Corruptions 403J

What are some of the costs of official mogul corruption?

''Official Moguls'' thus has a double meaning: officials and politicians enrich themselves through corruption more or less at will, at times moving into the economy by converting whole state agencies into profit-seeking enterprises, and ambitious businesspeople with official protection and partners take on a quasi-official status as they build their empires. Either way the locus of power lies not within the state but with officials who use political leverage to extract wealth. Boundaries between public and private domains are porous or, in effect, non-existent. Indeed, many Official Moguls operate in a realm between state and society, using power and resources that are neither clearly public nor private (Johnston and Hao, 1995). Top-level offices are useful mostly to create monopolies of various sorts that are then exploited with few restraints. Some monopolies may be small-scale affairs while others may allow Official Moguls and their business clients to dominate major segments of an economy.

Briefly outline the four themes that run through US campaign finance reform history.

1, reform efforts almost always start with minor reforms. Often, this leads to court cases where the Supreme Court identifies the appropriate boundaries of such reforms and then Congress responds. 2, most reforms are in response to a crisis or event of some kind. This is not necessarily a good form of policy making since it is not proactive and tends to only react to a single instance or problem rather than concern itself with the problems of the system as a whole. 3, the First Amendment right to free speech is the main obstacle to meaningful reform. In Buckley v. Valeo, the Court said that money is a form of political speech and cannot be limited. That is the main reason we do not have campaign spending limits or limits on independent expenditures, but only limits on how much can be given to a particular campaign. 4, most reforms deal with changes to the current system and not a new system of campaign finance. Even though the public generally views the campaign financesystem with disdain, there is little public support for public financing or other major changes to the process.

Define neo-populism and explain how it leads to corruption.

1. "personalized leadership; power gained by appealing to the support of the (usually unorganized) masses." Weyland argues that it is the lack of accountability that is inherent in neo-populist leadership that leads to corrupt behavior. Once a neo-populist leader has successfully attained a position of power, that power is concentrated in that one individual because of the personal nature of the campaign he or she ran. Because these leaders are supported by "the people," anyone who opposes them (e.g., accuses them of corruption) is an "enemy of the people" and not to be taken seriously. As noted above, the appeals made during their campaigns were that the old formal rules were obstacles to success and that they needed to have freedom to follow their own rules in order to achieve their goals. Therefore, it is expected that the neo-populist leader will attempt to weaken institutional safeguards like oversight panels, anticorruption rules, and an independent judiciary. And, this behavior will be supported by the people because they have come to believe that it is necessary in order to achieve economic and political change.

Explain the "effort effect" and the "electoral effect" of campaign contributions in the United States. Do either constitute corruption?

1. Effort effect. Hall and Wayman (1990) found that, controlling for all other factors, campaign contributions "bought time." In other words, monetary help by interest groups may buy a member's involvement in a bill's movement through committee—debate, amendment activity, etc. Electoral effect. Interest groups (through their political action committees, or PACs) attempt to affect legislative outcomes by helping those who hold issue positions similar to their own get elected to public office (Saltzman 1987; Wright 1985). In this setting, then, contributions do not change behavior but reward "good" behavior. Legislator characteristics such as committee assignment, party, electoral security, and seniority influence a member's expected votes and actions, and these votes/actions are, in turn, a determinant of the campaign contributions a candidate gets from a particular group. Effort effect is where you buy time so that you can be a part of the bill's movement through the committee, so it is corrupt because you are buying time which is basically bribing your way into the bill. Electoral effect is corrupt because they are rewarding good behavior which can be through contributions or other ways which is also bribing.

Do you think political contributions are inherently corrupt? Explain two reasons why or why not.

1. I do think that political contributions are inherently corrupt and the first and main reason I say so is because we give contributions because we want something in return. Sure, we say that we give them because our values align mostly with the person that we are giving the contributions to but in reality, we give those contributions to them because we want them to pass or deny bills on our behalf or do other things for people like us. The second reason is because these political contributions make it easy for the politicians to use these contributions for corrupt reasons. Things like gift theory, electoral effect, access effect, and effort effect are all theories on why and how contributions can become corrupt. Because they can become corrupt so easily makes corruption permanent in contributions.

Choose one of the case studies from Johnston's elite cartel chapter and explain why it was included. What specific characteristics led him to put that case there?

