Political Parties, Public Funding and Unintended Consequences

As has been discussed previously on this blog and elsewhere, party finance reform – notably an increase in public funding – is an increasingly popular response to the myriad of financial challenges that political parties face in the 21st century. The advantages and disadvantages of state funding have been discussed at length by academics, practitioners and politicians alike, with perhaps the biggest ‘pro’ being that it provides the opportunity to rid (or at the very least limit) politics of the undue influence of so-called special interests and wealthy donors. Michael Koss takes this argument a step further by showing that an increase in state funding becomes more likely ‘the more the discourse on political corruption identifies state funding as a remedy against corrupt practice in party politics’. Whilst these arguments are undoubtedly (at least to me) fascinating, what is also interesting about party funding reform – and, indeed, reform more generally – is the unintended consequences that are thrown up when reform occurs.

An example of this forms the basis of a new study by Harvard based PhD candidate Andrew B. Hall. In a study of five state legislatures – Arizona, Connecticut, Maine, Minnesota and Wisconsin – which have strong public funding programmes, or ‘clean election laws’ (the name is, perhaps, instructive of the motivation for implementing said reforms), Hall came up with three key findings. Firstly, as expected (and intended), public funding reduced the financial advantage of incumbent politicians. Secondly, and also as expected (and intended), public funding made elections more competitive. Finally, there was also an unintended consequence, the increase in public funding makes polarization in the state legislature worse. That is to say, legislation that introduces a robust public funding regime creates a disadvantage for moderate party candidates. The reason for this is that individual donors and what Hall calls ‘access oriented interest groups’, donate money in different ways and for different reasons.

The work brings to mind that of Iain McMenamin who shows that, in terms of business financing of political parties, ‘money is multi-lingual’. Donations can be either ideological or pragmatic (for a review of McMenamin’s 2013 book, see here). Ideological donations are donations to a specific party which holds some form of ideological affinity with the donor, whereas pragmatic donations are given without any notion of political affiliation, just to the party which is perceived to hold the most power. In the American context, Hall shows that we can understand ‘access oriented interest group’ donations as largely falling into the latter category which, intentionally or not, tends to favour more moderate candidates. Individual donations, however, fall into the former category, which tends to favour polarising candidates. This is because, unlike pragmatic interest groups, individual donors are much less likely to spread their donations across candidates of different parties, to ensure some form of influence (perceived or otherwise). Individual donors are much more likely to donate to those for whom they have a strong ideological affiliation, who also tend to be on the polarised end of the political spectrum. Therefore, funding reform which introduces significant state subsidy, limits donations from ‘access oriented interest groups’ and privileges individual donations, increasing polarisation in the state senate.

The findings also represent a much larger discursive point when engaging with corruption more generally. There often exists an unspoken dichotomy between acceptable and unacceptable influence. That individual donations are a positive sign of a functioning and vibrant democracy despite the fact that they may lead to ‘a polarized, and probably less functional politics’. Whereas special interest donations (from ‘access oriented interest groups’) tend to represent everything that is wrong with modern democracy and some sort of pervasive, shadowy, Bilderberg-esque influence over politicians – who have little interest in actual, y’know, public service preferring to make as much money from politics as possible before retiring to a cushy job in the private sector. The reality, of course, as these findings show is a little more complicated than this – no reform is perfect, democracy is messy and a trade-off will have to occur.

Beyond this is also the notion that donations are almost intrinsically corrupt if the group donating – or indeed the person being donated to – represents something that one does not agree with. There often seems to be a fairly thin line between what represents a corrupting influence and what does not and that line tends to be drawn alongside some form of normative political judgement. One man’s lobbyist (yuck!) is another man’s advocacy group (hooray!).

This was further shown by reports at the end of 2014 that a new study had tried to answer the question of whether power actually corrupts. One of the lab experiments is described by a co-author of the study as follows:

“Participants played what is called a dictator game. The dictator, referred to as the “leader” in the experiment, could decide how to apportion a sum of money between himself or herself, and his or her team. They had to make choices between serving the greater good – doing what’s right for public welfare by increasing the team’s payout – or serving oneself, thereby increasing the leader’s payout but destroying public welfare.”

The problem here is that the act of selfishness, and to a certain extent hypocrisy, is being (mis)taken to be a necessarily corrupt act. Furthermore, not serving the greater good is also seen as representative of a corrupt act. A person in a position of power (who I may or may not agree with) acting selfishly and not serving the greater good is not necessarily committing a corrupt act, just as a special interest group (who I might not agree with) donating a large sum of money to a politician (who I might not agree with) does not necessarily represent a position of undue influence. That is not to say that the action (or exchange) is desirable, but it is to say we should be wary about screaming (insert expletive of choice) corruption whenever we are presented with something that we disagree with.

To return to the study to hand. The work of Andrew Hall is interesting for two reasons. Firstly, it shows us that, at least in the context of the USA, an increase in state funding (at the expense of private funding) leads to certain interesting and unintended consequences. However, American politics is nothing if not exceptional, so I would be curious to see if these findings hold up in other contexts – particularly in the advanced industrial democracies of Western Europe. Secondly, the work of both Hall and McMenamin raises broader theoretical questions about what should – and  should not – be considered an illegitimate, or indeed corrupt, exchange. It is by engaging with this literature and building on it ourselves that we can draw these lines in an ever sharper way.

