critical perspectives on corruption: an overview

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GUEST EDITORIAL Critical perspectives on corruption: an overview Ed Brown and Jonathan Cloke Department of Geography, Loughborough University, Loughborough, UK Abstract Purpose – This introductory paper aims to serve a dual purpose. First, it seeks to trace some of the key elements of this emerging agenda in critical corruption studies and the major directions in which the field has moved since 2006, exploring some of the connections between dominant discourses of corruption and anti-corruption and the upheavals which have occurred in the global economy during this period along the way. Second, this discussion also aims to serve as a contextual introduction to this special issue by embracing some of the common themes elaborated in the other papers collected here. Design/methodology/approach – The paper presents a brief personal reflection on developments in the field of critical corruption studies. Findings – The paper reveals some of the limitations of the mainstream approach towards corruption. Originality/value – The paper summarises recent developments in the field and provides a context-setting narrative within which the other papers that comprise this special issue can be situated. Keywords Corruption, Perception, World economy Paper type Viewpoint There can be few occasions when the editors of a special issue have the timing of that special issue so felicitously supported by the passage of global events. As the editors of an edition devoted to deconstructing the concept of corruption, therefore, we are perhaps two amongst only a few people observing the events of the global economic crisis (hereafter the GEC) and the inquiries into its causes with some sense of satisfaction. From the “epidemic” of mortgage fraud in the USA (Black, 2010), “liar loans” (Levin, 2010) generated by a voracious securitisation chain in the global financial services sector, the GEC precipitated by the events of 6 August 2007[1] stands testimony to the enormous power of a dynamic, complex, global private/state hybrid in corrupting both the alleged market discipline of the private sector and all of its public sector regulatory mechanisms. Back in 2006 we published a paper (Brown and Cloke, 2006) in this journal which explored the potential synergies and relationships between critical geography and critical management studies traditions and traced some preliminary observations about how the development of a more critical approach towards corruption might be a fruitful avenue through which some of those collaborations might be developed. At that time there were few academics pursuing critical perspectives on this topic, although there were some (such as Alan Doig, see his contribution to this special issue) who had been being doing richly innovative work on the theme for many years. With the exception of the very few writers in any discipline who had been engaged in describing and analyzing part of the mechanisms of corruption that precipitated the The current issue and full text archive of this journal is available at www.emeraldinsight.com/1742-2043.htm CPOIB 7,2 116 critical perspectives on international business Vol. 7 No. 2, 2011 pp. 116-124 q Emerald Group Publishing Limited 1742-2043 DOI 10.1108/17422041111128203

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Page 1: Critical perspectives on corruption: an overview

GUEST EDITORIAL

Critical perspectives oncorruption: an overview

Ed Brown and Jonathan ClokeDepartment of Geography, Loughborough University, Loughborough, UK

Abstract

Purpose – This introductory paper aims to serve a dual purpose. First, it seeks to trace some of thekey elements of this emerging agenda in critical corruption studies and the major directions in whichthe field has moved since 2006, exploring some of the connections between dominant discourses ofcorruption and anti-corruption and the upheavals which have occurred in the global economy duringthis period along the way. Second, this discussion also aims to serve as a contextual introduction tothis special issue by embracing some of the common themes elaborated in the other papers collectedhere.

Design/methodology/approach – The paper presents a brief personal reflection on developmentsin the field of critical corruption studies.

Findings – The paper reveals some of the limitations of the mainstream approach towardscorruption.

Originality/value – The paper summarises recent developments in the field and provides acontext-setting narrative within which the other papers that comprise this special issue can be situated.

Keywords Corruption, Perception, World economy

Paper type Viewpoint

There can be few occasions when the editors of a special issue have the timing of thatspecial issue so felicitously supported by the passage of global events. As the editors ofan edition devoted to deconstructing the concept of corruption, therefore, we areperhaps two amongst only a few people observing the events of the global economiccrisis (hereafter the GEC) and the inquiries into its causes with some sense ofsatisfaction. From the “epidemic” of mortgage fraud in the USA (Black, 2010), “liarloans” (Levin, 2010) generated by a voracious securitisation chain in the globalfinancial services sector, the GEC precipitated by the events of 6 August 2007[1] standstestimony to the enormous power of a dynamic, complex, global private/state hybrid incorrupting both the alleged market discipline of the private sector and all of its publicsector regulatory mechanisms.

