Taming Systemic Corruption: The American Experience and its Implications for Contemporary Debates

Abstract

Endemic corruption in developing countries often seems intractable. Yet most countries that currently have relatively high public integrity were, at an earlier point in their history, afflicted with similarly pervasive corruption. Studying the history of these countries may therefore make a valuable contribution to modern debates about anti-corruption reform. This paper considers the experience of the United States, focusing principally on the period between 1865 and 1941. We find that the U.S. experience calls into question a number of commonly-held views about the struggle against corruption in modern developing countries. First, although some argue that entrenched cultures of corruption are virtually impossible to dislodge, the U.S. experience demonstrates that it is possible to make a transition from a systemically corrupt political system to a system in which public corruption is aberrational. Second, although some have argued that tackling systemic corruption requires a “big bang” approach, the U.S. transition away from endemic corruption would be better characterized as incremental, uneven, and slow. Third, although some have argued that fighting corruption requires shrinking the state, in the U.S. reductions in systemic corruption coincided with a substantial expansion of government size and power. Fourth, some commentators have argued that “direct” anti-corruption measures that emphasize monitoring and punishment do not do much good in societies where corruption is pervasive. On this point, the lessons from U.S. history are more nuanced. Institutional reforms played a key role in the U.S. fight against corruption, but investigations and prosecutions of corrupt actors were also crucial, not only because of deterrence effects, but because these enforcement efforts signaled a broader shift in political norms. The U.S. anti-corruption experience involved a combination of “direct strategies,” such as aggressive law enforcement, and “indirect strategies,” such as civil service reform and other institutional changes.