attempts to gain or maintain advantage over their political rivals. To translate such illicit resources into electoral success, corrupt politicians often manipulate the electoral process in two broad ways: election fraud and clientelistic exchanges with voters (i.e., the provision of targeted benefits to voters in exchange for their vote).8 Rather than review the large literatures on election fraud and clientelism here, we point the reader to excellent reviews by Lehoucq (2003), Birch (2009), and Mares and Young (2016), who discuss the diversity of fraudulent tactics and clientelistic strategies, the many actors working as brokers and operatives between politicians and voters, and the differences in positive and negative clientelistic inducements.
While an observation that corrupt politicians are strategic is hardly a surprise, it is worth highlighting several recent studies documenting politicians’ real-time adaptation to researchers’ interventions intended to improve electoral accountability. There is arguably no more direct evidence of (corrupt) politicians’ strategic responses than this type of evidence. In the Philippines, Cruz, Keefer, and Labonne (2017) implemented a field experiment just prior to municipal elections, providing voters with information about the proposed allocations of major spending program and contrasting them with mayoral candidate promises. While in many constituencies the newly informed voters were often disappointed by the revealed incumbent performance, the incumbents responded by increasing vote-buying in real time, offsetting on average the informational effects of the intervention.9 In Mexico, also before municipal elections, Arias et al. (2017a) randomly disseminated to households in electoral precincts results of municipal audit reports indicating the degree of malfeasance in infrastructure projects. The authors find that voters in treated precincts were more likely to report that parties incorporated malfeasance reports into their campaigns—particularly where reports uncovered higher levels of corruption. Asunka, Brierley, Golden, Kramon, and Ofosu (2017) randomly distributed domestic election observers to polling stations during the 2012 elections in Ghana to evaluate their effect on electoral fraud and election-related violence. While on average observers reduced fraud and violence at monitored polling stations, parties and their activists intent on performing fraud also adjusted in real time, relocating fraud to neighboring polling stations.
Corruption traps are especially pernicious when widespread corruption mainly attracts entrants inclined to behave in ways described in the previous section, while those who are unwilling to play by such rules steer away from politics. To understand the degree to which corruption can be overcome through selection—particularly when electoral control of incumbents is difficult for strategic reasons discussed above—it is hence important to study motives and personal characteristics of political entrants and factors that may encourage honest candidates to stand for political office. In this section we review some of the existing work on these issues.10
One way in which corrupt politicians negatively affect selection is when they seek to perpetuate their influence through dynastic and nepotistic ties. Dynastic politicians are frequent in many polities (Camp, 1982; Chandra, 2016). They usually enjoy substantial electoral advantages over non-dynastic candidates (Cruz, Labonne, & Querubín, 2017; Dal Bó, Dal Bó, & Snyder, 2009; Feinstein, 2010; Querubín, 2016; Smith, 2018), despite sometimes being of lower quality (Geys, 2015) and potentially providing little benefit to voter welfare (Braganca, Ferraz, & Rios, 2015; Labonne, Parsa, & Querubin, 2015).
Corruption is often exemplified by extensive nepotistic and favoritism practices. Recent studies have creatively taken advantage of administrative and other publicly available data to document the extent of such practices and their monetary and other consequences. For example, Labonne and Fafchamps (2017) use administrative data on 20 million individuals in the Philippines to show that relatives of current office-holders are more likely to be employed in better-paying occupations. Gagliarducci and Manacorda (2016) and Szakonyi (2017) find similar patterns in Italy and Russia, respectively, while Fisman, Shi, and Wang (2017) and Jia, Kudamatsu, and Seim (2015) document the prominence of social and geographical ties for selection and promotion in China. Even in low-corruption Denmark, Amore, Bennedsen, and Nielsen (2016) argue that greater political resources—measured by an exogenously enlarged municipality budget—may create sizable benefits for politicians’ offspring.11
The broader question is who may be drawn to political office and what their primary motivations are in contexts characterized by more or less rent-seeking. Several recent studies innovatively approach these important questions experimentally, and intriguingly, the cumulative findings—though limited in scope—highlight stark differences between high- and low-corruption countries. In experiments in India, Hanna and Wang (2017) and Banerjee, Baul, and Rosenblat (2015) use simple behavioral games to gauge honesty among university students and subsequently examine their desired career paths—in the public or the private sector. Both studies find that dishonest subjects are more inclined to want to enter public service than their honest counterparts. By contrast, in a similarly designed study in Denmark, Barfort, Harmon, Hjorth, and Leth Olsen (2015) find that dishonest students are less inclined to enter public service.12
A related literature investigates motives for running for office of “businessmen candidates,” prominent in some countries and largely absent in others. On the one hand, the concern is that business candidates may be disproportionately guided by private business concerns and particularly prone to serving narrow special interests while in office. On the other hand, business persons may require less or no illicit funds to run campaigns and possess enough wealth to refrain from seeking private rents. But if so, the puzzle is why such candidates would run in the first place—especially if they can lobby the policymakers for their interests. Gehlbach, Sonin, and Zhuravskaya (2010) examine this puzzle in Russia and argue that when institutions that hold elected officials accountable to voters are strong, business persons receive little preferential treatment and are disinclined to run for office. When such institutions are weak, however, business people can subvert policy irrespective of whether they hold office but may run for office to avoid the cost of lobbying elected officials, as well as to potentially secure rents from lobbying by others. Szakonyi (2016a) further argues that business people run when competing firms cannot coordinate on collectively staying out of politics and lobbying from the sidelines. He finds that these coordination challenges are greater when firm competition is fierce and when political parties are weak and thus more easily captured by special interests.
