The historical origins of corruption in the developing world: a comparative analysis of East Asia

A new approach has emerged in the literature on corruption in the developing world that breaks with the assumption that corruption is driven by individualistic self-interest and, instead, conceptualizes corruption as an informal system of norms and practices. While this emerging neo-institutionalist approach has done much to further our understanding of corruption in the developing world, one key question has received relatively little attention: how do we explain differences in the institutionalization of corruption between developing countries? The paper here addresses this question through a systematic comparison of seven developing and newly industrialized countries in East Asia. The argument that emerges through this analysis is that historical sequencing mattered: countries in which the "political marketplace" had gone through a process of concentration before universal suffrage was introduced are now marked by less harmful types of corruption than countries where mass voting rights where rolled out in a context of fragmented political marketplaces. The paper concludes by demonstrating that this argument can be generalized to the developing world as a whole

The culture variable vis-à-vis anti-bribery law: a grey area in transnational corporate criminal liability

Cross-border transactions are generating corresponding globalisation of law enforcement efforts. Culture has significantly influenced the legal analysis of anti-bribery law. With the increase of transnational bribery, benefits from globalisation will be undermined unless an effective legal regime can mitigate the harm of bribery. It is perceived that corruption in China is more prevalent than in the West given its embedded place in Chinese culture. It is further alleged that Chinese multinational companies (MNCs) are taking advantage of an unlevel playing field, as they are not subject to stringently-enforced anti-bribery laws. This hypothesis creates a myriad of anti-bribery problems in terms of legislation and enforcement, which particularly manifest in China’s perceived cultural toleration of bribery. Cultural assumptions undermine the global anti-bribery regime and compromise potential collaborative anti-bribery efforts across jurisdictions in a rapidly globalizing world. The Chinese culture does not necessarily impede China’s criminalisation of paying bribes to foreign officials. It is argued that the cultural role should not be overestimated, otherwise the hazard of the ethnocentric engagement with the Chinese culture would affect the ability of foreign MNCs to integrate their global compliance programmes. Multinationals can only mitigate their exposure to criminal liability globally, provided that they comply robustly with anti-bribery laws of both home and host jurisdictions

The Political Economy of Domestic Tax Reform in Bangladesh: Political Settlements, Informal Institutions and the Negotiation of Reform

This paper explains the persistence of a tax system characterised by low revenue collection and extensive informality in Bangladesh. It combines analysis of long-term formal and informal institutions and of micro-level incentives shaping negotiation of short-term reform. The system is unusually informal, discretionary, and corrupt, but remains resistant to change because it delivers low and predictable tax rates to business, extensive opportunities for corruption to the tax administration, and an important vehicle for fundraising by political leaders and rent distribution to their elite supporters. We then explore the dynamics of micro-level reform and external pressure within the constraints of this overarching political bargain

Capacity and Autonomy : An Exploration of Fukuyama’s Governance Hypothesis

Peer reviewe

The Political Economy of Tax Reform in Bangladesh: Political Settlements, Informal Institutions and the Negotiation of Reform

political economy, tax reform, political settlementsThis paper explores the political economy of tax reform in Bangladesh over several decades, shedding light on the complex factors that account for unusually effective and sustained resistance to significant reform. We contend that it is necessary to understand both deep-seated formal and informal institutions and the micro-level incentives that shape the negotiation of short-term reform in order to comprehend tax outcomes. We describe a tax system that is highly informal, largely manual and characterised by high levels of discretion and corruption. However, despite appearing highly dysfunctional on the surface, this system serves the core interests of powerful political, economic and administrative actors. Underpinned by robust informal institutions, the current system delivers low and predictable tax rates to businesses, provides extensive discretion and opportunities for corruption to the tax administration, and acts as an important vehicle for political elites to raise funds and distribute patronage and economic rents. While the tax system has not been without reform, individual reform efforts have been constrained by the parameters of this broader settlement, leaving competing interest groups to pursue strategic gains at the margins while seeking to satisfy external reform demands. This tax bargain reflects Bangladesh’s broader political economy, which is characterised by entrenched informal institutions underpinning the combination of generally weak governance and high levels of economic growth – the so-called ‘paradox of Bangladesh’.DfID, NORA

Policy Experimentation and Innovation as a Response to Complexity in China’s Management of Health Reforms

There are increasing criticisms of dominant models for scaling up health systems in developing countries and a recognition that approaches are needed that better take into account the complexity of health interventions. Since Reform and Opening in the late 1970s, Chinese government has managed complex, rapid and intersecting reforms across many policy areas. As with reforms in other policy areas, reform of the health system has been through a process of trial and error. There is increasing understanding of the importance of policy experimentation and innovation in many of China’s reforms; this article argues that these processes have been important in rebuilding China’s health system. While China’s current system still has many problems, progress is being made in developing a functioning system able to ensure broad population access. The article analyses Chinese thinking on policy experimentation and innovation and their use in management of complex reforms. It argues that China’s management of reform allows space for policy tailoring and innovation by sub-national governments under a broad agreement over the ends of reform, and that shared understandings of policy innovation, alongside informational infrastructures for the systemic propagation and codification of useful practices, provide a framework for managing change in complex environments and under conditions of uncertainty in which ‘what works’ is not knowable in advance. The article situates China’s use of experimentation and innovation in management of health system reform in relation to recent literature which applies complex systems thinking to global health, and concludes that there are lessons to be learnt from China’s approaches to managing complexity in development of health systems for the benefit of the poor

How Does Institutional Change Coincide with Changes in the Quality of Life? An Exemplary Case Study

This paper provides a framework to assess correlations between the change of institutional functions (political centralization, plurality, rule of law, security of property, economic liberty, measured by 12 indicators) and improvements in human development (income, education, health) and violence limitations (conflict-related death tolls) to separate effective from ineffective institutional change. We apply this framework to a low-end institutional environment and provide a century case study of todays Democratic Republic of the Congo (DRC). Major results are threefold: first, we provide a thick description of institutional development in the Congo in a colonial and post-colonial and hence long-run setting; secondly, we identify periods of institutional change with distinctly different degrees of effectiveness; and thirdly, we are able to provide qualitative information on the questions of perspective (we follow a non-elitist approach), institutional connections, and timing of effects. Finally we propose extension of the framework, especially with respect to in-depth studies of critical transition periods, and its application to comparative case studies