Sam Power

University of Sussex

Posted in Uncategorized

Corruption rumours again surface in Swaziland

Swaziland doesn’t appear in the western news that often, but when it does it’s rarely for the ‘right’ reasons. And, once again, that’s been the case in recent days. In similar fashion to a celebrity whose life is plagued by narcotics and alcohol abuse, the Swazi government continues to frame itself as a victim of circumstance rather than being responsible for its own demise. On New Year’s Day the country’s textile industry suffered a serious blow when the USA, a major recipient of textile exports from Swaziland, decided to withdraw its trade agreement with the nation (see here).

The reasons behind such aggressive action are to do with the non-compliance of the government in establishing legal sanctions protecting its labourers. Although Prime Minister Barnabas Dlamini states that the country will not suffer as a result, the predicted outcome is a loss of over 17,000 jobs, a devastating blow to a population of approximately 1million, which is already suffering from a high unemployment rate. Ironically, the King has also recently authorised a project worth US$90million, to build an oil storage facility in the country (see here). He proudly stated that it would “have a 90 million litre fuel capacity to last Swaziland 90 days. It [will also] store 42 million litres of diesel and 38 million litres of petrol and result in the creation of at least 300 jobs”. The tender for this project was not open, and neither was it approved by parliament. The contract has been given to the South African company, Kantey & Templer Consulting Engineers, which was also contracted to build a new airport in the country. Naturally, rumours of malpractice and patronage have begun to circulate amongst the political elite. What interests the monarch has with Kantey & Templer have yet to be uncovered. Such extravagance is viewed as unnecessary, particularly at a time when the nation will most likely require such funds to deal with the inevitable unemployment crises.

Quite what is going on here is not clear.  But it is something that certainly merits further attention as Swaziland struggles to keep its economic head above water.

NS

Posted in Uncategorized

Mike Tyson and the UK’s Anti-Corruption Plan

On 18 December UK Government finally unveiled its long-awaited National Anti-Corruption Plan (see here). The plan covers pretty much every area of public life in the UK, ranging from sport to prisons, and from how British companies should do business abroad to policing issues. The 66 action points are for the most part detailed and clear. The plan subsequently looks like a genuine step forward in the UK’s attempt to get to grips with the challenges that corruption poses.

The plan is not something that’s appeared overnight. Indeed, the anti-corruption community has been eagerly waiting the day when it finally emerged – it was originally scheduled to be published in June – and it didn’t take long for their comments and analyses to appear. Transparency International UK’s Chief Executive, the ever-sensible Robert Barrington, called the plan (see here) a “ground-breaking document” and praised the government for saying more about corruption in recent times than any UK government in living memory. Barrington was also quick, however, to note that there are still rumblings in the background about, for example, closing the Serious Fraud Office (the “only law enforcement body in the UK that has corruption as one of its top two priorities”) and that only this week the the audit commission’s renowned anti-fraud unit was unceremoniously closed down.

Alex Stevenson, writing on politicos.co.uk’s website, took a slightly different approach (see here), criticising what he described as “two politician-sized holes” in the plan. On the one hand the issue of a ‘revolving door’ that helps well-connected (often ex-) politicians move seamlessly in and between positions in the private sector (see here for a controversial recent example) was largely glossed over. How these relationships should be regulated subsequently remains decidedly unclear. On the other hand Stevenson also lamented the lack of anything substantive on party funding (a favourite topic of this blog, see here and here). Given the animosity between Labour and the Conservatives on this issue, that’s perhaps unsurprising. But, Stevenson claims, no less unfortunate for that.

Given that you can never please all of the people all of the time, how much substance is there to doubts such as these? One would hope that the fact that Westminster will soon lock down and descend in to election mode shouldn’t affect things unduly, although there is of course an outside chance that the next government might have no interest in taking the plan’s aims forward. Not impossible, but still very unlikely. That having been said, the biggest problem with plans – any plans – is not formulating them, it’s putting them in to practice. As Mike Tyson once said “(every one of) my opponents has a plan … until they get punched on the nose”. Iron Mike has a point. Even assuming the very best of intentions, plans can still be very big let-downs as (often unforeseen) things get in the way and stop aims from being fulfilled. The metaphorical punch on the nose can come at any time and in ways you’re not necessarily expecting.  Plus, some of the aims in this document are still just a little too vague for comfort. In the area of sport there is talk of the problems of match-fixing when the real issue is sports governance (something that is glossed over), whilst the action point (singular – point 14) on tackling corruption in prisons means everything and nothing.

The government also hasn’t really explained how it will evaluate progress. Would it not make sense for the (decidedly low-key) anti-corruption champion, currently Tory MP Matthew Hancock (the business minister with the intriguing full title of ‘Minister of State at the Department for Business, Innovation and Skills, Minister of State at the Department of Energy and Climate Change and Minister of State for Portsmouth’), to report back to parliament annually on this? It also appears to be everyone’s duty to take the plan’s aim forward, yet no one’s obligation. Political will is a notoriously hard concept to pin down (see here for one attempt to do so), but there is a feeling that if the will had been stronger, then someone would have been commissioned to take this forward as a main priority.

Ultimately, tackling corruption is – like many things in politics – not an event but a process. We will only be able to judge the plan’s success over time, and that means substantive change in key areas. Whether the resources and the commitment are going to made available to affect this change nonetheless remains very much to be seen.

