GV313-6-FY: Authoritarianism AndCorruption

Essay 2

What is the difference between political and bureaucratic corruption in respective of actors and effects? Which one of the twois more problematic in a democracy?

TAIRIN HUSSAIN110398

3700 words

Abstract

This review attempts to identify forms of corruption and its impact to institutions. The main focus for this paper is the discussion of political and bureaucratic corruption. We will look at the impact of patronage, bribery and to some extent the impact of large bureaucracy. The analytical testing for thispaper will be the investigation of which form of corruption can be more detrimental within a democratic state.

Key words: CORRUPTION, POLITICAL, BUREAUCRATIC CORRUPTION, and DEMOCRATIC STATE

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Context1. Introduction

2. Terminology: Corruption

3. Forms of Political Corruption

I. Effects of Political Corruption

4. Bureaucratic Corruption

I. Effects of Bureaucratic Corruption

5. Evaluation

6. Conclusion

7. References

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1. Introduction

Academically, there is a wide array of literature regarding corruption and its effects on democratic institutions. Corruption is one of the most topical issues that is discussed and has been researched extensively. Political theorists such as Huntington (1968) Verdier (1998) and Mauro (1995) have all made an assertion regarding whether corruption is beneficial or excruciating to the state. It is understandable that corruption is an essential tool to indicate the ‘fairness, stability and efficiency of a society and its ability to deliver sustainable development to its members,’ 1 thus, highlighting its significance. Transparency International also heightened the urgency tothis topic with claiming that, ‘corruption is one of the greatest challenges of the contemporary world. It undermines good government, fundamentally distorts publicpolicy, leads to the misallocation of resources, harms the private sector and private sector development and particularly hurts the poor’2 thus, signifying the importance of understanding the true extent of corruption.

1 Sampford, Charles JG, ed. Measuring corruption. Ashgate Publishing, Ltd., 2006. 1

2 Transparency International, http://www.transparancy.de/mission.html( accessed: 4 February, 2014)

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The hypothesis for this paper is that political corruption has a much higher cost to the state and its development. This is because corruption is known as an illness that is very difficult to cure. In the case of a democracy, corruption, if exposed, could lead to political apathy and disengagement, which could be seen in cases of the USA and UK. In the case of political corruption within a dictatorial regime, it could cause corruption to be more costly and form a culture of corruption, as seen in many Sub-Saharan African states. Nevertheless, that is not to mean that bureaucratic corruption is not an issue for state development. Although bureaucratic corruption has a grave impact to the red tape of a state and hinder entrepreneurs and detract investment, it has been claimed that it could encourage business to flourish in the long term and kick-start more businesses.

This paper will theoretically discuss the main differences to political and bureaucratic corruption and its impact to state development. The analytical framework of this paper will dissect corruption into foursections. The first section of this review will focus on the distinctive forms of corruption and the causal effectof corruption in the political sphere and the unelected bureaucracy of that given state. The second part of this paper will essentially focus on the testing of these theoretically arguments to states that are affected by political and bureaucratic corruption. This will mainly focus on the symptoms, causes and effects of individual forms of corruption. Within this section, there will be the identification of corruption, which includes bribery,patronage and impact of red tape. The final section of the paper will focus on the evaluation of the hypothesis and test which form of corruption is more problematic to a democracy. For this evaluation, we will use empirical analysis with democratically elected officials and test

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which form of corruption has a higher impact.

2. Terminology: Corruption

For this paper, it is imperative to understand the terminology of corruption and distinguish it, which is for the purpose to understand what to assess and what to take into account. In this section of the paper, we will look into exactly what terminology we will investigate. It is crucial to understand that corruption is a widely disputed term has many definitions and remains elusive for multiple decades (Uslaner 2009).

