Sousa

WORK IN PROGRESS: PLEASE DO NOT QUOTE WITHOUT AUTHOR’S PERMISSION 09-06-2015
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FIVE TENDENCIES OF TODAY’S CORRUPTION AND ANTICORRUPTION POLICIES
Luís de Sousa, Chairman TIAC (TI-Portugal) and Assistant Professor of
Political Science at the University of Aveiro (lmsousa@ua.pt)
Introduction
Everyday we watch the evening news another corruption scandal breaks
out involving political leaders, top businessmen, and senior public officials.
We got so used to the daily battering of our elites and of the core public
and market institutions of our democratic societies that there are very
few references left of what a “naturally sound condition of politics” (Philp
1997: 29) or “a well functioning market” actually means.
Democratic societies are complex systems of institutions and roles. Each
role is governed by a set of rules and principles that generate expectations
regarding the performance of institutions. Institutions are the foundation
of the social order: they exist to solve people’s problems and function as
benchmarks for individual conduct.
When the core institutions in a democratic society – political parties, the
parliament, the government, the public administration, the judiciary, but
also the regulated market – are systematically hit with corruption
scandals, they cease to be regarded as responsive to people’s needs and
problems and a normative reference to their conduct. This is the key
problem of the crisis we are living through. The imaginary of truthfulness
and purposefulness of the liberal-constitutional model of democracy has

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gradually lost its shine. Without a clear ethics referential for their conduct,
citizens seek informal practices, conventions and institutions to pursue
their interests and goals.
What explains this growing concern about declining ethical standards in
Western societies? Is this the result of hardening expectations in relation
to political and business leaders or is it caused by a growing discrepancy
between expectations and institutional means to achieve them, a sort of
collective state of anomy? What is it about today’s corruption that has
raised worldwide awareness and concern and pressured political leaders
to engage in an unprecedented ethics reform at different levels of
government? What major qualitative transformations need to be taken
into account when assessing today’s corruption and the way countries
have attempted to control it?
In this short presentation I will attempt to sketch 5 major transformations
of today’s corruption and corruption control policies in Europe.
1. The intensity of corruption
Corruption has become more visible, more widespread, more threatening
to the works of democracy and the State of Law. But is this intensity of
corruption real or product of the sharpening of perceptions about the
phenomenon? The answer to this question is first and foremost a
theoretical one. For some, all this ado about corruption is the product of
mediatisation hence the moral condemnation of the phenomenon is

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discrepant with its real dimension. Others believe, on the contrary, that
there are good reasons to perceive today’s corruption as a threat to the
functioning and values underpinning democracy.
We keep hearing that the costs added to a contract as a result of corrupt
practices may amount to between 20 % to 25 %, and in some cases even
50 % of the total cost of the contract; that the total annual losses of
corruption amount to billions of Euros. Yet, there is no certainty about
these figures. We always start from the assumption that the level of
corruption detected is only the tip of the iceberg, a fraction of a deeper
and larger problem in our societies. But to what extent is this guess
reliable? If we look at the mass surveys on corruption we notice that The
total proportion of Europeans with any exposure to corruption, i.e. who
say that they have either experienced and/or witnessed any corruption in
the past year, stands at 8%. And this is when things get interesting: one in
four Europeans (26%) agree that they are personally affected by
corruption in their daily lives and one in eight (12%) personally know
someone who takes or has taken bribes, yet, only a smaller proportion of
Europeans (5%) say that they have experienced a case of corruption in the
past 12 months, while 3% say they have witnessed a case in the past year.
Are we really talking about the same type of corruption? I will come back
to this question shortly.
In the meantime, it suffices to say that even if the intensity of corruption
cannot be fully measured, given the difficulty in providing reliable
indicators for its measurement, it is difficult to deny how important the
issue has become to the public debate. On no other occasion, had post-

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1945 democracies witnessed such an explosion of media inflamed affairs
or scandals, of continuous reporting and sentencing of cases of
corruption, of successive parliamentary debates and legislative initiatives
to combat corruption. Corruption has become one of the major issues
debated and addressed by national regional and international
institutions, agencies and NGOs (Rider 1997; Doig 1998; OECD 2000; TI
2001).
2. The cyclical nature of corruption
Despite the longstanding tradition in criminalising corruption in Western
societies, the phenomenon has never been eradicated, but has not always
attracted the attention of political and judicial authorities either. Only
when manifestations have become pervasive in various areas and
activities of political life, visible at different levels of government, eroding
the public trust on institutions and damaging fair market competition,
threatening the idea of good governance, have countries reacted to
corruption.
The evolution of corruption is cyclical displaying peak levels and less
intense phases, in what concerns attitudes towards the phenomenon. As
Bicchieri and Duffy put it, ‘In many countries, we have witnessed long
periods of systemic corruption followed by ‘clean-ups’ that are in turn
followed by other periods of corruption.’ (1997, 62).

