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Institutions and Anti-Corruption Discourse

  • Writer: Morgan McBride
    Morgan McBride
  • Aug 5
  • 7 min read

The United Nations. Parliament. Central Banks. Religious Organizations. Militaries. What roles do institutions play in the wider anti-corruption discourse?




Although there remains no singular, official definition of the term, corruption can be understood as the abuse of public office or entrusted power for private gain. The actions of corrupt individuals affect millions of people worldwide, as they increase costs, reduce public services, extort individuals, and much more. Every piece of stolen or misappropriated money and resources undermines the potential for equal opportunity in life and prevents investment in human capital.


On a deeper level, such activity fractures the trust between a government and its people by dismantling the inherent social contract of government responsibility, leading to growing fragility and violence. Such factors are not confined to developing nations; systems of corruption exist within the governments of all world powers.


According to an evidence paper from UK Aid, corruption refers to the improper use of resources or power for the gain of a private individual. Bribery, embezzlement, fraud, collusion, extortion, and other forms of misconduct constitute potential corrupt activities.


“Corruption robs schools, hospitals, and others of vitally needed funds. It rots institutions, as public officials enrich themselves or turn a blind eye to criminality. It deprives people of their rights, drives away foreign investment and despoils the environment. Corruption breeds disillusion with government and governance — and is often at the root of political dysfunction and social disunity.” — António Guterres, United Nations Secretary-General

From the imprudent actions of an individual, a private multinational corporation, or a public official, such abuse of power manifests as institutional failures with numerous causes and effects. Yet the web-like system of these harmful actions ultimately links nations and tethers them to one another, quickly turning a domestic problem into a global crisis.


The World Bank states that the most expensive and globally damaging forms of corruption stem from institutions in many wealthy nations, creating ripple effects that threaten institutions worldwide. Along with the benefits of globalization for developing nations, risks stemming from the actions of larger governments could create a crisis in a developing nation. The repercussions of corrupt activity trickle down into developing countries, which often have more fragile institutional structures, thereby inciting further global political and economic instability.


Nevertheless, anti-corruption discourse largely blames less-developed nations for the plague of corruption, thus asserting potential “cures” for these “meager” states. Such an examination fails to properly recognize the symbiotic relationships of the over two hundred nations and independent territories around the world.




Shang-Jin Wei, a global economy and development Senior Fellow for Brookings, posits that managing corruption is equally vital to controlling inflation and fiscal deficits. Wei further acknowledges that a major global economic stability concern centers on the volatility of international capital flows, the potential for currency crises, and dramatic fiscal reversals. Such insights highlight the serious implications corruption has for the global economy. Although it may seem exaggerated, a political corruption scandal in one country can negatively impact the economy of a nation thousands of miles away.


Gary Becker’s economic theory of crime also expresses that the applicable incentives for political corruption are the size of expected payoffs relative to a public official’s alternatives, the likelihood of detection and punishment, and the severity of potential punishment. In many cases, taxes and regulations incidentally incentivize people to engage in illegal underground activities to circumvent those constraints. The dynamics surrounding corruption thus place significant strain on an economy’s ability to mitigate the harms caused by illicit activity.


Furthermore, the economic and noneconomic factors are not independent of each other. The economic strain, political instability, social frustration, and other factors generated an increasingly complex network of pain caused by corruption.



Corruption & Institutions



Numerous studies explore how corruption permeates the structures of some institutions, as the actors within the system and the institutions mutually affect each other. The international landscape has operated economically and politically in ways highly lenient toward corrupt activities that would otherwise be illegal domestically.


Based on the studies conducted by Daron Acemoglu, economic institutions that cater to the wealthy, privileged elite will fail to achieve equality of opportunity and will create distortions that limit economic growth. Acemoglu asserts that the wealthy elite will invest in public goods only if they receive benefits in return, so the distribution of political power will likely remain unequal. These studies show that political institutions are critical for understanding the wealth of nations, or lack thereof.


A significant component of Acemoglu’s research explores the variations and effects of extractive institutions and settler institutions. Historically, Europeans and other “Western” nations installed extractive institutions to plunder resources or exploit the indigenous population of their colonies, yet these countries have since fallen behind their potential. Acemoglu, among other economists, sought to explain why some nations are financially better off than others, which in many ways parallels questions about the occurrence of corruption across different institutions.