1. In Italy two generations of political collusion, bound together by a pact to bar the Communists from power, built a multiparty electoral hegemony anchored by the Christian Democratic Party that extended into the bureaucracy and business as well. Elections and governments came and went, often in quick succession, but networked elites fed upon, and provided political cover for, extensive illicit dealings. Italy experienced significant, if uneven, economic development, but a weak yet heavy state resisted reform. When change came early in the 1990s, the old party system collapsed.

Define and provide an example of an informal institution. Explain how such institutions can lead to corruption.

1. Informal institutions are rules enforced outside of officially sanctioned channels. Panama has a strong presidential system of government, so one might suspect that there is less representation of diverse interests than in a legislatively controlled democracy. Perhaps in an attempt to counteract this formal weakness, each year in the budget, each legislator is allocated funds that can be spent at the legislator's own discretion in his or her district. One can see this has an attempt to make up for the representational weaknesses of hyper-presidentialism, particularly as it corresponds to writing the federal budget. If this were always the case then these "circuit funds," as they are known, would fall into the upper right-hand corner (substitutive) of the table above. Unfortunately, legislators have often used the funds as "slush funds" to attempt to buy votes in their districts by directing the money to particular subsets of their constituencies. In this latter case, the "circuit funds" fall into the bottom right-hand (competing) quadrant of the table. The "circuit funds" have recently been removed from the budget process, although there is some belief that they might return at some point in the near future.

Explain how party machines can be an example of functional corruption.

1. Jobs were given to those who needed an upper hand in society even if they were not the most educated they were still getting what they needed. With this they were loyal to those who gave them the positions so the politicians were able to get signatures when they needed. Once in office the politicians were doing things that would benefit the large corporations to get them to side with the politicians. This would intern let the politicians do what they wanted or needed to. They would use their power and their friends to keep getting votes by helping anyone who would vote or give them power. This includes the poor neighborhoods and the rich business owners.

Explain how governmental intervention in the economy can generate corruption in Latin America. Identify one potential reform and explain how it is supposed to reduce that corruption.

1. Latin American states intervene more in the economy, corruption increases because it gives government actors more access to and control over resources. To the extent that government actors control scarce resources, this creates an incentive for them to trade government policy (for example, giving businesses or individuals licenses in a particular sector of the economy) in order to get money to win elections (political power). Others argue that government intervention in the economy makes businesses more dependent on government action for economic success (economic power), so there are incentives for them to try to bribe government officials in order to get access to certain economic sectors or to purchase monopolies on goods or services. A good example of this is the effect of the Mexican oil boom in the late 1970s. Many argue that once the government controlled the state oil company (PEMEX), a considerable source of wealth in that country, corruption was bound to grow as other businesses tried to gain power through access to that oil. Political liberalization would have the same effect. If political competition were expanded, two things would happen. First, the competition for political office would create a natural incentive for competitors to keep an eye on one another. If a member of Party A were corrupt, then a member of Party B would run against him or her in the next election on that issue. In a political system where there is little to no political competition (e.g., a one-party state) then there is no loyal opposition to keep an eye on the party in power to keep them honest. Second, increased political competition means that individual government officials would probably have limited time in office, thus limiting their ability to consolidate power and create their own fiefdoms of control.

What is the difference between high-level and low-level corruption? Which is most common in Latin America?

1. Low-level corruption tends to be more economic and is based on clientelistic relationships and is more common in Latin America. Clientelism is an informal relationship between people of different social and economic status. a boss or big man and his clients. This relationship includes a mutual but unequal exchange of favors. High-level corruption is usually for the purpose of gaining political instead of economic power such as Africa. It is controlled by high-level officials for two purposes, to win elections or to amass personal economic resources.

Choose either Japan or Germany explain why that case was included in Johnston's influence market chapter. What specific characteristics led him to put that case there?

1. Major scandals in Japan led to a political shakeup in the early 1990s, temporarily ending Liberal Democrat Party (LDP) dominance and bringing new campaign styles, changed relationships between politicians and bureaucrats, and legal efforts to regulate ''money politics.'' In most respects, however, politics and policymaking in contemporary Japan continue as before. What is distinctive about these systems is not that they have avoided corruption - they have not - but rather that strong institutions, together with long-liberalized politics and economies, influence the form corruption takes and enable them to withstand its effects.

