CORRUPTION Syndromes of Corruption

Participation, institutions, and syndromes of corruption 37
Corruption as an embedded problem: sources of variation
Over the past generation most societies have experienced liberalization of
politics, economies, or both – at times on a dramatic scale. Early in the
1990s it was hoped that the shift to markets would fuel growth, and
thereby democratization, while lean, accountable governments would
best encourage markets. Most early enthusiasm focused on liberalization,
with institution-building taking a distinctly secondary role. At times the
state was seen as a necessary evil at best. But reality has turned out to be
much more difficult. Liberalization has usually not been moderately
paced and balanced: often, rapid political transitions and soaring social
expectations have given way to much slower and more difficult processes
of economic change, or moves toward markets have been stymied by state
institutions that are ineffective, repressive, or both.
In fact sound institutions are not impediments to free political and economic
participation, but rather help to protect it. In well-institutionalized
systems the state, political organizations, and civil society both moderate
political demands and aid in their expression, enhancing government’s
capacity to respond through sound policy; economic processes take place
within a framework of sound property rights, enforceable contracts, and
open, verifiable transactions. A state that cannot guarantee property rights
and basic liberties, collect taxes, enforce contracts, and provide legitimate
channels for the expression of interests will be ineffective and unresponsive,
and will invite private efforts to perform those functions, often by way of
corruption or violence. Where political organizations and civil society are
weak or non-existent officials may wield power with impunity and conflicts
in society are less likely to remain moderate. There will not necessarily be
no growth in economic or political participation, but much of it may take
place outside the official institutional framework, obey few rules or boundaries,
and serve only a powerful few. A 1997 pyramid scheme in Albania,
for example, resulted in the loss of nearly a third of the nation’s savings and
a violent upheaval (Percival, 1997; Jarvis,2000). On the political side,
personal factions or even private armies can supplant parties and interest
groups (O’Donnell, 2001), and mafiyas can become the means of contract
enforcement (Varese, 2001). Particularly in a setting of weak institutions,
unbalanced growth in political and economic opportunities allows dominant
groups in one sphere to exploit the other.
Searching for patterns
The issue raised by these relationships is not just more versus less corruption.
Rather, I argue that the state and trends of participation and