Back in 2006 we published a paper (Brown and Cloke, 2006) in this journal whichexplored the potential synergies and relationships between critical geography andcritical management studies traditions and traced some preliminary observationsabout how the development of a more critical approach towards corruption might be afruitful avenue through which some of those collaborations might be developed. Atthat time there were few academics pursuing critical perspectives on this topic,although there were some (such as Alan Doig, see his contribution to this special issue)who had been being doing richly innovative work on the theme for many years. Withthe exception of the very few writers in any discipline who had been engaged indescribing and analyzing part of the mechanisms of corruption that precipitated the

The current issue and full text archive of this journal is available at

www.emeraldinsight.com/1742-2043.htm

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116

critical perspectives on internationalbusinessVol. 7 No. 2, 2011pp. 116-124q Emerald Group Publishing Limited1742-2043DOI 10.1108/17422041111128203

Page 2: Critical perspectives on corruption: an overview

GEC[2], furthermore, none of us could have predicted how quickly and dramatically theneed for this kind of critical analysis would change. That same year (2006) a group oflike-minded individuals from both geographical and business school/criticalmanagement studies backgrounds collaborated in an entertaining session exploringthe emerging research agenda around the critical geographies of corruption during theannual Royal Geographical Society conference in London. This special edition bringstogether considerably revised versions of some of the papers that were first presentedduring that session as well as another specially invited paper. This introductory paperserves a dual purpose. First, it traces some of the key elements of this emerging agendain critical corruption studies and the major directions in which the field has movedsince 2006, exploring some of the connections between dominant discourses ofcorruption and anti-corruption and the upheavals which have occurred in the globaleconomy during this period along the way. Second, this discussion also serves as acontextual introduction by embracing some of the common themes elaborated in theother papers collected here.

Corruption, or rather the combating of corruption, remains a major internationalpre-occupation. Announcements of mitigation and adaptation funding for developingcountries after the Copenhagen Summit last year, for example, drew the now familiarchorus of protests about aid simply feeding corruption from some observers (Brownand Cloke, 2010), whilst the ring-fencing of international development spending and itsexclusion from the savage public spending cuts being contemplated in the UK at thetime of writing follows a growing body of critique concerning accusations ofcorruption in the use of UK aid monies (see Hawley, 2003a, b for examples). Thepre-occupation with corruption is however becoming increasingly surreal; how forinstance does the announcement by the Department for International Development(DFID) of the setting up of an international anti-corruption academy, “ananti-corruption centre of excellence” (DFID, 2010), square with the UK government’sprovision of aid to the massively corrupt Karzai regime in Afghanistan (Howell andLind, 2009), itself the product of substantially corrupt elections, or the pressure exertedon the Serious Fraud Office to terminate their investigations into the affairs of BAESYSTEMS plc in relation to the Al Yamamah defence contract with Saudi Arabia(Sexton and Hildyard, 2008)?

Additionally, an increasing number of new international commitments to combatcorruption have been signed, major international gatherings held and furthersignificant international funding provided for governance reforms and anti-corruptionactivities across the Global South (see Kolstad and Wiig (2009) and Kim et al. (2009) forsome examples). These are occurring, however, at the same time as the projectedanti-corruption powers of the protestant work ethic and the underlying virtues ofcapitalist market discipline in the Global North are increasingly taking on theappearance of the emperor’s new clothes. Accompanying this anti-corruption crusade,however, a small but growing body of critical academic work has emerged which hasquestioned the impacts of this burgeoning anti-corruption activity (in terms of actuallyhaving any effects on reducing corruption levels, however measured) and, at the sametime, has begun the process of deconstructing the ideological and conceptualunderpinnings of the dominant definitions and interpretations of corruption (seeAndersson and Heywood (2009a); Bracking (2009); Brown et al. (2007); Bukovansky(2006); Doig et al. (2007); Fritzen (2005); Gephart (2009); Heeks (2007); Ivanov (2007);

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Kolstad et al. (2008); Michael (2004); Razafindrakoto and Roubaud (2010); and Sampson(2010); amongst others).

