Corruption has been a part of human societies since the oldest of times. Corruption, fraud, embezzlement, theft, bribes, and kickbacks are all forms in which people try to increase their income at the cost of others. Beginning in the latter half of the 1990s, an increased recognition of these costs led to many international and nongovernmental organizations demanding that political and business leaders demonstrate high standards of honesty, ethics, and social responsibility. This in turn led to a concerted fight against corruption, money laundering, and black markets around the world as well as to the recognition of the importance of governance.
Although disagreements abound, corruption is most frequently defined as the misuse of public power for personal gains. Corruption, unlike fraud and embezzlement, refers to decisions that politicians and public bureaucrats (public officials for ease of exposition) make based on authority delegated to them by the populace. When these decisions are motivated by personal gains rather than by the public’s interest, other than politicians favoring segments of the population they represent, this is considered corruption. One of the difficulties of identifying corruption is that these self-serving decisions can often be disguised as good public policy.
Corruption exists in two broad forms—although there are many variations within these two categories and often the two will be intertwined with each other. Administrative, or petty, corruption refers to acts of bribery, kickbacks, or grease money, in which public officials extract a payment for implementing an existing decision. In its purest form this type of corruption is an attempt to redistribute rents or profits associated with a decision. When officials accept a bribe for favoring a particular contractor for a public construction project, they are asking the contractor to share profits associated with the contract with them. The main consequence of such an act of corruption is the redistribution of income that in turn will have some influence on resource allocation.
Political, or grand, corruption or “state capture” occurs when political leaders either allocate national budgets or introduce legislation to facilitate projects from which either they themselves or their close associates will benefit. In almost all cases of political corruption the public would not have made the same decision as the political elite if it were in a position to make that decision. The corrupt elite’s profits come either in the form of bribes or from direct stakes in the projects that benefit from the decisions. Examples of corrupt politicians accepting bribes exist in almost every country—industrialized or developing. Also, examples of dictators who have managed to enrich themselves while impoverishing their countries abound: Haiti under François Duvalier (1907-1971), Philippines under Ferdinand Edralin Marcos (1917-1989), Zaire under Mobutu Sese Seko (1930-1997), Nigeria under Kwame Nkrumah (1909-1972), and Uganda under Idi Amin (c. 1925-2003) are just some of the examples. Political corruption leads to the misallocation of a country’s economic resources while redistributing income within that country.
Corruption is difficult to measure, but it exists in all countries. In countries where corruption is not endemic, corrupt acts are carried out under secrecy. In countries where corruption is widespread, corrupt incomes take so many forms that measurement becomes meaningless. The most consistent attempt to measure corruption has been carried out by Transparency International (TI), a Berlinbased nongovernmental organization (NGO). Every year TI surveys business people and experts, and based on their perceptions it provides a rating between 10 (no corruption) and 1 (most corrupt). Of the 158 countries ranked in 2005, Iceland, Finland, and New Zealand were the least corrupt and Turkmenistan, Bangladesh, and Chad were the most corrupt.
To understand why corruption exists, it helps to examine why there is less corruption in some—usually industrial-ized—countries. One can start by recognizing that authority over public-sector budgets and regulatory frameworks comes with the potential for huge personal benefits. Assuming that only a small percentage of a population is pathologically honest, most public officials will be tempted to take advantage of their authority. Their gains, however, come at someone else’s cost. Therefore, those who may lose from corruption want to control and check the powers of public officials. These checks come in the form of well-developed legal, political, and social institutions within the society. As such, the existence or absence of corruption depends on the balance between the powers of public officials against the strengths of institutions and control mechanisms that empower the public.
All countries have laws against corruption. Selection and retention of public officials, at least in democratic societies, will depend on the public officials demonstrating honest behavior. Democratic institutions that allow a fair and wide participation of the public in the selection of public officials create a barrier against the spread of corruption. Offending officials will be identified and punished by the judicial system or at least not reappointed to their positions. A free press accompanied by an independent and honest judiciary forms another barrier that prevents corruption. Institutions and a variety of organizations that represent specific interest groups in a given society will exert influence on public officials if corruption is likely to harm that society. In so far as politicians derive their authority and appointment from their constituencies, these institutions form another line of defense against corruption. Once in power, however, public officials will have means to render these control mechanisms less effective. A dictator usually succeeds in rendering them completely ineffective; hence, dictatorial regimes are often more corrupt than democratic ones. Democratic leaders are restricted by the strengths of the institutions in a society that constrains behavior of public officials.
