Anti-Corruption: a response to Michael Dowdle (part I)

In an insightful and provocative post entitled Anti-Anti-Corruption, Michael Dowdle suggests that there is something fundamentally wrong with the anti-corruption discourse in the development field. This is my attempt to partially respond to it.

Dowdle's argument is organized in three points: (i) there is not evidence that corruption is damaging to growth; (ii) it is a self-congratulatory and self- serving discourse of developed countries, to justify why they are wealthy and the rest of the world is not; (iii) it allows us to continue to believe we can interfere and change outcomes in our own societies. I will leave the first and third points for future posts, as they deserve more space than I should take in a single post.
 
As to second point, I think it seems to ignore two important turns in the anti-corruption discourse. 

The first turn occurred in the 1980s, when Susan Rose-Ackerman, challenging modernization theory, used the rational actor model and new institutional economics to reject the idea of corruption as a societal and cultural phenomenon. Corrupt behavior was then conceived as a result of a system of institutional incentives (Rose-Ackerman, 1999). This first turn largely rejected any claim of moral superiority, grounding the discourse on the idea that the institutional context (not your intrinsic moral values) matter the most. This became the prevailing theoretical framework since them.

The second turn occurred in the 1990s, when the idea that there is a demand side and a supply side of corruption lead the OECD to promulgate the first multilateral convention to combat bribery of foreign officials – the OECD Anti-Bribery Convention. This document not only acknowledged that developed countries were part of the problem, but it also set up monitoring mechanisms for the signatories to check on their progresses in adopting legislation to combat corruption, as well as in monitoring and enforcing these provisions.

In sum, it is hard to see a discourse of moral superiority in the terms in which the debate has been framed in the past 20 years both in academia and in policy circles. 

Perhaps, Dowdle's concern is not with the specific terms according to which the debate has been framed by academics and policy makers, but with the fact that it has had undesirable ideological consequences (which are distinguishable from the motivations that guided those formulating policies and theories). If that is his point, my response is that many things we do have undesirable ideological consequences, but this is not necessarily a reason not to pursue them.* 

For instance, Foucault challenges the idea that the creation of prisons was a victory of humanism over corporal punishment. Instead, he says: "It is not enough to say, with the 18th-century "reformers," that "humanization" and "progress" explained and justified this radical change in the penal system. (...)" 

When inquired about this in an interview:  

Q. Then, all the talk and activity about prison "reform" and "humanization" is just subterfuge? 

Foucault replies: 

A. It seems to me that whether the prisoners get an extra chocolate bar on Christmas or are let out to make their Easter Duty is not the real political issue. What we have to denounce is not so much the "human" side of life in prison but rather their real social function-that is, to serve as the instrument that creates a criminal milieu that the ruling classes can control."

Acknowledging that Foucault is right does not imply that we will necessarily advocate reverting back to the polices that we had before prisons, i.e. bodies being "branded, amputated, wrenched apart". 

Thus, the question that needs to be addressed is what are the gain (and losses) of fighting corruption, and whether there is evidence to support the idea that such gains (and losses) exist. I will address this point in my next post.


*Note: I would like to thank Marcio Grandchamp for helping me formulate this point, and for suggesting the example. Any errors are mine.   

 

Anti- Anti-corruption -- Part I

Michael W. Dowdle

    (Note:  A couple of months ago, I gave a presentation at the Centre for Transnational Legal Studies that involved, among other things, a critique of the anti-corruption movement.  Because Mariana Prado was going to be in attendance, I wrote out in advance for her what my critique would consist of, so that she could provide a rebuttal should see so wish.  She has since suggested I post the critique to this blog. The critique is in two parts.  In this part, I suggest what motivations really underlie the discourse of anti-corruption.  In the next part, I explore the practical problems that this discourse seems to engender.)

 * * * 

 Corruption holds a magical place in the field of law and development.  It is the go-to as to why developing countries do not in fact develop.  After all, we know what it takes to develop (i.e., good legal institutions), so why is it that developing countries do not develop?  It can only be because their leaders and elites must be putting their own personal interests ahead of those of real development. 

 In fact, these is little hard empirical support for this, least as best as I can find.  There are a lot of studies showing an inverse correlation between levels of development and levels of corruption.  But correlation does not show causation.  And in fact, high levels of corruption are also associated with the fast industrial development, as indicated in the contemporary cases of China, Brazil, India, Indonesia, and in earlier cases of the United States ca. 1880s and early industrial England ca. 1790s.

I think the reason this trope survives unchallenged is because it serves three important psychological purposes insofar as the Western considerations of development are concerned.  First, it allow us to preserve our faith in our own political-economic ideology – providing a convenient explanation as to why that ideology in fact rarely – if ever – is able to do what it claims to do insofar as economic development is concerned. 

Second, it allows us in the West to celebrate our own special dedication to moral principles.  “Lookee here,” it says, “the reason that developing countries don’t develop is because of moral hazard.  We, by contrast have developed, meaning that we have been civilized enough to put our fellows above our own personal interest.  Aren’t we special?  Aren’t we deserving.”  Relatedly, it allows the West to not feel guilty about their material privilege.  It means that the average American does not need to feel undeserving in earning 9x that of the average Brazilian (US$69,821/yr as of 2011 vs. US$7,898/yr as of 2010).  We can simply conceptualize it as a reward for our superior moral virtues.

