Three causal narratives about regulation and corruption

Claire A. Dunlop, University of Exeter, UK
Claudio M. Radaelli, University College London, UK

What is the exact causal relationship between corruption in the public sector and regulation? Hundreds of studies have scrutinized this relationship. We end up with not just one, but three causal narratives: that regulation causes corruption but under certain conditions; that it is the quality of regulation to hinder corruption; and that anti-corruption regulation can aggravate the problem of corruption.

The first narrative is by far the most popular. It is corroborated by studies carried out mostly by economists – regulation of private market activities may not only be inefficient, but push companies and small business entities to pay bribes to avoid either compliance or administrative costs – or simply to get a permit that depends on the discretion of public authorities. Does it follow that de-regulation is always a good idea to curb corruption? It depends: for a start, we have an efficiency loss if we scrap regulation that generates net social benefits. Then in some cases even what apparently looks like the most benign form of de-regulation, such as de-regulating business starts-up, can facilitate corruption. This is the case when de-regulation facilitates the process of rent-extraction by ruling elites. It also depends on whether we are looking at small-scale corruption in rule-making or grand-scale regulation-induced corruption such as nationwide privatization plans or the attribution of licences to broadcast television.

Here the second narrative has a role to play. It is not regulation in general that causes corruption, but those regulations that are particularly bad. Bad for what, in what ways? Bad because of irritating burdens, the presence of discriminatory consequences between types of firms and economic operators, and also bad for governance – consultation opportunities may be in practice restricted to the usual suspects and inspection plans may de facto encourage corruption. This is where we encounter an important lesson: to be effective, the use of regulatory policy to hinder corruption has to be targeted. Instead of bonfires of regulation, we need to rely on policy instruments that allow sifting through regulation in granular ways. This explains the success of policy instruments such as regulatory impact assessment.

And yet – the third narrative claims – shouldn’t we tackle corruption by drawing on regulation directly, that is, with specific anti-corruption regulatory architectures? In the European Union public anxieties about corruption in Eastern and Southern Europe are rife. These anxieties are particularly acute when it comes from European Union funds for development and cohesion. In Brussels, the European Commission may think they are funding projects, instead they are fuelling corruption. To avoid this, the EU’s development and cohesion policies have kind of mutated into a problem of fighting corruption and protecting the monies of the European Union. So, we have a complete re-categorization of EU policy – from development policy to anti-corruption. But, the story goes on, the heavy regulatory framework raises the cost of applying for EU funding – small firms are excluded and only the best organised firms can access EU funding for projects. Other firms hire specialist consultants that translate the language of EU formalities and regulations into the language that economic operators understand. The whole system becomes heavily regulated and makes non-compliance harder to detect because the bar is raised: more specialism, more ‘entrepreneurs’ that allow local actors to fund their activities want even if these activities do not really produce ‘development’ and ‘cohesion’.

Where do these narratives leave us when it comes to designing solutions? An original way to re-cast the debate is to focus on the design of the instrumentation that governs the production and usage of rules. In a sense this is meta-regulation, that is the procedural rules (found in administrative law) that apply to the life cycle of regulation. Regulations do not come from nowhere. In the OECD experience, governments have adopted administrative procedures through which proposed regulations are appraised (via impact assessment), then designed (via drafting rules), then again notified to stakeholders for comments (via consultation in Europe, or notice and comment in the USA). These procedures are complemented by other procedures that allow regulations to enter into force, be delivered, accessed (via Freedom of Information Acts) and re-calibrated through judicial review – and in many countries via the Ombudsman. There is a whole-of-government meta-regulatory design concerning the life-cycle of regulation. By measuring the characteristics of the meta-regulatory design across countries we can infer whether the opportunities for corruption during rule-making are increased or reduced. This implies the existence of a set of coherent measures on impact assessment, consultation, judicial review, freedom of information and the Ombusdman. For this reason we are collecting a new data set where we follow the same template to gather information across the EU-28 on how impact assessment, consultation, freedom of information, judicial review and the Ombusdman procedures work in terms of openness, access, transparency and scope. This novel data set will allow to empirically identify country by country the accountability relationship that the meta-regulatory design generates, and to associate with the outcome of interest, in our case corruption.