Thus, institutions that play an important role in controlling corruption include a free press, an independent judiciary, and a free and democratic political system that gives full voice to the populace in the political process. Research clearly establishes that the absence of corruption within countries correlates with the level of development of these institutions. It is noteworthy that ideology does not seem to play a role in the extent of corruption. Daniel Kaufmann divided countries into “leftist” and “non leftist” regimes (1998, p. 140). The correlation between the extent of corruption and the type of regime was zero.
Corruption—which is an important component of what is now called governance—is extremely inimical to economic growth and development (Jain 2001). It leads to misallocation of resources, distorts labor markets, discourages investments, and alters income distribution. The myth that corruption helps markets by “greasing the wheels of commerce” has been proven false. While it is true that a bribe may speed up one transaction, it creates incentives for more and higher bribes in previously bribe-free activities. In a remarkable study of bribery, Robert Wade (1985) shows that once bribes are introduced, bureaucracies redirect their attention from providing services to the public to maximizing bureaucrats’ illicit incomes.
The most damaging consequence of corruption may be in how it inhibits investment in the economy. Research clearly establishes that countries with high corruption have lower levels of investment and economic growth (World Bank 2001). Corruption, which usually exists in an environment of poor overall governance, makes it difficult for entrepreneurs to invest by increasing the cost of starting a business venture. After investments have been made, corruption creates uncertainty for entrepreneurs because the public officials have an option to extract bribes from the venture should it prove profitable. This option increases entrepreneurs’ risks and lowers their returns.
Corruption also distorts the selection of public-sector projects. Small maintenance projects are more effective in terms of their output, but corrupt officials do not like to spend money on smaller projects because they may be carried out by a larger number of contractors, making it more difficult to extract bribes. Thus, corruption biases investment expenditures from high-output to low-output projects. Construction of “roads that go nowhere,” “bridges that no one crosses,” and unused shells of school buildings that abound in the developing world may have been motivated by bribes, not the needs of the society. In addition, if measured by the extent of bribes as a percent of revenue of a firm, corruption affects small firms more than big ones. Because innovative activities in most economies tend to be taken up by small entrepreneurs, corruption stifles an important source of economic growth. Corruption also discriminates against foreign direct investment because dealing with corrupt officials requires familiarity, which is an advantage that domestic firms may possess.
Corruption affects the labor market by distorting returns for various activities. It distorts the allocation of talent between power-seeking activities and other productive activities in an economy. Furthermore, as noted earlier, corruption discourages the allocation of talent to entrepreneurial activities by lowering rewards and increasing risks.
Corruption does not affect all members of a society equally. The poor suffer relatively more from corruption in two ways. First, bribe payments may represent a higher percentage of their income than similar payments by the rich. In this sense, corruption acts as a regressive tax—lower-income households carry a larger burden than higher-income ones. Second, corruption causes the delivery of public services, for example, health care and education, to deteriorate. Such a deterioration affects the poor more than the rich first, because they may have to pay a bribe to receive the services and second, because they depend more on such services. Corruption may also allow the rich to pay fewer taxes than required by law. This lowers the revenues of the state, further deteriorating the ability of the state to provide services for the poor. Studies confirm that corruption causes income distribution to worsen.
Recognizing that corruption is a serious obstacle to fighting poverty, many international and nongovernmental organizations since the latter half of the 1990s have been leading the fight to reduce corruption around the world. This fight focuses on three areas: civil societies in which the public plays a key role, a top-down commitment from the political leadership to fight corruption, and a proactive private sector that accepts its social responsibility to operate in a corruption-free manner. Countries that belong to the Organization for Economic Cooperation and Development have accepted their responsibility in this fight by passing antibribery laws that prohibit their firms from paying bribes in other countries. These laws, however, are rarely strictly enforced.
It is difficult to assess the impact of global efforts to fight corruption. Stories of success tend to be anecdotal. If the ratings of TI are any indication, it will take several years before this fight has a significant impact on the extent of corruption around the world.
SEE ALSO Accountability; Bribery; Capital Flight; Hot Money; Money Laundering; Transparency
Jain, Arvind K. 2001. Corruption: A Review. Journal of Economic Surveys 15 (1): 71-121.
Kaufmann, Daniel. 1998. Research on Corruption: Critical Empirical Issues. In Economics of Corruption. Ed. Arvind K. Jain. Boston: Kluwer Academic.
Transparency International. 2005. Corruption Perceptions Index 2005. Transparency International. http://www.transparency.org/policy_and_research/surveys_indices/cpi/2005.
Wade, Robert. 1985. The Market for Public Office: Why the Indian State Is Not Better at Development. World Development 13 (4): 467–497.
