Jordan: Institutional Change and Corruption

Abstract

We analyze the Jordan case from approximately the mid-1970s to around 2009 in this chapter. Jordan offers us “the experimental treatment” of introducing direct, multiparty legislative elections in an autocracy where a national private SME business association (formed by geographically concentrated private SMEs) exists. If our theoretical prediction presented is valid, we should expect to see corruption declining in Jordan after the introduction of multiparty legislative elections in 1989 in which de facto opposition parties were allowed to participate. We should also expect to observe (as per our theoretical story) that de facto legislative opposition parties and the national SME association formed an anti-corruption alliance after 1989 to jointly exert pressure on the ruling elite to curb corruption. This joint pressure compels the ruling elite to implement anti-corruption measures that reduce corruption. We employ a variety of techniques and sources including analysis of original survey data, open-ended interviews, existing studies, and time-series data on corruption to evaluate the empirical validity of our causal claims in the Jordan case. We begin our analysis with a brief overview of Jordan's economy and the political history of the country's multiparty legislature. The rest of the chapter is organized into four sections. The first section discusses the main features of domestic private SMEs in Jordan, the geographic concentration of these firms, the views that SME owners hold regarding corruption, and the tactics that they favor to address their corruption problems. This section shows that Jordanian SME owners view corruption as a serious obstacle to their business and have rebuilt the Amman Chamber of Commerce into a national SME business organization. They have also used this business chamber as a platform to raise their voice against corruption. The second section examines the response of Jordan's rulers to the SME-led Amman Chamber of Commerce's corruption concerns across two time periods – the pre-1989 era when an elected multiparty legislature did not exist and the post-1989 period during which an elected multiparty legislature (that included de facto opposition parties) was established. We show that Jordan's ruling elite was not responsive to the SMEs’ grievances about corruption in the absence of a multiparty legislature before 1989. But after a multiparty legislature was established in 1989, Jordan's rulers adopted measures to combat corruption in response to the joint anti-corruption pressure exerted by the Amman Chamber of Commerce and legislative opposition parties.