Acemoglu and Robinson’s book Why Nations Fail posed the question: “If bad institutions have such a strong impact on material well-being, why do countries get locked into them?” The dichotomy between inclusive and extractive economic institutions underscores the significance of institutions in anti-corruption efforts.


On the one hand, inclusive financial institutions support their populations by ensuring that citizens receive the benefits of their own actions. An institution of that nature focuses on providing public goods, an unbiased system of law, and a method of securing an individual’s property rights. On the other hand, the purpose of an extractive institution steers economic rewards toward the outnumbered elite. Corrupt activity permeates through both types of institutions. However, an extractive institution style is inherently suited to allow such movement.


For instance, the oil, gas, and mining industries can generally be understood as extractive institutions. These lucrative industries often maintain hubs in resource-rich areas, where multinational corporations, political elites, and other high-net-worth investors extract resources and wealth from a country. Within the well-oiled machine of extractive institutions, many of its powerful actors reap the benefits of these industries. At the same time, their workers and their communities receive minimal earnings and often numerous other deficits in return.



Anti-Corruption Discourse


Many nations have specialized anti-corruption agencies that work with international bodies and organizations to implement anti-corruption policies. Strong global governance efforts have supported a transition towards anti-corruption across numerous sectors and jurisdictions worldwide. A primary approach in these efforts centers on the development of strong policies by robust institutions. Yet, a variety of conversations, some positive and some negative, have emerged surrounding the growing efforts of anti-corruption work.



A promising approach to anti-corruption discourse focused on institutions would likely prompt discussion of how global powers created extractive institutions that threaten the prosperity of developing nations. Based on historical and contemporary international relations findings, the world’s institutional power structures have inherently enabled well-developed countries to profit from extractive institutions elsewhere. Failing to acknowledge this fact allows for the nuance of corruption to slip through the cracks.


In many countries, anti-corruption discourse is often weaponized by politicians to target their opponents, placing legitimate reform on the back burner. Authoritarian populist parties often claim to be bastions of anti-corruption reform during their political campaigns. However, the same candidates and political parties set anti-corruption reform efforts aside once in office, since they no longer align with their needs after assuming office.



Marine Le Pen, the long-time leader of France’s far-right National Rally party, was convicted alongside twenty-four members of her party for the misappropriation of approximately 4.6 million euros in European Parliament funds. Even though Le Pen has now been deemed ineligible for political office until 2030, she has been able to weaponize her corruption charges as rhetoric to incite her party’s disdain towards their opposition. Le Pen and her party have voiced their outrage at their treatment and punishment for the “alleged illicit activity.” The irony of this matter is potent, since, earlier in her career, Marine Le Pen called for elected officials to become permanently ineligible for public office if convicted of embezzlement or corruption.


Moreover, key terms like “anti-corruption”, “good governance”, “accountability “, and “transparency” are continually used by those fighting corruption and by those bolstering their own corrupt activity.


Considering public rhetoric regarding anti-corruption efforts across international resolutions, treaties, and other commentaries helps gauge the extent of action that the willing public takes against corruption. Anti-corruption reform could thus spur a new approach by placing a stronger focus on institutions, since institutions reveal where wealth and power go.



Why does this matter?


Because political and economic institutions are linked in multiple ways, anti-corruption work has difficulty ensuring stability for both types of institutions. A more in-depth study of the connection between institutions and anti-corruption efforts could explore how the unequal power structures that permeate the global landscape function and, hopefully, help undo some of the damage. From an institutional perspective, the colonial powers throughout history -- who are also among the world’s current powerful nations -- created a structure that enables corruption to increase in underdeveloped nations. Thus, the discourse should shift towards how such former colonial powers developed such inequality and how those elite nations can effectively aid developing countries.



Non-governmental organizations like Transparency International, the OECD, and the United Nations actively tackle various aspects of global corruption; however, the power of elite individuals poses roadblocks to most systemic change on the issue. Most of these organizations lack significant international governing authority, so they often cannot enforce anti-corruption policies against offenders. Anti-corruption reform faces numerous obstacles domestically and globally, including unwilling politicians opposed to reform, the expense of comprehensive reform, the fear of defying a state’s social norms, and other barriers to change.



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