Conceptually, the research question is whether the design that appears once we have measured the five procedures mentioned above triggers social mechanisms that effectively make the bureaucracy accountable to the general public – in some countries the design may well be flawed if it tilts the scale towards special interests. Our work in the project Protego (Procedural Tools for Effective Governance), carried out with Professor Alessia Damonte at the University of Milan, suggests that, first, the procedures work together, hence we should model the causal effect of the whole design on corruption as outcome. Second, this causal effect works through mechanisms that make the bureaucracy accountable to a narrow or wide set of actors. Third, it is the accountability relationship at the stage of rulemaking that has a special place in the production or mitigation of public sector corruption. In fact, it is when a rule is formulated or delivered that bribes are paid and corrupt exchanges take place. By working together, the instrumentation of meta-regulation can either make a special interest in control of rulemaking (this can also be the public managers themselves) or make the bureaucracy respond to a plurality of interests. We can see now that the issue is no longer one of constraining bureaucracy or giving it discretion. Neither is it an issue of the political principals being able to force on the bureaucracy their preferences. It is an issue of whether rulemaking generates accountability to a pluralist constellation of interests. If this is correct, we would expect cross-national variation on corruption depending on the combination of policy instruments affecting rulemaking. This brings us to our to final question: to examine this variation, how what types of data are available? A vast literature has raised pretty fundamental doubts on the validity of the most common cross-country indicators like Transparency International’s CPI – Corruption Perception Index. Unfortunately, this is one of the indicators most often used in cross-country research.

Are we condemned to use datasets we have little confidence in – only because they are the only ones that allow for cross-country analysis? Others have looked instead for alternatives, especially objective measures. By their very nature, objective measures do not have the bias of perceptions-based indicators. To illustrate, we can use the gap in physical infrastructure (a given level of infrastructure should exist given the level of capital outlay, it is not there it must be because of corruption), the number of public managers involved in cross-border corruption cases, or single bidding in competitive markets as proxy of favouritism in public procurement. Further, it should not be taken for granted that cross-country empirical analyses should be carried out at the national level. The regional level can provide valuable lessons.

Although the debate on measuring corruption is lively, there is no convergence. To establish the exact meaning of corruption in a given social setting and achieve strong construct validity, one has to go in the field and look at how communities socially construct corruption. However, practice and meaning-tracing has obvious limits when one is interested in cross-national research. Then one needs data that are available in time-series and for many countries. For us, the most coherent respond is to generate new data that respond both to the research questions about corruption and regulation we want to address, and reflect faithfully the understanding of causality embodied in the causal narrative we want to test.

Claire A. Dunlop is Professor of Politics and Public Policy at University of Exeter, UK

Claudio M. Radaelli is Professor of Politics at University College London, UK



Corruption Hunters! SCSC alumni team up to recover and return illicit assets in Nigeria

Former Sussex students, Jonathan Benton and David Ugolor, are now actively taking the anti-corruption fight forward in Nigeria. They explain more about their work here.

We’re into the third year of President Buhari’s term in office, elections loom. For those not familiar with Nigerian politics, President Buhari was elected fair and square on an anti-corruption ticket. The last lot were awful. I (Jonathan) know, I investigated the person who was undoubtedly the most powerful woman in Nigeria (at the time), Diezani Alison Madueke, the former oil minister. Former Central Bank Governor, now the Emir of Kano State, Saraki, put the loss in oil revenues from corruption during her term in office at US$40bn. That’s right, $40bn!

David and I were post-graduates under Prof. Dan Hough and Dr. Liz David-Barrett’s tutelage. Prior to Sussex we were both active anti-corruption professionals, Sussex honed, tamed and educated us. David has over a quarter of a century of anti-corruption campaigning under his belt. I was a Scotland Yard detective who landed the best job in the world, head of the UK’s grand corruption and illicit money flows enforcement unit – the Proceeds of Corruption Unit, later the International Corruption Unit. It was such an amazing job I stayed there for nearly a decade.

We’re both still fighting corruption. David leads the civil society movement that is ensuring that the assets repatriated as a result of investigations in Switzerland, the US and UK are returned to those who need them – those denied basic public services because their elites lined their own pockets first.

