Is the U.S. as Corrupt as the Third World?

Former New Orleans Mayor Ray Nagin leaves federal court, after being sentenced in New Orleans, on July 9 Photograph by Gerald Herbert/AP Photo

Last week former New Orleans Mayor Ray Nagin became the latest American politician to be sent to jail for abuse of power, following in the footsteps of former Detroit Mayor Kwame Kilpatrick and onetime Illinois Congressman Jesse Jackson Jr. Despite such high-profile convictions, most Americans see political corruption as a problem that plagues the developing world far more than the U.S. The truth is more complex: It’s certainly the case that paying bribes is a lot less common in the U.S. than in Nigeria or Bolivia, for example. But when citizens are asked if corruption is prevalent in their country, they’re thinking about a lot more than bribes. They’re more concerned about whether government and the political system is fair or stacked against them. And on those grounds, there are good reasons to think the difference between the U.S. and developing countries isn’t very big at all.

It doesn’t take a detailed look at Transparency International’s Corruption Perceptions Index to work out which types of countries are viewed to be particularly corrupt by the political risk analysts, aid agency economists, and think-tank staff whose opinions the index reflects. At the (virtuous) top of the ranking are rich countries: Sweden is No. 3, the U.K., 14; and the U.S., 19. At the (villainous) bottom are poor countries: Ivory Coast is No. 136, Vietnam, 116; and Tanzania, 111. It’s an unquestioned truth among Western politicians, businesspeople, and aid agency employees that corruption is rife in the developing world and that’s a big and, perhaps, even the main reason why poor countries are poor.

When surveys ask companies around the world about how often they make side payments for anything from avoiding taxes to winning a government contract, there’s a strong pattern: the poorer the country, the more likely companies are to make such payments. Ask individuals if they have ever paid a bribe and it’s the same story: According to Transparency International surveys, only 10 percent of Americans say they have ever been asked to pay a bribe, and 6 percent of people in the U.K. have. Compare that with 22 percent in Turkey, 33 percent in Pakistan, or more than half of the populations in countries such as Senegal, Ghana, or the Democratic Republic of the Congo.

Nagin wasn’t convicted of taking a bribe. His big crimes were related to steering business to his family’s kitchen countertop company.  That underscores a vital truth: There are lots of different ways to be corrupt. And when you survey people around the world about the problem of corruption in their country, most have a definition of “corruption” that’s broader than bribery. Ask the same people, “Have you paid a bribe,” and then ask, “Is corruption a problem in this country?” and the relationship between the two answers is weak. Again, ask the same companies, “How much do you pay in bribes?” and “Is corruption a major constraint to doing business,” and many who say bribery in their industry is common also don’t see corruption as a problem—while many who don’t pay bribes are convinced corruption is holding them back.

People in poor countries are more likely to say the police and the judiciary are corrupt than respondents in rich countries. Less than a third of people in the U.K. and about two in five in the U.S. think police are corrupt, compared with 82 percent in Pakistan and 92 percent in Ghana. But there’s pretty much no relationship between national income and views of how corrupt business is. And people in richer countries are slightly more likely than are citizens of poorer countries to say political parties and the media are corrupt or very corrupt.  In the U.S., 76 percent of the public thinks political parties are corrupt—the same proportion as in Romania, Ghana, Pakistan, or the Democratic Republic of the Congo.

How people answer questions about the corruption of political parties or legislatures is more closely related to how they answer the question, “To what extent is this country’s government run by a few big entities acting in their own best interests?” Rather than defining corruption narrowly around the question of whether bureaucrats ask for a speed payment to cut through red tape, most people conceive of corruption as elites using the power of government to their own advantage.

One good indicator of government being skewed toward the interests of the rich is income inequality. After all, if government is set up to favor the lucky few, you’d expect the lucky few to be especially wealthy. It turns out this is as much a problem in rich countries as poor ones. The top 10 percent of households in the U.S. shared 44 percent of total after-tax income in 2004 (the figure is higher today). In the U.K., the top decile share 34 percent of total household income. The average for the 78 developing countries with data from the World Bank over the last five years is a top income share of 32 percent.

There’s a relationship between popular perceptions of political corruption and inequality. People in more unequal countries do indeed perceive the system as more skewed against them. Recent analysis in the U.S. suggests the political system couldn’t be much more skewed against the average guy: Studying the link between opinions and policy change, Martin Gilens of Princeton University and Benjamin Page of Northwestern University found that the median income voters’ opinion had little or no influence on outcomes, while the respondent at the 90th percentile had “substantial” impact.

For all that bribery and collusion are serious problems worldwide—and rampant in some developing countries—the average person appears to think that corruption is about a lot more than paying a bribe. It’s time for business and political elites to take note and use a slightly less self-serving view of corruption. Leaders of the rich world face exactly the same challenge as their colleagues in the developing world: “Fighting corruption” is about more than dollars under the table or law enforcement, it’s about following the spirit of the laws—and rebuilding trust so citizens think their voices really count.

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