Checks, Balances, and Bribery: Corruption in Developing Democracies

By Teddy Tawil

What’s the going rate to bribe a politician? A judge? A television executive? The answers offer fascinating insights into checks and balances—when they’re most needed, which are most important, and why they’re the bedrock of well-functioning democracies.

Let’s start with a simpler question: when is a lack of checks and balances most harmful? The answer might come as a surprise: generally, in countries rich in valuable resources like oil or minerals.

Emerging democracies in these nations are often derailed by patronage politics in which power goes to the highest bidder. The more resource wealth at a candidate’s disposal, the more attractive the prospect of bribing voters instead of winning their ballots legitimately. Perversely, the electoral competition that allows democracy to thrive is then sent into reverse, rewarding those best at bribing voters. If a country has strong sectarian divisions, the process becomes even easier, as an aspiring autocrat must only pay off ethnic leaders to win over whole blocs of the electorate. Checks and balances, or constitutional limits on specific exercises of power, root out this corruption by raising its cost and risk, making it a less sustainable political strategy. [1]

Public works projects in Nigeria, Africa’s most oil-rich country, show these concepts in action. After transitioning to democracy in 1979, the new Nigerian government’s first act was a thinly-veiled effort to reward their patrons: they recalled a contract awarded for the construction of a dam, and suspiciously quintupled its price. In 2003, after Nigeria’s democracy was re-established, President Olusegun Obasanjo courageously took a different approach. He instituted several basic restraints, including a competitive bidding process for public investment projects, which, on average, reduced project prices by 40%.[2] The implication is clear: Unconstrained democracy with resource wealth can create a breeding ground for graft, but even simple restraints are effective at curbing corruption.

You may still be wondering: what is the going rate to bribe a politician? $5,000 to $20,000 a month, at least in Peru in the late 1990s.[3]

In the 1990s, Peru seemed like a democracy, with a constitution, regular elections, opposition parties, term limits, and other safeguards. However, beneath this façade, police chief Vladimiro Montesinos Torres seized power, cultivating an extensive network of influence by bribing politicians, judges, and media executives. He meticulously recorded these bribes to incentivize his enablers to stay loyal: if Montesinos was unseated, he could release the information, and they would be implicated too. When Montesinos’ house of cards unraveled in 2000, many of these records were revealed.[4]

They show that while Montesinos offered politicians $5,000 to $20,000 a month and judges $5,000 to $10,000, he paid television-channel owners an average of about one hundred times more. The extreme measures Montesinos took to curtail the free press suggest that he saw it as the most important potential check on his power by far. Even if honest politicians or judges exposed his corruption, by severing their link to the people, Montesinos rendered them largely powerless. Montesinos was ousted only when the one television network he had failed to pay (too few viewers, he figured) aired footage of him bribing an opposition congressman, causing public outcry.[5]

Montesinos.png

Montesinos counting out $1.5 million for the vice president of Channel 4, a Peruvian television network.

Credit: Peruvian Congress, El Heraldo, Photo Archive.

Nigeria and Peru epitomize the immense power of checks and balances, restraints so ingrained into American society that they’re easy to take for granted. In the face of tyranny, as the lone television network that dared to challenge Montesinos shows, even one courageous actor risking danger to check corruption can make a difference.

References
[1] Paul Collier, The Bottom Billion: Why the Poorest Countries are Failing and What Can Be Done About It. (Oxford: Oxford University Press, 2007), 44-48.

[2] Collier, 48-49.

[3] John McMillan and Pablo Zoido, “How to Subvert Democracy: Montesinos in Peru,” Journal of Economic Perspectives 18, no. 4 (2004): 77-78, accessed August 28, 2020, https://pricetheory.uchicago.edu/levitt/Papers/McMillanZoido2004.pdf.

[4] McMillan and Zoido, 69-74.

[5] McMillan and Zoido, 69, 77-91.