La Mordida - Corruption in Mexico

With the return of the PRI (Institutional Revolutionary Party) to the Mexican presidency in December last year, plenty in the policy community and blogosphere have begun to worry that the kind of corruption and nepotism that overtly characterized PRI rule would again dominate. I don't suggest that Mexico has fixed its corruption problem, but observers rightly worry that substantial but fragile democratic gains and improvements in governance (including a major reform of the country's judicial system, initiated in 2008) could be reversed.

Corruption is notoriously hard to measure, not just in Mexico, but globally. Transparency International (TI), authors of one of the most widely used measures, is based on perceptions of corruption, a standard criticized as a crude attempt to universally operationalize an inherently subjective definition of the phenomenon (to be fair, I believe TI does disclaim that its measures are not to be used as a comparative indicator of corruption, internationally).

In democracy and governance circles, "democracy" is often seen as an anecdote to corruption. This view, which replaced the theory advanced by Sam Huntington (and others) in the 1960s that corruption acted as a kind of economic "lubrication," has itself become increasingly complicated and questioned in recent years.

The theory works like this: if X agents' corrupt behavior is tolerated by political elites, increased political competition should provide an incentive for political challengers to expose shady dealings. Thus, as political competition increases (and power subsequently changes hands regularly), the costs of exposed corruption (or, increased public discussion, debate, and opprobrium) rise. In addition, with true competition, voters have viable alternatives to which they can turn--providing a mechanism for punishing corrupt incumbents.

I did a study that used a measure of corruption developed by Transparencia Mexicana (TM, a national TI affiliate), which measures actual experiences with corruption at the state level (rather than a kind of national "poll of polls"), to test how increased competition over the last decade has affected corruption. I looked at the relationship between state TM corruption scores and a proxy measure for competition based on state level voting for deputies (congressmen). This measure accounts for competition based not on the winners of state elections, but by the percentage of the vote gained by various parties: those with more, competitive parties, were more competitive (see Laakso and Taagepera 1979, here).

What I found was that experience with corruption in Mexico actually increased slightly as electoral competition increased. These findings square with previous work on the subject by Stephen Morris (2009), who found that while electoral competition does eventually lower corruption, this happens only after an initial period of rising experience with corruption. Others have shown that this period could last years, and, without getting too much in the weeds, some would even question whether a rise in corruption would necessarily be "initial" (rather than permanent--I'm thinking of Carothers, T.).

The logic here isn't complicated. As newly competitive parties use accusations of corruption to bludgeon their opponents, the public perceives an increase in corruption. Interestingly, while I noted that TM measures experience, literature on the issue (see Cleary and Stokes, 2006) shows that one's experience with corruption is highly dependent on their perceptions of corruption in society, not to mention awareness of extant social norms that dictate what behaviors are corrupt. This awareness is, in turn, affected by socioeconomic status and education. So the two (experience and perception) are closely related and nearly impossible to isolate. Whether the egg came before the chicken, here, is not clear, though I am optimistic about the prospects for lower corruption.

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Corruption has a myriad of terrible effects on countries where it is rampant. There's a wealth of literature exposing the way in which corruption undermines investment and growth, not just lowering investment, but distorting the allocation of scarce resources and public services in ways that harm the poor. This exacerbates inequality and undermines the rule of law, two areas where Mexico has made fragile but important progress since the democratization that began in the late 1990s.

The election of Pena Nieto's PRI doesn't reverse Mexico's democratization necessarily; state and local politics--the incubator of democratic oppositional strength that began this trend--remain competitive. But the new president has a lot to gain by attacking corruption and, hopefully, a lot to lose by allowing a return to patronage politics. One way to do this is to support the judicial reform transition from an inquisitive (Napoleonic code-based) system to an accusatory (common law, rights-based) system.

Another is to support free access to public information. Several studies (see for example, DiRienzo, et al, 2007) show a strong positive relationship between increased access to public information, especially when aided by the proliferation of information technologies, tends to result in lower levels of corruption (based on several measures). Mexico has one of the world's best right to information laws, on paper, but seriously lacks political support--from the highest levels--to enforce compliance and the provision of access to information as provided in the legislation.