Corruption In Local Government Research Articles

Corruption and misconduct: A behavioural reflection from investigative reports into local government

This paper offers a local government perspective on the behavioural factors which can be the precursors for corruption and misconduct and those factors which can prevent corruption and misconduct. The investigation centred on corruption and misconduct evidenced from local government investigation reports in Australia, New Zealand and the United Kingdom. A corruption and misconduct taxonomy was developed and the role of the audit committee in the oversight of corruption and misconduct allegations in local government was empirically tested. The empirical findings indicated low support for an audit committee managing corruption and misconduct allegations. The qualitative research found that a robust culture of zero tolerance of corruption and misconduct was one of the best ways to keep a council honest.

Bribery and corruption in Australian local councils

This paper explores public concerns about corruption and bribery in Australian local government and provides guidance for policy-makers on how to control bribery and corruption. Lack of regulation is a major reason why local councils are not taking appropriate anti-corruption or bribery measures. The author urges regulators to impose radical and mandatory requirements, especially reporting requirements, on local councils. Australia should also look to other countries for successful measures to curb bribery and corruption.

Household Income and Relationships with Different Power Entities as Determinants of Corruption

This article adds to the corruption literature by identifying factors influencing Bangladeshi farm households’ probability of experiencing corruption in different service sectors. The economet ric results show that households’ probability of being exposed to corruption can largely be explained through their income and their relationship with different power entities. The direction of the relationship between income and corruption vary across services. Relatively rich households have a higher probability of experiencing corruption in sectors such as education, health and electricity. These households are less likely to experience corruption in local government and agricultural extension services. The results here are contrary to the common trend in corruption research that addresses households’ aggregate corruption experiences. Households with relationships with different power entities have a lower probability of experiencing corruption than their counterparts without these types of relationships.

The effect of government corruption on the efficiency of US commercial airports

In this paper, we argue that the cost of providing public goods is affected by local government corruption because bureaucrats have no strong incentives to pursue mandated tasks under a corrupt environment. Commercial airports in the United States are chosen to demonstrate such impacts of corruption. We first develop a theory which predicts the impacts of corruption on productivity and variable input allocation of airports. We then test the predictions by estimating a stochastic variable cost frontier model which incorporates both technical and allocative efficiency of airports. The empirical evidence confirms the theoretical predictions by revealing the following: (1) airports are less productive in more corrupt environments; and (2) airports tend to use more contracting-out to replace in-house labor in more corrupt environments. The findings can be applied to the context of other public goods and have important policy implications for reforming governance structure of public good provision.

Measuring community empowerment as a process and an outcome: preliminary evaluation of the decentralized primary health care programs in northeast Thailand

In 1997, Thailand began to devolve essential public service functions to a local level. However, the implementation process has been slow, especially in the public health domain. Public concerns with local government ineffectiveness and corruption have prompted the Ministry of Public Health to launch a pilot decentralization program whereby a small number of local communities across Thailand were chosen to receive the budget and management authority over basic health services. To evaluate the outcome of health decentralization in these pilot communities, this paper argues that the conventional health outcome measures (e.g. infant mortality rate, fertility rate, and average life expectancy) are inadequate for understanding the dynamics of community learning and development. To address this inadequacy, the community empowerment concept is used to analyze the social and political aspects of public health decentralization. Qualitative techniques, including participant observation, focus group interviews, and face-to-face interviews, are used to analyze the impact of localized public health programs on community empowerment in four communities in northeast Thailand.

The Antecedents of Corporate Social and Environmental Irresponsibility

ABSTRACTThis study combines internal and external perspectives to examine the antecedents of corporate social and environmental irresponsibility. In terms of internal factors, we focus on the extent to which a firm incorporates corporate social responsibility (CSR) into its business strategy and the level of firm‐specific R&D investment. With respect to external factors, we focus on market cost pressure and local government corruption. We developed hypotheses and tested them using original survey data of 295 Chinese firms covering four years. The results show that incorporating corporate social responsibility into business strategy and investing in R&D both predict less socially or environmentally irresponsible behavior by a firm. In contrast, cost pressures and government corruption correlate with an increased likelihood of irresponsible social and environmental behavior by firms. Copyright © 2013 John Wiley & Sons, Ltd and ERP Environment

Local Political Corruption: Potential structural malfunctions at the central–local, local–local and intra-local levels

Despite growing preoccupation on the part of both the public and researchers with the concept of political corruption and the ‘corruption eruption’ phenomenon, research studies addressing corruption in local government are few and far between. This exploratory research offers a theoretical conceptualization of institutionalized corruption in local government, and identifies structural factors that lead to such corruption. Further, this study empirically assesses institutional corruption at the local level and its correlation to attitudes and characteristics of local authorities and their populations, based on a survey of 1,709 residents of 156 local authorities in Israel and data on the local authorities from a separate database. This article proposes a model according to which local corruption arises from structural factors at three levels: the central–local level (relations between local authorities and the central government); the local–local level (competition between local authorities) and the intra-local level (factors relating to the performance of local councils and local democracy). Our analyses reveal correlations among characteristics of the local authority and community, residents' perceptions of local performance and perceptions of local corruption. Implications of the findings in light of strategies conventionally employed against corruption in local government are discussed.