World Bank. 2001. Governance and Corruption. World Bank Group. http://www.worldbank.org/wbi/governance.
Arvind K. Jain
"Corruption." International Encyclopedia of the Social Sciences. 2008. Encyclopedia.com. (June 30, 2016). http://www.encyclopedia.com/doc/1G2-3045300467.html
"Corruption." International Encyclopedia of the Social Sciences. 2008. Retrieved June 30, 2016 from Encyclopedia.com: http://www.encyclopedia.com/doc/1G2-3045300467.html
Consider the first sentence of Jean-Jacques Rousseau's (1712–1778) Discours sur les arts et sciences (Discourse on the arts and sciences, 1750): "Has the restoration of the sciences and arts contributed to the purification of mores, or their corruption?" Corruption denotes deterioration, a qualitative decline from an original (absolutely or relatively) natural or pristine state; related terms include decay, deterioration, disintegration, corrosion, and degeneration. Corruption is sometimes used in a related (but distinct) sense, to denote a state of affairs—a "state of corruption"—often in contrast to one characterized by virtue. In either form (verb or noun) corruption is an intensely historical term, describing either a process of qualitative spoliation or the end result thereof.
The discourse of corruption and virtue offers critics and philosophers a powerful rhetorical tool with which to indict societies' perceived shortcomings vis-à-vis some past standard. When placed into narrative form, corruption accounts generally contain four elements: (1) a description of the symptoms of corruption (social, moral, political); (2) identification of an agent of corruption; (3) a timeline by which critics identify the agent's appearance and trace its corrupting influence; and (4) a call to action to turn back corruption and restore lost virtues.
In the history of ideas and historiography, the discourse of corruption has often, though not exclusively, been associated with the tradition of civic republicanism. More recently, a significant body of research has brought the tools of social science to bear on the identification and measurement of corruption in the political sphere, and offered general theories about conditions under which corruption is fostered or retarded. This entry will point out, in an admittedly abbreviated manner, some of the main lines of research and refer the reader to key texts in the literature on corruption.
Corruption, Civic Republicanism, and Republican
Perhaps the most rhetorically powerful and historically influential language of corruption appears in the tradition of civic republicanism associated with Italian Renaissance humanists like Niccolò Machiavelli (1469–1527), Francesco Guicciardini (1483–1540), and Leonardo Bruni (c.1370–1444), which emphasizes the civic and social nature of the human good. Drawing on such classical sources as Aristotle (384–322 b.c.e.) and Cicero (106–43 b.c.e.), republicans see the realization of civic virtue as requiring the active involvement of relatively equal citizens in making decisions about their common life. Thus, anything that distracts citizens from the common good—internal factions, luxury, security, foreign influences, great disparities of wealth (even, for some thinkers, Christianity itself)—can be seen as an agent of corruption. Conversely, anything that fosters or rewards citizens' mutual self-regard and keeps their efforts focused on the good of all promotes civic virtue and helps stave off corruption. Drawing on both classical and Renaissance ideas, Rousseau advances the single most important modern theory of republican virtue.
Republican concerns about virtue and corruption are not limited to Europe: the tradition has also fundamentally affected the historiography of the American experience. Alongside the American obsession with Lockean individualism, a republican school emphasized the Founders' concern for civic virtue in the citizenry. Connecting Italian humanism and the American founding was the contribution of J. G. A. Pocock's monumental The Machiavellian Moment : Florentine Political Thought and the Atlantic Republican Tradition (1975). For Pocock, a discernible discourse about corruption, virtue, and the very nature of the political task ran from Renaissance Italy through England's civil wars and across the Atlantic, where it facilitated the development of the American character and the split with England. The ideal of the active citizen, of republican politics as the effort to preserve civic virtue and keep corruption at bay, has exerted a strong pull on the political imagination down to our own time.
Political scientists have developed sophisticated analyses for the study of political corruption. No single definition of political corruption can avoid controversy since, barring consensus on the proper nature and extent of legitimate politics, we necessarily lack agreement on how to define corrupted politics. Nonetheless, as one would expect, researchers emphasize political, institutional, or bureaucratic locations of corruption; the misuse of public power; or "behavior which deviates from the formal duties of a public role because of private-regarding … pecuniary or status gains; or violates rules against the exercise of certain types of private-regarding influence" (Nye, p. 419).