We’re now in Abuja together, working out what we’re going to do next. David has built an awesome web-based property tracker – – it does what it says on the tin. It tracks property, that is, property owned by elites. Yes, the ultra high-value villas in smart areas of Abuja that have been, somehow, bought by senior politicians, military personnel and so on, all supposedly on their modest state salaries. It is awesome.

We’ve grand ideas for the next phase. I’m fortunate to have a network of former Scotland Yard financial investigators in London to work with. All have been with me investigating corruption in Nigeria and the illicit money flows to London (and beyond). By helping to hide the loot, London has been – and still is in part – “fantastically corrupt”, to use the phrase former UK prime minister David Cameron used of other countries. We’re going to continue to expose it, ensure law enforcement and prosecutors take their illicit gains off them, and David’s team will make sure it goes back to the people from which it was stolen from. Corruption hunters. Thank you Liz and Dan, you’ve helped us on that journey.

Jonathan Benton and David Ugolor

Ghana workshop: Analysing red flags in procurement data

What do you get if you cross anti-corruption activists with mathematicians? It’s no joke. This was exactly what we did in Cape Coast, Ghana, recently, bringing these two groups together to analyse procurement data for evidence of corruption ‘red flags’ in a two-day hackathon at AIMS Ghana.

By Liz Dávid-Barrett (University of Sussex) and Mihály Fazekas (University of Cambridge). Follow us on Twitter @corruption_red

The anti-corruption world has a tendency to pin its hopes on transparency as a solution, and recently in particular on the idea that big data will revolutionise the fight against corruption. The logic is compelling. Whereas we always relied heavily on subjective perceptions to measure corruption, big data allows for more objective evidence about how – and how much – administrative procedures are subverted and manipulated.

But some profound obstacles remain. The most obvious is that, before data can be analysed, it needs to be collected. Yet many governments – especially in developing countries – struggle to collect relevant data of a reasonable quality.

Another problem is that we need people to analyse data, and they need to know what they are looking for. That means knowing the local context and the favoured tricks for conducting and covering up corrupt behaviour.

Our aim is to bridge these two gaps. In our research, funded by the British Academy/DFID Anti-Corruption Evidence programme, we collect and analyse data about public procurement for corruption risks. We also collaborate with the African Maths Initiative, who have developed a free user-friendly software platform for statistical analysis. The software makes it easier for groups to analyse our data using our method, and is an important step in turning transparency into accountability.

We look for red flags such as tenders being advertised only for a very short time (which benefits insiders who had prior knowledge), non-competitive procedures being used (often invoked on spurious grounds), or supposedly open competitions that attract only one bidder. While none of these is necessarily evidence of corruption, analysing big datasets allows us to spot patterns which – at the very least – flag up areas that warrant further investigation.

We initially focused on development aid that is spent through national procurement systems, collecting a database of more than 500,000 contracts, in more than 100 countries and covering almost a 20-year period. We share this data openly and have used it to analyse how the local regime type and changes in procurement rules influence corruption patterns.

We then worked with the African Data Initiative to develop a procurement-specific menu on their open-source statistics software, R-Instat. They originally developed R-Instat to address the need for greater access to statistical analysis tools in Africa, and have used the tool for a number of other development goals, most prominently, for helping farmers to analyse and act upon climate data.

The procurement menu on R-Instat provides a drop-down menu, on which users will find simple ways to analyse the data (for video guides, see here, here and here). We have uploaded two datasets of World-Bank funded contracts across a wide range of developing countries and many years. You can choose any one of our ‘red flags’, and easily see its prevalence in a particular country over time, or compare countries or sectors in the same year.

Visualisations are important in data analysis, so R-Instat also includes many graph and map options as well as tables.  In our Ghana workshop, we brought the data, the method, and the software and added two more key ingredients: anti-corruption activists from Ghanaian NGOs, who know all about how politicians and public officials manipulate the procurement process to divert public money into their pockets; and some of Africa’s best maths students, studying at AIMS Ghana, who know how to use statistics to analyse data.

Over one-and-a-half days, working in interdisciplinary groups, the teams analysed our donor aid data using R-Instat. Even in such a short time, they were able to produce graphs comparing the prevalence of red flags across countries or over time. They learned that there are different ways of counting contracts – by number or by value – and these might yield different results. And they noticed that sometimes a lot of data are missing, which might be a red flag in itself.