Fiscal Decentralization: guilty of aggravating corruption in China?

The relationship between fiscal decentralization and corruption is highly controversial but insufficiently tested with respect to China. This article empirically tests whether fiscal decentralization aggravates corruption in China's local governments. To acquire more robust results, we employ multiple corruption and fiscal decentralization measures and collect data for 31 provinces from 1998 to 2008. Fixed effects panel models estimate the impact of fiscal decentralization on corruption after controlling for gross regional product per capita, the relative wage in the public sector compared to the private sector, political leadership changes, education levels, law enforcement and the number of NGOs. Our findings suggest that China has experienced a trend towards fiscal recentralization rather than decentralization in the 2000s. We also find the moderating effect of the level of law enforcement on corruption: fiscal decentralization in local governments with strong law enforcement deters corruption but the opposite relationship is found when their law enforcement is weak. The implication of our research is that a sound legal system and political will are prerequisites for successful fiscal decentralization.

Badly Designed Institutions, Informal Rules and Perverse Incentives: Local Government Corruption in Spain

This paper analyses the problem of corruption in the local government in Spain, where despite a complex and sophisticated set of local rules to ensure due process in town planning and urban development, a great number of corruption incidents have come to light. The explanation of this outcome rests in the combined effect of factors such as the bad design of both integrity rules and town planning policies, the relevance of informal institutions such as the patronage networks, and the existence of perverse incentives. The Spanish case highlights the important influence of local informal institutions for the actual working of formal ones.

Fiscal Decentralization, Corruption, and the Shadow Economy

We analyze the implications of fiscal decentralization for the size of the shadow economy, local government corruption, and the provision productivity enhancing local public goods. Most important, we show that an increase in the share of locally raised tax revenue left with the local government brings more entrepreneurs from the shadow and into the official economy. In addition, corruption, measured by the size of bribes that local government imposes on entrepreneurs for letting them use official public goods fully, may increase or decrease, depending on the extent to which public goods enhance the entrepreneur's productivity. We test the model's implication with respect to the size of shadow economy using cross-sectional country-level data and find strong support for our results.

Donors, State Building and Corruption: lessons from Afghanistan and the implications for aid policy

This article critically analyses the state-building agenda from a governance and aid policy perspective, and from an anti-corruption viewpoint in particular, highlighting potential problems with both theoretical and practical applications of state building in a development context. Inconsistencies and contradictions between the state building and anti-corruption work have not been adequately explored or reconciled. In particular, the article explores these tensions using the example of the Performance-Based Governors' Fund (pbgf) in Afghanistan, where some donors are looking to reduce corruption in local government, encouraging often ‘warlord’ governors to run their administrative offices with integrity. The article argues that the pbgf approach—with its themes of being realistic, going for indirect strategies over the long term and building integrity rather than fighting corruption, provide important lessons for the anti-corruption community as a whole, both at the level of theory and practice.

Bounty Hunting: The Limits of Financial Incentives for Reporting Corruption

Financial incentives for exposing illegal behavior are experiencing a resurgence in popularity in the United States. These laws offer a “bounty” to the person who reports illegal behavior to government investigators or prosecutors. Bounty laws are held up by lawmakers, anti-corruption activists, and some scholars as an effective and low-cost enhancement to government investigatory and enforcement efforts. They have two primary aims: return money to government and deter future illegal behavior. This project uses an original dataset on local government corruption to present the first empirical analysis of their ability to deter corruption in the false claims context. I find that while bounty laws may be quite effective in recovering government money, we have no evidence that they actually succeed in deterring corruption. This is, in part, because they are currently aimed at very large amounts of corruption, among which there are very few cases. To the extent that lawmakers want to use the tool more broadly, they should consider two approaches. The first is to lower the currently high bar to receiving a bounty for blowing the whistle. The second is to focus on expanding the law into other forms of corruption that directly take government money, like embezzlement, rather than using them to deter non-monetary corruption, like nepotism or many kinds of bribery.