Accounts of political selection are likely incomplete without considering the role of political parties. Since political parties are longer-lived than individual candidates, they should in principle be incentivized to develop reputations for good governance and programmatic platforms rather than negative selection or reliance on clientelistic or fraudulent strategies (Alesina & Spear, 1988). In practice, however, parties are often vehicles for corrupt political selection in two stylized opposite forms. On the one hand, historically and in the present day, there are political machines—well-oiled and highly disciplined non-programmatic party organizations where corruption is the currency of advancement and party screening is rigorous (Glaeser & Goldin, 2006; Menes, 2006; Stokes, 2007). On the other end of the spectrum are organizationally weak parties that are unable to discipline their members. Such parties are usually found in volatile party systems where party switching is endemic. Consequently, party control over members’ career concerns is weak, which may provide corrupt entrants with more leverage, even while being potentially electorally costly for parties (Klašnja & Titiunik, 2017).
Political machines are particularly prominent in systems that give party leaders centralized power, such as closed-list proportional representation (Gingerich, 2013), and where rents are stable and sufficient to ensure electoral domination, such as polities with a higher share of the poor in the electorate (Stokes, 2007). Conversely, in electoral systems encouraging personalistic politics, such as open-list proportional representation and majoritarian systems, parties must frequently prioritize electoral appeal, such as charisma or other forms of “valence” (Carey & Shugart, 1995), which may come at a cost of tolerating corruption. Because of credible commitment problems, parties may also be less able to discipline their members when time horizons are short (Klašnja & Titiunik, 2017), the value of holding key political offices is particularly high (Hollyer, Klašnja, & Titiunik, 2017), or when voters strongly favor one ideological camp over another (Gingerich, 2014).
In addition to these structural, institutional, and political factors that may affect political selection, scholars have also examined the role of two individual-level motivations in decisions to run for office and/or public sector employment: material and prosocial motivations. The dominant questions about material motivations have been whether higher public sector wages may help attract better-quality candidates—including candidates with greater integrity—and induce greater effort among those already occupying office. The evidence is mixed. Some studies argue for and find (some) positive effects of increasing wages on the quality of the candidate pool and politicians’ or bureaucrats’ efforts (Besley, 2004; Dal Bó, Finan, & Rossi, 2013; Ferraz & Finan, 2008; Gagliarducci & Nannicini, 2013; Kotakorpi & Poutvaara, 2011) and on the reduction in corruption (Klašnja, 2015; Van Rijckeghem & Weder, 2001). Others, however, either find no effects (Keane & Merlo, 2010) or argue that increasing wages may attract lower-quality candidates with worse outside options and lower opportunity costs (Caselli & Morelli, 2004; Messner & Polborn, 2004).
