The Encyclopedia of Libertarianism

Corruption

The Oxford English Dictionary defines the verb corrupt as turning “from a sound into an unsound impure condition; to cause to ‘go bad’; to make rotten or rotting.” In public life, the verb corrupt means “to destroy or pervert the integrity or fidelity of (a person) in his discharge of duty; to induce to act dishonestly or unfaithfully; to make venal; to bribe.” This definition is both more familiar and more problematic for liberty, and in this context the idea of corruption speaks to the proper relationship of private interests to politics and government.

The exchange of money for goods and services in private markets reveals individual preferences and contributes to human welfare. Paying money for goods or services provided by a public official constitutes bribery and often involves punishment for the parties to the transaction. Why is bribery invariably equated with corruption and condemned? It is not obviously inefficient. Indeed, in highly collectivized nations, paying public officials to allow what would otherwise be normal market exchanges may contribute much to human welfare.

Experts have condemned bribery for economic and political reasons. Economic studies have found that bribery of state officials is associated with poor economic performance. Susan Rose-Ackerman concludes that “it can reasonably be conjectured that corruption is one of the primary causes of the continued under-development in South Asia, Latin America and Africa and an important cause of the disappointing performance of the post-communist transition in the former Soviet Union.” Critics also argue that bribery contravenes the normative basis of politics. In modern democracies, voters (principals) elect representatives (agents) who are trusted to act to advance the welfare of their principals. Most people see bribery as incompatible with this trust. The bribe payer seeks a benefit from the government that is provided by the bribe taker in exchange for the bribe. The private interests of both the bribe payer and the bribe taker seem incompatible with the broader interests of the voters who elected a representative. Thus, bribery corrupts the representative function of modern democracies.

These standard accounts of corruption and bribery involve efficiency and democratic accountability, not liberty. But bribery has implications for liberty as well. Bribes that purchase special tax preferences imply higher taxes for others given the same level of government spending. Bribes that obtain regulations to bar entry to a market coerce those who wish to do business in that market. In some cases, government actions that are particularly prone to bribery—like the licensing of economic activity—inherently restrict individual liberty.

It is possible that bribery might liberalize some parts of society, but such payments are unlikely to create a general liberty under the rule of law. The bribe payer seeks a series of private, individual benefits from government; he would have no reason to purchase a broad liberalization of a whole market. One would expect bribes to enlarge a coalition of rent seekers, but not to generally liberalize society. More empirical evidence on this question would be welcome.

In the United States, money, democracy, and liberty interact, not always happily, in the financing of election campaigns. Taxpayers pay for a relatively small proportion of the costs of election campaigns in the United States, whereas individuals and groups contribute to the campaigns of chosen candidates. The U.S. Supreme Court has recognized that such contributions and spending by candidates affect freedom of speech, holding that such contributions and spending are 1st Amendment rights. Therefore, Congress is prohibited from making any law restricting these liberties. However, Congress has enacted, and the courts have validated, many restrictions on donations of money in elections, including mandatory disclosure and contribution limits. Courts have justified such measures as ways to prevent corruption or the appearance of corruption in government. Contributions can be the equivalent of bribes if they are given implicitly or explicitly in exchange for official favors (often called quid pro quo corruption). But contributions most often are nothing more than expressions of support for a candidate or cause. Laws that restrict donations made for these purposes thus impinge on individual liberty without preventing corruption.

The problem here goes beyond the inevitable errors associated with all regulation. Most campaign finance regulation seeks to bias electoral struggles in favor of the majority party in a legislature or of incumbents in general. In both cases, campaign finance regulations complicate the entry of challengers into elections, thereby sustaining an  existing partisan majority or increasing the probability of the reelection of the average incumbent. In short, campaign finance regulations do not accidentally violate freedom of speech; such violations are the primary reason for the regulation. Campaign finance regulations, like the corruption they seek to prevent, actually serve the narrow interests of parties and incumbents instead of the interest voters have in open competition for legislative seats. Thus, campaign finance restrictions may be deemed a kind of corruption.

The U.S. Supreme Court’s “appearance of corruption” justification for regulating money in politics has little to do with actual bribery or corrupt dealing. The Court argued that if citizens came to believe that contributions bought political favors, they would lose confidence in the government. Thus, contribution limits and other restrictions are said to bolster confidence in government by mitigating this appearance of corruption. However, as Nathaniel Persily discovered, campaign finance appears to have no real relationship one way or the other to trust in government. In any case, public trust in government tends to reduce, rather than protect, individual liberty. Thomas Burke has identified two other conceptions of corruption in U.S. Supreme Court decisions. The conception of corruption centering on distortion assumes that official actions should closely reflect public opinion: “Campaign contributions are corrupting to the extent that they do not reflect the balance of public opinion and thus distort policymaking through their influence on elections.” The Supreme Court has applied this concept of distortion to bless state restrictions on political activity by businesses whose wealth and campaign donations do not reflect public opinion. The “monetary influence” conception says public officials are corrupt if they perform their duties with monetary considerations in mind; sometimes contributions are said to create political debts that endanger the integrity of the system. Campaign contributions can thus corrupt governing even if no explicit deals are made.

