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CORRUPTION, CHARACTER, AND INSTITUTIONS

Published online by Cambridge University Press:  09 May 2019

Mario Villarreal-Diaz
Mario Villarreal-Diaz*
Affiliation:
Enterprise and Policy Analytics, University of Texas at Austin
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Abstract:

Is corruption merely a flaw of character, or is it more fundamentally related to the institutional environment? Scholars from various disciplines mainly side with the narrative that, ultimately, corruption is a problem of character flaws. Policy prescriptions around the world are designed based on this understanding. In this essay, I challenge this understanding, arguing that it is at best incomplete, and misleading at worst. I argue that we should focus instead on three aspects of how the prevalence of virtuous acts is profoundly tied to people’s institutional environment and the incentive structure that derives from it. First, I observe that there is a difference between virtue and acting virtuously, and that even with the aid of moral education and coercion, virtue itself is hard to come by. Second, I discuss how formal institutions and social norms influence people’s propensity to perform virtuous acts rather than engage in corruption. Finally, I explore how institutions that increase the transaction costs associated with everyday life also increase the prevalence of corruption. Based on these three explorations I derive some public policy guidelines that, if followed, might increase the probability of success of anticorruption programs.

Keywords

Corruptioncharactervirtueinstitutionstransaction cost
Type
Research Article
Information
Social Philosophy and Policy , Volume 35 , Issue 2 , Winter 2018 , pp. 264 - 287
Copyright
Copyright © Social Philosophy and Policy Foundation 2019 

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Footnotes

*

I thank the other contributors to this volume, as well as the journal’s anonymous reviewer, for their insightful comments.

References

1 Precise estimations are hard to obtain and there are discrepancies among sources. Quoted estimates are based on data from the Secretaria de Seguridad Pública de la Ciudad de México, http://www.ssp.cdmx.gob.mx/

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3 For a contrasting view, see Ferretti’s paper in this volume. Her analysis suggests that institutional corruption can always be traced to corrupt individuals’ actions, thus her “continuity” theory. On my model, by contrast, people create institutions. In the process, because they have limited foresight, they can inadvertently institute opportunities and incentives that corrupt agents interacting with the institutions they create. Where my model is accurate, it explains rather than merely posits corruption.

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