Summing up a Career

The big decisions being made in Washington and state houses inspired me to look back, all the way to my first Washington Commentary. It was in September 1982 during President Reagan's first year in office, and I bluntly declared that the benign U.S. Department of Education had been turned over to ideologues. They were bent on eliminating it, or at least reducing it to being no more than a conduit for their research and statistics. So, not much more than a quarter century later, here we are with the largest infusion of federal dollars into education ever, the almost certain prospect that there will be national standards in a few years, and a federally induced mania for testing that is going to define teaching, just as it has student success. Why do I fear that none of these will work as well as promised? Scanning through many of the subsequent commentaries, I realized that the pushes and pulls, rhetoric and good reforms mixed with bad ones lead to questions, not answers. The American public education system is still below capacity, and I wonder why. Certainly, jagged-edged, rather than cutting-edged, policies often get in the way. But the questions that really stump me probe deeper than any law or reform, so I'm putting a few out there for this summer of heady decisions on education across the country. Why are education institutions--school districts, state policy agencies, teacher preparation programs--so inferior compared to the people who work in them? This idea is not original with me--I heard it from David Simon, the brilliant writer/director of the TV drama series, The Wire. As a beat reporter for the Baltimore Sun, he observed the corruption and mismanagement of local police and government (including the schools) and turned his insights into a series that is an indictment of American society, writ large. Simon's explanation that greed incubates inferiority doesn't exactly fit with education. The principal of Main Street High School has no illusions about being in the same league as a Wall Street CEO. But the issue of power backed by the misuse of statistics (another Simon theme) rings true for education. Everyone jockeys for power, whether it's administrators, unions, think tanks, or politicians, and he who lies best with statistics, wins. Meanwhile, talented or, at least, committed educators who want to do good for kids work inside inferior systems as best they can and for as long as they can stand it. The federalism that governed education for two centuries--evolving into shared responsibility among national, state, and local levels--is in shambles. Mayors, states, and federal officials are trying to move schools forward, but the feds are investing massive stimulus dollars in state finance systems that favor the wealthy and penalize the poor. How is this top-down approach going to change that? The stimulus regulations ask states to show how they're going to address the problems, but such politeness leaves the door wide open for the statistical liars. A related question has to do with leadership. What goes into the thinking of state officials, administrators, school boards, policy makers, and others who make decisions with public money and people's lives that causes them to come up with so many bad or, at least, uninformed choices? Sometimes, they seem like lemmings, determined to follow the latest fad or advice without realizing that it is leading them right over the cliff. I put charter schools (certainly vouchers) in this category. If the purpose is to improve student achievement, neither charters nor vouchers offers proof of working. …

Assessment of Armenian local government corruption potential

AbstractLocal government in many developing countries is prone to institutional and individual corruption. Using a set of questions developed for a Baseline Review of the status of procedures and practices of Armenian local governments, a general matrix was developed that may be applied to any local government in any country. The matrix looks at three broad areas where the potential for corruption has historically been high: awareness and reporting suspected corruption, procurement practices, and internal control practices and procedures. This article presents a methodology (the matrix questions) that will enable the development practitioner to rapidly assess the corruption potential and develop training or technical assistance to reduce the corruption potential. Copyright © 2009 John Wiley & Sons, Ltd.

Electoral Accountability and Corruption: Evidence from the Audits of Local Governments

We show that political institutions affect corruption levels. We use audit reports in Brazil to construct new measures of political corruption in local governments and test whether electoral accountability affects the corruption practices of incumbent politicians. We find significantly less corruption in municipalities where mayors can get reelected. Mayors with reelection incentives misappropriate 27 percent fewer resources than mayors without reelection incentives. These effects are more pronounced among municipalities with less access to information and where the likelihood of judicial punishment is lower. Overall our findings suggest that electoral rules that enhance political accountability play a crucial role in constraining politician's corrupt behavior. (JEL D72, K42, O17)

Does Enforcement of Intellectual Property Rights Matter? Evidence from Financing and Investment Choices in the High Tech Industry

