This paper surveys the relationship between democracy and corruption in more corrupt than South Africa and Brazil (tied at rank 69) and China (rank 80). Africa and, to a lesser extent, Russia-all places where the sub- ject of corruption tion that have no special relationship to democracy at all. Still, they present. Sub-Saharan Africa, Southern and. Central Asia, the .. existing results on the relation between democracy and corruption are mixed. A main problem that.
Some argue there is simply no relationship between the two variables Ades and Di Tella,; Fisman and Gatti, While it is unrealistic to assume that any method can eliminate corruption altogether, the question is whether the practice of democracy can reduce the severity of the problem over time Habtemichael and Cleote, This dissertation will test the hypothesis that democracy can reduce corruption.
Chapter II will begin by briefly detailing the meaning of democracy. Finally, chapter VI explores the empirical evidence. As the dissertation unfolds it will become clear that there is evidence to support the hypothesis that democracy can reduce corruption, but the link is far from conclusive.
Electoral competition can be beneficial, but democratic elections rarely reduce corruption alone. It is necessary to divide democracy into two stages, democratisation and democratic consolidation  — as levels of corruption typically increase in the initial stages of democratisation Montinola and Jackman, ; Quizilbash, ; USIP,10; Saha et al.
With this in mind, there is evidence to support an inverted U relationship between democracy and corruption Treisman, ; Fishman and Gati, ; Xin and Rudel, ; Chowdhury, Once democracy is consolidated, there is reason to believe that corruption can be reduced.
However, the process is not linear, it can take a great deal of time and results vary across different forms of democracy and in different countries Kolstad and Wiig, Furthermore, consolidated democracies are not short of their own forms of corruption. In essence, there is no simple relationship between these variables Rose-Ackerman, Observers should be positive without being overly optimistic.
Democracy is one of many possible methods to reduce corruption Uslander, Corruption also comes in different forms UKaid, Many of the studies presented in this paper rely on subjective perception indices, a method of testing that is both limited and potentially problematic. However, an analysis of these indices is beyond the scope of this dissertation . Definitions It does not take long to find detailed explanations of democracy Shepard, ; Gallacher, ; Cohen, ; Harrison, ; Tilly, There is no checklist of a democracy but the text books do repeat common principles and themes Doig, They include political legitimacy of the state through universal suffrage and regular elections; an effective political opposition and representative government; impartial and accessible criminal justice systems and the absence of arbitrary government and human and civil rights indicated by freedom of religion, association, expression and movement for a full definition, see Doig, Particular attention will be paid to vertical horizontal  and societal accountability .
Vertical Accountability In an oligarchy or an autocracy, those in power are rarely elected by popular vote see Figure 2  South West College, Autocracies depend on the support of a small group of political and social elites, the military, the bureaucracy and the secret police USIP,9.
The general public have less influence on the political process and less knowledge about how decisions are made Shah, and therefore, there is less transparency and less accountability. In a democratic regime the populace acquires more extensive and effective means of detecting and punishing corrupt practices Sandholtz and Koetzle,38 — as universal suffrage and democratic elections allow citizens to hold their elected officials to account Linz and Stepan, ; Rose-Ackerman, ; Lederman et al.
It is natural to assume that this system of government could reduce corruption. Firstly, there is a formal channel of vertical accountability not present in alternative systems of government  see Figure 2 Transparency Accountability Initiative, ; UKaid, Politicians are, to some extent, accountable for their actions Linz and Stepan, ; Rose-Ackerman, ; Lederman et al.
While citizens cannot force elected politicians to work in their interest Bebchuk and Fried,they can dismiss those who do not Chowdhury,; USIP,12; Bhattacharyya and Holder,2; Batzilis,3. Therefore, with a punishment mechanism in place, politicians  have an incentive to constrain their greed and align their interests with those of their constituents Linz, ; Linz and Stephan, ; Boswell, ; Rose-Ackerman, ; Bailey and Valenzuela, ; Lederman et al. Because a candidate directly accused of abusing their position of power for personal gain can expect to lose the election Rose-Ackerman, Revelations of corruption can impose reputational costs for wrongdoing, demand public inquiries and encourage the dismissal of elected politicians and bureaucrats Osipian, In rare cases corruption scandals can result in prosecution ibid, So it is in the interest of opposition parties to uncover any of their opponents who are engaging in corruption.
