PSC 403J Final Exam

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

"Elite cartel practices may outwardly resemble Influence Markets: money and favors change hands, with benefits flowing to favored people and businesses. Most societies involved are relatively stable, middle-income or affluent democracies, or are well along in the consolidation process. Perceived levels of corruption, while higher than in INfluence market societies, remain lower than in Oligarchs and Clans, or Official Moguls, cases. Civil society and for accountability, while weaker than in Influence Market societies, are far from negligible." Differences: institutions are weaker because political regimes have been in place for shorter periods of time; inequality is more pronounced; competition is unpredictable; political parties have shallow roots "Corruption in Elite Cartels is to protect, as well as to enrich, networks of higher-level elites". "The point is not to influence specific policies but rather to stymie or co-opt competitors, amass enough influence to govern, and insulate economic and policy advantages from electoral and social pressures."

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

"Japan too has Influence Markets in which political figures help connect private interest, many of them business, to decision makers within a strong, well-institutionalized state. Here too political contributions, some of them legal, are integral to that process". There was a one party system in Japan for a while, which forced candidates of that party to compete in "money politics". Structural corruption is a problem in Japan. "The pervasiveness of corruption, the large financial stakes involved, and cultural dimensions too (such as norms of exchange and attitudes toward authority, the latter shaping both factionalism and response to scandals) set Japan apart. "For years it was thought that top bureaucrats -- high-status figures in society as well as within the state -- were generally honest. By the end of the 1990s, however, an important official in the Ministry of Health and Welfare was found to have taken both payments and extensive hospitality from construction firms." Japan has seen great improvement in their economic sector, but corruption runs deep within the bureaucracy, which is why it is considered an influence market. There also was a large network of donors who gave money to those they wanted to see in power. There also were very weak constraints in terms of corruption, so not much accountability was held for politicians with their involvement in corruption.

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

"Poverty, insecurity, and the need for protection make followers relatively easy to recruit; unpredictable competition and a climate of uncertainty, however, can make it difficult to reward and retain them, adding to the incentives to corruption and violence." "Oligarch and Clan corruption feeds upon and reinforces pervasive insecurity, and unpredictable corruption is the most damaging of all in development terms"

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

"The Supreme court determined that the Congress was not constitutionally allowed to regulate party nomination processes like primaries; it could only regulate general elections"

What are some of the costs of official mogul corruption?

"[Moguls] 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, but these cases lack the political accountability and strong institutions required for an orderly market economy." Moguls will claim an entire segment of an industry, so there are few competitors and they face little legal or political constraint; this means that this is harmful to economic development

What are the three critical relationships in a party machine?

1. Party Organization: "nominated and gathered enough voters to elect the second group 2. 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" 3. Interest groups: who needed favors from the officeholders in order to continue their economic success

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

1. Reform efforts almost always start with minor reforms: 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: Not a good kind of policy since it only reacts to a single instance and isn't proactive 3. The First Amendment right to free speech is the main obstacle to meaningful reform: the many reason there aren't more campaign spending limits is because of the first amendment 4. Most reforms deal with changes to the current system and not a new system of campaign finance: this is even though the public looks at the current system with disdain

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

1. The extent to which corruption affects every aspect of society and politics; it is systematic because almost everyone participates in it 2. It is generalized: affects all sectors: personal, private, educational, social, political and economic 3. It is very expensive (paying a bribe doesn't mean that someone will get what they paid for)

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

An example of this is when Cass refuses to make improvements in the slums until he sees a different mayor in office. Skeffington offers the job of Fire Marshal to Cass's son, who does not appear capable of the job. Cass, not wanting to face the embarrassment to his family that his son being Fire Marshal would bring, gives into Skeffington's demands. As promised, Skeffington rides along in a parade of enthusiastic supporters past the building that Cass resides in, after getting what he wants. To the viewer, this seems like a positive because Cass is portrayed as a nasty person, refusing to help those in need. However, this is a clear form of party machines because Skeffington used his political power to get something he wanted. He may have done this because of his genuine concern for the citizens, but he also had an upcoming election and wanted the support from constituents. Opponents didn't have the option to refuse to do things if they wanted to keep their dignity. This is an example of party machines because Skeffington used his influence to make those improvements when he knew the election was upcoming. He knew that if he were able to make improvements to the living situation, more of the voters would vote for him. However, it is still beneficial to them.

Define decentralization and explain how it might affect corruption in Africa.

Decentralization: "reducing the amount of power held by the executive and redistributing that power amongst more individuals, institutions, or levels of government" This would just move corruption in Africa, instead of ending it because corruption is at every level

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

Economic crises lead to political instability; the cost of losing power is so high that people turn to violent and deadly conflict The economic and political instability magnify inequalities in society Leaders have resources that they can distribute to their supports which helps them to maintain their regime When resources dwindle, those who are being served by the regime dwindle and the lower class becomes larger "In a neo-patrimonial system, the state exists as an "interest group". The government focuses on economic accumulation for itself".