By the end of the workshop, the groups had started to delve deeper into the data . They spotted surprising patterns and sought to understand what might lie behind them, or used their knowledge of how corruption occurs to think about how red flags might relate to one another. Are companies that win because they are the only bidder more likely to be registered in offshore secret jurisdictions, for example?

Playing with the data is easy in R-Instat, and that means that users can easily experiment, test ideas and theories, or look for evidence to support or refute rumours. As one of the participants said afterwards, “now we can talk about corruption in this country in a more focused, targeted and sensible manner…cos too often the overly political and emotive discussions tend to obfuscate the real issues and even impact”.

The workshop helped show what can be done with evidence. We still need data as a starting point, but by showcasing what can be done with the right tools, we also hope to create advocates who will lobby governments for greater transparency as well as for tighter control over how public money is spent.

The way to hell is paved with good intentions; what football’s VAR can learn from an anti-corruption programme in Brazil

“Football is not a matter of life or death” claimed Bill Shankly, an iconic former manager of Liverpool football club, “it’s far more important than that”. Shankly, ever able to come up with a memorable line, was certainly over-egging that particular pudding, but the importance of football to billions of people around the planet shouldn’t be ignored.

Football is also, of course, a multi-billion dollar business. There is serious money to be made both within the game (i.e. the salaries that top players earn) and from without it (i.e. via advertising contracts, sponsoring opportunities and such like).  It’s with that in mind that FIFA, the governing body of world football, is trying to take steps to make sure that the decisions the officials on the field take are correct.

Helping referees out

Being a football referee is not easy.  The game is faster now than it ever was.  Referees are required to be real physical athletes just to keep up with the flow of play.  Throw in the fact that when the stakes are so high players are often more than willing to try and game officials and it becomes clear that a referee’s lot is not a straightforward one.

Those who oversee world football have subsequently made concerted efforts over the years to help referees out. Two referees’ assistants have run up and down the sidelines since as early as 1891, whilst exactly 100 years later a fourth official was introduced on the sidelines to further assistant the man/woman in the middle. Furthermore, in 2009 two more officials were added at either end of the field for high profile international fixtures. Refereeing is clearly now a team game, too.

On top of the human additions, goal-line technology now tells referees when the ball has crossed the goal-line. Indeed, that has become the norm in high profile competitions like the Premier League. Furthermore, its use is now widely accepted.  It was not always thus.

The use of technology to help referees out has not stopped there.  In 2018 the notion of a Video Assistant Referee (VAR) was written in to the laws of the game.  In essence, the system is simple. Video technology can be used to assess whether errors have been made in four areas; in the run up to a goal being scored, in penalty decisions, in decisions that lead to straight red cards and to cases of mistaken identity (i.e. when red or yellow cars have been awarded incorrectly). If it becomes clear that the referee has made a mistake, the decision will be overturned.

The referee can ask the team of officials operating VAR to look at decisions he/she has made or officials can unilaterally choose to check decisions. Either way, the aim is to help stamp out really bad refereeing calls.

The proof of the pudding

In many ways the logic behind VAR is impeccable.  Who can’t want to see correct decisions being made? But, the devil lies in the detail and football’s technology buffs could do worse than look at the world of anti-corruption to see why the theory doesn’t always match the practice.

As in football, no one wants to see more corruption.  No one argues that corruption (read ‘bad referring decisions’) is to be encouraged. But anti-corruption scholars and activists have long since learnt that whilst using technology to fight corruption can work (see this great example where potential corruption cases in aid projects can be tracked, for example) it can never provide all the answers.

One such example comes from Brazil. A computer programme called Rosie has been developed to keep an eye on the expenses’ claims that Brazilian parliamentarians make.  Why?  Well, Brazilian MPs have a history of buffing up their expenses so as to make a little extra money on the side.  Rosie doesn’t just look at how many Reals have been claimed, she looks at what they have been claimed for and whether that claim is out of line with what should broadly have been expected.  If a given claim looks anomalous, Rosie alerts real people so that they can investigate further.