For the purpose of this paper, ‘corruption’ is best described as a procedure where there is a ‘use of public office for private gains,’ 3 which coincides Rose-Ackerman(2004) with corruption as the ‘misuse of public power forprivate or political gain.’ 4 By understanding the meaningof corruption is clear to see that it remains loosely defined as it could apply to those in the political sphere. There is a sense of dishonesty and lack of transparency in the terminology as it is described as ‘private’ gains.

It is also important to understand the mechanisms for corruption for the purpose of this paper. Zafarullah (2001) highlights this could be in the form of ‘bribery, rent-seeking and misappropriation of funds, the performance of public organizations is adversely affectedby a host of other factors like excessive lobbying, delays in service provision, pilferage and larceny, irresponsible conduct of officials, bureaucratic

3 Williams, Robert. Politics of Corruption. Vol. 3. Edward Elgar Pub,2000.

4 Rose-Ackerman, Susan. "Governance and corruption." Global crises, global solutions 322 (2004). I

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intemperance, patronage and clientelism’ 5 This will be important to note for the later sections in the paper.

3. Forms of Political Corruption

To understand the effects of corruption, it is an imperative to distinguish the different forms of corruption. In this section, we will assess the literature and understand the aspects of political corruption. For this section, we will also assess the actors, mechanisms and significance of political corruption.

‘Political corruption’ is any transaction between privateand public sector actors through which collective goods are illegitimately converted into private-regarding payoffs (Heidenheimer et. al.1993). To build on this further, it is the term used for when ‘political decision-makers use the political power they are armed with, to sustain their power, status and wealth.’6 These are a goal that solely focuses on the self-interest of the individual. This maintains the idea that there is a member of the public office that is abusing that power,7

5 Zafarullah, Habib, and Noore Alam Siddiquee. "Dissecting public sector corruption in Bangladesh: issues and problems of control." Public Organization Review 1.4 (2001): 465

6 Amundsen, Inge. "Political corruption: An introduction to the issues." CMI Working Paper (1999).3

7 To add to the defining of political corruption, Johnston (1986) highlights that the perception of corruption were more likely to be labeled corrupt acts if it involves ‘larger sums of money, involving public officials rather than private citizens, involving direct rather than indirect taking, involving the official keeping the moneyrather than passing it on (for example to a political party) and situation in which the rule-breaking is prominent rather than an average citizen.’ Therefore, there is a sense that the public perception of corruption is far worse in the case of political corruption according to Johnston (2002)

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thus, the main actors being the private enterprise/ individual and the public official.

To fully understand the effect of political corruption, it is an imperative to understand the many forms of corruption. Political corruption comes in many forms, such as bribery, extortion and patronage, all of which toeither obtain private revenues or to control economic markets. For the purpose of this paper, we will discuss arecurring concept in this field of ‘grand corruption’ that is developed by Moody-Stewart (1997), which highlights the use of bribery. ‘Grand corruption’ is theterm used to describe the ‘transfer of large financial benefits to private firms through procurement contracts and the award of concessions.’8 It is also important to note that this occurs at the ‘highest levels of government and involves major government projects and programmes.’ 9 For this case of corruption, it heavily involves the bribery of government officials to obtain a government project that is extensively high in revenue.10 Noelker, Shapiro and Kellogg (1997) highlight large-scaleconstruction scandals11 with the United States Defense

8 Susan Rose-Ackerman, 1999, 27

9 Susan Rose-Ackerman, 1999, 27

10 There are many recorded cases of grand corruption, such as Rose-Acherman (1999) highlights that in 1996, two corporations had bribed government officials for the construction contracts of Terminal 2 in Frankfurt. It was then reported on September 25 1996 by Reuter Business Report claims that this bribe had increased the price of theproject 20 to 30 percent of the total project. To highlight grand corruption even further, Schwarz (1994) indicates that in the 1970s, two German companies paid bribes of 20 percent of the value of the steel mill construction in Indonesia.