Not only does this encourage greater transparency in the political process, it firmly incentivises the incumbent government to meaningfully engage in the fight against corruption Chowdhury, It also induces politicians to avoid allegations of corruption if their party is seeking re-election Osipian, By making politicians more accountable to the public, therefore, democratic elections encourage politicians to transform their behaviour and help them become more conscious of the electorate Linz, ; Linz and Stepan, ; Boswell et al.
Some also argue that electoral competition can drive down private rents that can be appropriated by individuals because offers of favourable treatment for special interests can be undercut by the opposition Myserson, ; Ades and Tella, In other words, knowing someone in a position of power becomes less valuable where the incumbent government can rarely rely on remaining in power Kolstad and Wiig,3.
This explains why there are many proponents of democratic elections to reduce corruption Mershon, ; Scheiner, ; Lederman et al, ; Ferraz and Finan, ; Schleiter and Voznaya,4; Batzilis, Horizontal Accountability Another basic principle of liberal democracy is that power in government should not be vested into a single authority Samarasinghe,6; Rose-Ackerman,85; National Conference of State Legislatures, Alone, this does not prevent an abuse of power.
However, when a system of checks and balances is implemented, where each branch of government has the authority to hold other institutions to account, a system of horizontal accountability has been established Transparency Accountability Initiative, Each wing of government will have separate oversight responsibilities and separate authorities ibid, In turn, each wing of government is accountable to another, with the power to stop, criticise and block their actions Lassen and Alt,1.
In turn, the government remains accountable for its actions between elections. Logically, horizontal accountability and checks and balances should act as a safeguard against corruption Persson et al. By limiting individual discretion, checks and balances on power can constrain the ability of officials to deviate from impartial practices Kolstad and Wiig,3.
A state institution becomes less powerful when its actions are regularly scrutinised by other institutions Samarasinghe,6; Rose-Ackerman,85; Kolstad and Wiig,3; USIP,12; National Conference on State Legislatures, Democratic institutions provide the checks on governmental power that are necessary to limit the potential for public officials to accumulate personal wealth and carry out unpopular policies Barro, Also, with checks and balances the risk of engaging in a corrupt transaction increases.
In an autocratic or oligarchical system, there are no legal restraints or other conditions to prevent the ruling elite from exercising their will Saha et al.
However, in a democracy, the costs of engaging in corruption are naturally intensified with heightened risk McGovern, ; Persson et al. By expanding democracy one is increasing the probability of the detection and punishment of corruption, and in turn, reducing the proportion of bribe-takers Saha et al. A separation of powers also enhances transparency in the political process, because there is clear information concerning the remit of each branch of government.
In turn, information rents should decrease with greater transparency Kolstad and Wiig,3.
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While democratic elections allow citizens to hold their elected officials to account when the election is held Transparency Accountability Initiative, ; UKaid,19horizontal accountability and checks and balances on power allow state institutions to hold elected officials to account while they are in office McGovern, ; Persson et al. Societal Accountability In a democracy, there are also other means to reduce corruption. When democratic rights and freedoms are ensured and protected by law, the media, Non-Government Organisations NGOs and Civil-Society Organisations CSOs can work to enforce social accountability — an indirect way to hold government officials to account.
According to the Canonical Policy Agency Model see Barro, ; Ferejohn,voters can use this information to help them make an appropriate, informed decision in the next election. They can also expose hidden information, stimulate inquiries and publicize discoveries of corruption Saha et al, When a corruption scandal is out in the open, the government has a higher incentive to prosecute and punish the miscreants Saha et al.
By spreading the state of corruption institutions of societal accountability can encourage anti-corruption agencies to pursue prosecution Power and Taylor, They can also influence public policies by actively criticising corruption and public misdeeds Chowdhury,2; Besley and Burgess, Some argue that an independent press is one of the most effective institutions to uncover and publicize wrongdoing by government officials Lederman et al.