More specifically, Rosie is looking to pinpoint cases where Brazilian law-makers spend more than the R$ 46.000 (US$ 14,700) that they are allowed. They can spend this on various expenditures that are necessary to do their jobs; meals, flight tickets, fuel and such like. As this nice explainer notes, the Brazilian Chamber of Deputies used to get around 20,000 individual claims a month and before Rosie was invented each of those had to be processed manually; a system wide open to error and, in the worst cases, corruption.

In theory, Rosie is doing work that humans can’t.  She’s keeping an overview of many thousands of transactions and highlighting cases that the human eye might well miss.  Yet, ultimately, Rosie is simply not capable of passing qualified judgement.  A out-of-since claim may indeed be evidence of corruption and Rosie’s advocates have been quick to point those out.  Or the claim may simply be left-field but defensible. Rosie can’t know that.  Furthermore, parliamentarians have quickly got to know the new rules of the game and they can and do change their behaviour accordingly.  Maybe they change the nature of the expenses claims that they make or, more probably, they simply find other ways to make that extra buck.

Learning from Rosie

What does all this have to do with VAR? Rosie is ultimately trying to make an exact science out of a fundamentally subjective process.  VAR is doing exactly the same.  Rosie is good at highlighting outlandish claims, VAR should be able to pick up outlandish refereeing faux pas. Rosie can and does make a contribution to nailing down spurious expenses claims.  VAR, in theory, should be able to do the same in terms of helping referees get decisions right.

Yet, the more one looks the more one realises that whilst Rosie has a role to play, the more one wonders whether the same really can be said for VAR.  For one thing, whilst there is a level of subjectivity that Rosie struggles with, this is multiplied significantly in the case of football. Pundits spend hours contemplating whether a particular decision to give a penalty, for example, was indeed right.  There is anything but a consensus on exactly when a player ‘dives’ or when he/she simply loses his balance.  There is a list of potentially contentious points where Rosie struggles, but that list in the case of refereeing decisions in football is much, much longer.

Narrower though Rosie’s remit is, she experiences precisely the same problem. She can see things.  But she can’t pass definitive judgement on them.  Indeed, the people who then come to Rosie’s aid also find some cases quite hard to make calls on, too. Goal-line technology, on the other hand, works precisely because there is a definitive answer out there.  Technology can indeed tell us whether the ball is over the line, just as the DRS in cricket can tell us (more or less every time) whether a batter has been run out.  In cases where there is doubt in cricket, there is a widely-accepted (and long-standing) plan B; the decision of the on field referee (or ‘umpire’) stands.  End of story.

The Way to Hell

FIFA’s decision to use VAR in the forthcoming World Cup is therefore a case of the way to hell being well and truly paved with good intentions. Much as we might want to believe otherwise, the types of decision that get referred to VAR do not have clear-cut answers.

There is, of course, an irony to this. Players make mistakes all the time.  They give the ball away, they mis-time tackles, they drift out of position, they take shots that end up nowhere near the goal.  Indeed, the imperfection of the game is, for many, one of its most endearing features.

Putting it more bluntly, football is simply not mature enough for us to expect VAR to work. Too many people within the sport are out and out utility maximisers who really aren’t interested in treating officials (and indeed the game) with the respect it deserves.

Given all of this, expect VAR to provide yet more controversy in the summer.  Buckle up football fans, it’s going to be a bumpy ride.

Dan Hough

8 May 2018

Investigative journalists and the fight to unearth the corrupt

Former Sussex student Juan Leopoldo Martinez explains why investigative journalism really does need to be at the forefront of the anti-corruption fight 

When facing state, judicial or parliamentary inertia or a lack of effectiveness in fighting corruption, investigative journalism is one of the main tools societies have left to fight graft. However, investigative journalists faces two main problems when trying to do justice to this honourable aim.

The first is the overflow of information in societies that receive important news minute by minute. This becomes an obstacle to in-depth research; there is no time for details, only for the next major event that happens somewhere in the world.

The second problem is more complex: the threats against those who investigate the events, for those journalists who go beyond the known or told facts, for whom it’s not enough to take the statements made by politicians and public figures, but who want instead to reach the truth behind the discourse. By pursuing this truth, they touch important interests of powerful people who are not willing to accept any risks to their business, especially if their activities are dishonest or if disclosing certain information would damage their reputation.