Dan Hough

Posted in Sport

Selling both gold and money; German party funding goes weird

How best should political life be funded? The question is hardly new, and it should come as no surprise that it’s received coverage on this blog before (see here and here). For some the introduction (or expansion) of the state funding of politics is one way of fighting the influence of big business in political life. For others state funding brings with it more problems than it solves, and it’s subsequently viewed more sceptically. The more interesting work moves beyond this and tries to work out how different funding regimes can lead to different types of corruption (see here). Be all that as it may, debates as to how politics should or shouldn’t be funded have taken on a peculiar new dimension in Germany in recent weeks. And this debate has done plenty to muddy the decidedly murky waters yet further.

Germany has a system of party funding that comprises three basic elements. Party members pay subscriptions, individuals and corporate entities can donate money directly and parties that poll above 0.5 per cent of the vote in national elections receive subsidies from the state. Some parties rely particularly heavily on membership dues, others do better in terms of the donations they receive whilst some are particularly reliant on state funding. Table 1 illustrates the balance per category for each of the main parties represented in the German parliament (as of 2011).

Table 1

Party Funding in Germany

Who gets what and how (in per cent)?

Party Membership Dues Public Subsidies Donations Others*
CDU 28.46 31.65 15.47 24.42
SPD 30.51 27.23 7.77 34.49
FDP 21.64 39.77 19.30 19.29
Left Party 33.92 42.31 6.64 17.13
Green Party 21.73 37.50 13.04 27.73
CSU 27.57 28.11 15.95 28.37

Source; Bundestags-Drucksache, 17/12340

* Most of this money (around 55m Euro in total in 2011) is made of by contributions from elected officials such as MPs, MEPs, local councillors and members of regional parliaments (MdLs).

Germans (and Germany-watchers) regularly dissect the traditional arguments about the virtues of this system (see here for a good summary of the main issues). Are smaller parties over compensated? Does the not inconsiderable state subsidy make life just a little too easy for the parties? Do parties with free-market ideologies (such as the FDP in this case) benefit unduly from donations from business? And so on. The focus none the less tends to be on the traditional parties. Every once in a while there will be a piece in a Sunday supplement about the challenges that micro-parties face, but the attention of both the popular and academic world tends to remain on the big six. Two rather peculiar developments in the Autumn of 2014 have changed that just a little.

In October 2014 the Alternative for Germany (AfD), a new and spikey right-wing anti-Euro movement that entered the European Parliament in 2014 (having narrowly missed entering the federal parliament in Berlin the year before), began selling gold in its online shop. They sold it in the form of gold coins (the 490 Euro replica German Mark coin was particularly popular – it sold out within days) and gold bars. In the first 11 days of business the party had managed to persuade over 800 people to part with their cash to the tune of around 1.6m Euro (see here, in German, for more on this).   Even the AfD was surprised by the uptake.

The AfD’s metamorphosis in to a gold-selling business has had a direct and an indirect effect on its coffers. On the one hand the profits flow directly in to the party’s bank account and help it carry out its activities. On the other hand it also means that it can claim more money from the state.  Why?  The party is currently entitled to claim around 5m Euro on account of the votes it has received in recent elections, but it can only get that if it can illustrate that it has raised the same amount of money itself.  If it can’t, then it will only get funds proportionate to what it has raised (so, if the AfD raised 4m Euro from members’ contributions, donations and other business, it could claim 4m of the 5m it is theoretically due from the state). So, the more gold it sells, the more money German taxpayers give the party.

It didn’t take long for a reaction to the AfD’s money-making wheeze to materialise. Protests were lodged, investigations were undertaken. Indeed, the Bundestag’s administration conducted a thorough enquiry in to whether the AfD’s behaviour in any contravened Germany’s ‘Party Law’. Much to the consternation of the President of the Federal Parliament (effectively the Speaker), Norbert Lammert, it didn’t and the gold-selling continued. Cue lots of head-shaking from the German political class. Lammert, meanwhile, called for the Home Affairs Select Committee to change the law precisely to outlaw this type of shenanigans.

If that wasn’t enough, the current law was made to look even more ridiculous in early December. Another party, ‘Die Partei’, found an altogether different way of getting the state to fund its activities. The ‘Partei’ is rather like the Monster Raving Looney Party (MLP) in the UK, taking a light-hearted, satirical look at all things political. The major difference to the MLP is that on account of Germany’s electoral system the ‘Partei’ only needs relatively few votes to make it in to parliaments – and this it did in 2014, sending Martin Sonneborn to the European Parliament after polling a mere 0.6 of the vote.

‘Die Partei’ is well known for coming up with schemes and ideas that are aimed at making others look just a little silly.  So we perhaps shouldn’t have been surprised when the Partei announced that if the AfD could sell gold, then it could sell money. The Partei announced that for 105 Euro you could buy 100 Euro from them, for 25 Euro, meanwhile, you’d get 20 Euro. Much to the Partei’s surprise, 80,000 Euro has already landed in the party’s account, and orders totaling over 163,000 Euro have come in. Following the same logic as the AfD, the 5 Euro profit on every transaction moves the party that little bit closer to claiming the 240,000 Euro it claims it has access to from state coffers (see here for more on this).