In a democracy, individuals have the freedom to associate with these institutions, the freedom to expose information and therefore the freedom to promote greater transparency. In an oligarchy or an autocracy, these freedoms are not ensured and individuals attempting to expose wrongdoing and corruption are often in great danger. Without these institutions it is difficult for citizens to vote retrospectively  Chowdhury,; Kolstad and Wiig,3 and punish corrupt candidates, if there are few institutions dedicated to publicizing wrongdoings by public and private officials Chowdhury,; USIP,12; Bhattacharyya and Holder,2; Batzilis,3.
These institutions also act as an informal check on power, outside the realms of formal government Bruentti and Weder, ; ; Chowdhury, ; USIP,13; Bhattacharyya and Holder,2; Osiphian, With all this in mind, it appears, that democracy can serve as a tool to reduce corruption Langseth,12, 15; Treisman, ; Chowdhury,13; Kolstad and Wiig, If the likelihood of detection and punishment is high, bribes may not be worth paying or accepting Rose-Ackerman, The higher the probability that corruption will be detected and punished, the lower the effective benefits available Rose-Ackerman, The competing politicians and officials may turn honest, simply because it is no longer profitable for them to engage in corruption Rose-Ackerman, Empirical Evidence Electoral competition does have its uses Emerson, Too little competition between candidates puts accountability severely at risk Giliomee, ; Mershon, ; Scheiner, ; Schleiter and Voznaya,4.
Schleiter and Voznaya4 warn that even the most unpopular, corrupt, under-performing incumbents can survive in office if competition between opposition parties is weak Giliomee, ; Mershon, ; Scheiner, Montinola and Jackman analysed 66 countries from to and 51 countries from to and found that if competition exceeded a certain threshold, democracy can counteract corruption. However, this issue is far from simple. InClaudio Ferraz and Frederico Finan used Brazilian audit reports to test whether the possibility of re-election affects the level of rents extracted by incumbent mayors.
Similar evidence was found in an earlier study Ferraz and Finan, Therefore, one needs to strike a balance between too little and too much competition. Insecurity of tenure and too much security of tenure can corrupt arrangements in a similar way Olson, If a politician is operating where their re-election is unlikely, they may treat the government as an arena for short term gain Rose-Ackerman, Yet, insecurity of tenure can also corrupt arrangements Olson,; Rose-Ackerman, A political candidate must have the chance to return to power in the next election, but the prospect should be well below certain Rose-Ackerman, The concept of vertical accountability is also contentious.
On one hand, there is evidence to suggest that the scope for corruption can be powerfully conditioned by the ability of voters to control their politicians Schleiter and Voznaya, InBatzilis analysed the impact of electoral competition on the levels of corruption in Greek municipal governments.
Batzilis34 found that the competitive municipalities had substantially lower levels of corruption. He35 argues this is because party competition can strengthen the screening mechanism of elections and impose a stricter discipline on the incumbents.
InSchleiter and Voznaya used evidence from 70 different democracies around the world and found that party system competitiveness can reduce corruption by enhancing the information available and effectiveness of the choices available to the electorate It would therefore seem that democratic elections are a useful tool in reducing corruption. However, where party systems were strongly fragmented and the governing party dominated the political system, corruption was found to be higher Schleiter and Voznaya, The cost of electoral campaigns alone can produce new incentives for politicians to extract rents from wealthy individuals Rose-Ackerman,83, 90, ; Kolstad and Wiig,3.
Corruption often exists as part of a wider clientelistic framework where politicians tolerate the misuse of state funds by officials so they can gain access to the networks maintained by those funds Singer, Parties may suppress corruption because it is in their interest. Finally, while elections may increase transparency, as Mehmet Bac argues, that this can simply make it easier for individuals to identify which official to bribe.
With this in mind, it cannot be taken for granted that the right level of electoral competition will naturally reduce corruption. Furthermore, it is dangerous to assume that the electorate will not knowingly vote for a corrupt politician Kolstad and Wiig,3or that a candidate accused of such activity will necessarily lose the election Rose-Ackerman, Even an informed and rational voter may strategically vote for a corruption politician Pani, Social and ethnic ties can prove a larger influence than academic qualifications or performance in office Banerjee,3; Horowitz, While it seems logical, vertical accountability does not always have the desired effect.