11 Lambsdorff (2002) also highlights grand corruption but narrows thescope even further with explaining that this is as ‘parochial corruption’ where there is a ‘transaction with a few potential contractors and, thus, restricted competition,’ which underlines the

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Department. This was where the Federal Bureau of Investigation convicted 54 individuals and ten corporations for disclosing technical specifications on competing bids in return for money and jobs.12 Therefore, highlighting that political corruption can influence economic policies of the state.

In addition to bribery that can take place, government extortion also is a form of political corruption.13 Political extortion is the term used to describe ‘politicians [that] may maximize returns by threatening expropriation of existing private rents and then forbear implementation of the threat in exchange for a payoff.’ 14

McChesney (1997) further highlights that political extortion ‘need not be cash’ 15 and it could be in the form of buying voting support or suppressing future

severity of this form of corruption and that being that this could occur within a dictatorial rule or in a fully functioning democratic state, such as the US.

12 Noelker, Shapiro and Kellogg (1997), ‘Procurement Integrity Revisions Ease Burdens,’ National Law Journal, May 19, 7

13 NGOs have made various counts of government extortion with a need to pay to leave the country, which is known as a ‘leaving visa.’ This has been claimed to take place in Sudan and to ensure volunteersto leave the country safely, they must pay large sums of money. On 19March 2009, Sudan’s Labour Ministry ‘ordered all of the expelled agencies to pay their local staff members six months’ severance pay’ rather than the expected one month. It has been claimed that extra payouts amounted to $11.5 million for the 13 organisations, in addition to US$10.6 in usual termination-without-notice payments and $20.3 million in seized assets. (see http://www.irinnews.org/report/84090/sudan-ngos-accuse-government-of-extortion for more details; accessed 04/02/2014)

14 McChesney, Fred S. Money for nothing: politicians, rent extraction, and political extortion. Harvard University Press, 1997.

15 McChesney, Fred S. Money for nothing: politicians, rent extraction, and political extortion. Harvard University Press, 1997.

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opponents from running in elections. Extortion plays on the insecure individuals that have very little option butto comply, it is at its worse when it is from the highestlevel of public office. There are many actors to political extortion and that is the public official, the private enterprise or individual with a lack of judiciarysystem to criminalize this act. It could be said that flawed democracies and non-democratic states have a risk for this occurring as it lacks in the rule of law.

A final form of political corruption is the use of patronage16 and nepotism.17 Arguably, this is more likely to take place in those states that lack in strong institutions and are recently formed states.18 The reason for this being that states that are ‘facing imminent threats to their hold on power often have shorter time horizons and are more preoccupied with placating the specific groups most pivotal to their survival.’ 19 This use of political corruption is to uphold loyalty around the executive power and it would hinder not only the political infrastructure but also hinder the management of macroeconomic policies in the state. It is also could explain the notion that corruption leads to higher levels

16 For the purpose of this paper, ‘patronage’ is the use of state resources to reward individuals for their political support. It is not only inclusive to monetary funds but also could be the reward of security, job prosperity or high public official roles.

17 Nepotism is the term used for favoring job positions not based on merit but based on close family, kinship or clan ties.

18 Alence (2004) argues that this is the case as these states have ‘the strongest temptations for governments to jeopardies their own countries' developmental prospects are rooted in political insecurity’ in "Political institutions and developmental governance in sub-Saharan Africa." The Journal of Modern African Studies 42.2 (2004):

19 Alence, Rod. "Political institutions and developmental governance in sub-Saharan Africa." The Journal of Modern African Studies 42.2 (2004): 166

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of crime.20 By entering a position of work through paymentor misuse of power would indicate that the public officials have a great source of power they can exploit. This in turn could result in the civil society in participating themselves in corrupt acts: ‘[They] will incline to ignore evidence of obvious corruption, and thus join the conspiracy of silence that permits forms ofcorrupt activity to have a frequent incidence or to become standard operating procedure.’ 21 Thus, underlininga grave concern for patronage and nepotism that eventually, it will trickle down to the people taking part in corrupt acts.