Political corruption presents itself in a host of settings. Susan Rose-Ackerman considers the legislative and bureaucratic arenas, and presents political corruption as an economic, cultural, and political phenomenon with important implications for democratic societies. More broadly, scholars have attempted to analyze political corruption in a variety of global contexts (Heidenheimer, 1970; Heywood, 1997). Nor has this research necessarily involved a turning-away from historical concerns with equality and participation: Patrick Dobel offers a general theory of corruption that draws on classical authors yet speaks to contemporary political life, suggesting practical steps toward staving off corruption in modern states.
Countless reform movements within the world's major religions have framed their critiques by denouncing the corruption of pure or pristine doctrines. Indeed, on one view, Buddhism itself grew out of a deep dissatisfaction with the corruption and increasingly complex nature of Hinduism, not entirely unlike the early Protestants who attacked the corruption of the Roman Catholic Church and called for a return to simpler ancient doctrines. Often these critiques point to the effects of wealth and luxury on the purity of religious doctrines and practices, and moral standards more generally: echoing civic republican themes, the fourteenth-century Islamic scholar Ibn Khaldun bluntly asserted that "luxury corrupts morals" (pp. 131–132).
The biblical account of the Fall is perhaps the paradigmatic corruption metanarrative, with its account of a lost, originally virtuous, condition and the ongoing struggle for redemption. But other religious traditions draw on the images of corruption as well: according to the Buddhist Milindapañha "[t]he virtuous and well-conducted man … is like a medicine in destroying the poison of human corruption; is like a healing herb in quieting the disease of human corruption; is like water in removing the dirt and defilement of human corruption" (ch. 5, sec. 98). The virtue here described is, of course, not social republican virtue, but rather a specifically religious understanding of what is required to stave off the corruption that can grow from within.
Finally, we should note the classical tradition that utilizes the terms "generation and corruption" in reference to the body and things subject to growth and decay in the physical realm. Plato (c. 428–348 or 347 b.c.e.) describes philosophers as those who love eternal verities "not varying from generation and corruption," and regards gymnastic, given its emphasis on the body, as "having to do with generation and corruption" (Republic 485b, 521e). Indeed, Aristotle (384–322 b.c.e.) announces in the first sentence of his On Generation and Corruption, that his task is "to study coming-to-be and passing-away." Later, Augustine (354–430) brought a Christian view of the immortal soul to this classical understanding, describing the "soul pressed down by the corruptible body, and weighed down by earthly thoughts, many and various" (De Trinitate, 8.2).
How might we explain the widespread appeal of discourses on corruption? The truth likely remains somewhere deep within the individual and collective dynamics by which people attempt to come to grips with change in their lives, and to construct a meaningful narrative connection between past, present, and future. The power of corruption rhetoric seems to lie in its recognition of the inherent fragility of all human endeavor—indeed, of human bodies. Talking in terms of corruption, for civic republicans, often makes sense of a host of social changes by placing them into a coherent, purposive, and meaningful frame of reference, highlighting past glories, and spurring audiences on to greater things in the future. Corruption accounts, like all political speech, are inherently partial and moralistic, but they are also extremely effective in pointing to the price paid for progress, be it technological, political, or economic. When Adam Smith (1723–1790) boasted, in his Inquiry into the Nature and Causes of the Wealth of Nations (1776) that the poorest English laborer lives in material comfort undreamed of by an African king, Rousseau was there to ask about the price paid for this economic "progress," using the language of corruption to frame and reinforce his critique.
But is corruption, however variously defined, always to be lamented? A few scholars have ventured the hypothesis that corruption is necessary, though indeed not sufficient, for such tasks as the smooth operation of an economy. Business practices routinely denounced as "corrupt" may serve a variety of extremely important social and economic functions. Such a view, overtly or not, hearkens back to Bernard Mandeville's (1670–1733) famous dictum that private vices yield public benefits.
See also Constitutionalism ; Humanism ; Poverty ; Republicanism ; Virtue Ethics ; Wealth .
Dobel, J. Patrick. "Corruption of a State." American Political Science Review 72 (1978): 958–973.
Heidenheimer, A. J., ed. Political Corruption: Readings in Comparative Analysis. New York: Holt, Reinhart, and Winston, 1970.
Heywood, Paul, ed. Political Corruption. Oxford: Blackwell, 1997.
Khaldun, Ibn. An Arab Philosophy of History: Selections from the Prolegomena of Ibn Khaldun of Tunis. Translated and arranged by Charles Issawi. London: Murray, 1950.
Nye, Joseph S. "Corruption and Political Development: A Cost-Benefit Analysis." American Political Science Review 61 (1967): 417-427.
Pocock, J. G. A. The Machiavellian Moment : Florentine Political Thought and the Atlantic Republican Tradition. Princeton, N.J.: Princeton University Press, 1975.
