Research on Corruption

1 1 Research on CorruptionA policy oriented surveyJens Chr. Andvig and Odd-Helge FjeldstadInge AmundsenTone SissenerTina S reideCommissioned by NORADF inal report, December 2000 Chr. Michelsen Institute (CMI) & Norwegian Institute of International Affairs (NUPI)2 PrefaceThis survey, Research on Corruption . A Policy Oriented Survey , is an overview ofcontemporary Corruption Research . The main objective is to present Research that isrelevant for foreign aid policies to developing countries. The survey is commissionedby the Norwegian Agency for Development Co-operation, NORAD. An earlier draftversion of the study was disseminated to the participants of the workshop Corruption : Critical Assessments of Contemporary Research , held in Oslo, 19-20 October survey may be somewhat biased towards economic approaches, reflecting the factthat the writing and editing has primarily been done by the economists Odd-HelgeFjeldstad (CMI) and Jens Chr.

2 Andvig (NUPI). In addition, Tina S reide (CMI), alsoan economist, has contributed to chapter 3, However, Inge Amundsen (politicalscientist, CMI) has written chapter 4 and made several contributions to chapters 2 and10. Furthermore, Tone Sissener (CMI), a social anthropologist, has written chapter , hopefully, at least some of the approaches from these two other social sciencedisciplines are readers will note, despite the broad approach of the paper and its substantiallength, several important themes are not dealt with. While we have discussed typicalsituations that give rise to Corruption in different parts of public organisations, Research focusing on specific sectors such as the police, the judiciary and internationalrelations is not dealt with explicitly in the survey.

3 The same applies to literature on theorganisation of corrupt transactions: when and why middlemen arises, what kind ofred tape may endogenously arise and so on. Recent Research on these issues has beenrather thin . Furthermore, this theme opens up for many questions that require amuch more in depth approach than what can be achieved through a priority is that we have focused on recent academic Research . Thus, while asurvey of the output of public commissions dealing with Corruption would be useful,this is not covered by this study. Moreover, to make the survey accessible for a3multidisciplinary audience, the most abstract and technical parts of the literature arepresented in a non-technical way, emphasising the intuition behind the spite of its limitations we hope this survey will be considered useful and used by researchers, students, development practitioners and aid , December 20004 Research on CorruptionA policy oriented SurveyTable of BATTERY OF OF VERSUS BUREAUCRATIC DEEP STRUCTURES OF order and organisations and and the predatory state in from the deep structure of EQUILIBRIUM MODELS OF EMPIRICAL FOUNDATION OF RECENT Research ON OBSERVATIONAL BASIS OF Corruption MEASURED: THE CONSTRUCTION OF Corruption Corruption Perception Index (CPI).

4 Bribe Payers Index (BPI).. level of Corruption and the meaning of an index rankings based on conditional ATTEMPTS TO MEASURE Corruption MORE ACTION Research SCIENCE PERSPECTIVES ON SYSTEMS AND THE CAUSES OF AND INFORMAL AND OF Corruption ON PERSPECTIVES ON S RATIONAL-LEGAL BUREAUCRACY Corruption : THE CONVENTIONAL DISTINCTION IN SOCIAL METHODS AND EXAMPLES OF ANTHROPOLOGICAL FIELD WORK STUDIES ON LOGICS INFORMING EVERYDAY logics of logics of solidarity PERSPECTIVES AND QUANTITATIVE ANALYSES OF THE CAUSESOF AND LEVELS OF ECONOMIC RIGHTS AND AND SECTOR SALARIES AND RECRUITMENT OPENNESS AND ASSESSMENT OF REGRESSION ANALYSIS BASED ON SUBJECTIVE PERSPECTIVES AND QUANTITATIVE ANALYSIS OF THECONSEQUENCES OF AND BENEFITS OF AND PUBLIC SECTOR AND THE RATE OF AND ECONOMIC AND PUBLIC AND INTERNATIONAL AND THE ABILITY OF OPEN ECONOMY AND THE SIZE OF THE UNDERGROUND ANALYSIS OF CAUSES AND CURES OF BUREAUCRACY-MODELS.