Explain why China was included in Johnston's chapter on official mogul corruption. What specific characteristics led him to put it there

1. Official moguls are often officials and politicians that enrich themselves through corruption. in China. They often have personal clienteles including relatives, business people, and local leaders, but there is little political reason to share spoils with mass constituencies in the manner of machine bosses. Economic opportunities are growing in these societies (see table 7.1), but these cases lack the political accountability and strong institutions required for an orderly market economy. Opposing corruption can thus be risky business, and even those citizens who bitterly resent it may leave the heavy lifting to others. Corruption of this type is often large scale and freewheeling that crosses international borders. These Chinese business leaders and politicians are dealing in corruption that does cross borders.

How and why does insecurity play a role in oligarch/clan corruption?

1. Oligarch corruption feed upon and reinforces insecurity. Many investors are likely to insist on short-term gains rather than planning for the long haul or will stay out of the country altogether. This means that investors will be in and out and not pay as much attention to the long game of the corruption in the country. That just leaves the poor to deal with what they can. Insecurity means that they have to do what they can just to live day to day and the rich can attend to whatever they want. With less people watching it is easier to use corrupt tactics.

What are the three critical relationships in a party machine?

1. The first group, the party organization, nominated and gathered enough voters to elect the second group, the public officeholders. Officeholders, once elected, had direct access to patronage positions, allocation of government contracts, and licensing and other regulatory procedures that could affect the success of business. And, finally, the third group was made up of interest groups (both business and others) who needed favors from the officeholders in order to continue their economic success. "The party organization was often the broker between these private favor seekers and public officeholders" (Stone 1996, 448).

Define the terms pervasiveness and arbitrariness as they relate to corruption. What impact do they have on the type of corruption in a country?

1. Pervasiveness it the amount of corruption and arbitrariness is the predictability. To some degree, they argue that pervasive corruption, while an additional business expense, is somewhat useful, because it provides information about who to bribe and how much to bribe. In addition, foreign firms do not have to collect much information to know that they are better off if they use a bribe to get resources. Arbitrariness, on the other hand, is almost always negative, because it makes it harder for firms to decide whether they should try to bribe, who they should try to bribe, and for how much. This is especially difficult for foreign firms because of the inherent secrecy of corrupt exchanges and the fact that they do not have a good, intuitive sense of how things are going to work in a foreign or unfamiliar environment. Both the secrecy and sense of "foreignness" would make the foreign investment riskier. 1, they argue that countries in cell 1 (high pervasiveness/low arbitrariness) will attract more FDI, because even if firms have to pay bribes, they can expect to receive the agreed upon service. Because they are certain to receive the service they have paid for, they will feel less disadvantaged when compared to local firms. 2, when both pervasiveness and arbitrariness are low (cell 2), investment will be high, because while fewer firms will pay bribes, if they do, they know they will likely receive the product or service for which they bargained. 3, when both characteristics are high (cell 4), the likelihood of FDI is diminished. This is because firms know they will have to pay bribes in order to have a chance to participate in the economy, but they do not know when those bribes will lead to the required service. This makes foreign firms feel particularly disadvantaged when compared to local firms and reduces their incentives to invest in cell 4 countries. 4. Finally, even when pervasiveness is low but arbitrariness is high (cell 3), less inbound FDI will occur, because even though the likelihood of paying a bribe is low, the uncertainty of whether a bribed paid will result in a necessary service will make foreign firms feel more disadvantaged when compared to local firms.

How and why does violence play a role in oligarch/clan corruption?

1. Poverty, insecurity, and the need for protection make followers relatively easy to recruit. However, it can be difficult to reward and retain them so they incentives people through corruption and violence. This corruption can be linked to violence such as parliamentarians, journalists, and jurists who opposed the clans are murdered. This way the oligarchs and clans can keep control of the media which is a way to show the people what they are doing is correct.

Choose one of the case studies from Johnston's oligarch/clan chapter and explain why it was included. What specific characteristics led him to put that case there?

1. Russia is in this model because it has a small number of individuals that use the wealth, political power, and violence to contend over major stakes, while rewarding their followers. Russia saw the fall of a dictatorial (if ossified) state and a planned economy that had sustained development in some respects while impeding it in many more.

What is "soft money" and how was its use impacted by the Bipartisan Campaign Reform Act (2002)?