In fact, accusations of vote buying and electoral fraud show that corruption can be rife even in an electoral democracy IRIN, Burundi, for example, is supposedly a democracy at peace Sinduhije et al. Latin America is another fine example. Although the last three decades have witnessed significant advances in electoral democracy  Dix, much of the region continues to be ravaged by corruption The Economist Intelligence Unit,24; Karl,80; Otaola and Angel,5.
Bribery, in particular, is not new to the region Weyland, The number of corruption cases is quite astounding Little, Bribery to obtain government contracts, the sale of national assets and enterprises and the use of public funds for electoral campaigns, all show the abuse in their positions of power for their private gain, or interest, in the presence of electoral democracy Otaola and Angel,5. In fact, the whole region is plagued by corruption see Figures 3 and 4 Gargano, ; Parkinson, ; The Economist, Argentina, Brazil, Bolivia, Peru and Venezuela are just some of the nations racked by serious cases of corruption in the last two decades The Economist, With this in mind, it is natural to assume that electoral democracy alone does not reduce corruption Boswell et al, ; Saha et al.
Taking another example, in former Soviet bloc many countries transitioned from Communism to multiparty democracies and yet, corruption is still rife USIP, Bulgaria is a fine example, the nation conducts regular elections and still corruption remains prevalent in many of the state institutions USIP,11; Economist Intelligence Unit,4, Indeed, the prevailing evidence is that corruption actually increases in the initial stages of democratization Montinola and Jackman, ; Quizilbash, ; USIP,10; Saha et al.
Africa is liberalizing, but it will take time, and one must be prepared to persevere for a long haul. It was pointed out also that democracy in Africa has been badly hindered by the state's control of the economy; this has meant that the only way to get rich has been through political office, intensifying the problem of corruption, and inducing leaders to cling to political power.
This has been disastrous for the economies in African countries. Thus, economic liberalization, empowering ordinary producers, may well be an aid to political democracy. Furthermore, in most African countries, the small number of individuals with power have managed to erode any semblance of accountability, legitimacy, democracy, and justice, which has been a basis of considerable disappointment to the planners, economists and policy makers who want African governments to introduce a reasonable and collective attack on poverty, disease, illiteracy, and other challenges to development.
In the deliberations, certain desperately needed elements of good governance were identified, including popular participation in governance, accountability and transparency, the elimination of corruption, the protection of freedom of information and human rights, and the decentralization and devolution of power. Page 34 Share Cite Suggested Citation: This recognition emerged from the Arusha Conference "Putting the People First" of Februaryconvened under the auspices of the United Nations Economic Commission for Africa and attended by over delegations representing grass roots organizations, nongovernmental organizations, United Nations agencies, and governments.
The African Charter for Popular Participation in Development and Transformation, which was adopted by the plenary, holds that the absence of democracy is a principal reason for the persistent development challenges facing Africa: After all, it is to the people that the very benefits of development should and must accrue.
We are convinced that neither can Africa's perpetual economic crisis be overcome, nor can a bright future for Africa and its people see the light of day unless the structures, pattern, and political context of the process of socioeconomic development are appropriately altered.
In the three workshops, the importance of popular participation in building democratic society likewise was underscored: When one examines existing democratic societies, one realizes they have succeeded primarily because they have involved people to help make it work.
Also, they have empowered those engaged in democratic projects. In short, they have succeeded by giving voice to those who have been voiceless. As such, critics of the government either are intimidated or absorbed. Page 35 Share Cite Suggested Citation: Foreign nongovernmental organizations also tend to work with governments and may be used by them in order to promote government patronage.
For example, it was noted that "measures that require the registration of civic associations, such as trade unions or student movements, have been used by governments to dissolve associations on petty pretexts. It also was suggested that civic associations become institutionalized and begin to support one another. Explicit measures to this end have been taken in Zambia since the recent presidential elections.
One participant also pointed out that nongovernmental organizations in Namibia were inculcating a sense of participatory democracy in their projects, including in the schools.