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The rise in ethical standards in democracies is not necessarily long lasting.
The values of transparency, equality, accountability and integrity will not
always remain a priority to citizens. Other more individualistic values,
such as personal success and affluence may become dominant again. The
more exclusive a society’s set of values becomes, the more limited the
scope of their realisation. Over time, a society’s value structure tends to
exhaust its creativity and begin to wane permitting other conflicting
values to ascend. Periods of intense condemnation of corruption and
politically enforced morality in public life tend to shade into oblivion and
deviant practices and behaviours become once more tolerated.
There is no specific set of causes that make corruption move from a period
of widespread tolerance to one of intense condemnation. Various
political, institutional, economic and social changes are responsible for
that normative change. The periodicity of these fluctuations is unknown.
It is not possible to pinpoint when standards degenerate and when these
are likely to be revised and how long each phase will take. Fluctuations
are different in length and intensity from one country to another, but the
cyclical nature of corruption and anti-corruption crusades remains
common to all.
3. The sophistication of corruption
Today’s corruption cannot be interpreted solely as a crime against the
public purse and the State, an abuse of public office for private concerns
as treated traditionally by national criminal laws and penal codes. This
black corruption, repudiated both by ruling elites and the mass public

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(Heidenheimer 1989) is more restricted in its forms and nature than those
grey manifestations which have surfaced in most democracies in recent
years and whose definition tends to leave room for double-standards:
“acceptable infringement or immoral legality?”.
The type of corruption that makes the headlines today can no longer be
interpreted merely as “the abuse of entrusted power for private gain”, to
paraphrase Transparency International’s definition. This understanding of
corruption was and still is central to its conceptualisation as a
penal/criminal offence.
However, such hard boundaries are rarely clear-cut and that explains, to
a great extent, the inefficacy of penal measures in in capturing the
essence of the corruption that pervades advanced democratic societies
nowadays.
The traditional distinction between political, bureaucratic and market
corruption is conceptually cumbersome since most recent manifestations
of corruption take place in a limbo created between these spheres. There
is equally a growing confusion of the roles traditionally played by actors
involved in the illicit transaction: the public agent that is appointed
politically; the politician that is recruited from a senior public office; the
businessmen who enters politics to protect and promote his own
interests.
The complexity of today’s corruption is also about the sophistication of its
mechanisms and forms. Paying a bribe for a building license or to speed

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up the approval of a building project does not require the same degree of
sophistication as paying illicit commissions to obtain fiscal benefits,
privileged and secret information about privatisation processes in course
or even flexible market regulations. Lobbying a councillor for future
constituency works does not require the same complex, impersonal and
multi-client contact networks as those unveiled between businessmen
and political elites at the national or European levels.
But the issue is even more complex: today’s corruption is not about
individual misconduct and rent-seeking practices in detriment of the
principal’s objectives, but the perversion of the mission and goals of
public institutions and the distortion of policy and regulatory processes in
benefit of large economic groups.
4. The systemic nature of corruption
The events witnessed during the past two decades show that corruption
was less about the sporadic and individual wrongdoing of public officials
and showed a more systemic and institutional nature.
Before, corruption resulted mainly from undue pressure, from the
manipulation of bureaucratic instruments, policies or procedures to the
advantage of unscrupulous individuals. Today’s corruption results from a
series of practices or behaviours that have become a way of life, a
systematic and organised violation of the standards governing public life.
Democracies rest upon some basic ethical principles, such as,

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transparency, accountability, fairness and integrity. When the political
class, public officials, market actors or citizens act in such a way as to
injure or circumvent these principles, such actions may not result in
immediate benefit for the corrupt and corrupted, nor be susceptible to
being sanctioned. Yet, these practices/behaviours still represent a
violation of the principles underpinning democratic administration and
politics. The concept focuses less on individual rule violation and owes
more to classical understandings of corruption based on the decline of
ethical standards (Johnston 1996) or degeneration of the democratic
culture (Philp 1997, 37-38) in societies.
In a nutshell, whereas corruption in the past was regarded as the exercise
of illicit pressure through material and non material inducements on the
part of market actors upon public officials, in order to distort or
manipulate to their advantage, bureaucratic procedures and political
decisions; today, corruption results primarily from a series of power
strategies developed by certain economic agents with the intent of
manipulating public policy and market regulation to their benefit, while
passing the costs and moral hazards of these political and administrative
decisions to the taxpayer. Everything takes place under the veil of legality
and transparency. There is no criminal offence as such, yet decision-
makers and their parties get rewarded for their services through revolving
door and political financing practices. This legal (Kaufmann and Vicente,
2011) or institutional (Thompson, 2013; Lessig, 2013; Light, 2013;
Newhouse, 2014) corruption develops over time through the collusion of
public and private interests, and by generating unjustifiable rents to