I. Effects of Political Corruption

There are many effects of political corruption that couldbe detrimental to the state. One effect is that politicalcorruption highlights a key symptom of institutional decay and is on the road to state failure, which links toits progression of political development.22 In this section of the paper, we will examine the core problems of political corruption and how they all hinder the political development on one nation.

20 Heidenheimer (1970) highlighted a case where a crooked police chief paid the mayor $10,000 for his appointment, and then had recoupthrough payoffs from organized crimes

21 Heidenheimer, (1970) political corruption: readings in comparativeanalysis, 28

22 From the works of J.S Nye (1967), political development will mean the ‘growth (or decline) in the capacity of a society’s governmental structures and processes to maintain their legitimacy over time.’ It could be argued that political corruption hinders the perspective of democracy by reducing the legitimacy of its institutions and thus,that is a devastating effect of political corruption.

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Firstly, it is important to note that political corruption has the potential to ‘destroying the legitimacy of political structures’ 23 and this is by the corrupt officials damaging the right to rule and serves the interest of certain groups rather than the entire population. It is stated that in a democratic state everyone is equal before the law and if corrupt officialsare misusing state revenues or their public office, this is damaging their legitimacy to rule. Nye (1967) argues that this could cause a social revolution or military coups with people dissatisfied with their current political regime. Although Nye (1967) indicates that social revolution increases political development, there is a clear indication that military coups24 hinder political development as it gives the power to those who are unelected, known for being aggressive and obtain military power. This argument highlights that political corruption has a very negative connotation with the population and thus causing social tension25 within society. By increasing political corruption, for the solepurpose of personal gain, aggravates those who are not entitled to do the same. Thus, this inequality causes many institutions to fail. In the case of a democracy, political corruption would be very short-lived without

23 Nye, Joseph S. "Corruption and political development: a cost-benefit analysis."The American Political Science Review (1967): 424

24 Nye (1967) argues that in the case of Ghana, corruption had playeda role of being the causation to military coups where the corruption had hindered the economy so greatly that real wages had fallen drastically, especially for the soldiers

25 The Tunisian revolution that started 17th December 2010 highlightedtension raising so much over corrupt officials that the people demanded change after Mohamed Bouazizi ‘set himself on fire outside the building of the local officials who had abused him.’ Highlightingthat there is a limit to the level of abuse the population can take. (Huffington Post; http://www.huffingtonpost.com/cobus-de-swardt/a-year-after-corruption-i_b_1174219.html; accessed 05/02/2014)

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the use of oppression and thus, allowing those to mobilise and cause an uproar of opposition.

Also, the loss of legitimacy26 severely hinders political infrastructure such as the judicial branch and the electoral system as they would have little meaning to theexecutive. To remain democratic, it is an imperative to have a ‘separation of powers’27 to uphold checks and balances for the politicians. If this does not occur, it would result in an illegitimate regime and reduces accountability of the politician. Furthermore, the political cost of political corruption is the control of turnover in power, by hindering the process of turnover in power, the electorate would be disenfranchised with the process and thus gravely hindering the political institutions. Pharr (2002) highlights that Japan had suffered from this ‘declining confidence28’ in the political structure where there was ‘low public trust levels [that] persisted29’ and there were ‘reported dissatisfaction with politics’30 in the 1980s right through to 1990s. Thus, highlighting that political

26 Reus-Smith (2007) best describes legitimacy as the ‘right to rule’the sovereign state

27 Bellamy, Richard. "The political form of the constitution: the separation of powers, rights and representative democracy." Political Studies 44.3 (1996): 436-456.

28 Pharr, Susan J. "Public trust and corruption in Japan." Political Corruption, Concepts and Contexts (2002): 838

29 Pharr, Susan J. "Public trust and corruption in Japan." Political Corruption, Concepts and Contexts (2002): 835-62.

30 In a survey led by Asahi Newspaper surveys conducted between 1978 and 1996, 18 out of 22 surveys reported dissatisfaction by the masses(for more see reference: Pharr, Susan J. "Public trust and corruptionin Japan." Political Corruption, Concepts and Contexts (2002): 835-62.)