“Good” candidates may be more driven to run for office because of prosocial motivations than material ones, such as altruism (Benabou & Tirole, 2006), commitments to a prosocial goal (Callen, Gulzar, Hasanain, & Khan, 2013; Handy & Katz, 1998), or because of intrinsic utility from helping others (Broockman, 2013). There is some empirical evidence that increasing the salience of prosocial motivations may be effective in motivating potential entrants to run (Gulzar & Khan, 2017; Kolstad & Lindkvist, 2012; Serneels, Serra, & Barr, 2011). However, these questions remain understudied compared to the role of material incentives.13
The story we have painted in the preceding sections is not a pretty one. While the existence of “corruption traps” has been well understood in the literature for some time now—as well as intuitively grasped by policymakers in the field—the first wave of research in this regard focused on coordinating expectations between a single set of highly relevant actors, primarily bureaucrats, as a solution for getting out of these traps. We have instead suggested the importance of taking the political nature of corruption traps more seriously and, in doing so, have illustrated a whole new set of challenges in the way of high-corruption countries seeking to exit these traps. On the positive side, recent theoretical work associated with games characterized by multiple equilibria and a wave of new—particularly experimental—empirical studies are providing much needed insights into better understanding the problem and, hopefully down the road, crafting potentially effective solutions.
We see a number of directions in which additional research would be valuable. First, researchers have only recently begun theorizing about and examining empirically the role of coordination in enhancing political accountability. Recent contributions reviewed above suggest that providing coordination signals—informing voters that others may be willing to participate in collective action—may be more potent in focusing voters’ minds on corruption than just providing information about incumbent transgressions. It would be useful to study conditions under which such coordination signals are particularly effective. For example, what acts as a (more) credible coordination signal: a mobilization campaign by a non-partisan actor or the one by an opposition party? If the latter, what types of parties may foster coordination most effectively? A number of populist anti-corruption and anti-establishment parties have recently effectively mobilized disaffected voters, like the Pirate Party in Iceland, the Five Star Movement in Italy, and the En Marche movement in France. Yet many such parties in the past have had short half-lives and limited influence, particularly once they entered government (Bågenholm, 2013; see also Hanley & Sikk, 2016). What explains the frequent ephemeral nature of such parties, and how may political entrepreneurs sustain voter coordination against corruption?
Another potentially interesting direction for research on coordination and responses to corruption concerns the role of networks. Much progress has been made in understanding the networks of beneficiaries of corruption—networks of patronage and nepotistic hires, politically connected firms, and recipients of clientelistic goods. These networks are of course exclusionary, pitting these “insiders” against often fragmented and demobilized “outsiders” (Bauhr & Charron, 2017). How best can these outsiders be networked and mobilized? For example, to what extent can new technologies such as social media help with coordination within such weakly organized and disparate groups? Recent research on social media as a facilitator of protest suggests one such direction for study. For example, Larson et al. (n.d.) use data from 130 million Twitter users to show that participants in a protest of the Charlie Hebdo shooting in Paris were more likely to be embedded in denser online networks than a similar comparison group of Twitter users who did not attend the protest. Perhaps even more closely linked to the question of sharing information about corruption, Barberá et al. (2015) demonstrate that even those at the very peripheral part of information-sharing networks during protests (e.g., people who only share one message on Twitter about the protest) can cumulatively play an outsized role in extending the reach of that information. Research extending these types of studies into the domain of anti-corruption campaigns—or efforts to encourage clean politicians to run for office—could prove valuable.
We also believe more research is warranted on the characteristics of potential or actual entrants into politics and the public sector in contexts with different levels of corruption. As discussed above, several recent studies have intriguingly suggested that more honest individuals are less likely to desire to enter the public sector in a high-corruption environment in India (Banerjee et al., 2015; Hanna & Wang, 2017) but more likely to do so in a low-corruption environment in Denmark (Barfort et al., 2015). Do similar patterns hold among a larger set of countries along the continuum of corruption prevalence?14 If so, what aspects of the public sector (relative to the private sector) and individuals’ human capital expectations may encourage such positive selection in low-corruption environments, and which of those aspects—if any—may be transferable to high-corruption environments?
We believe the field could benefit from more study of the non-monetary incentives that may encourage good candidates to run, particularly in high-corruption environments. As discussed above, there is reasonable agreement that higher public sector salaries may attract better-quality entrants. Nevertheless, this strategy may simply be too costly for cash-strapped governments in many developing countries (Besley & McLaren, 1993; Van Rijckeghem & Weder, 2001) or may induce adverse selection by attracting candidates overly motivated by material motives compared to prosocial ones (Matozzi & Merlo, 2008). It would be useful to better understand to what extent other public sector job attributes may be attractive, such as security, whistleblower protections, reputation, possibility of human capital accumulation, impact on public good beneficiaries, etc. (see Dal Bó et al., 2013, for steps in this direction).
