As the world continues to become more and more Westernized, numerous states have subscribed to western democratic ideals often in conjunction with liberal economic reforms. However, despite acquiring characteristics intended to curb political corruption, states all across the globe have experienced increases in corruption. In order to answer the question as to why government corruption is more pervasive in some countries than in others, Gabriella Montinola and Robert Jackman take a data-oriented, systematic approach to determine characteristics distinct to states experiencing high levels of corruption. Their project is largely focused on reevaluating public choice theories which posit that corruption stems from low levels of political or economic competition. Thus a reasonable inference to be drawn from this hypothesis is that in order to eliminate corruption, political and economic competition need to be increased. However, Montinola and Jackman find the public choice explanation only partially true. In their analysis they look at factors of democracy, public sector size, economic development, and OPEC membership, as well as subcategories of each. Although Montinola and Jackman arrive at conclusive evidence as to why corruption is more pervasive in certain societies, many of the effects appear to be nonlinear, most notably those associated with levels of political competition (Montinola and Jackman, 2002: 147). Overall, in their study, Montinola and Jackman succeed in creating an objective basis upon which accurate cross-national analysis of corruption in relation to society is made possible.
Much of the discussion about the sources of corruption put forth by Montinola and Jackman is viewed against a backdrop of the public choice theory that ‘incentive systems create and shape opportunities for corrupt behavior’ (Montinola and Jackman, 2002: 149). Essentially, corruption levels appear to comport with how much incentive individuals have to engage in corrupt behavior. Although Montinola and Jackman’s study follows this rationale, their findings are not always consistent with public choice explanations. Rather, by examining a broad sample of countries and numerous time periods, certain implications emerge that run contrary to common perceptions about the causes of corruption.
In order to adequately understand Montinola and Jackman’s analysis, the definitions of their country evaluation criteria, democracy, public sector size, economic development, and OPEC membership, are needed. For the measure of democracy, they look at freedom of group opposition, political rights, and autonomy of the legislative body as a way to gauge political competition (Montinola and Jackman, 2002: 157). These measures include implications of political turnover and the size of the electorate, in effect weighing possible political costs for engaging in corrupt practices. Similarly, public sector size is intended to focus on the amount of economic competition allowed in a given society and defined as the share of total GDP taken up by the public sector (Montinola and Jackman, 2002: 158). In theory, a larger and less efficient bureaucracy would be more likely to incentivize rent-seeking while hindering competition of the private sector, thus enhancing corruption. However, the analysis seems to show the opposite. Level of economic development is simply measured and GDP per capita, and is significant as an indicator of public sector wages. Returning to the public choice model, high paid public sector employees are less likely to engage in corrupt activities because of high costs associated with such behavior. Finally OPEC membership is simply measured as whether or not a country is a member of the Organization of the Petroleum Exporting Countries. Nonetheless, because of complete government control over the central sector of the economy, OPEC membership provides an interesting case study which raises questions about the ability of democracy and economic development in limiting corruption.
First, in their analysis of the relationship between democracy and corruption, Montinola and Jackman do find that political competitiveness does have a negative effect on level of corruption. However, they believe that ‘perhaps [their] most important conclusion is that political competition matters and there is an interesting threshold in this relationship’ (Montinola and Jackman, 2002: 167). The ‘threshold’ being referred to here is an apparent gap in the ability of political competition to hinder corruption found in newly emerging or reemerging democracies. Numerous examples in post-colonial Africa show that as countries are transitioning towards democracy but not yet fully democratized, corruption tends to emerge. Montinola and Jackman continue by pointing out that while states under authoritarian rule may experience lower levels of corruption than partially democratized states, they prescribe that ‘countries suffering from substantial corruption need more democratic practices, not less’ (Montinola and Jackman, 2002: 168). Similarly, they stress the need of an elected legislature that is willing to accept a high level of political competition, even after gaining office. The presence of democracy within a society also tends to promote transparency in government as political participation takes place. Sirowy and Inkeles argue that democracy ‘feeds a participatory mentality that carries over into the economic arena and greatly increases the flow of information so essential to effective and efficient governments’ (1990:133-4). Thus in the case for democracy, Montinola and Jackman conclude that democracy does limit corruption once a sufficient level of democratic practices is reached.
In examining the size of government as having a potential effect on corruption, Montinola and Jackman were unable to make a decisive claim for or against. While received wisdom suggests that large governments foster corruption by increasing rent-seeking opportunities in the public sector, the opposite may in fact be true. For one thing, higher government spending may indicate higher wages for government employees, which would thus curb incentives to engage in corruption. Moreover, Montinola and Jackman cite examples from South America in which countries that had decreased the government’s presence actually experienced higher levels of corruption (Montinola and Jackman, 2002: 169). Either way, they are unable to determine what effect, if any, government size has on level of corruption.