Explain the "effort effect" and the "electoral effect" of campaign contributions in the United States. Do either constitute corruption? Why or why not?

Effort effect doesn't buy votes, but it buys time. If an interest group gives money to a legislator, this will increase the amount of time they spend on a particular bill/committee. The electoral effect is when "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"; this does not change behavior, but rewards "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." Both of these constitute corruption because a legislator is spending their time on particular issues to make sure that they get money from a particular group. They are supposed to devote their time to making laws for public interest, but in this scenario, their ability to make money depends on if they support the interests of certain groups.

Define "machine politics" and "political machines."

Machine politics: "The manipulation of certain incentives to partisan political participation: favoritism based on political criteria in personnel decisions, contracting, and administration of the laws." "In a system controlled by machine politics, those in power try to maintain, consolidate, or increase that power by using the tools of government to get certain individuals and groups to support them at the polls" Political machine: "an organization that practices machine politics, i.e. that attracts and directs it members primarily by means of these incentives"

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

Functional corruption is the idea that corruption can serve as a positive force in some countries, particularly developing ones. In this theory, corruption serves to aid weak institutions. Party machines are an example of this because politicians will often use their influence to get things for voters in exchange for votes. In addition to this, there were was an influx of immigrant voters between 1870 and 1920, "so the incentives and services controlled by the party machine were often used to integrate new immigrants into the political system, and in turn, buy their loyalty to the party and votes for the party ticket through the provision of apartments and jobs." Many times, giving someone a place to live or money is a more reliable way to ensure that they will vote for you than simply creating policy that benefits them. Therefore, party machines are a form of functional corruption because it benefits the people and the corruption is more or less done in the public interest.

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.

Governmental intervention leads to more corruption because "it gives government actors more access to and control over resources". They are able to trade the scarce resources that the government is control of for money to win elections. Reform: Political liberalization. This is supposed to reduce corruption because it would create more competition, which would make political opponents keep a closer eye on each other. Right now, there isn't much competition, only one party in power, so there isn't someone who can run against the corruption that is happening. The second thing this would do is make it so there were term limits and limits for a particular party, because right now the same party can consolidate power and stay in office for a long period of time.

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

Institutional institutions are "rules enforced outside of officially sanctioned channels"; there is no actual rule or punishment but people follow it. An example is in Panama where every year in the budget, legislators are given funds for their district to be used at their discretion. However, this often leads to corruption because legislators use this money to buy votes. Informal institutions lead to corruption because they lead to a lack of accountability, since these are not rules that are written into law. "Informal institutions also often lead to the circumvention of formal laws."

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

Low-level corruption is more economic and based on clientelistic (clientelism is an informal relationship between people of different social and economic status; mutual but unequal exchange of favors) relationships High-level corruption: "for the purpose of gaining political, rather than economic power; controlled by high-level officials for two general purposes: to win elections (electoral power) or to amass personal economic resources" High-level corruption is more common

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

Neo-populism: "personalized leadership; power gained by appealing to the support of the (usually unorganized massed". Neopopulist leaders tend to run as the "outsider" to the system. Normally, support comes from unorganized and largely disenfranchised groups Neo-populism leads to corruption because there is a lack of accountability. Once that person is able to achieve power, the power is personal since they ran a campaign based on their individual platform. Additionally, since this person ran supported by "the people", anyone who opposes them is seen as an "enemy of the people" "It is expected that the neo-populist leader will attempt to weaken institutional safeguards like oversight panels, anti corruption rules, and an independent judiciary." Neo-populist leaders don't have the support of a party, so they need large amounts of money to keep their supporters mobilized, so they use corruption to get this money. They also "use corruption to keep their personal aides and bureaucrats in line".

Define neo-patrimonialism and explain its causes.

Neopatrimonialism: "an administrative apparatus which coheres around a network of personal dependencies rather than objective administrative structures with no clear cut separation between incumbent and office, between public resources and private interest" Example of the Last King of Scotland The ruler is often seen as the state; there is no separation of politics and economics; there is normally no middle class, but only a very large lower class and very small upper class Causes: People join politics to gain economic power and wealth Scarcity of resource: win vs. lose mentality because there are such limited resources to go around Globalization makes the public offices more important and people will fight even harder for control

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

On the spot: a short-term relationship that could involve a one time exchange; there are few ex ante or ex post costs, someone only needs to know what an appropriate bribe amount is and that it's okay to pay a bribe A long-term exchange: corrupt relationships that happen more than once or over a long time period; there are more costs within this relationship 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).

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?

Russia is one of the case studies that Johnston uses. "Corruption in Russia is pervasive, often organized along clan lines, harmful to democratic and economic development, and at times linked to violence." One characteristic of Russia that has led to them being an oligarch/clan country is their transition from the Soviet Union to a "democratic" state. There are still many underlying issues from this quick transition, and this shows the negative effects of quick liberalization. The kinds of corruption in Russia that we see today also existed in the Soviet Union times, but now there is supposed to be a different kind of system. This corruption includes Mafiyas, or muscle for hire, that keep the citizens/opponents in line so that those who are in power can stay in power. The institutions are weak, as well as participation. The elections are rigged or people are bought/scared into voting for one party. The institutions lack the ability to create checks and balances for those who are in power. There are very few oligarchs who control the majority of the wealth and power in the country, whereas many of the citizens in Russia are incredibly poor.