Financing of and investing in R&D are prone to risks of appropriation by competitors, information asymmetry, and agency problems. Although legal protection of intellectual property (IP) rights at the national level is necessary to encourage investing in R&D, we show that the effective enforcement at the local level is also critical. We concentrate on the impact of provincial level IP rights enforcement on the financing of and investing in R&D, using a unique and rich sample of high technology firms. These firms are located in twenty-eight provinces/districts throughout China. The enforcement of IP rights differs at the provincial level, although the firms are under the same set of national and international laws. Controlling for provincial institutional factors such as economic development, banking system development, legal system performance, and local government corruption, we find that the enforcement of IP rights positively affects firms' ability to acquire new external debt (including formal and informal financing) and external equity. The firms in provinces with better enforcement of IP rights invest more funding in R&D, generate more patents, and produce more sales from new products. We also find better enforcement of IP rights helps mitigate the problem of appropriation by local partners in foreign and ethnic joint ventures. To deal with the problems of reverse causality and omitted common variables, we adopt the instrumental variable method and the approach used by Rajan and Zingales (1998), and the impact of IP rights enforcement is robust to different specifications. Our evidence confirms that enforcement of IP rights matters even in China. Furthermore, our results support that the enforcement of IP rights affects the growth in the economy via the channels of financing of and investing in R&D.

Electoral Accountability and Corruption in Local Governments: Evidence from Audit Reports

Political corruption is a concern of many modern democracies. It weakens democratic institutions, restricts public services, and lowers productivity undermining economic development. Yet despite its importance, our understanding of what determines corruption is limited. This paper uses a novel dataset of political corruption in local governments, constructed from reports of an anti-corruption program in Brazil, to test whether the possibility of re-election affects the level of rents extracted by incumbent politicians. Exploiting variation induced by the existence of a term limit, we find that in municipalities where mayors are in their final term, there is significantly more corruption compared to similar municipalities where mayors can still be re-elected. In particular, the share of resources misappropriated is, on average, 57 percent larger in municipalities with lame-duck mayors. The findings suggest that electoral rules that enhance political accountability play a crucial role in constraining politician’s corrupt behavior.

COMMUNITY POLITICS IN LIVERPOOL AND THE GOVERNANCE OF PROFESSIONAL FOOTBALL IN THE LATE NINETEENTH CENTURY

This article studies the political significance of the schism that occurred at Liverpool's single professional football club in 1892 and which led to the incorporation of two clubs, Everton FC and Liverpool FC. Significantly, the management and direction of professional football had become bound up with community politics and identity at a time of important change in municipal politics when the tories' ascendancy faced a Liberal challenge partly predicated on the success of a virulent moral crusade over the influence of alcohol, social decay, and corruption in local government. At its simplest, the dispute at the club concerned allegations of commercial exploitation by the largest financial stakeholder. More fundamentally, rival factions were championing competing models for the role they believed a successful football club should be performing within the community which, in turn, embraced attempts by the political parties to engage male, working-class voters. Interestingly, the schism was within Protestant ranks for, despite the prominence often assigned to the role of sectarianism in Liverpool politics, differences between Catholics and Protestants played very little part in the dispute. This case study highlights the complexity of Liverpool political activities and alliances and reveals the importance of a multi-layered interplay of local and national issues.

News Crusaders

Publication of news stories exposing government corruption has enjoyed an unprecedented growth in the People’s Republic of China over the last 15 years. This growth is tied to China’s market reform and news organisations’ response to reader demand for muckraking journalism. It is also encouraged by the conditional tolerance of a central government that sees such reports as an effective tool for promoting political legitimacy and stability by helping to rein in local government corruption and providing an outlet for public discontent. Chinese readers have embraced these stories and elevated the reporters and news organisations that publish them to celebrity status, even referring to them as “news crusaders”. It is not unusual for reporters from investigative journals to be literally swamped by hordes of people seeking their help to expose the story of an official who abused or deprived them of some right. But, the newfound success and expanding social authority of Chinese investigative reporting is already threatened. The new threat to investigative reporting comes from its own popularity and success. This paper uses Bill Kovach and Tom Rosenstiel’s (2001) analytical framework to examine Southern Weekend’s process of defining and pursuing its professional and journalistic identity.

FREEDOM OF THE PRESS AND PRIOR RESTRAINT

The constitutional implications of the decision of the Court of Appeal in Cream Holdings Ltd. v. Banerjee [2003] EWCA Civ 103, [2004] Ch. 650 (noted [2004] C.L.J. 4) to grant an injunction restraining a newspaper from publishing allegations of corruption in local government on the grounds of breach of confidence were such that it was not surprising that leave to appeal to the House of Lords was readily granted and that the matter has been speedily resolved: [2004] UKHL 44, [2004] 3 W.L.R. 918. A disgruntled former employee of Cream Holdings had approached a local newspaper alleging that her former employers were engaged in the corruption of a local authority official by offering money to secure entertainment licences. The employers sought an injunction restraining both the employee and the newspaper from publication on the grounds of breach of confidence (but no defamation was alleged by those running the company).