However, economic development measured by GDP per capita did appear to have a negative effect on corruption, thus implying that states with higher levels of economic development are less likely to experience corruption. In their analysis, Montinola and Jackman introduce an idea of diminishing returns associated with the relationship between corruption and level of economic development, essentially arguing that although corruption is hindered by economic development, this effect loses steam as development continues (Montinola and Jackman, 2002: 160). But, similar to the effect of government size, high GDP per capita is likely to reflect higher wages earned by public sector employees, again reducing their incentive to act corruptly.
Finally, member states of OPEC seem to experience a high and unique level of corruption. While government size appears to have an insignificant effect on corruption levels in most places, OPEC membership proves to be an exception as the central sector of the economy, petroleum exports, is completely state controlled. Montinola and Jackman refer to this as the ‘OPEC effect,’ which ‘suggests that state control of all aspects of the dominant sector of an economy does in fact increase the opportunities for seeking and corruption’ (Montinola and Jackman, 2002: 170). Moreover, by controlling such a large portion of the economy, politicians gain an incentive to use clientelism to electoral advantage. Thus the ‘OPEC effect´ has significant economic and political consequences for corruption levels, as competition is continually diminished. Jahangir Amuzegar argues, ‘Since oil revenues accrued directly to the state treasury, political leadership-traditionally separated from the people in most member countries-also became economically and financially independent’ (1998: 107). Through control over immense oil wealth, political leaders in OPEC states were able to insulate themselves from the people, drastically limiting the possibility of political competition. As Amuzegar continues, ‘Oil income was used to secure political peace (if not loyalty), ensure public employment, distribute patronage, and co-opt the opposition,’ creating an environment in which corruption is able to flourish (1998:108).
Although there is no uniform response as to why corruption is more pervasive in some societies than in others, Montinola and Jackman create fairly clear templates to help predict whether or not a state will be prone to experience corruption. Although previous knowledge would suggest that larger governments, with expansive bureaucracies and more rent-seeking opportunities, would facilitate high levels of corruption, their study indicates that this is probably not the case, and that the opposite may in fact be true due to government spending on employees’ wages. Similarly, countries with high economic growth measured through GDP per capita again may be indicative of a high wage level. Higher wages reduce incentive to engage in corruption, so countries with high economic development and possibly those with large bureaucracies inhibit corruption.
The negative effect of democracy on levels of corruption is unequivocally supported by Montinola and Jackman, particularly in the ability of democratic processes to increase competition and the likelihood of political turnover. Such electoral uncertainty lessens political leaders’ incentives to act corruptly. However, partially democratized countries such as those introducing or reintroducing democracy are likely to experience corruption, perhaps at levels higher than those found in authoritarian governments, thus explaining the nonlinear effect democracy has on corruption. Also, as Sirowy and Inkeles argue, democracy may also provide citizens with a less tangible desire to be involved in participatory politics, resulting in greater demand for government transparency.
By bringing OPEC membership into their study, Montinola and Jackman complicate their analysis by showing that merely possessing one criterion for a low-corruption society may not be enough. Despite possessing immense wealth through petroleum exports, OPEC member states continue to experience high levels of corruption. Their claim that big governments do not necessarily lead to corruption is also compromised here because of state control over the dominant economic sector. Again, this in turn limits the possibility of true democracy by insulating government officials from the people and incentivizing their use of brides and patronage to remain in power. The case of the OPEC countries suggests that a lack of economic competition can translate into low levels of political competition, which as Montinola and Jackman argue, is the prime environment for corruption. Thus, to guard against corruption, it seems that countries need to eliminate existing incentives to engage in corruption. Those countries that fail to do this are the ones experiencing more pervasive corruption. However, Montinola and Jackman demonstrate that those societies which foster political and economic competition, encourage electoral consequences, and promote economic development are the ones most likely to avoid corruption.
Notes
Amuzegar, J. (1998), ‘OPEC as Omen’, Foreign Affairs, Vol. 77, no. 6, pp. 95-111.
Jackman, R. and Montinola, G. (2002), ‘Sources of Corruption: A Cross-Country Study’, British Journal of Political Science, Vol. 32, pp. 147-170.
Sirowy, L. and Inkeles, A. (1990). ‘The Effects of Democracy on Economic Growth and Inequality: A Review,’ Studies in Comparative International Development, Vol. 25, pp. 126-157.