Whether the ‘Partei’ actually sees any of that money remains to be seen, but one thing is for sure; ingenious actors can make even the most well-thought through system look like the proverbial ass. The German party-funding regime is short on neither laws nor judicial attempts to interpret them, but that hasn’t saved it from two parties trying (successfully) to ‘play the game’. What can we learn from this? Firstly, party funding regimes never stand still as rational actors do their level best to get the most (in financial terms) out of them. Secondly, normative assumptions about what is and what isn’t appropriate behaviour will differ considerably; for some the AfD and ‘Die Partei’ are chancers bringing the system in to disrepute, for others they are simply quicker and more nimble than their bigger, more established opponents who may well be unhappy simply as they themselves didn’t think of similar schemes first.  Is, in other words, selling a victoria sponge at a summer garden party any different to selling gold on the open market (or indeed cash to those who want to pay more for it than its face value)? The method (selling something for profit) and the end product (that profit flows to your party of choice) are the exactly same.  One thing is none the less for sure – it’ll be worth watching how the German political class deals with these unconventional challenges to the party funding regime.

Dan Hough

Posted in Uncategorized

The CPI’s far from perfect, but maybe we should cut it some slack

Another year, another CPI.  The world’s most well-watched measure of public sector corruption was published on 3 December and the usual suspects were in pretty much their usual places.  Denmark (92 out of 100) pipped perennial rivals New Zealand (91) and Finland (89) for the top spot, whilst North Korea and Somalia once more share the dubious honour of coming joint 174th and therefore last.  A number of countries can be celebrated as apparent success stories; the Ivory Coast, Egypt, Saint Vincent and the Grenadines, for example, all improved on their 2013 performance by five points, whilst Afghanistan, Jordan, Mali and Swaziland added four points to their previous totals.  At the other end of the spectrum Recep Tayyip Erdoğan’s Turkey dropped five points (from 50 to 45, and with that from to 64th from 53rd), whilst Angola, Malawi and most notably China – despite an ongoing and high-profile anti-corruption campaign from leader Xi Jinping (see here and here for more on that) – dropped four places.

So much for the nuts and bolts of the results, which can be dissected in all their glory here.  What can and should we read out of all this?  In order to answer that question it is worth stepping back and remembering how the index works and what TI is trying (successfully and unsuccessfully) to do with it.  The CPI is a composite index and a variety – 12 in 2014 – of data sources are used to create what is effectively a poll of polls on perceptions of public sector corruption in a given country.  TI provides a detailed account of where its data comes from (see here) and also how it uses it.  The CPI was first published in 1995 when it included 41 countries, with New Zealand achieving the best score (i.e. nearest to 10, as it was then) and Indonesia the worst (nearest to 0).  By 2014 the CPI had expanded to 175 countries.  The data produced is used, in varying ways and for varying purposes, by journalists, other anti-corruption organisations and not least politicians, and the CPI has undoubtedly developed into the key brand name in the study of corruption worldwide.

The CPI’s prominence has certainly not shielded it from criticism.  Indeed, criticising the methodology that underpins the CPI has become very commonplace.  Steffan Andersson and Paul Heywood, for example, see a number of basic problems (see here).  Firstly, the CPI measures perceptions of corruption rather than corruption itself.  Secondly, there are fundamental definitional problems that should lead us to be very unsure of what respondents actually understand the term corruption to mean.  Indeed, frequently it appears that the terms bribery and corruption are used interchangeably and are for many one and the same thing.  Thirdly, the CPI suffers from ‘false accuracy’ and there is no way of knowing what the real difference between scores that are closely grouped together is in practice.  A difference, in other words, of just a few points can lead to countries being a fair distance apart in the league table and yet we are not at all sure that these differences actually reflect what is happening in the real world.  Finally, responses to the various surveys are very likely to be shaped by – whether directly or indirectly – the assumptions and attitudes of the western business community; for the simple reason that the majority of people asked have roots in this particular milieu.

Other analysts have also not been slow in coming forward with their criticisms.  Steve Sampson, speaking for many in the development studies community, is sceptical of what he regards as “corruption becoming a scientific concept” as measurement tools like the CPI can, and have, easily become objects of political manipulation (see here for Sampson’s at times biting critique).  Even fellow quantifiers such as Theresa Thompson and Anwar Shah from the World Bank have criticised some of the statistical techniques that TI have employed (see here). They leave no one in any doubt as to how grave they think the CPI’s methodological shortcomings are when they state that “closer scrutiny of the methodology … raises serious doubts about the usefulness of aggregated measures of corruption” and “potential bias introduced by measurement errors lead to the conclusion that these measures are unlikely to be reliable, especially when employed in econometric analyses” (Thompson and Shah, 2005, pp-8-9).  Stephen Knack’s careful dissection of the CPI (here) also makes uncomfortable reading for TI defenders; he argues, for example, that scores are frequently not based on the same set of sources that were used for that country in the previous year.  This is evidence, he claims, of the unreliability of scores even within one country, let alone on a cross national basis. He also raises further significant issues about the independence – in a statistical sense – of the data used, claiming that many of the ‘statistically significant’ changes that TI claims to have uncovered would not in reality be so if “appropriate corrections for interdependence” had been made.

