Can Institutional Reforms Reduce Corruption? Economic Theory and Patron–Client Politics in Developing Countries

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Abstract

ABSTRACT The ‘anti‐corruption consensus’ of the dominant development paradigm sees corruption as a governance failure and maintains that graft can be reduced or eradicated through appropriate institutional reforms, such as strengthening the judiciary, designing corruption‐proof regulatory regimes, and establishing anti‐corruption agencies. This article aims to cast doubt on the theoretical rationale of this family of anti‐corruption interventions. The neo‐classical paradigm that informs the consensus is based on a set of unsatisfactory idealizations, which undermine the explanatory power of mainstream economic models of corruption. Drawing on insights from economic sociology and anthropology, the article develops an account of the relationship between corruption, cultural norms and patron–client politics in developing countries. This account shows that corruption is embedded in socio‐cultural structures that are endemic to the process of transition to industrial capitalism — a transition that all developing countries are arguably undergoing, however haltingly. This insight clarifies the theoretical limitations of mainstream corruption economics and provides a framework for constructing more empirically adequate explanations of corruption levels in specific countries. It also suggests that substantially reducing, let alone eradicating, corruption in the developing world may not be possible without fundamentally rethinking the existing set of anti‐corruption strategies and techniques.

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