Distortion as a corrupt practice assumes that policymaking should follow public opinion. This idea leaves little room for constitutional constraints on majorities or for intense minority views that might one day persuade a majority. In particular, the illiberal idea that existing public opinion should provide a standard for limiting participation in politics enshrines the status quo. Fortunately, this conception of corruption has been largely ignored by the Supreme Court. The “monetary influence” conception of corruption has been joined to ideals of deliberative democracy. Dennis Thompson argues that representatives should deliberate about the public good. Private interests are permitted in a deliberative democracy, but those who advance them must frame their interests in broader arguments about the public good. It is argued that money corrupts politics when contributions enable private interests to make policy or direct their energies for purely private reasons.

However, campaign donations have a legitimate place in a liberal republic. They may support speech and other political activities to advance an ideal of the public good. How then can citizens or public officials distinguish corrupt and laudable contributions? The motivations of the giver are difficult or perhaps impossible to discern, particularly when purely private interests become skilled at transforming their self-interest into arguments for the common good. The deliberative standard seems unworkable, especially given the important liberties that hang in the balance. Bruce Cain has objected that deliberative democrats misconstrue the nature of American politics and thus its corruption or integrity. The American founders did not create a deliberative republic in which representatives act as trustees of the public good. Instead, policymakers aggregate preferences that citizens reveal through votes, campaign contributions, voluntary associations, and other ways. The representative in this pluralist republic is a delegate for the preferences of his constituents. Apart from bribery, the monetary conception of corruption makes no sense in this republic; donations are a weapon in political struggle and a way to better inform social choices.

Is this conception of pluralism compatible with a liberal government? Pluralism offers a justification for public power after constitutional constraints were abrogated with the New Deal. Groups struggle over policy in a world where government power over economic life observes few limits. Pluralists see themselves as the intellectual heirs of James Madison, but some differences should be noted. Madison believed in a liberal, constitutional republic in which group struggle helped sustain the limited nature of the government. Pluralists recognize no such restraints. Private interests organize and seek to win in policy struggles. The result can be rent seeking, which libertarians regard as corruption. Of course, the organization of groups also may constrain state power, but the limits here are only partially Madisonian. Madison’s commitment to constitutions and liberalism has been lost to most writers who embrace the pluralist conception of politics. The deliberative democrat seeks to tame private avarice and abuses of government power through restrictions on money in politics. Thus, although it is true that the concerns of pluralists and the deliberative democrats at times intersect with those of libertarians, both differ in fundamental ways. As Bradley Smith argues, it is doubtful that reforms can constrain abuses of power in a postconstitutional regime like the United States.

Other approaches to corruption exist. Scholars have recently given much attention to classical republicanism. Their findings have sometimes deeply contravened liberal notions. Gordon Wood, for example, writes that “ideally, republicanism obliterated the individual” in early America. In recounting the American view of civic virtue in the 1770s, Wood writes of the “willingness of the individual to sacrifice his private interests for the good of the community.” Individual liberty in this regard becomes something akin to corruption of the citizen. Similarly, contemporary communitarians seem to equate individual liberty with selfishness and social decline. Such characterizations assume that any conduct not directed to the common good of a society must be thought corrupt. This hope for a Spartan regime has little in common with liberty.

Yet the problem of private interests in politics lingers for the libertarian. Most libertarians blame the expansion of the state for corruption. Hence, if we reduce what the government does, we also will reduce corruption. But if voters are corrupt in a libertarian sense, liberty may foster corruption and the expansion of the state. Americans have the liberty to engage in politics. When they do, they form groups that seek redistributed wealth for their members or lobby for restrictions on the liberty of others that would benefit them. Voters are hardly exempt from the desire for plunder. Gordon Tullock has noted that campaign contributions “are not actually for the purpose of buying votes. The votes are bought by the bills passed by Congress, or the Legislature, which benefit voters.” In that exchange of votes for money, might one not discern a loss of integrity among average Americans? The “pure” libertarian citizen would support the rule of law and generality in public policymaking, as well as strong rights to life, liberty, and private property.

Although people create institutions, institutions also create people, so it is perhaps not surprising that voters expect government benefits in exchange for their votes. How might a nation escape this cycle of democratic corruption? Politicians need to be elected, and they are unlikely to attain that end by telling voters they cannot have what they want. But libertarians might recognize that corruption may be more than an excuse to limit liberty. It also may offer a way to identify and understand the moral decline that follows (and fosters) the continual expansion of the welfare state.

 

Further Readings

Burke, Thomas F. “The Concept of Corruption in Campaign Finance Law.” Constitutional Commentary 14 no. 127 (1997): 127–149.

Cain, Bruce E. “Moralism and Realism in Campaign Finance Reform.” University of Chicago Legal Forum 111 (1995): 115–116.

Persily, Nathaniel, and Kelli Lammie. “Perceptions of Corruption and Campaign Finance: When Public Opinion Determines Constitutional Law.” University of Pennsylvania Law Review 153 no. 1 (2004): 119–180.

Rose-Ackerman, Susan. Corruption and Government: Causes, Consequences, and Reform. New York: Cambridge University Press, 1999.

Smith, Bradley A. “Hamilton at Wits End: The Lost Discipline of the Spending Clause vs. the False Discipline of Campaign Finance Reform.” Chapman Law Review 4 (2001): 117–145.

Thompson, Dennis F. Ethics in Congress: From Individual to Institutional Corruption. Washington, DC: Brookings Institution Press, 1995.

Tullock, Gordon. Public Goods, Redistribution and Rent Seeking. Northampton, MA: Edward Elgar, 2005.

Wood, Gordon. The Creation of the American Republic, 1776–1787. Chapel Hill: University of North Carolina Press, 1969.

Originally published .