For its part, TI has certainly tried its level best both to be open about the methodological shortcomings of the CPI (as well as its other corruption indices) and also to adjust them wherever possible.  The founder of the CPI index, Johann Graf Lambsdorff, for example, is careful to acknowledge some of the methodological issues inherent in all composite indicators and he is always careful to describe changes in country scores from year to year as changes in perceived corruption rather in actual corruption levels.  TI has also tacitly admitted that the CPI has its limitations by the very fact that it has developed a whole host of other indices – such as the Bribe Payers Index and the Global Corruption Barometer – looking at both the perceptions and experiences of specific groups of stakeholders (ranging from businessmen to households).  One of TI’s founders, Jeremy Pope, has been rather more explicit, claiming that “the CPI’s major usefulness is in the past” and the TI has to be “a lot more sophisticated these days” (quoted in Andersson and Heywood, 2009, p.755).

And yet, all these criticisms not withstanding, the CPI has done one indisputable thing; it has put the issues of corruption and anti-corruption well and truly on the policy map.  Indeed, as Andersson and Heywood astutely observe;

“We should not underplay its significance in the fight against corruption: its value goes beyond the stimulation of research activity, since the publication of the CPI each autumn has generated widespread media interest across the world and contributed to galvanising international anti-corruption initiatives, such as those sponsored by the World Bank and the OECD” (Andersson and Heywood, 209, p.747).

Even staunch critics of the quantification of corruption have begrudgingly admitted that “whatever its limitations” the development of the CPI has “undoubtedly done much to promote the anti-corruption agenda” (see here).  It is also doubtful that any of the more nuanced second and third generation indices that both TI itself and other organisations have developed would have seen the light of day if the CPI hadn’t existed before them.

So, with all that in mind, we should be careful of perhaps reading too much in to the data that has been produced.  But we should also perhaps be wary that cynicism gets us nowhere and that TI, for all its sins, continues to push the analysis of corruption to the forefront of our thinking.  And that alone should be reason enough to cut the CPI just a little slack.

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Xi Jinping continues to talk tough on corruption, but the more he cracks the whip the more he reveals the superficiality of what he’s doing.

Cui Lianhai is a name that next to no one in the UK will have heard of.  Until recently Mr Lianhai was a CCP (Chinese Communist Party) apparatchik, minding his own business in the nondescript town of Qinjiatun in Jilin Province, North-East China.  That changed in June, when Mr Lianhai was sentenced to 20 years behind bars (see here).  His crime?  He was revealed to have claimed an average of 278 Yuan (approximately 28 pounds) a day in travel expenses.

Mr Lianhai’s commute may not cost him quite the same as it does each of the thousands who cram in to commuter trains around cities like London everyday, but from the outside looking in, and putting it decidedly diplomatically, no matter how much he’s added on to the true cost of his daily journey, the punishment still looks a little on the heavy side.  Mr Lianhai’s case is also not unique; Xinhua, one of China’s most well-known news outlets, has revealed that more than 6,000 CCP officials are currently under investigation by CCDI (China’s anti-corruption agency) inspectors for fiddling their travel expenses, with 2,350 in the state of Heilongjiang (in Manchuria) alone.  Padding the expenses account can certainly get you in to trouble (as British MPs know better than most), but, still, 20 years in prison?  This is heavy duty stuff.

The anti-corruption drive being pushed by China’s leader, Xi Jinping, has not been slow to put the indiscretions of both heavyweights (known as ‘tigers’) and no-names (‘flies’) like Mr Lianhai under the microscope.  By the end of August 2014 nearly 75,000 of the CCP’s 86 million members had been investigated for corruption, with over a quarter found guilty of their alleged indiscretions.  Xi’s strategy for rooting out corrupt practices has been two pronged; publicly prosecute a small number of big names as well as a much greater number of lower officials down the bureaucratic hierarchy.  The aim?  Send a message to everyone else that they could be next if they don’t buck their ideas up.

Impressive though all of this sounds, the chances of it prompting long-term change are slim.  Anti-corruption campaigns in China are nothing new, and CCP leaders have regularly used them as flimsy cover for either stabilising their own positions and/or as a tool for purging political opponents.  Indeed, there have been no less than four such discernible campaigns since Mao passed away and all of them have followed largely similar patterns; scare your opponents, show you’re in charge and punish a significant number of people with either fines or jail terms.

If Xi were serious about tackling corruption, then prosecutions would be only one part (and a relatively small part at that) of a much bigger package.  In practice, the structures that underpin Chinese public life are the problem, and tackling them is much more difficult.  In practice, Xi needs to move China, however slowly, in three broad directions.  Firstly, Xi needs to make an effort to limit the amount of bureaucratic discretion available to Chinese public servants.  In a system where transparency and openness don’t come naturally, the more discretion you give individuals the more you should expect them to take personal advantage of it.  Tackling the kickback culture that pervades much of China’s regional and local government is not easy, but creating rules based systems that shape decision-making would be one way of making a start in terms of tightening things up.  That doesn’t have to undermine one-party rule, but it does have to – slowly but surely – mean that rules shape decision-making.

Secondly, the CCP may well keep internet usage on a tight leash, but if it really wants to root out corrupt behaviour then it needs to support rather than curtail the right of the media to investigate allegedly corrupt acts.  Turkeys, you might argue, may also vote for Christmas, but if the CCP is serious about tackling corruption it needs to find a way to channel the not inconsiderable public discontentment with their corrupt elites in to the anti-corruption process.  Sina Weibo, China’s version of Twitter, is one tool for doing this (for more on this, see here), but there are others.  The CCP needs to show it’s moving with the times and aware of that.