Reporters Without Borders have reported that, during 2017, at least 47 journalists have been killed worldwide while 183 social communication professionals have been imprisoned. To those, we should also add the risks taken by citizens who help journalists and media assistants; in this group, at least 13 have been murdered and 182 put in jail. There are no statistics on the amount of intimidation.

One recent example of such horrific crimes against journalists is the assassination of Daphne Caruana Galizia, one of the journalists who led the investigation of the Panama Papers and the corruption that it brought to light within her country, Malta. Even when she informed the police around two weeks before her murder that she was receiving death threats, security forces were not able to provide the protection needed and her life ended tragically.

The threats against investigative journalists are not just based on violence. Reporters Without Borders also publishes the annual World Press Freedom Index, a measure that considers several factors to determine “the level of freedom available for journalists”. By their analysis, the level of freedom has worsened considerably even in democratic systems. But the most disturbing fact, as per their report, is that the attacks on the media and newspersons are increasing worldwide.

Despite the danger, the risks reporters take are valuable. Investigative journalism is a key factor in the fight against corruption, with the capability to prompt real action by the state to prosecute graft or to stimulate collective action initiatives when sectors of society consider that something must be done against such problems.

Investigative journalism is essential to anti-corruption, and is often the last bastion of scrutiny in the most corrupt environments.  It is a fundamental instrument for good governance and a pillar of democracy. From that, it can be understood that investigative journalism is a fundamental factor to the improvement of the democratic system. But for investigative journalists to play their role, it is essential that journalists -and the media- are protected and free. Society should make efforts to promote the kind of journalism that brings positives outcomes as put public resource management under surveillance, and all the subsequent collective benefits that such actions involve.

Juan Leopoldo Martinez


Juan Leopoldo Martinez studied for an MA in Corruption and Governance at the University of Sussex in 2016-17. Previously, he graduated with BA in Journalism and MSc in Organizational Communication in Venezuelan universities. His work experience includes an internship at the APPG on Anti-Corruption of the UK Parliament, PR Director at the regional parliament of Carabobo in Venezuela and advisor at the same institution. He has a background working for private media, political and not-for-profit organizations.

When is an anti-corruption campaign not an anti-corruption campaign?

When does an anti-corruption campaign do enough to justify the claims made of its supporters? How, in other words, can we know that anti-corruption campaigns really are about tackling corruption? SCSC Director Dan Hough outlines how we might begin to see the wood for the trees.

Anti-corruption campaigns are once again in the news. Crown Prince Mohammed bin Salman (or MbS, as he is often known), the ambitious heir to the Saudi throne, is at the centre of the most recent attempt by a country to root out high-profile corruption. MbS heads up a new, powerful anti-corruption committee that, within hours of its creation, prompted the arrest of a clutch of rich, powerful and previously untouchable Saudi princes and assorted others. Even close family members of King Salman have not been exempted; two of the King’s nephews have been detained as has the brother-in-law of the late King Fahd (who passed away in 2005). 30 plus members of the ultra-elite are now in some form of custody. MbS appears to mean business.

Yet it has not taken long for dissenting voices to question what’s driving this sudden quest for probity. On 6 November the UK’s Financial Times, for example, noted in a leader column that what the FT called a “purge” was “all about consolidating power”. Martin Chulov in the Guardian, meanwhile, described the arrests as part of a broader “revolution” of reform that had the much large goal of shifting internal bases of power.

Similar claims have been made about Xi Jinping’s efforts to fight corruption in China, where, despite the arrest of over a 100,000 people (including a significant number of high-ranking officials), there remains a strong suspicion that the campaign in the Middle Kingdom has rather more to do with maintaining stability (and indeed Xi’s personal powerbase) than it does about genuinely getting to corruption’s root cause.

Politicising Anti-Corruption

Working out what’s really going on in either Saudi Arabia or China is difficult. Neither are states that where politicians are naturally open to rigorous questioning. Indeed, hereditary monarchies and communist autocracies remain instinctively averse to being open about their inner workings.