5 PRINCIPAL-AGENT and recruitment and sector and political Corruption MAY CORRUPT - MULTIPLE EQUILIBRIUM LEVEL VERSUS LOW LEVEL in international business Corruption in international business PROCUREMENT AND IN QUEUING IMPORTANCE OF OF ANTI- Corruption WORLD BANK S BRIEF EVALUATION OF THE WORLD BANK S POLICY AHEAD FOR Research ON IntroductionCorruption has recently become a major issue in foreign aid policies. However,behind the screens it has always been there, referred to as the c-word . The majorconcern for international aid policy through the last five decades is to improve theliving conditions for the poor in the poorest countries of the world. This endeavourrequires a close co-operation with the national governments in poor speaking, however, the governments in poor countries are also the mostcorrupt.

6 This is one of the few clear empirical results of recent Research on level of GDP per capita holds most of the explanatory power of the variouscorruption indicators (Treisman, 2000; Paldam, 1999a). Consequently, if donors wantto minimise the risk of foreign aid being contaminated by Corruption , the poorestcountries should be avoided. This would, however, make aid policy rather is the basic dilemma Corruption raises for aid policy. Unlike internationalbusiness most development aid organisations and international finance institutionshave the lion s share of their activities located in highly corrupt countries (Alesinaand Weder, 1999). The international community in general and some donor countriesin particular are, however, increasingly willing to fight the good governance strategies of the World Bank and the InternationalMonetary Fund initiatives to curb Corruption are given priority.

7 OECD and the UNDP have also developed particular anti- Corruption programmes to assist governments intackling the problem. Furthermore, several bilateral development agencies haveplaced anti- Corruption efforts high on their development agenda. Whether this is adesirable change in focus of aid policy, and, hence, whether it is possible to findworkable policy instruments to fight Corruption , remains to be is a problem that mainly arises in the interaction between government andthe market economy where the government itself must be considered it is complex to handle from a theoretical point of view. This difficulty isunderlined by the fact that data are difficult to gather, and, if available, data are often soft , unreliable and masked. Moreover, from an aid organisation s point of view theissue of anti- Corruption may become diplomatically delicate since at least some of the7stakeholders who are handling the aid instruments in the partner countries, are likelyto be part of the this complexity, academic Research has made some interesting clarificationsof likely general causes, set some of the agenda for defining the key issues andthereby prepared some of the groundwork necessary for formulating anti-corruptionpolicies and programmes.

8 However, Corruption deals with actions performed byagents in specific political and bureaucratic organisations, all applying considerableimplicit information. Often Corruption will spread among organisations within thesame polity. Therefore, it has proven fruitful to combine country specific knowledgeand thematic knowledge on Corruption when tracing the causes of Corruption , tounderstand the variety of Corruption (s), and to suggest remedies and cures for fightingcorruption. Comparative Research has to some extent offered insights that arepotentially replicable in other situations, and may clarify the extent to which theexperiences of one country or institution are transferable to others. But, comparativeand general insights on causes and possible remedies will have to be tailor-made tothe specific purpose of this report is to review the state-of-the-art in international corruptionresearch.

9 The study has two objectives. First, it aims to review the essential elementsof the various approaches that have been used to analyse the causes and effects ofcorruption. Thus, the study is organised as a literature review, extracting andevaluating the core elements of Corruption Research in economics, political scienceand sociology/anthropology. Second, it aims to explore how Research has been appliedin developing countries. This is a question of what policy recommendations have beenmade, and what might be learned from the anti- Corruption campaigns and policiesapplied in specific years ago Research on Corruption was a small field. Currently, however, a largenumber of articles and reports are published every month. This development partlyreflects an increased public concern for the problem.

10 Furthermore, at least in the caseof economics, it reflects internal changes in the analytical approaches and tools of thediscipline combined with access to new data that has made Corruption a researchabletopic. Thus, it has also made it easier carry out a survey on Corruption Research 8since many interesting contributions and insights are available. On the other hand, ithas also become a more demanding task because of the sheer bulk of readings that issprawling in all kinds of thematic and intellectual study is not meant to be comprehensive. We have aimed at a balanced, assorted,and what we consider an interesting selection of topics. The report is organised asfollows: What is Corruption , and how is Corruption understood in various academicdisciplines?