In discussing the relationship between participation and efficiency, the question of what is meant by efficiency was raised. Participants suggested that "a technocratic approach to efficiency takes political issues out of the hands of the people and stifles participation.
One classic example of this approach has been the imposition of structural adjustment programs, under which the entire management of the economy is removed from the realm of participatory politics. If, on the other hand, the efficiency of the government is to be measured by its ability to meet the needs of its people, then a high level of participation can only promote this end.
Discussions could have helped people to be prepared for the impact of reforms. In this manner, perhaps the reforms even could have been softened. If efficiency is measured by the government's ability to meet the needs of its people, they suggest, then "the first task of government is to make sure citizens' lives improve on a daily basis, because if citizens do not see improvement, their enthusiasm for supporting government policies wanes.
The misuse or diversion of assistance and domestic funds by corrupt officials, which was tolerated during the cold war to receive support in the international system, is being replaced by a new emphasis on good governance.
A Critical Analysis of the Relationship between Democracy and Corruption
In the past, said a number of participants, "aid appeared to be driven by certain political factors without a congruence of interests between givers and receivers. Among some participants, the assumption is that such groups can act as watchdogs, serving as the best deliverers of assistance; a number of participants did not agree, arguing that newly democratic governments should receive and channel such aid.
With regard to public officials, participants pointed out that mechanisms must be devised to hold leaders responsible when they use public resources in ways that society considers unacceptable. To that end, they noted that any public accountability system should include periodic competition and a clear set of rules and expectations.
Participants emphasized the notion that the principle of accountability, essential to democracy, requires exposing the truth, with stated and enforced consequences for violating the rules, without exception, even for those in power.
The lack of accountability in Africa has led to the gross misuse of public resources.
For example, single-party systems in Africa do not allow for much in the way of accountability. The effect has been rampant corruption and the deterioration of socioeconomic conditions—an indication that people in Africa were governed without being able to control their governors.
This not only requires systems of financial accountability, but also the capacity and willingness to monitor the overall economic performance of the government. Another challenge discussed under the rubric of good governance was to achieve transparency in government transactions.
In most African countries, participants noted that it is difficult to find functioning establishments in which government accounts, external procurement procedures, and central bank operations are discussed objectively: The state must be deprivatized [from domination by the few] and a public arena must be created where there would be room for argument and discussions based on what is good for the entire society.
Things should be argued in public terms so that everyone can participate on an equal basis. Several participants pointed out that government should not conceal information from its citizens. A number of suggestions were put forward by participants regarding the ways in which transparency might be achieved in Africa.Corruption: The challenges of Modern Democracy
These included freedom of the press, donors' insistence that governments make their ledgers and gazettes public knowledge, requiring declarations of assets from public officials, exposing and confronting corruption, and accountability from below.
Some participants also raised the question of whether donors genuinely verify democratic conditions in recipient countries, such as Liberia and Kenya. In the case of Liberia, participants suggested U.
With regard to Kenya, participants pointed out the inconsistency in application of the good government policy advocated by the British, compared with other bilateral donors. Despite Daniel arap Moi's initial reluctance to yield to the demands for multiparty politics, Kenya received substantial British investment and was defended by both Foreign Minister Douglas Hurd and Aid Minister Lynda Chalker as having a good human rights record.
One participant argued, "Perhaps democracy is being used as a legitimation of intervention. There is a need for transparency in the advice donors give to African governments.
When projects [that have been agreed on behind closed doors] fail, the onus is put on African governments. Page 38 Share Cite Suggested Citation: One participant stated, "Having worked for several aid agencies, I will add that the donors need to undertake governance reforms. I hope that the progressive and democratic forces in Africa both during and after the transition will demand those reforms of the donors. For example, demand the publication of confidential reports of the World Bank and International Monetary Fund.
They are confidential only in lessening the level of accountability of these agencies to populations and opposition. I think there should be much more transparency in the policy-making process, especially during structural adjustment negotiations. That lack of transparency has satisfied only the donors and the governments, and it will be interesting to see, after the transition, whether newly democratic governments will open up this process to the press, and I think they should, because it will much improve the structural adjustment process.