Finally, and even more fundamentally, the Chinese government needs to find a way to increase the role of citizens not just in reporting corruption when they see and experience it, but also of having rather more say in how they govern themselves.  This does not by any stretch mean the implementation of democracy a la the West; on the contrary, the CCP would have an opportunity here to develop new ways of bringing citizens in to the discussion in ways that it finds appropriate.  Small steps are likely to be better than no steps at all, and there is some evidence that the CCP is aware of this.  Not that we see radical change happening, but local elections, for example, already take place in more places than many in the West probably realise.

Xi’s problem is that these challenges have as much to do with the quality of governance as they do with directly tackling corruption.  The former comes before the latter, and that remains true no matter how many low level expenses cheats end up in prison.  If you’re not on this journey, in other words, for the long haul, you’re not on it at all.

Dan Hough
University of Sussex

Posted in Uncategorized

Swaziland – a sorry corruption tale

Swaziland is a small country that often gets overlooked. It neighbours Mozambique, is partially engulfed by South Africa, and is a country rife with systemic and largely-tolerated corruption. As a result of this over 70 per cent of the population currently lives under the UN poverty line. Add to that the fact that it has the highest HIV & AIDS incidence rates in the world (although thankfully these rates are now depleting, largely thanks to the Clinton Health Access Initiative (CHAI)) and we have a country that has significant problems to deal with.

Swaziland remains one of the last absolute monarchies in the world, whereby the wealth of the state is concentrated within the hands of its rulers. Be that as it may, The Times of Swaziland, the only news source in the country that attempts analyse contemporary affairs with any degree of transparency, recently revealed that MPs in Swaziland still receive close to twice as much monetary compensation as do the leaders of SADAC countries such as Lesotho, Mozambique and Botswana. Some things just don’t add up.

Swaziland’s leaders have recently announced that they aim to be a first world country by 2030, however there is a lack of basic planning and even understanding as to what this means. Large amounts of money are currently being thrown into a project to build a casino-resort in an area already housing two such institutions- is this a weak attempt in attracting tourism, or simply an excuse for the government to spend taxpayers money on unwarranted luxuries? Furthermore, a new airport has been built to deal with the non-existent air traffic that the country apparently experiences daily. In true Swaziland fashion, this new structure is not easily accessible from the three major cities in the country, and the derelict roads make it less so. However, it is in close proximity to the royal residence, which supposedly makes the project worthwhile. The contracts for such large construction budgets are naturally given to government cronies, resulting in systemic nepotism (see here). How this state will ever reach the status of a developed country is a question that all natives seem to be asking. Unfortunately, such issues cannot be discussed openly, for fear of persecution by the government. Thulani Maseko, a human rights lawyer who was imprisoned for questioning the legitimacy of the judiciary, portrays this case perfectly. Maseko even wrote an urgent letter to President Barack Obama, imploring him to intervene during a Summit of African Leaders at the White House, on the behalf of all individuals who were subjected to human rights abuses within various African nations (see here). Obama has yet to publically comment.

Sadly the situation in Swaziland seems to be one of hopelessness. Without a change in the way that the government is governed, or at least a shift in norms, Swaziland will not be able to cultivate a successful future for itself. Furthermore, the lack of interest regarding corrupt practices in Swaziland by the international community showcases how practitioners of corruption have not been held accountable for their actions. Swaziland’s situation is desperate, but it is one that hardly anyone seems to take any notice of.

Articles that may be of interest to readers:
• Anti-corruption talk in Swaziland http://www.times.co.sz/Features/74005.html
• Speech by the King of Swaziland at the Summit of African Leaders: http://www.whitehouse.gov/sites/default/files/docs/swaziland_nationalstatement.pdf
• The World Organization Against Torture’s meek attempt at defending Thulani Maseko: http://www.omct.org/human-rights-defenders/urgent-interventions/swaziland/2014/07/d22774/

N.S.

Posted in News

The financing of politics – corrupt, whichever way you look at it?

Sam Power, an ESRC-funded PhD student at the Sussex Centre for the Study of Corruption, ponders the challenge of crafting a corruption-free party funding regime. No easy task …

Tuesday 18th September saw Transparency International and the Political Studies Association host a symposium entitled ‘Corruption with Research Impact’. The event also marked the launch of a new PSA specialist group on Corruption and Political Misconduct. The event covered some interesting and at times difficult territory; what can practitioners legitimately expect from academics in terms of policy- (and in this case corruption) relevant research? What (in terms of data and access, for example) can academics expect from practitioners? Tricky questions. The first panel of the day involved a discussion by leading academics that gave an overview of research being done on corruption and integrity in Britain today. Dr. Liz Dávid-Barrett (a recent signing by the SCSC, incidentally) argued that one of the key areas that future research should focus on was institutional corruption, and that one key part of this mosaic is corruption in party finance. Indeed, she suggested that academics should be engaging with questions such as is party finance inevitably corrupt? Now since that question is very much in my own particular academic wheelhouse, I thought it might make sense to discuss some of the key themes and challenges that the question presents. In a previous post, I outlined problems with the funding of politics and tackling corruption, so I’ll try my level best not to ‘double-dip’ on any of the points made then.