Rose-Ackerman, Susan. Corruption: A Study in Political Economy. New York: Academic Press, 1978.
——. Corruption and Government: Causes, Consequences, and Reform. Cambridge, U.K.: Cambridge University Press, 1999.
Wood, Gordon S. The Creation of the American Republic, 1776–1789. Chapel Hill, NC: University of North Carolina Press, 1969.
Andrew R. Murphy
Murphy, Andrew. "Corruption." New Dictionary of the History of Ideas. 2005. Encyclopedia.com. (June 30, 2016). http://www.encyclopedia.com/doc/1G2-3424300167.html
Murphy, Andrew. "Corruption." New Dictionary of the History of Ideas. 2005. Retrieved June 30, 2016 from Encyclopedia.com: http://www.encyclopedia.com/doc/1G2-3424300167.html
corrupt practices, in politics, fraud connected with elections. The term also refers to various offenses by public officials, including bribery, the sale of offices, granting of public contracts to favored firms or individuals, and granting of land or franchises in return for monetary rewards. Election fraud may consist of efforts to influence or intimidate the voter or to tamper with the official ballot or election count. To eliminate these practices nearly all democratic nations have passed laws that attempt to safeguard the honesty of political campaigns, elections, and officials. In Great Britain the Acts of 1883 and 1918, frequently amended, define election abuses and limit political spending by or on behalf of candidates for Parliament. In the United States individual states have their own election laws, preceding federal statutes. In large cities of the United States election fraud has historically been associated with political machines (see bossism). On the federal level, the Corrupt Practices Act of 1925, the Hatch Act of 1940, parts of the Taft-Hartley Act of 1947, and the campaign financing legislation of 1974 were attempts to limit campaign spending and the size of contributions. Requiring public disclosure and providing public funding of the presidential campaign were in response to abuses connected with secret campaign funds used in the 1972 presidential election (see Watergate affair). Subsequently, the Senate and the House established ethics committees and codes of conduct, and required public accounting of income and campaign contributions. The Ethics Act of 1978 and the stricter Government Ethics Reform Act of 1989 bar top government officials from lobbying private corporations or other governments for specified periods after leaving office. The latter act also bars former executive branch officials, congressmen, and their staff members from trying to influence senior employees in their former branches for one year after they leave office. These reforms, however, have not prevented the proliferation of Political Action Committees, a marked increase in campaign spending, and the creative use of loopholes, such as
for party-building, with no contribution limits. The term
has also been applied to businesses and labor unions, in the former case for price fixing, and in the latter for misappropriation of funds or the rigging of union elections.
See G. Thayer, Who Shakes the Money Tree? American Campaign Financing Practices from 1789 to the Present (1973); M. Clarke, ed., Corruption (1984); W. J. Chambliss, On the Take (2d ed. 1988); P. M. Stern, The Best Congress Money Can Buy (1988); Congressional Quarterly Editorial Research Reports (1989); M. P. and P. Glazer, The Whistleblowers (1989).
"corrupt practices." The Columbia Encyclopedia, 6th ed.. 2016. Encyclopedia.com. (June 30, 2016). http://www.encyclopedia.com/doc/1E1-corruptp.html
"corrupt practices." The Columbia Encyclopedia, 6th ed.. 2016. Retrieved June 30, 2016 from Encyclopedia.com: http://www.encyclopedia.com/doc/1E1-corruptp.html
cor·rup·tion / kəˈrəpshən/ • n. 1. dishonest or fraudulent conduct by those in power, typically involving bribery. ∎ the action of making someone or something morally depraved or the state of being so: the word “addict” conjures up evil and corruption. ∎ archaic decay; putrefaction. 2. the process by which something, typically a word or expression, is changed from its original use or meaning to one that is regarded as erroneous or debased. ∎ the process of causing errors to appear in a computer program or database.
"corruption." The Oxford Pocket Dictionary of Current English. 2009. Encyclopedia.com. (June 30, 2016). http://www.encyclopedia.com/doc/1O999-corruption.html
"corruption." The Oxford Pocket Dictionary of Current English. 2009. Retrieved June 30, 2016 from Encyclopedia.com: http://www.encyclopedia.com/doc/1O999-corruption.html
"corruption." Oxford Dictionary of Rhymes. 2007. Encyclopedia.com. (June 30, 2016). http://www.encyclopedia.com/doc/1O233-corruption.html
"corruption." Oxford Dictionary of Rhymes. 2007. Retrieved June 30, 2016 from Encyclopedia.com: http://www.encyclopedia.com/doc/1O233-corruption.html