In most African countries, corruption constitutes an important means by which individual wants and needs, especially in patronage-ridden personal regimes, can be satisfied.
Although corruption is a general problem for all governments, governments of developing countries tend to exhibit the problem in a particularly noteworthy way. In countries such as Nigeria, Ghana, Sierra Leone, Zaire, and the Central African Republic, corruption is so extensive that it is viewed as a way of life. Making or receiving bribes in most African countries is considered a practical tactic to look after one's needs and interests, achieving incomes and security far greater than provided by one's monthly salary.
Because of an absence of effective structures with autonomy and strength to check corruption, the governing elites of most African countries have engaged in high and sometimes egregious levels of corruption, increasingly diverting state resources for personal gain. In Zaire, for example, one participant mentioned that corruption has been termed a structural fact, with as much as 60 percent of the annual budget misappropriated by the governing elite.
Foreign aid, noted the participants, although designed to contribute to development, also has served as an alternative source of wealth for corrupt elites. It was also pointed out that, to the extent that government has been immersed in patron-client relations and in cases in which state office is granted as a means to amass personal wealth, corruption has increased in scale and proportion. One significant suggestion advanced by participants in both the Benin and Namibia workshops was that public monies siphoned off by corrupt leaders and public officials and deposited in the West must be returned.
They made a plea for donors to suggest steps that African countries could take that might help retrieve the stolen money deposited in foreign accounts by these public officials.
One participant stated, "Stolen monies do not belong to the few individuals who perpetrated the thefts. The people of African countries were robbed. If donors were to try to help get this money back, it maybe would contribute to democracy and democratization.
Although participants acknowledged that corruption in Africa emanated from the lack of democracy and accountability, they emphasized that corruption is not unique to Africa and also may be found in liberal democratic systems. Consequently, they were of the opinion that the real issue is the absence of institutions capable of tackling corruption.
As one participant argued, "With regard to corruption and stolen money, my own advice is to let sleeping dogs lie and engage ourselves more in how to create institutions that will help make a repeat performance impossible.
I also think we can suggest to donors that we want a change in the form in which aid comes. For example, donors no longer should give direct monetary aid, because this can be misutilized, but could provide assistance in other ways that would ensure it is effectively utilized.
For example, it was stated that almost everywhere in Africa "radio and television are under direct government control. Radio is often particularly important in rural areas, and among people not literate in European languages, whereas newspapers are expensive to run and can be subject to government censorship or indirect pressures over matters such as the supply of newsprint.
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In countries like Mozambique, the media were assigned a political role as agents of mobilization. In South Africa, although restrictions have been eased, newspapers still retain a high degree of self-censorship. It was acknowledged, however, that professional training is needed for journalists, especially in countries whose press has been under state control.
One participant called for African journalists to train younger colleagues, organize themselves into associations and trade unions, and to sponsor conferences around the issue of the press and democracy. These steps, he offered, "could contribute to the emergence of a free and independent press in Africa, with persistent reporting in turn contributing to improved governance.
It also was pointed out that reforms of press laws will be required in a number of countries. Some participants advocated that a code of ethics for the press be instituted simultaneously with such new laws. As one participant illustrated, "ultimately, freedom of the press reflects the freedom of society itself.
In countries such as Swaziland and Zambia, the refusal of the press to be coopted was a major factor contributing to an open society. In Nigeria, there are over 50 newspapers and lots of magazines, with many of them in local languages and dialects. Generally, the more press there is, the greater the difficulty government has in suppressing it.
Participants indicated that regular indigenous institutions for monitoring should be established, although assistance from international civil society also could be very supportive, ideas that will be discussed further in the next chapter.
The use of alternative media, such as drama, news murals, and posters to educate people about rights was also recommended. Participants noted that, in politically fragmented countries, decentralization might allow the various political, religious, ethnic, or tribal groups greater representation in development decision making, thereby increasing their stake in maintaining political stability.
One participant convincingly argued, "With reference to decentralization, I would simply like to say that we have to look at things from the point of view of democratic society. Are we going to tolerate diversity?