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selected groups at the expense of the sustainability of public finances and
intergenerational equity.
5. The transnational nature of corruption
Corruption adds to a series of other transnational issues - such as,
transports and communications, technological and scientific
development, energy, the expansion of trade and financial transactions,
migration, environmental problems, organised crime, population growth,
poverty, famine - that presuppose interdependence and externalisation
of control.
Globalisation has often been proclaimed and defined as an ideal world
system where people, ideas, capital, goods and services circulate freely.
But the world is still far from the global village heralded prematurely and
globalisation evolves through a series of contradictions.
Corruption has been gradually perceived by governments as a global
phenomenon challenging democracies and the State of Law from above
and below. Governments have resorted to international instances and
initiatives as an attempt to overcome the insufficiency of traditional State
sovereignty in confronting the complex and cross-border mechanisms of
corruption. But this prise de conscience by national governments has not
been linear and has not always resulted in a positive action. More often
than not, conviction and international co-operation have been
outweighed by a great deal of hypocrisy and double standards in what

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concerns the adoption and implementation of control initiatives. This is
often matched by a general indifference of national public opinion
towards corruption taking place abroad.
Governments and world economic and financial institutions have
engaged in an unprecedented moral crusade against a number of virtual-
States, known as “fiscal paradises”, that prosper thanks to their obscure
banking, financial and commercial systems. The laundering of money and
profits resulting from criminal activities (such as drug and arms
trafficking), most of which with a negative impact on the social tissue of
modern societies has been an incentive for this concerted and vigorous
international action. But that has not been without hypocrisy, since most
of these fiscal paradises had also hosted, for many years, several Western
holdings seeking advantageous tax benefits and unscrupulous
businessmen and politicians (and parties) who used offshore bank
accounts a posteriori for illicit payments at home and abroad. Some of
these mechanisms have contributed to perfect and ensure the efficacy of
corrupt transactions by making them more invisible, more clandestine
than before.
In spite of the double-standard action of governments with regard to
corruption taking place outside their own jurisdiction and the symbolism
of international initiatives, the cross-border nature of today’s corruption
has increasingly driven governments to resort to international instances
to combat its pervasive effects at the national level. The fight against
corruption is no longer contingent solely to State jurisdictions, actors and
measures.

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---- XXXX ----
Moving away from the theory to the practice, what have been the major
challenges to corruption control policies in Europe? I will just consider a
few of these Gordian knots:
1. Proliferation of anti-corruption laws and instruments
Member states have put in place a whole arsenal of laws and provisions
aimed at promoting transparency and integrity in the public and market
sectors as well as new anticorruption specialized bodies. This
unprecedented multiplication of anticorruption laws and institutions
does not add to the functionality, effectiveness and credibility of the
public integrity system: it disperses financial and policy efforts, increases
the costs of communication and coordination, and blurs the responsibility
of individual actors and institutions.
Therefore, the crucial question today is not whether countries are
prepared to fight corruption but how successful or effective integrity
instruments and institutions actually are in strengthening prevention,
detection and repression of corruption. The plea to pay more attention
to ‘what works’ is often heard, but there have been little efforts at
streamlining best practice. In fact there is little understanding how these
conglomerates of anticorruption policies and institutions interact and
work towards the creation of a cohesive and sustainable ‘Integrity System’.

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We already know that well-functioning integrity systems promote better
governance across all aspects of society, and, ultimately, contribute to a
more just society overall. However, the challenge is to know if there is a
combination or configuration of laws and institutions to make the
integrity system workable and effective and what lessons can be learnt
and transferred from one context to another.
2. Lack specialization of national auditing and judicial authorities
The effectiveness of recent anticorruption reforms has been questioned
by the lack of specialisation of those bodies entrusted with preventive
and repressive functions.
The lack of specialized skills and training on corruption and related
economic crimes by financial auditors, administrative inspectors, criminal
investigators, prosecutors and judges, reduces their detection and
enforcement capacity and creates obstacles to effective judicial
cooperation.
Not all EU countries have the necessary technical expertise and financial
resources to make the anticorruption system work. How can Europe-wide
cooperation be sought with such capacity differential?