Third, and perhaps more importantly (and certainly less condemningly), it allows us to preserve our faith in human agency.  The discourse on corruption allows us to believe that our well-being is susceptible to human intentionality.  It allows us to continue seeing ourselves as masters of our universe rather than as merely its subjects.  Particularly when we see examples of brutal poverty, we all want to “do something”.  “Just eliminate corruption” gives us a convenient reassurance that something can in fact be done.

Unfortunately, little of this actually redounds to the benefit of those in developing countries.  In fact, I feel that such illusions are not only wrong, but often dangerous.  I will explore this in my next post.

Discussing Law and Development in Japan – by Dave Trubek

 The study of law and development seems to be flourishing these days.  I do not mean that there are well- attended conferences or widely read journals. There should be but there aren’t. Rather, what I mean is a lot of things are going on in lots of places that are carrying forward the original law and development impetus even if they do not use that title or communicate with others doing related work. 

Take my recent visit to Nagoya University’s new program on Cross Border Legal Institution Design run by the Nagoya Law School’s Leading Graduate School Program http://www.law.nagoya-u.ac.jp/~leading/en/index-e.html. This program, under the energetic leadership of Yoshi Matsuura, has developed an innovative program to train law and development practitioners and scholars from all over the world. Students engage in real-world projects, meet with leading scholars and experts, travel to developing countries to do field work, and prepare concrete reform proposals. 

I was there to attend a student-organized conference that involved leading academics from Asia, Europe and the US who had been selected by the students. While there we worked with student groups on topics of mutual interest. The students come from rich and poor countries: I personally interacted with students from Japan, France, Poland, Taiwan, Uzbekistan and Bangladesh. Hassane Cissé, Deputy GC of the World Bank, was there to talk about the Bank’s newly created Global Forum on Law, Development and Justice. http://www.globalforumljd.org/ and we had a stimulating discussion about the limits of global solutions to law and development problems and the need for deeper knowledge of local contexts. 

If the field of law and development is to realize its promise, there is a need for more programs like this, better ways to share information about research and teaching, and more opportunities to bring senior people in the field and aspiring practitioners and scholars together.

By David Trubek

Resuming Activities

Dear Readers, 

we are resuming activities on this blog soon, with a larger group of contributors. Please visit the blog to get the latest news, or sign up to receive regular updates. 

We will be preparing regular posts on the latest literature on law and development, commentary on current events and announcements about academic opportunities. We are also hoping to promote some debates among our regular contributors.
 
In addition to posts from our regular contributors and to your valued comments to their posts, we would welcome occasional posts from our readers. If you would like to submit a post for publication, please contact mariana.prado@utoronto.ca. Your post will be evaluated by three of our regular contributors and publicized if unanimously approved.

Stay tuned! 

Privatization

J. David Brown, US Census Bureau Center for Economic Studies, Institute for the Study of Labor (IZA), Heriot-Watt University - Centre for Economic Reform and Transformation (CERT), John S. Earle, George Mason University - School of Public Policy, Central European University (CEU) - Department of Economics, Institute for the Study of Labor (IZA), and Scott Gehlbach, University of Wisconsin, Madison - Department of Political Science, Harvard University - Davis Center for Russian and Eurasian Studies have a new piece on Privatization.

ABSTRACT: In this paper prepared for inclusion in the Oxford Handbook of the Russian Economy (Michael Alexeev and Shlomo Weber, eds.), we replicate, update, and extend our earlier work on manufacturing enterprise privatization and productivity in Russia. Our results suggest a more nuanced view of Russian privatization than that offered by either its critics or its defenders. We confirm earlier findings that the average impact on productivity of privatization to domestic owners is around -3 to -5 percent, though some regions show productivity gains similar to those in Central Europe (an increase of 10 to 20 percent). The regional variation is strongly positively associated with the size of the regional bureaucracy. Notwithstanding the average negative effect, our updated results through 2005 (the most recent year for which comparable data are available) show a pronounced change after 2002 as the productivity effects of Russian privatization have begun to approach those seen elsewhere much earlier. Privatization became most effective west of the Urals, in areas with greater market access. Initially an outlier, by 2005 Russia appeared to be becoming more of a “normal country,” at least in the narrow sense of the impact of private ownership on firm productivity.

Do Victims of War Need International Law? Human Rights Education Programs in Sudan

Mark Fathi Massoud (McGill Law) has a new article, Do Victims of War Need International Law? Human Rights Education Programs in Sudan. It examines contemporary programs in law and development in authoritarian and war-torn contexts. The paper is based on nearly 18 months of field research in Sudan, since 2005.

A Research Agenda for Development Economics

Esther Duflo

, Massachusetts Institute of Technology (MIT) - Department of Economics has an interesting paper on A Research Agenda for Development Economics.

ABSTRACT: Development economics has grown tremendously in the last fifteen years. It can continue to grow and improve in the next decades by focusing on three areas. First, revitalizing the tradition of applied theory which transformed development economics in the 1980s and 1990s, by giving us a better understanding of how poverty shapes individual options. A new wave of applied theoretical work is needed, to incorporate recent empirical findings that have revealed the limits of the earlier theoretical framework. Second, continue expanding and improving empirical work, in particular experimental work. More ambitious, potentially more expensive experiments, should be conducted. Third, expanding theoretical and empirical work on the aggregate consequences of micro-level distortions, themselves identified by the new theoretical and the empirical work to be done under the first and second areas of focus.