The limitations of the mainstream approach towards corruptionOne point that emerges in a couple of the contributions to this special edition is thatdespite the clear role of fraud, regulatory capture, statistical invention and othercorrupt practices in the private sector in the genesis of the global financial crisisthrough which we are currently living (Baker, 2010; Izurieta, 2009; Lewis et al., 2010;Strauss, 2009), the mainstream anti-corruption industry has been strangely silent onthe implications of the events of the past few years for our understanding of the causesand impacts of corruption, let alone the policies designed to combat it. The dominantvoices in this anti-corruption industry continue to be heavily reliant on the sameNeoliberal economic theories that are themselves implicated in the failures that gaverise to the GEC. They appear to have little or nothing to say about the dynamics ofprivate sector corruption, the significance of the involvement of major transnationalcorporations and their representatives in determining regulatory environments acrossthe globe or the impacts of the continued intertwining of state and private spheres. Atthe same time, within the mainstream Northern literature on corruption there has alsobeen a relative lack of attention paid to corruption amongst strategic trading partners(e.g. China), countries that occupy a vital position in the supply of oil (e.g. SaudiArabia) or hegemons more generally (e.g. the relative silence in the literature on themassive US corporate corruption in Iraq, Whyte, 2007). All of these issues continue inthe main to be left to one side in favour of less problematic takes on the issue.

Most mainstream international work on corruption has continued to focus on thepublic sector as the principal source and/or location of corrupt activities. The WorldBank’s (1997, p. 8) frequently quoted definition of corruption as “the abuse of publicoffice for private gain” continues to be hugely influential despite repeated critiques ofits obvious limitations in the academic literature and even amongst other internationalinstitutions. The Asian Development Bank (1998, p. 8), for example, in theirinstitutional review of anti-corruption frameworks developed a strong critique of theoverly narrow focus on the public sector in the Bank’s definition and proposed that itshould be replaced by “the abuse of public or private office for private gain.” EvenTransparency International (TI) has recently suggested a broadening of the Bank’sdefinition, suggesting corruption should be defined as the “abuse of entrusted powerfor private gain” (our emphasis, see Transparency International, 2010). Nevertheless,whilst there has been, at least in some cases, a definitional nod in the direction ofdefining corruption as a phenomenon that affects both private and public sectors, inmost cases in practice it is only the public sector which is investigated and whereabuses are publicised. Thus, TI may have a broader definition of corruption in the FAQsection on their web site (see above), but when it comes to their celebrated annualcorruption perceptions index they revert to describing corruption via the World Bankdefinition critiqued above – “the abuse of public office for private gain” (see Anderssonand Heywood, 2009b).

The dominance of this kind of limited approach continues to cripple any meaningfulinvestigation of the causes and impacts of corruption in different settings. As Polzer(2001, pp. 19-20) argued nearly a decade ago in relation to World Bank thinking oncorruption:

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The common “Western” conception of corruption, including that used by the Bank, dependson the existence of a public domain which is recognisably separate from a private sphere,with different codes of acceptable conduct in each. While in the private sector, firms andindividuals are expected to seek personal profit and enrichment, organisations andindividuals in the public sector are expected selflessly to fulfil a duty to a greater public good.A corrupt action is one which contravenes this model. Akhil Gupta argues from ananthropological perspective that this distinction between public and private is far fromuniversal and is predicated on a particular European cultural and historical experience.

The dualistic and derivative nature of so much that is written about corruption leads toover-simplified understandings of the nature of the state and its relationship with civilsociety (as well as the interconnections between private and public sectors). Thecontinued automatic association of corruption with economic mismanagement andpoor economic performance is also problematic. There has been a failure to engagewith any of the ample literatures developed elsewhere which have analysed the successof economic development in countries with enduring and substantial state/privatecorruption – the writings of Kang (2002) and Moran (1998) are just two examples ofthis. Overall, the mainstream literature on corruption continues to give the distinctimpression that it is easier to attempt to “deal with” corruption if it is something thatcan be tightly defined and reduced to a set of technical challenges and difficulties thatcan be dealt with via the development of new institutions, the steering through ofappropriate administrative reforms or simply reducing the size of the state sector. Incontrast, it has always been our contention that the most interesting debates aboutcorruption are those which explore the complex relations between private and publicsectors in specific contexts, that embed analyses within an appropriate understandingof local political cultures and historical contexts and which do not treat corruption as anational level “black box.” Such debates are of exceptional importance because theyhold up a mirror to those technical “experts” doing the defining and aim right at theheart of how rich northern countries perceive themselves historically. They ask vitalquestions about concepts such as transparency, accountability and governance andask us to analyse what they mean within the socio-political and cultural context inwhich they were constructed.