However, getting to the bottom of why anti-corruption campaigns take place in democracies is actually not that much easier. India’s anti-corruption movements, for example, have often been criticized for being middle class vehicles for defending their own (privileged) positions in society, whilst the Kaczynski twins in Poland were widely criticized for what looked much like their overtly political anti-corruption initiatives of the late 2000s. The USA’s constant pushing of the OECD to adopt an anti-bribery treaty has also been criticised for being rather more about defending the interests of US business than genuinely clamping down on corrupt practices. Political imperatives and anti-corruption campaigns often appear to sit uneasily side-by-side.

There may well be (very) good reasons to be sceptical of the motives of politicians who launch large-scale anti-corruption initiatives. Beware, for example, those who ‘wage war on corruption’. If we learnt anything from the tenure of George Bush Jr’s time as US president, we should know that waging war on abstract nouns (terror, in Bush’s case) gets you nowhere. Corruption is, for better or worse, part of the human condition. Attempts to understand under what conditions it flourishes and what can subsequently be done to counteract it subsequently tend to be better served by nuance rather than bombast.

Furthermore, fighting corruption is not simply a technocratic challenge. It is not the case that if politicians simply showed a little more gumption then progress would inevitably be made in stamping it out. Many (no doubt well-meaning) anti-corruption activists misunderstand the challenge to hand. It is easy to assume that there are ‘right answers’ when tackling graft, but in the cold light of day there is plenty of politics involved. Anti-corruption is not like mail-order shopping; it is not possible to pick the right policies from a catalogue. Politics, of all sorts, complicates matters.

That is not a defence of the corrupt. It is an attempt to acknowledge that anti-corruption is political and that politics itself is messy, difficult, unsatisfying and at times unedifying. People disagree (often fundamentally) on what is right and what is wrong. Revelations in both the the ‘Panama‘ and newly the ‘Paradise’ Papers have, for example, led to loud calls for reform to prevent power brokers corrupting away their allegedly ill-gotten gains. Off shore jurisdictions have come under sustained fire for helping the rich and powerful in effect mitigate their tax liabilities. For some, this is corruption in all but name. Yet a plurality of UK citizens, as even the pro-reform Tax Justice Network (TJN) acknowledges, are happy for the UK to compete with the EU on the basis of tax competition (or ‘tax war’, as the TJN prefers to call it). A significant number of UK citizens, in other words, are quite happy to act in ways that many see as not just dishonest and unethical, but also plain old corrupt.  As I say, anti-corruption can be difficult.

Focusing Anti-Corruption Efforts

If the way forward is not necessarily high-profile and top down then what indeed should the focus be? If one is going to try and make a difference, it makes sense to be specific about what exactly the corruption problem is by defining the terms that are relevant to it. Successful reform, in other words, requires the identification of specific goals and a clear explanation of (i) why these reforms are necessary and (ii) how these reforms are going to be achieved. In a world of ever more verbose rhetoric, it is much better to under-promise and over-deliver than the other way around.

The most thoughtful NGOs in this area realise this. Transparency International in the UK, for example, focuses on the problems in specific sectors with a view to finding out what drives corrupt practice before then suggesting specific reforms to achieve specific goals. That TI UK doesn’t always get it right is a given. But the logic of the approach is surely correct.

The mass of anti-corruption literature that now exists tells us that the best reforms are those that bring a broad range of actors together to pursue sets of agreed aims. Sometimes this involves talking to power-holders or power-brokers who have interests that need to be respected. This may involve talking to people who ideally would be avoided. But in many states there is no way around the fact that those in power could potentially have much to lose if genuine reforms were to be enacted. Expecting them to give up what they have and even agree to things that could lead them or their allies into conflict with the law is simply unrealistic. Turkeys do not vote for Christmas, after all.

The real challenge is working out what progress is possible where. Policies that help citizens find out just a little more about how decisions are made and how they can legitimately defend their own interests as well as hold those in power responsible for their actions are likely to be steps forward. However, do not expect them to be simple steps or ones that those with something to lose will take lying down. The road to reform is incremental and confusing, and it often involves spending considerable time lost down cul-de-sacs.

Evaluating MbS’s reform agenda

All this leads us back to Saudi Arabia. As things stand, we know too little about what Saudi Arabia will look like (or indeed is supposed to look like) by the time MbS’s work is done. The current push is almost certainly ensnaring some people who more or less everyone would understand to be ‘corrupt’. But one swallow a summer does not make, and that is certainly not enough for us to be able to say in good faith that this really is all about corruption.