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

Soft money: "the legally unlimited money that individuals and groups could give to political parties for the purposes of party building and party support activities (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." Its use was impacted by the Bipartisan Campaign Reform Act (2002) because it outlawed "soft money" contributions to parties, but doubled the "limits on contributions to candidates and parties made by individuals and interest groups."

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

The Asian miracle is that there are high levels of corruption in Asian countries, but there are still high amounts of foreign investment and strong economic development and growth. This has been theorized to be due to the "fixed costs" or corruption that exist in these Asian countries. Although there is a lot of corruption, for the most part, businesses know how much it is going to cost them to do business in a particular country. This differs from Africa, which also has high levels of corruption, because people never know how much they're going to have to pay or how often it will be in African countries.

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

The FECA 1974 created the strictest spending limits for campaigns. It was determined by the voting age and population size of the district a candidate was running in; if a district was more populous, a candidate could use more money for their campaign. They also "created an independent agency to oversee and implement the campaign finance system, and further expanded and clarified disclosure requirements." Buckley v. Valeo complicated the FECA because it determined that it was unconstitutional to limit the amount 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.

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

The gift theory is that no gift is altruistic, but there is "always an obligation incurred for the recipient to reciprocate at some future time." This gift isn't returned immediately, but stays in the recipients mind to be returned at a later time. Gifts maintain a bond and relationship between the two parties involved. I do consider this to be corruption because groups are giving gifts/money to a legislator with the hopes that they will return the favor at some point with policy. In addition to this, politicians don't have to return the favor right away, but instead they can do it when it is convenient for them. Therefore, their constituents or other legislators won't necessarily know that the connection exists. "As noted before, policy outcomes and legislative votes, access, and effort are public goods that are supposed to be exercised for public benefit. Campaign contributions serve as a private gain to the politician since they are required to maintain the politician's political power."

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

The term pervasiveness relates to the amount of corruption within a country and arbitrariness relates to its predictability. Therefore, scholars can make models of particular countries based on the amount of pervasiveness in relation to arbitrariness. This impacts countries because it will impact the amount of foreign firms that want to invest in a country and the overall economy. There are 4 possible outcomes of this: high pervasiveness/low arbitrariness, low pervasiveness and arbitrariness, high pervasiveness and arbitrariness, and low pervasiveness and high arbitrariness. Countries with high pervasiveness and low arbitrariness will have good FDI because even though there are high levels of corruption, foreign firms will know what to expect and be able to invest accordingly. The economy in these countries is better because foreign firms are not afraid to invest when there is a certain level of security. On the other hand, countries with high levels of pervasiveness and high levels of arbitrariness will be doing significantly worse. This is because not only are there high amounts of corruption, but it is also unpredictable so foreign firms won't want to invest because it will be uncertain how much it is going to cost them.

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

This form of corruption in China started with Xiaoping's government because he launched market-oriented reforms; before there were centrally planned and controlled prices but this allowed for goods and services to be sold more freely. The national economy was also opened to foreign trade and investment. "Official profiteering became a major problem, taking on various forms such as moonlighting, speculation, taking gifts, and bribery." "Decentralization created pockets of impunity, often in a growing gray area between state and markets. Managers in the state-owned sectors could tap into the cash-generating activities of their enterprises and enrich themselves with little risk of punishment." "Many young people turned to the pursuit of wealth, while an absence of strong overriding norms blurred boundaries of behavior" -- young people had the idea to get rich and get rich fast There are thousands of monopolies involved in corruption from collusion in government agencies, bribery, embezzlement, tax fraud. Much of this impunity can be seen at all forms of government and across the country in China.

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

Violence plays a role in oligarch/clan corruption because there are relatively few people in power and they want to keep their power. In places like Russia, Mexico, and the Philippines, journalists and opponents have been murdered for opposing the regime. "Threats of violence also play a role in discipling followers who, after all, have a variety of options. Buying their support repeatedly is very expensive; using a bit of "muscle" on the unreliable can have valuable demonstration effects". It is less costly to use violence/organized crime to silence those who oppose you or to get people to vote for you so that people can stay in power. This plays a role in oligarch/clan corruption by making it so that the same people can stay in power. It creates fear to speak out or oppose the current government, so that those people are able to stay in power.

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

Yes: gift giving theory is that politicians are going to want to "pay back" what they have been given so they are going to want to make policy and spend time on things that will benefit those who have given them money; therefore public interest isn't being accurately represented in their policy decisions 2. The system of political contributions is corrupt. Interest groups can help a person who is going to support their views get elected; they will donate money to a person to win because once elected, they will have access to that person and already have a personal relationship Campaigns should be funded by the public, because politicians are going to be the ones representing them