Professor Robert Klitgaard is a leading international expert on corruption. He has written a number of books on the subject, including Tropical Gangsters, which is included in the New York Times’ Books of the Century. Professor Klitgaard has advised many governments on economic strategy and institutional reform, and his consulting work and research have taken him to more than thirty countries in Latin America, Asia and Africa. In this issue of IBAC Insights Professor Klitgaard gives a preview of his keynote address at the 7th Australian Public Sector Anti-Corruption Conference.
A few years ago the Australian author James Boyce published a remarkable book called Born Bad, which traces the history of the doctrine of original sin in Christianity and beyond.1 Boyce makes a strong case that many modern and post-modern takes on humankind, including Freud and Nietzsche, build on original sin. And so it is in the study of corruption. A kind of 'it’s in our bones' argument often stops people from thinking hard about what to do and how.
So let's start with a few preliminaries. Every society has corruption, defined as the use of office for illicit private gain. At the same time, every society decries corruption. It is one of the most talked-about issues around the world, the theme of disturbances and campaigns, the subject of condemnations and ardent promises.
And yet: even as we complain, we accept; and sometimes, we participate. The essence of underdevelopment, for people as well as countries, could be this: we say we don’t want something, and then we go ahead and do it.
In these situations we may talk metaphorically of a culture of corruption as when 'Good people, trapped in a corrupt structure, become corrupted as they do their best within the given economic, legal, institutional structure.' 2 In fact, in many cases where corruption becomes the expectation, people have excellent individual ethics. Given what everyone else is doing, it may be almost an imperative to bribe, to be dishonest, to cheat.
A corrupt equilibrium can be understood as an 'n-person Prisoners’ Dilemma'; where many people wish they didn't have to participate but where individuals' maximising logic drives them to do so. Once corrupt behavior is embedded, each individual may have little choice but to go along. The logic of calculation and equilibrium suggest solutions that go beyond efforts to change a culture’s norms and values.
The principles of change resemble other situations of collective action.3 There are a variety of ways to 'subvert' a corrupt equilibrium, including 'frying big fish', taking two or three highly visible steps people can perceive as progress, and reforming institutions to raise the risks and lower the rewards from corrupt behaviors.4
It is therefore possible to adopt an economic perspective on corruption and explain it with concepts like monopoly power, weak information systems, and incentive systems that are easily undermined by the unscrupulous. Noble exceptions aside, the avaricious side of human nature finds a particularly hospitable environment in settings characterised by poverty, instability, and social disintegration.
The story is of course not exclusively economic. Good leadership and competent employees make a difference. To put it another way, even good systems can be subverted. As experience in many countries shows, the best of legal systems and organisation charts may fail if employees are incompetent and unmotivated.
There is no once-and-for-all cure for corruption. But we can make our anti-corruption efforts more sustainable if we:
- make the supply of goods and services more competitive
- make regulations and permits simpler and less encumbering
- make citizens' feedback about the good and bad things government does more efficient
- link this feedback more closely to the monetary and non-monetary rewards
- improve the transparency of governmental affairs.
It should be no surprise to notice these are also good guidelines for a more efficient and just governance.
 Boyce J 2015, Born Bad: Original sin and the making of the Western world, Counterpoint Press, Berkeley.
 Light DW 2013, 'Strengthening the theory of institutional corruptions: Broadening, clarifying, and measuring', Edmond J. Safra Working Papers, No. 2, 21 March.
 Olson M 1971, The logic of collective action, Harvard University Press, Cambridge; Poteete AR, Janssen MA, & Ostrom E2010, Working together: Collective action, the Commons, and multiple methods in practice, Princeton University Press, Princeton.
 Pieth M (ed.) 2012, Collective action: Innovative strategies to prevent corruption, Dike Verlag AG, Zurich; Klitgaard R 2015, Addressing Corruption Together, OECD, Paris.