We’ll learn much more when (or indeed if) the anti-corruption committee’s work translates in to detailed policy. Will we be able to learn more about who generates wealth and how they do it? Will we be able to make more sense of who takes which decisions and why they take them? Will the process of governance reform lead to (slow, but steady) changes in political culture? It’ll take time for answers to these issues to be forthcoming. Only when they do will we really begin to know whether MbS’s drive is going to lead to sustainable changes in behaviour.

Dan Hough, University of Sussex


Don’t take norms for granted. The case of the USA’s ‘adieu’ to the EITI

In the first week of November the United States announced that it would cease to implement the Extractive Industries Transparency Initiative (EITI), thus choosing to exit an international club that has spread the norm of transparency with considerable success. In this post, Liz David-Barrett reflects on what this means for extractives globally and what it tells us about how international norms spread.

The EITI is a voluntary initiative through which governments commit to disclose the payments they receive from companies in the extractives sector – oil, gas, forestry and mining – as well as simultaneously compelling the companies operating on their territory to publish what they pay. The logic is that this transparency, overseen by a multi-stakeholder group comprising government, the private sector and civil society should help to curb corruption. That in turn will mean that more of the revenues earned from resource wealth reach the people, combating the ‘resource curse’.

There is a lively debate on whether the EITI works or not. Some researchers argue that it is not much more than ‘cheap talk’, a cynical effort to signal good intentions on which governments never follow through.  The EITI is seen as a sham particularly in countries where governments repress civil society, undermining the ability of the multi-stakeholder group to hold the key actors to account. Then again, the fact that US oil companies fought it so hard – the withdrawal is a victory for companies that lobbied to keep their tax affairs secret – suggests that implementation of the EITI standard does change the power balance among citizens, governments and companies.

Ken Okamura and I have argued that, even if the evidence is mixed on whether the EITI curbs corruption in implementing countries, the initiative has at least served to spread norms about transparency and disclosure in the extractive sector. We find that the promise of reputational benefits is a key motivation for governments to join and that the reputational capital earned through implementing the standard translates into material rewards such as increased aid. But that does not undermine what the initiative has achieved in terms of increasing the level of transparency and scrutiny of a sector that is highly vulnerable to corruption.

One of the key factors in the EITI’s ability to spread the norm of transparency was the fact that it had a wide membership which included some key players.  The value of different types of new members has varied over the initiative’s life. At the beginning, it was critical to have some big oil-producing countries on board, and countries which were rated as ‘highly corrupt’ on indicators such as the TI Corruption Perceptions Index. Nigeria and Azerbaijan, as pilot countries, were a good choice to get things started. These were, in the terminology of Finnemore and Sikkink, ‘norm entrepreneurs’. Subsequent joiners were inspired partly by a desire to ‘keep up’ with their neighbours – there was a flurry of West African interest following the Nigerian role model.

After some years though, critics began to argue that the initiative was the rich global north imposing values on the poor global south. Few developed countries were implementing the standard themselves, attracting charges of hypocrisy. In response, at the G8 summit in 2013, all of the G8 countries made at least some form of commitment to move towards implementation. Transparency in the resource sector seemed to have reached the third stage in Finnemore and Sikkink’s life cycle – internalisation. It was even institutionalised in law in the United States (the Cardin-Lugar amendment to the Dodd-Frank Act) and in an EU directive, although the former ran up against legal challenges more or less immediately.

And that is why the US decision to leave is such a blow. The United States has said that it will continue to be involved at the international and board level. But it will be impossible to be constructive or serve as a role model when it has walked away from the initiative itself. Now, when trying to attract new members, the initiative will not be able to sell itself as a prestigious international club striving for universal values. Even the argument that greater transparency is inevitable – and hence it is better to earn reputational capital by getting ahead of the game – will flail. Indeed, the EITI is also in trouble in the UK, where a protracted crisis in the multi-stakeholder group has recently come to a head and the civil society network has walked out. It looks like the initiative’s reputational pull is diminishing fast.

More broadly, the US decision is a reminder that the diffusion of international norms is not a unidirectional or inexorable process. Sometimes things go into reverse.

Liz David-Barrett, University of Sussex,