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apathy and disengagement could have long-term consequences.

Political corruption gravely reduces sustainable, economic growth and reduces foreign direct investment (Bayley 1966; Myrdal 1989; Aidt 2009). This is due to many factors. One being that political corruption could lead to the leaders’ control of resources and power combined into one causes a desire of kleptocratic regimes.31 By the states’ resources being controlled by corrupt officials, there will be an increase in inefficiencies of that economy and the enhancement of personal wealth rather than national wealth.32 The most applicable example of this level of corruption and mismanagement of resources was seen in the state of Zaireunder Mobutu Sese Seko, who had embezzled an estimate value of five billion dollars in a very short amount of time.33 This had crippled the state where the economy ‘GDPper-capita in 1992 was less than half of what it had beenat independence in 1960.’ 34 Thus, highlighting that one

31 Kleptocracy is best described as ‘where the state is controlled and run for the benefit of an individual, or a small group, who use their power to transfer a large fraction of society’s resources to themselves.’ Found in Acemoglu, Daron, Thierry Verdier, and James A. Robinson. "KLEPTOCRACY AND DIVIDE‐AND‐RULE: A MODEL OF PERSONAL RULE." Journal of the European Economic Association 2.2‐3 (2004): 162-192.

32 Muammar Gaddaffi had ruled Libya for 42 years and it was reported he had ‘embezzled, stole, and otherwise illicitly acquired as much asUSD 200 billion in assets,’ which accounts for $30,000 from each citizen in Libya (claimed in FERIM, VALERY. "DICTATORSHIPS IN AFRICA." ct4| 2012 1: 128.)

33 In 1977, Mobutu’s family took $71 million from the National Bank for personal use and by the early 1980s his personal fortune was estimated at $5 billion (Leslie 1987,p. 72). This case highlights that it the political branch itself involved in corruption and not the bureaucracy

34 Acemoglu, Daron, Thierry Verdier, and James A. Robinson. "KLEPTOCRACY AND DIVIDE‐AND‐RULE: A MODEL OF PERSONAL RULE." Journal of

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devastating impact of a misuse of political power is thatthere are regressive policies put into place to extort the resources for personal wealth of monetary and political means.35 It should also be noted that political corruption, such as bribery and patronage also has a negative impact on the economy. Bribery increases the unit cost of each product/service and therefore investorswill factor this as a cost.36 If the cost to invest into an economy is so high, this will detract foreign investors, which will severely hinder employment, povertyrates and public spending.37 Thus, highlighting that political corruption can deter economic investment.

Therefore, to conclude this section, there is amounting evidence to suggest political corruption hinders the functionality of the state. Not only does it affect the very foundations of the regime but it also thwarts the perception of legitimacy for the given state. In the caseof a democratic state, political corruption hampers accountability to high-level officials and withdrawing the electorate to political stability. The evidence highlights that political corruption not only affects thepolitical sphere, but it also affects the economic markets by distorting prices and hindering competition. With high levels of political corruption, there is strongthe European Economic Association 2.2‐3 (2004): 162-192.

35 Shleifer and Vishny (1993) highlights that there is a higher chance of corrupt leaders to focus on projects with increased chancesof bribes, thus neglecting public services

36 To put in perspective of this, in the case of Brazill, 2010 study by the FIESP (the Federation of Industries of Sao Paulo State, in itsacronym in Portuguese), the average annual cost of corruption in Brazil is between 1.38% to 2.3% of the country’s total GDP

37 Paolo Mauro (1998) indicates this occurs as corrupt officials allow poor, cheap materials enter infrastructure with additional bribes. Thus causing building collapses, as seen in Bangladesh in 2013

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indication that this will hinder political development, therefore, creating social instability.