Despite the supposed transformations ushered in under the so-calledPost-Washington consensus (Sheppard and Leitner, 2010), recent years have seen acontinued tendency towards the promotion of further market liberalisation as auniversal solution to development “problems”, including corruption. This is despite agrowing, albeit grudging, recognition of the importance of political context inmediating the supposed beneficial impacts of liberalisation, even amongst itssupporters. For example observations such as “financial liberalisation is good fordevelopment when governance is good, but may be bad for development whengovernance is bad” (Blackburn and Forgues-Puccio, 2010, p. 1337) have beenpoignantly reinforced by the lamentable governance exercised throughout theeconomies of the richest and most powerful countries on the planet. Leaving to one sidethat this statement is itself a sweeping, ahistorical generalisation, at the least itsuggests that if we have a more historicised approach towards the nature ofgovernance and patterns of corruption in individual places then, in fact, financialliberalisation may not be an appropriate development strategy under conditions wherepoor governance is a major issue. Moreover, given the series of events that began in

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2007, the contradiction explicit in continuing to recommend liberalisation in a globaleconomic environment in which the state and taxpayers have bailed out the costs ofthat very liberalisation on an unprecedented scale amongst the richest, most liberalisedcountries, seems to escape Neoliberal apologists.

This special issueThis, then, is the context within which the papers that constitute this special issue canbe situated. The four papers that follow develop some of the points we have sketchedhere in more detail. Two of the papers (those by Alan Doig and Jonathan Murphyrespectively) are focussed on the question of corruption indicators and the nature of theinstitutions (TI in this case) that calculate them and promote their usage. JonathanMurphy’s paper begins by making some general observations about the relationshipbetween capitalism, corruption and crises before then going on to make a stronglyargued critique of TI which focuses, in particular, on why TI seem to have had“nothing of any significance to say,” (Murphy, 2011) about the role of corruption in thegenesis of the US sub-prime crisis and hence the global financial crisis and depressionthrough which we are currently living. In addressing this “astonishing” silence,Murphy explores the background, forms of operation and underlying ideology of TIand offers a highly critical view of its actions, stressing the politicisation of some of itsnational chapters, its inability to deal with Western, business-driven corruption andthe implications of its board-level partnerships with major corporations. He finisheswith some observations about what a truly effective international independentanti-corruption organisation might look like.

Alan Doig’s paper also considers the role of TI (amongst other internationalorganisations providing corruption assessments) but is focussed much more broadlyupon the relative merits of different approaches towards the comparative measurementof corruption via quantitative and qualitative indicators. The paper is also stronglyfocussed upon international business but in this case Doig’s interest is not in exploringthe corrupt activities of corporations themselves, but rather in assessing how theymight assess the corruption-related risks and challenges they may face in operatingwithin particular national contexts.

Doig traces the background to the explosion of international legislation oncorruption before then moving on to explore the response of business to this changingcontext and the importance for international businesses of not only understanding theneeds of their customers, but also of understanding the types of corruption which theymay encounter and the operating environment (the state) within which they have toconduct their business. In this context, the accuracy and reliability of the available dataon the nature and extent of corruption within individual nations takes on greatsignificance and Doig explores in some detail the strengths and weaknesses of existingsources of quantitative and qualitative data on corruption. His conclusions sound awarning to businesses against relying on the dominant quantitative assessments ofcorruption (such as TI’s Corruption Perception Index (CPI)) or at the very least treatingthem with “caution and context” and stresses the need for in-depth country-specificmaterial, whilst raising some concerns over the quality of much of the existing materialof this nature.

In the paper by Rocha, Brown and Cloke on corruption in Nicaragua the importanceof context is also stressed, but the paper returns to some of the wider concerns about

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the limitations of the mainstream understanding of corruption (and hence the design ofmost anti-corruption interventions) traced in this introductory paper. The paperpresents a detailed exploration of a particular epoch of Nicaraguan corruption andwhat it reveals about the complexities of corruption within one particular state, as wellas the wider relationships between corruption and patterns of capital accumulation(returning us to some of the themes of Jonathan Murphy’s paper). Readers will alsoperceive some disturbing echoes of practices that have been revealed within the “clean”global financial services sector since the beginning of the GEC.

