Saturday 7 May 2016

(ASSIGNMENT 4) CORRUPTION IN THE USA - N Chandrasekhar

In my first assignment, I evaluated two instances of corruption in the USA, using my “economic warrior” hat to examine abuses in discretionary power.

If we are to examine corruption in the USA using Johnston’s “4 syndromes” framework, we find that it falls under the “Influence Market”.

Transparency International
ranks the USA as 16th out of 168 countries in its Corruption Perceptions Index.  This is not bad at all, seeing as most of the OECD countries are ranked lower.

But despite its ranking, the USA has an outsize influence, thanks to it’s the global reach of its policies that its economic clout affords, its powerful mega-corporations, the largest of which are richer than some developing countries, and the role that its banks, markets and so on play in laundering the proceeds of corruption from other countries. This influence allows it to, as Johnston writes in Syndromes, “dominate the international anti-corruption agenda”.

Barry Seldes does all my work for me when he writes about a kind of a morally problematic “legal corruption” (a conception of the economists Daniel Kaufmann and Pedro Vincente) that is a shift away from unfair expoitation of public office and quotes them when he asserts that corruption now is all about “collusion between the public and the private”.

He talks about legal corruption as a “newly emergent” form of corruption where the existing political systems are not suborned towards the gain of individual agents but instead for the gain of institutions.

He gives the example of how Wall Street ( a metonym for the financial services industry) gained control of the US “federal financial policymaking machinery to institutionalize rent extraction from the national income”. This, he asserts, is a direct consequence of the increased financialisation of day-to-day American life from 1990 onwards, and helped in part to cause the 2008 financial crisis.

This is difficult to combat! An official act can be happily legal, but also corrupt on a deeply moral level.  So how do you ask for laws against these sort of things? This is the defining challenge of corruption enforcement in the USA and other developed countries today.


Most people are deeply uncomfortable operating at such levels of moral ambiguity, and this is where the media comes in, helping to set societal standards, and to determine at what level collusive behavior becomes corruption. Activist and investigative journalism moves fearlessly to move to shape opinion, and create outrage and move for change over issues such as campaign finance and cronyism (ref. the Citizens United controversy)

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