Finally, we believe that more work should be done to examine how party organizations and party systems affect corruption. There is a rich body of work on institutional causes of corruption (for a thorough review, see Golden & Mahdavi, 2015), but most of this literature treats political parties as a black box devoid of any independent agency. Earlier work has shown how bureaucratic corruption is often a product of deliberate choices by politicians, rather than their inability to monitor and rein in bureaucrats (e.g., Golden, 2003). There is little reason to doubt that parties often similarly choose corrupt and/or clientelistic electoral strategies endogenously. Scholars should therefore devote more attention to conditions under which parties find it advantageous—or at least not costly—to promote candidates prone to corruption (for work in this direction, see Aidt, Golden, & Tiwari, 2015; Hollyer et al., 2017; Vaishnav, 2017).
The long-run persistence of countries (and regions within countries) as either “high-corruption” or “low-corruption” polities makes it a natural fit for theories based around the presence of multiple equilibria. And certainly corruption must fall into those classes of games where the net welfare benefits of choosing one equilibrium over the other are abundantly clear: from behind the veil of ignorance, it is impossible to imagine anyone choosing a high-corruption state for their society. And yet corruption remains rampant in the world, despite decades of policy innovations aimed at reducing it. Hopefully, there is a role here for much of the new scholarship described in this article to play. For no matter how disappointing it may be to realize that the challenges of overcoming corruption traps may be even more serious than originally thought, better characterization of these challenges must inevitably be a first step toward overcoming them.
We thank Catherine De Vries and an anonymous reviewer for useful comments and suggestions.
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(1.) World Bank Group President Jim Yong Kim declared corruption “public enemy number one” in developing countries (2013).
(2.) The coordination challenges may also arise within a district, not just across districts, as highlighted by our model. Voters within a district may not vote against a corrupt incumbent if they suspect voters will, out of concerns that doing so would inhibit their access to clientelistic goods that would benefit other voters (Kurer, 2001).
(4.) There have been no studies to date examining the impact of dissemination of information about corruption through social media on individual voter behavior and coordination between voters (Enikopolov, Petrova, and Sonin, 2016, come closest but examine the reactions of shareholders of public utilities while assuming that at least some citizens react negatively). Nevertheless, recent studies that investigate protest behavior in non-democratic countries suggest that activities on social media mobilize protesters in response to various political issues (Acemoglu, Hassan, & Tahoun, 2015; Barberá et al., 2015; Enikolopov, Makarin, & Petrova, 2016; Metzger & Tucker, 2017; Larson, Nagler, Ronen, & Tucker, n.d.; Lotan et al., 2011; Sabadello, 2011).
(5.) The regimes of Mohammed Suharto, Ferdinand Marcos, and Mobutu Sese Seko are prominent examples of organized systems of political corruption that also famously provided for large illicit private gains for their leaders. On the other hand, there are numerous examples of honest politicians presiding over systems rife with corruption, such as President Harry Truman, a loyal member of the corrupt Pendergast machine in Kansas City, or prime minister of India Manmohan Singh.
(6.) In addition to offering preferential contracts to politically connected firms in exchange for funds, other common ways of illicit party financing include state-owned enterprises and agencies as well as local governments contributing directly to party coffers (see, e.g., Grzymala-Busse, 2007).
(7.) This type of political corruption often engenders personal corruption as well through direct bribes to individuals, largely responsible for politicians’ illicit wealth accumulation (Fisman, Schulz, & Vig, 2014; Klašnja, 2015; Querubin & Snyder, 2013), as well as lucrative positions in the private sector following a career in politics (Eggers & Hainmueller, 2009).
(8.) Electoral fraud and clientelism are not exercised only by corrupt politicians. However, both fraud and clientelism often go together with corruption (Callen & Long, 2015; De La O, 2015), not least because corrupt politicians usually stand to lose more (rents, possibility of jail time) from electoral defeat than their non-corrupt counterparts (Klašnja, Little, & Tucker, 2017).
(11.) Interestingly, while Folke, Persson, and Rickner (2016) also find sizable income gains for children of politicians in Sweden (but fail to find similar returns to politicians’ siblings), they conclude that these income gains are unlikely to be illegitimate, but rather reflect children’s earlier entrance into the labor force, postponing further education.
(12.) In Russia, however, Gans-Morse, Kalgin, Klimenko, and Yakovlev (2017) find that university students who prefer a career in the public sector are characterized by greater altruism and are less willing to cheat.