Rocha, Brown and Cloke explore different paths by which competing elite groups inNicaragua have been able to make use of different discourses in appropriatingresources from the state in a range of ways that reflect the use of different mechanismsfor justifying and legitimising corruption. The paper also outlines the mutuallysupporting discourses of local elites and international donors in constructing asimulacrum of anti-corruption (Latour, 2005). The conclusion to the paper stresses howin Nicaragua as elsewhere corruption is a far more complicated phenomenon than canbe grasped by naive approaches which locate corruption purely in the public sector –not only does corruption in Nicaragua thoroughly permeate the false state/publicbinary, but the actual positing of such a binary provides not only rationale but alsofunding which further fuels corruption.

Finally, John Christensen’s paper is also focussed on corruption within a specificplace or rather in this case type of place – tax havens. He begins by outlining thecentral importance of tax havens to the functioning of the global economy and tracingtheir origins. The major part of his argument is the role that offshore tax havens playin servicing illicit economic activities, the detrimental impact that this has had upondeveloping countries who are particularly prone to capital flight and the collusion ofkey governments (such as the UK in particular) in preventing the development ofeffective international action to police cross-border financial flows and trace themovement of “dirty” capital. He concludes by arguing that the global anti-corruptionmovement needs to enter a new phase where attention begins to move from merelyfocussing on the demand side of the equation (the bribe-takers and embezzlers) to muchmore directly address the role “of accountants, bankers, lawyers and offshore financialcentres in enabling corrupt practices.”

This last is perhaps a connecting argument which brings together the analysisoffered in all of the papers which constitute this special edition. Most observers(including us) would probably agree that there are forms of behaviour represented ascorrupt (although not always illegal) that are important because of, for example, theirimpacts on the pursuit of development, the stability of democratic political processes ormore generally to the effectiveness of businesses and processes of innovation andwealth creation. We would, however, also argue that too much of the mainstreamliterature on corruption (and the anti-corruption interventions which have beendeveloped out of the insights of those literatures) makes universalising assumptionsabout how corruption affects those issues in specific contexts. It is safe to say that all ofthe contributors remain unconvinced by the direction of current anti-corruptioninterventions and hope that the ideas contained in these papers go some way towardsstimulating further debate and fomenting further challenges to accepted ways ofthinking about the definitions, causation and impacts of corruption and how it mightmost effectively be combated.

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Notes

1. PNB Paribas had to suspend three of its hedge funds on 6 August 2007 because “it hadbecome impossible to calculate the net asset value of the funds” (Iwaisako, 2010, p. 355).

2. Tickell (2000) deserves an honourable mention here.

References

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Andersson, S. and Heywood, P. (2009b), “The politics of perception: use and abuse ofTransparency International’s approach to measuring corruption”, Political Studies, Vol. 57No. 4, pp. 746-67.

Asian Development Bank (ADB) (1998), Anticorruption: Our Framework, Policies and Strategies,ADB, Manila.

Baker, A. (2010), “Restraining regulatory capture? Anglo-America, crisis politics and trajectoriesof change in global financial governance”, International Affairs, Vol. 86 No. 3, pp. 647-63.

Black, W. (2010), Statement before the Committee on Financial Services regarding public policyissues raised by the Report of the Lehman Bankruptcy Examiner, United States House ofRepresentatives, Washington, DC, April 20.

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Gephart, M. (2009), “Contextualizing conceptions of corruption: challenges for the internationalanti-corruption campaign”, German Institute of Global and Area Studies Working Papers,No. 115, available at: http://repec.giga-hamburg.de/pdf/giga_09_wp115_gephart.pdf(accessed 27 October 2010).

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About the Guest EditorsEd Brown is Associate Director of Loughborough University’s Sustainability Research Schooland Senior Lecturer in Human Geography at the same institution. His research interests span thepolitical economy of Neoliberal economic reforms in Central America, debates over water andenergy poverty in the Global South and critical geographies of corruption and illicit finance. EdBrown is the corresponding author and can be contacted at: [email protected]

Jonathan Cloke is a Lecturer in Human Geography at Loughborough University and aResearch Associate with the Globalization and World Cities (GaWC) Research Network. Hisresearch and consultancy cover a range of themes including financial services for the urban poor,corruption, energy poverty and cities and gender.

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