1. Soft money" is the legally unlimited money that individuals and groups could give to political parties for the purposes of party building and party support activities (e.g., registering voters, mobilizing party members, educating the public on party issues and positions) but was not to be spent on any direct efforts to get a specific candidate elected. President Bush signed their Bipartisan Campaign Reform Act, which outlawed "soft money" contributions to parties while doubling the limits on contributions to candidates and parties made by individuals and interest groups. The money that used to go to parties in the form of "soft money" has now shifted to 527 committees—tax-exempt organizations that are involved in politics but that cannot specifically advocate for or against a candidate.

Define the Asian miracle and explain one of the theories for why it exists.

1. The Asian miracle was when the Asian governments were defined by weak institutions, systemic corruption, crony capitalism, and rent-seeking officials. Even though they were this way the Asian countries developed anyway. This theory for this is that Asia's corruption is at a fixed cost while everywhere else is not at a fixed cost. This means that their corruption is predictable and reliable. If you pay for something you are most likely to get what you paid for. There are two types of costs one is the Ex ante costs which must be paid prior to the development of the contract. These costs include determining who the players are and what level and types of bribes they might require entering into a contract. Ex post costs are costs that are paid after the contract has been agreed to. These costs include policing the agreement, ensuring compliance, adapting to changing circumstances where appropriate, and resolving any conflicts that might arise.

Briefly summarize FECA 1974 and explain how Buckley v. Valeo (1976) affected its implementation.

1. The Federal Election campaign act This limited the financing for presidential primaries and general elections. It also required disclosure and attempted to limit contributions. Buckley v. Valeo court case determined that it was unconstitutional to limit the amoun of money that a campaign could spend since it violated their free speech protected under the first amendment. It also stated that any individual or group that wanted to spend money on behalf of (or against) a candidate could not be limited as long as that spending was independent of the candidate's campaign (known as independent expenditures). The Court did note, however, that limiting direct contributions to a campaign from an individual or group was allowed, because unlimited contributions of these types lead to a public belief that the process is corrupt and could ultimately undermine support for the political system. In 1976, Congress amended FECA to deal with the Court's concerns.

Take one specific example from The Last Hurrah and connect it to a characteristic of party machines.

1. The example that I am choosing is when Skeffington is at the funereal. The first thing that happens is he gives a large sum of money to the lady and says it is not from him. The next thing that happens is many people come to the funereal even though the dead person was not liked that much. This is when everyone is talking about politics and not being respectful to the dead. The last part is really where the party machine characteristic comes into play. Skeffington is talking to the mortician and tells him that he is going to give the girl a discounted price of 35 dollars. The mortician says that he is not able to do that and this is an expensive thing. Skeffington then states that if he does not give the girl a discounted price then he will ruin his business. He does this so that the girl will go around telling everyone that Skeffington is a very nice person and to gain votes.

What are the main differences between an on-the-spot and a long-term exchange?

1. The first is the "on the spot" exchange. This is a relatively short-term relationship (e.g., bribing a police officer to get out of a ticket). Because the relationship is short-term (one-shot), it has few ex ante or ex post costs. In fact, one might argue that the only cost is the ex ante cost of knowing that a bribe is possible and what an appropriate size of the bribe should be. long-term exchange. These include any corrupt relationships that are entered into that might occur more than once or over a longer time period (e.g., government contracts, etc.). Long-term relationships/contracts are riskier because there are significant costs to determine whether the relationship might be of use to the firm (ex ante) and to make sure that the relationship continues to be beneficial to the firm after the contract has been consummated (ex post)

Define "machine politics" and "political machines."

1. The terms "machine politics" and "political machine" are commonly used so as to confuse two quite different phenomena. "Machine politics" is the manipulation of certain incentives to partisan political participation: favoritism based on political criteria in personnel decisions, contracting, and administration of the laws. A "political machine" is an organization that practices machine politics, i.e., that attracts and directs its members primarily by means of these incentives. Unfortunately, the term "machine" is also used in a quite different and less useful sense to refer to the centralization of power in a party in a major political jurisdiction: a "machine" is a united and hierarchical party organization in a state, city, or county. Now there is no necessary relation between the two dimensions of incentives and centralization: machine politics (patronage incentives) need not produce centralized organization at the city level or higher. (page 374)

What are some of the consequences of neo-patrimonial corruption?