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There is an urgent need to develop targeted training capacities at the
national and EU levels to create a common ground for judicial
cooperation.
The lack of specialisation is also reflected in the way the court system is
organised to address complex crimes such as corruption and related
offences. According to the 2010 Report on the Efficiency and Quality of
the European Judicial Systems of the European Commission for the
Efficiency of Justice(CEPEJ) from the Council of Europe, specialised first
instance courts represent only 19% of all the first instance courts
considered as legal entities. Out of these, only a few deal specifically with
corruption and other fraudulent practices. Finland, for example, has a
Court of Impeachment that hears charges against Ministers. But this is an
exception to the rule. In the majority of cases, specialisation in the courts
only goes as far as the classical division between civil, criminal, and
possibly administrative matters.
3. Lack of information sharing and judicial cooperation
Further to the lack of specialization, bodies with shared responsibilities in
preventing and suppressing corruption rarely work in an integrated
manner.
At the operational level, information sharing and cooperation are often
impeded by jurisdictional issues, lack of trust and institutional rivalries.
The same difficulties are to be found at the policy coordination level.

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If information sharing and inter-institutional cooperation is difficult to
achieve at the national level, cooperation between different national
judicial authorities in dealing with cross-border corruption or fraud is even
more precarious. The successful conclusion of these investigations
depends on archaic judicial cooperation procedures and Mutual Legal
Assistance (MLA) requests that are rarely replied in a timely manner. To
what extent the delay in answering to MLA requests is a consequence of
administrative inertia and the lack of prioritization of cross-border
corruption by foreign judicial authorities or a deliberate policy to force
these cases to move from criminal prosecution into a negotiable financial
resolution in order to protect the image and interests of national
implicated parties, is something that needs further clarification.
4. Lack of dialogue with stakeholders
Another recurrent problem is the lack of dialogue between decision-
makers and stakeholders with regard to the design and implementation
of anti-corruption policies. In order for anti-corruption policies to be
effective and durable, the policy process (from design through
implementation to monitoring and evaluation) should be inclusive.
Governments are clearly feeling under pressure and are willing to act fast,
but celerity is limiting dialogue and consensus building around the various
solutions presented. The inevitable consequence of this is the recurrent

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cosmetic changes to the legislation and the institutional set-up without
a conducting policy or vision of how the whole system should operate.
The degree of stakeholder acceptance and appropriation of the
anticorruption measures put in place depends on the way these are being
communicated to them and to what extent they feel part of the
anticorruption reform endeavour. Consultation and communication
methods are largely underdeveloped in the field of anticorruption.
5. Doubtful sustainability of anticorruption efforts
In the current context of economic and financial crisis, sustainability of
anticorruption efforts is the main challenge facing national and European
authorities.
On the one hand, opportunities for corruption have grown apace, due to
a variety of reforms and changes to the traditional structure and process
of the State’s administration: the introduction of austerity measures has
led to a sudden loss of status by many middle rank public officials
disproportional to their delegated competences and everyday
discretionary power; reducing state ownership in public companies
through privatisation processes carried out under a very tight schedule
and in a context of recession; fast and unchecked growth of public private
partnerships, as a response to the State’s limited public investment
capacity and without a proper control framework; restructuring and
downsizing of the public administration leading to new supervision

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vacuums or the extinction of certain auditing units; dramatic normative
changes in relation to the role of public officials and the governing public
management ethos, rendering the public sphere more permeable to
undue private influence; blurring of public and private interests through
the institutionalization of conflicts of interest and revolving door
practices; escalating campaigning costs disproportionate to the
traditional sources of financing; etc.
On the other hand, governmental capacity to sustain a well-resourced
anticorruption policy has decreased considerably. Working under tight
budget conditions is not necessarily a bad thing. It is known that efficiency
cannot be attained only through systematic injections of funding. Anti-
corruption bodies operating under tight financial conditions often deliver
better results. Over time, however, their staff members are likely to be
disheartened by the lack of resources. Whatever measure is used, it is
clear that a certain level of organization and resources are necessary for
the agency’s role to be taken seriously. Therefore, it is important to find
a Pareto optimal solution for governmental anti-corruption efforts,
matching objectives with the necessary resources to achieve them.
Conclusion
To conclude, the fight against corruption emerged as one of the most
significant issues during the past twenty years both at the national and EU
levels.

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During the past two decades, an unprecedented number of laws,
specialised bodies and anti-corruption strategies and action plans have
been put in place at the national level.
In formal terms, countries are better equipped today to fight corruption
than they were two decades ago. In practice, many doubts remain as to
whether these efforts are sustainable in the long term.
If the fight against corruption is to remain a priority in the political
agenda, and to be taken seriously by public opinion, governmental
rhetoric needs to be matched with concrete achievements, both on the
preventive and repressive dimensions of corruption control.
It is equally important to avoid jumpy reactions to scandal. Instead,
governments need to assess risks in everyday decision-making and
administrative procedures and identify gaps in their integrity systems in
order to act preventively and improve controls.

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