The first thing to note is a simple inevitability – for parties to survive they need to be funded. It can be privately, it can be publicly or it can be a mixture of the two, but there is a need for some sort of funding regime. The main reason for this is that, in an almost uniformly Europe-wide trend, party membership is falling to such a level that parties simply cannot raise the revenue to be self-sufficient (see here for more on this). Previously, I outlined the fact that many advanced democracies adopt a system of state funding, because of the (in my view under-researched) belief that it represents a necessarily less corrupt form of party finance. Further, that what is more important is the kind of corruption challenge that state funding represents and if it is (as I suspect) a different corruption challenge than that posed by private funding. Measuring levels of corruption can only get us so far, at some point there needs to be a distinction between types. Which brings us back to the question at hand, if neither state nor private funding are able to deliver corruption-free party finance, then surely party finance itself is inevitably corrupt. So what is to be done?

Firstly, and importantly, expecting anything – let alone party finance – to be ‘corruption-free’ is wishful thinking of the highest order. Therefore, it is important to distinguish between the notion that party finance is inevitably corrupt because politicians are all lying, cheating, snout-in-the-trough, self-serving scumbags, or what Matthew Flinders (more eloquently) calls the ‘bad faith model of politics’ and a competing, more realistic, argument that party finance is inevitably corrupt, but on the whole politicians do not abuse power, and are honest people performing a vital public service. This does not mean, as Flinders rightly notes, that we should ‘dismiss valid concerns regarding the operation of democratic politics or the behaviour of some politicians; but it is to place these concerns in context in an attempt to foster a more balanced debate’. This distinction is key. Accepting the premise that party finance is inevitably corrupt does not necessarily entail holding a negative view of politicians and the political elite, it merely involves facing up to the fact that certain corruption challenges are inevitable.

This runs parallel to a second important consideration that when it comes to corruption, public perceptions matter and are often unrealistic. As Flinders argued in a previous article, there is an ‘expectations gap’ – the difference between what is demanded, and what can realistically be achieved. Further to this point, Jennifer van Heerde-Hudson and Justin Fisher use data (see here) generated from YouGov’s online panel to show that the public has little knowledge of the British party funding regime, that this ignorance was no barrier to hostility towards the system and that attitudes to party finance broadly fall into two camps – those that are ‘anti-party finance’ (parties, and by extension politicians, are inherently corrupt and waste money) and ‘reformers’ (those that feel the existing party funding regime is unsatisfactory, but support further reform). The headline finding is that the British public ‘knows little of party finance and, consequently, public opinion is unlikely to offer a rational course of action for effective reform’.

The argument here is not that the public should never be consulted about potential change, or that the public does not understand politics, it is more that public opinion should not serve as a gatekeeper, at least in terms of party finance reform. As van Heerde-Hudson and Fisher highlight, the only acceptable party funding regime according to public opinion is one that is entirely funded by membership subscriptions – a system that never really existed in the Britain and, as previously mentioned, is simply unworkable. This also serves to further show the damage that the ‘bad faith model of politics’ can have on the effective working of the political process and, perhaps explain, the gulf that their seems to be between the ‘public’ and ‘politicians’. The ‘bad faith model of politics’ damages people’s perceptions of political institutions and can cause the public to see everything as corrupt. In terms of party finance, this leads to little or no distinction between what can be considered a corrupt or legitimate exchange and corruption, it would appear, is seen to be everywhere.

To return to the question that Liz David-Barrett posited on 18 September, is party finance inevitably corrupt? Well, yes. However, this argument should not be considered a value judgement on politicians or the political process in this country. It should be understood as an acceptance that any system of party finance presents unique corruption challenges. By dismissing politicians themselves as inevitably corrupt, we not only do them a disservice but damage the potential for significant, effective reform. At the end of my last blog post I called for an improved discourse between the media, the public and politicians regarding corruption in the UK – a conclusion I suggested was a cop-out. I’m afraid little has changed and the conclusion still stands (sorry!). Ultimately, it is important, no, vital, to realise just how imperative it is to engage with this question and to do that one should try one’s level best to attend these symposia and engage in these debates.

Posted in Academic, Policy, UK, Uncategorized

Is corruption always bad?

Corruption is defined as the “the abuse of entrusted power for private gain” by Transparency International and is charged with various ills afflicting any one nation. The presence of corruption means that public resources are being used for private benefit, undermining the state’s ability to pursue gains for the greater population and has been described as an obstacle to the process of democratisation, as slowing down economic growth, increasing socio-economic inequalities, creating disrespect towards governing institutions and fostering a culture of non-compliance with laws and regulations.

With so many charges at its door, corruption seems like the ultimate evil, preventing good governance, democratisation and economic welfare of nations. However, to treat corruptions as the sole cause of problems with statehood would be a mistake. Indeed, some academics are now challenging the treatment of corruption as something bad altogether.

Developing countries face many problems other than corruption. These include lack of experience in writing good laws and developing achievable policies with clear objectives and coherent strategies. Many suffer from a lack of trained and experienced workers to staff the civil service, the regulatory agencies and the judiciary to provide that compliance, monitoring and the rule of law. Some are wrought with conflict between key elites, which hold the power to stimulate economic growth and social development. And a few states have had little or no experience of statehood whatsoever for much too long to be able to do a good job, like those nations that emerge through independence from a larger state.

These are contexts that also often suffer the most from corruption but to assume a linear, unidirectional relationship between corruption and the other problems listed above would be wrong. This is because one does not necessarily lead to the other and the relationship may exist both ways, or indeed be circular.