4. Bureaucratic Corruption

Due to the nature of this analysis, it is imperative to fully understand to what extent bureaucratic corruption affects any given state. This section of the paper will focus solely on bureaucratic corruption and its effects to institutions. For this paper, the definition for ‘bureaucratic corruption’ it is a term that refers to ‘corrupt acts of appointed bureaucrats in their dealings with either their superiors (the political elites) or with the public.’ 38 The main actor for bureaucratic corruption is appointed administrators that implement thegovernment policies. The nature of this corruption is that a public official allows a private agent a privilegethat they are not legally entitled to, in return for a payment in cash or kind. (Ackerman 1998) The bureaucrat has the resources of power to have the opportunity to exploit if the political elite does not properly control this apparatus.

A main cause for bureaucratic corruption is the state’s inability to pay civil servants appropriate wage for the labour; ‘when bribe levels are high or the probability ofdetection and fines low [this] predict[s] that the wage necessary to eliminate corruption is high.’39 By low wages, which is mainly seen in developing nations40, the

38 Rose-Ackerman 1998, 37

39 Ehrlich, Isaac, and Francis T. Lui. "Bureaucratic corruption and endogenous economic growth." Journal of Political Economy 107.S6 (1999): S270-S293.

40 With regards to Bangladesh, Rijckghem and Weder (1997) argue that low salaries force public servant to supplement their incomes illicitly.

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bureaucrat is enhancing its wages by backhanded deals.41 There are many implications for low wage and this could include moonlighting. It is important to note the causality of bureaucratic corruption as it highlights thereasoning for a bureaucrat to be corrupt. With political corruption, there is an importance of obtaining personal wealth and control its power, in the case of bureaucraticcorruption, there is a sense of increasing personal wealth but not to a grander scale. Many theorists such asRose-Ackerman (1998) and Leff (1964) agree that bureaucratic corruption falls into the category of ‘pettycorruption’ 42 and it mainly involves the use of bribery.

There are three ways a bureaucrat can be corrupt. Firstly, a bureaucrat can be corrupt via bribing to ‘equate supply and demand,’43in the economic markets. Thiswould be the barrier to entry within a market; ‘a corruptbureaucracy will not necessarily award service and purchase contracts to the most efficient producer.’ 44 Thus, highlighting that to obtain a contract from the state, there is red tape and a bureaucrat would award private enterprise permits and contracts. However, in thecase of bureaucratic corruption, these permits and contracts will be awarded to those that offer the highest

41 Mauro (1998) argues this happens so civil servants can making ‘ends meet’

42 This is defined as corruption ‘on the small scale or the corruption, which is done on the low-level. The corruption amount seems to be little if we compare it to the overall business transactions. (http://www.readyratios.com/reference/business/petty_corruption.html;accessed: 05/02/2014)

43 Rose-Ackerman 1998, 37

44 Jain, Arvind K. "Corruption: a review." Journal of economic surveys 15.1 (2001): 96

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bribe and therefore hindering competition and legitimacy of the process.45 Another form of a bureaucrat to be corrupt is the bribe to be an incentive payment. This is the incentive given to the bureaucrat to be more productive and ‘work at a faster rate.’46 This could be atany level and would quicken the pace of the application. Finally, Ackerman (1998) highlights that another common practice for bureaucratic corruption is the bribery to lower costs. In this respect, it could be the judicial system failing as it would require a judge to be corrupt to lower the sentencing of an individual or even not charge at all.47 This would require a corrupt judicial branch and has many implications for the state institutions.

