CORRUPTION Syndromes of Corruption

Influence Markets 61
disillusionment that can result, are pressing corruption issues in most
Influence Market systems. So is a lack of political competition – among
parties, or between incumbents and challengers. Even where economic
effects appear to be modest, Influence Market corruption can undermine
the vitality and competitiveness of political life.
Three market democracies
Japan, Germany, and the United States are three of the world’s wealthiest
and strongest democracies. Their powerful corporations, the global reach of
their policies, and the roles their banks and markets play in safeguarding
(and at times laundering) the proceeds of corrupt dealings elsewhere all have
major implications for our other three groups of countries. Much the same is
true in terms of reform: the United States in particular advocates standards
that, for better or worse, dominate the international anti-corruption agenda.
All have experienced major scandals during recent decades, ranging from
Watergate in the United States to Germany’s Flick and Elf/Acquitaine
cases, to the Lockheed, Recruit, and Sagawa Trucking episodes in Japan.
Still, in none of the three has corruption threatened basic political or
economic arrangements. Major scandals in Japan led to a political shakeup
in the early 1990s, temporarily ending Liberal Democrat Party (LDP)
dominance and bringing new campaign styles, changed relationships
between politicians and bureaucrats, and legal efforts to regulate ‘‘money
politics.’’ In most respects, however, politics and policymaking in contemporary
Japan continue as before. What is distinctive about these systems is
notthattheyhaveavoidedcorruption–theyhavenot–butratherthat
strong institutions, together with long-liberalized politics and economies,
influence the form corruption takes and enable them to withstand its effects.
These broad characterizations are reinforced by table 4.1, which presents
many of the statistical indicators discussed in chapter 3.InGermany,Japan,
and the US political and market liberalization are a fait accompli; while the
data suggest some pulling back on the economic side, property rights are
secure, intervention in the economy is selective, and officials are generally
held accountable. All three countries have high scores on institutional and
social capacity and overall development. Japan ranks somewhat lower than
Germany and the US (but still well above the median) in terms of government
effectiveness and regulatory quality. It is rated as having somewhat
more corruption, and less effective controls, than Germany and the US,
though again all three countries compare very favorably to the medians.
How valid are the corruption comparisons? It is hard to say: index scores
are approximations at best. Many Japanese scandals take place at the peaks
of a centralized political system and closely watched economy and are thus