For example, existence of even widespread corruption, does not necessarily indicate that the state has weak regulatory/monitoring capacity, or that its legal institutions are inadequate. The number of court cases initiated by members of public against state officials on charges of corruption has increased in countries like Russia, for instance. And these are not just a formality with no practical retribution. These court cases are being won against the state 70-80% of the time, and prompt (and significantly large) compensation is indeed being paid to the victims. So, despite the fact that the number of overall cases (those won and lost) is increasing, it would be wrong to say that formal institutions are inadequate at monitoring or punishing corruption.

This brings us to the second point – corruption can buy loyalty and support, necessary for large-scale reforms, which would not happen otherwise. In particularly rigid and hierarchical systems or sectors corruption can consolidate the interests of opposing elites and act as the grease in the wheels to facilitate important socio-political and economic change. In this sense, corruption can actually aid the development of high state capacity by giving the state a way to fulfil its functions – such as providing physical infrastructure, monitoring the private sector and ensuring political stability.

All that is good, but corruption breeds corruptions. The reforms that take place with the help of corruption end up benefiting someone or other (and usually not the broader public). Otherwise, there wouldn’t be support for them, right? So even though we go through with reforms and have a level of stability within a country, the new system just becomes more and more laced with corruption. Well, even here we now find critics. It would seem that even corruption has a tipping point, and when it gets too much it rallies people to complain, rise up and change the regime. Some critics claim this is what took place in Ukraine earlier this year.

Lastly, a bit on definitions. Corruption doesn’t have to be bad is we don’t call it ‘corruption’. Let’s take elections as an example and talk about ‘lobbying’ and ‘campaign donations’. In 2010 an amendment to the US election law was made, which removed limits on election campaign spending by corporations and unions. In 2014 this was followed up by removing limits on individual donations. Many critics voiced serious concern for the effect these amendments would have on democracy, since the changes effectively allowed for political support to be bought. Speaking with your rouble in Russia (or any other currency anywhere else in the developing world) is a definite no no – it is perceived as corrupt and undemocratic. But when making his decision to vote in favour of the changes to the US law, Justice Roberts of the USA Supreme Court was convinced that speaking with your dollar has become a part of free speech and is completely democratic. With a majority of 5-4 the amendments were passed on both counts and provided food for thought for Corruption Studies.

Elena Gorianova

Posted in Uncategorized

Sussex students feel the conference vibe

Three Sussex students on the MA in Corruption and Governance course took to the conference stage in the first week of May. Felicitas Neuhaus, Francisco Valenzuela and Michael Badham-Jones talked to policy-makers about the fruits of their own labour, a research project with the Overseas Anti-Corruption Unit (OACU) on civil society movements and anti-corruption. In this blog post Michael Badham-Jones talks to us about their experience.

“At the beginning of May we were given the very exciting opportunity to present the findings from a research project that we are doing as part of our MA in Corruption and Governance. We presented our ideas at the International Foreign Bribery Taskforce conference at the London Museum. Our research is looking into what effect civil society movements (CSMs) can have on attempts to tackle corruption. The prospect of presenting was a daunting one. And for several reasons. Firstly our project is still in a fairly early phase, so although we have a lot of questions we have very little in the way of concrete answers. Secondly the room was full of very senior members from organisations such as the United Nations, World Bank, FBI, UK/Canadian/Australian police and the Department for International Development (DFID). These two previous concerns mixed with the fact that none of us had ever presented to anyone apart from a group of our peers at university. Nerves were on edge.

Although the prospect of presenting in front of such people was a very daunting prospect, we all came away with a brimming feeling of pride over presenting to such an esteemed group. I would like to stress here that if ever you are to get the opportunity to present in front of such a room bite off the hand that gives you the opportunity, for me at least it is probably my proudest achievement in my four years at the University of Sussex. The opportunity to speak at the conference came about because of the exciting opportunity that the MA in Corruption and Governance offers in being able to do an internship. Our internship is with the Overseas Anti-Corruption Unit (OACU), a division of the City of London Police. The internship that they offer isn’t traditional in the sense that we are not up in the office 3 to 4 days a week, but rather as mentioned previously a research project. The beauty of this was that as a trio we were allowed to within reason pick a corruption related project of our choice, the only limitation being that the OACU and DFID had to have an interest in our project. As a result of requiring an interest we have for example had to include how useful CSMs can be to law enforcement.

In concluding this blog post I would stress that pushing yourself outside of your comfort zone academically is very rewarding, and the post-presentation response that was extremely warm and encouraging. The result of this was the offering of help and support from the United Nations, DFID, and perhaps most importantly some great exposure for ourselves. Our names were included in the conference pack under speakers, which considering all three of us are presently looking for employment post-MA can do no harm. Being realistic that this probably won’t lead to employment it still looks fantastic on a CV and I was able to use the experience just the other day in a cover letter for a job that I have applied for as one of the requirements was experience presenting and talking in front of large groups. University is all about seizing the opportunities that present themselves and this is a lesson the three of us learnt last week, I won’t lie to you at first we all felt too inexperienced and ill prepared to be speaking at such event, but after talking it through with one another we felt it was too big an opportunity to miss out on, and as such are incredibly great for to Sanjay Anderson Chief Inspector at the OACU for giving us this amazing opportunity.

Posted in Uncategorized