I. Effects of Bureaucratic Corruption

Unlike the effects of political corruption that appeared to be much more detrimental to the state’s functions, bureaucratic corruption has an array of effects that are 45

An example of this has been the recent developments of Rolls-Royceand facing a new corruption inquiry over allegations that ‘it paid bribes to win lucrative contracts to supply Hawk trainer jet engines to an aircraft manufacturer owned by the Indian government.’ (The Telegraph, http://www.telegraph.co.uk/finance/newsbysector/epic/rrdot/10672170/Rolls-Royce-faces-inquiry-over-Indian-jet-bribes-claim.html; accessed4/03/2014)

46 Rahman, Aminur, Gregory Kisunko, and Kapil Kapoor. Estimating the effects of corruption: implications for Bangladesh. Vol. 2479. World Bank Publications, 2000.

47 A case of this occurring was Chevron being accused of bribing an Ecuador judge. One of the ‘illicit payments – in the amount of $1 million – was offered as a bribe to the Ecuador judge who wrote the opinion finding Chevron liable for $19 billion in damages for dumpingtoxic waste into the rainforest.’ http://chevrontoxico.com/news-and-multimedia/2013/0913-chevron-tried-to-bribe-ecuador-judge-with-1-million-payment, 13th September, 2013; accessed 04/03/2014)

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positive and negative (Wei, Shleifer 2000). This section of the paper will investigate the evidence on how damaging is bureaucratic corruption to individual states.

It could be argued that bureaucratic corruption can have many externalities; ‘Corruption has a negative, deleterious and divesting influence on investment and economic growth, administrative performance and efficiency and political development.’48 The overall social cost it has on society is much greater than expected. By adhering private costs of the goods providedby the state, it reduces the revenues of the state.49 In return this has the potential to lower the level of investment to the state, as there is widespread corruption and in return will lower the supply of public goods. This includes functioning education, health services and limits private entrepreneurship. This hindrance to the state has an impact that when it reacheshigh levels, it will halt the economic and social development of the state (Knack, Keefer 1995)

Also, it could be claimed that corrupt bureaucrats artificially become more inefficient50 than those who are not corrupt. By purposely becoming very inefficient and slow-paced, it slows economic development and makes the 48 Mollah, Awal Hossain. Combating Violence against Women in South Asia: An Overview of Bangladesh. UNPAN, 2005.

49 Mauro (1996) reports regression analysis which shows that a country that improves its standing on the corruption index from 6 to 8 (0 being the most corrupt, 10 the least) will experience a 4 percentage point increase in its investment rate and a 0.5 percentagepoint increase in its annual per capita GDP growth rate. Bureaucraticcorruption is included in this cost of corruption

50 Theobald (1990) claims that this stifles entrepreneurialism, increases misuses scarce national resources, weakens administrative capacity which contributes to serious political decay and undermines stability, democracy and national integration

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state inefficient.51 With enforcing the culture of bribes,the only incentive to work productively would be the extra cost of the individual. This would severely harm public services as public servants refuse to work efficiently or productively.

Nevertheless, it would be naïve to believe all corruptionis unscrupulous and damaging to the economy.52 In the caseof bureaucratic corruption, there are cases where it has in fact increased the productivity of the economy.53 By avoiding red tape, it has inspired businesses to invest in the economy; ‘The bureaucracy plays an extensive interventionist role in the economy and its consent or support is a sine qua non for the conducts of most economic enterprise.’54 Thus, underlining that the government has other priorities and the bureaucrats invest their interest in economic output. The variable inthis case would be the lack of state resources and revenues. By the ability to quicken the pace of the bureaucrats, it gives an incentive to the civil service to work harder, which was lacking from the state itself. Leff (1964) also claims that bureaucratic corruption

51 A case of this occurring Khan (2002) noted that the cost of bureaucratic corruption is that if it increased corruption by 1 percent, this would decrease the growth rate by 0.72 percent

52 Leys,Colin. "What is the problem about corruption." Journal of modern African studies 3.2 (1965): 217

53 It could be said corruption guarantees certain zones of freedom and of free movement in the face of the totalitarian tendencies inherent in states and political parties and state control. It would mean bureaucratic corruption increases the chances of being able to invest in an economy rather than be declined by the political elite (Becquart-Leclerq 1989)

54 Leff, Nathaniel H. "Economic development through bureaucratic corruption."American behavioral scientist 8.3 (1964): 9

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could make ‘a higher rate of interest’55 as it increases the chances of certainty and guarantees the investment56 to take place.