1. that as a country becomes more integrated into the global political and economic system, the zero-sum game will turn into a positive-sum game (where everyone has the opportunity to benefit even if one group benefits more than another). However, as globalization increases the value of a country's natural resources, it actually serves to make public office even more valuable and attractive, and neo-patrimonial leaders continue to exploit the natural resources of their countries for their personal benefit. in a neo-patrimonial system, political instability often leads to violent and deadly conflict because the costs of losing power are so high. Those in power are willing to do almost anything to maintain that power. The first reason for this relationship between economic and political instability is that neo-patrimonial corruption reinforces and magnifies inequalities in a society. All of the inegalitarian effects of corruption that were discussed in the first week of this class are worse in a patrimonial system, because the leaders have no incentive to even pretend to distribute wealth equally among the masses. Second, to the extent that a leader has distributed resources to supporters (e.g., the military, etc.) to maintain their support of the regime, economic problems mean that there are fewer resources to allocate. If the leader cannot continue to pay off those who help him to maintain power, those supporters are likely to look elsewhere for someone who can or will. Third, as resources diminish, the number of people in society who are not served by the regime grows and the number of those who are served becomes smaller. The inevitable political implication of these trends is revolt by the masses.

Define decentralization and explain how it might affect corruption in Africa

Decentralization is the transfer of control of an activity or organization to several offices or authorities rather than a single one. This would affect the corruption in Africa majorly. If there was decentralization in Africa it would make it harder to have neo-patrimonial corruption because it would put the power in the hands of more people rather than one person so there would need to be more people who have to agree on something rather than one person making all the decisions.

Briefly explain the "gift theory" of campaign contributions. Do you consider this corruption? Why or why not.

Gift theory" of contributions is based on the extensive literature in anthropology and sociology on gift giving. This theory starts from the assumption that no gifts are altruistic. Each time a gift is given, there is an obligation incurred for the recipient to reciprocate at some future time. If something is expected after a gift is given and they get that something then it is basically bribery. If it is not expected and the gift is given with only good intentions then it is not corrupt.

How is elite cartel corruption different from influence market corruption? How are they similar?

Institutions in elite cartel countries are weaker than those in the Influence Market countries. Another difference is that on the inside they elites are trying to control the people instead of the institutions. The similarities of the two are that they outwardly resemble each other with the money and favors change hands, with benefits flowing to favored people and businesses.

Define neo-patrimonialism and explain its causes

Neo-patrimonialism- "administrative apparatus in which coheres around a network of personal dependencies rather than objective administrative sectors with no clear cut seperation between incubent and office, between public resources and private interest" (Theobald 1994). the ruler is viewed as the state and no distinction is made politics and economics are essentially the same thing causes: personal relationship principles scarcity of resources globalization

Explain the three ways that corruption tends to be different in Africa.-

One way that corruption differs in Africa is the extent to which affects every aspect of society and politics. In Africa, corruption is systemic, meaning that almost everyone participates in it in some way, from the chief executive of the country to the least powerful member of society. It is also generalized because it affects all sectors of society—the personal, private, educational, social, political, and economic. Finally, it is very expensive. Because corruption in Africa is less organized and centralized than in other regions, making a payment (of a bribe for instance) does not guarantee that the bribe payer will receive the service paid for. Because of this decentralization and lack of predictability, corruption in Africa limits development and investment by foreign countries and firms

Influence Market

Strong political and administrative institutions.

Oligarchs and Clans

Strong political but weak institutions.

How did Newbury v. U.S. (1921) impact campaign finance rules in the U.S.?

The Publicity Acts were repealed and replaced in 1925 by the Federal Corrupt Practices Act. This act both limited and extended the earlier law. It required that all disclosure occur on a quarterly basis (four times per year). However, it also raised the amount of money that could be spent in a campaign and it applied only to general elections. The latter change was a response to a Supreme Court decision in Newberry v. US (1921) where the Court determined that the Congress was not constitutionally allowed to regulate party nomination processes like primaries; it could only regulate general elections. The FCPA governed campaign finance until (1) the Hatch Act of 1940 incorporated the first yearly limits on contributions to federal campaigns or parties by individuals and further limited the amount of money that could be raised and spent by federal parties and (2) the Taft-Hartley Act of 1947 banned contributions from labor unions (remember that corporate contributions had been banned since 1907).

Official Moguls

Weak politics and weak institutions but the elites operate among these in order to gain more power and resources.

Elite Cartels

political regimes are in place for shorter periods of time and institutions are