In addition to this, is the fact that if the civil service are poorly paid, the impact of corruption could in fact top up the wages of badly paid staff and ‘mobilize the bureaucracy for more energetic action.’57 Therefore, enhancing their commitment to this position and being able to afford to stay in the position, thus, causing labour stability for the state. Leff (1964) highlights that the use of bribes act as an incentive fora more productive bureaucracy, which improves the state development.

Therefore, to conclude this section, it is evident to seethat bureaucratic corruption has many consequences. Thereis a sense that although there are grave concerns for bureaucratic corruption, there are positive attributes, which could benefit individuals and economic investment.

5. Evaluation

The evidence supports the hypothesis that political corruption is far worse than bureaucratic corruption. This is because political corruption undermines the foundations of a democratic state as it reduces 55 Leff, Nathaniel H. "Economic development through bureaucratic corruption."American behavioral scientist 8.3 (1964): 10

56 This argument is highlighted by the works of Howard Pack (1988) inclaiming that import and export substitution depends on the policy environment, thus, certainty is important, found in Rose-Ackerman, Susan. "When is corruption harmful." Political corruption: Concepts and contexts (2009): 354

57 Leff, Nathaniel H. "Economic development through bureaucratic corruption."American behavioral scientist 8.3 (1964): 10

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accountability, legitimacy and the chances of turning over the power of the executive. Corruption can cause theincrease in predatory rent-seeking policies and divert priorities from much needed public services, such as health and education. The empirics of this paper highlights that the economy suffers far greater with the exploitation by political leaders than by the work of bureaucrats. This is because political corruption is far more self-motivated and bureaucratic corruption, it has been claimed increased short-term efficiencies.

In the argument of political development, the greatest hurdle to do this, as shown in this paper, is political corruption. There is clear evidence to highlight the implications political corruption causes, such as mass extortion, high levels of kleptocracy and increasing the public’s opinion of distrust in the regime itself. There is an increase in allocation of resources and talents of the population shown and this could lead to poor governance.58 Although bureaucratic corruption hinders economic development by increasing inefficiency, it wouldbe far more difficult to solve bureaucratic corruption ifthe executive itself is corrupt. Nevertheless it is important to note the implications of reduction of tax revenues for both political and bureaucratic corruption.

6. Conclusion

To conclude, the evidence highlights that many political theorists such as Ackerman, Nye (1967) and Johnston (2002) agree that political corruption has far greater consequences than bureaucratic corruption. The reason being that it hinders political development and causes apathy and dissatisfaction of the populous. Political corruption is undeniably an illness for democracy and if 58 Mauro (1996) further links this idea of poor governance to the restriction of aid donors

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it occurs in the first place, it would suggest the institutions are lacking in effectiveness. In regards to Johnston’s work of the syndromes of political corruption,there is clear evidence to suggest that political corruption happens in many forms. This is detrimental fordemocratic institutions as it opposes the very foundations of the institutions.

Also to note, the political corruption hinders democraticstates far greater than bureaucratic corruption as if bureaucratic corruption was taking place in a state, the executive branch would take measures to control this via legislation, which was shown in the US and the Federal Agency in 1996. However, if political corruption was taking place, it would be very difficult to reprimand andpunish the offenders as they are at the highest level of law. This would indicate political corruption as a vicious cycle, which hinders social, political and economic development and will eventually trickle down to the people. Therefore, a policy recommendation for this paper is that if there is a state with high corruption, its first treatment to eroding this would be to criminalise corruption at its highest level, which will not eradicate corruption completely but it would legitimize and hold accountable to the highest level. Change would have a greater chance in a state with bureaucratic corruption rather than political corruption.

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7. References

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