Research in Focus with Eric Uslaner (January - February 2008)
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Is corruption in Africa rooted in economic inequality, mistrust, or deficient institutions? In January 2008, we examined 'Corruption and the Inequality Trap in Africa' with Eric Uslaner, from the Department of Government and Politics at the University of Maryland. In his paper, Uslaner describes the inequality trap as a vicious cycle from inequality to low trust, to corruption and back to inequality. He argues that corruption is ultimately a socio-economic problem which must be tackled from the bottom up as well as at the institutional level. |
 Eric Uslaner |
GSDRC:
What is the inequality trap and what lead you to conduct this research?
Eric:
The inequality trap is a vicious cycle from high inequality to low trust, to high levels of corruption and back to more inequality. The argument I make is that corruption does not rest simply upon bad institutions but also upon how people become dependent on corrupt regimes and practices because they don’t have the resources to participate in a regular economy. High inequality leads people to distrust those who may come from a different class or ethnic background. Once people become mistrusting, they are more willing to cheat because they perceive others as doing the same. There is no sense of mutual respect or mutual responsibility and so corruption becomes less problematic. Although it may still concern people, it becomes accepted as a survival tactic.
Corruption is really a tax on the poor because corrupt governments have less to spend on public services. They give special treatment to the rich, who can afford to bribe public officials. As a result corruption leads to more inequality. It’s not easy to break out of this cycle. Countries that were corrupt in the 1980s remain corrupt now. Highly unequal countries remain highly unequal and low trusting countries remain low trusting.
In response to the second part of your question, this research was a follow on from a previous book that I wrote on trust. I wanted to explore the linkages between trust and corruption and that lead me to focus on inequalities, because inequality is the strongest predictor of low trust. I began work on transition countries in central and eastern Europe where there is a strong perception of rising inequality and envy of the wealth that has been created through corruption. From there I began to focus on the triangle between corruption, inequality and trust.
GSDRC:
It is interesting that it is grand corruption rather than petty corruption which shapes whether people think the government is handling corruption well. Please could you explain a little more about this and why you think this is so?
Eric:
Grand corruption is when politicians, business people and leaders profit from corrupt dealings - that is through dealings that are outside the law or outside accepted practices. Crucially, grand corruption involves large sums of money and, as such, is generally not accessible to ordinary people.
Petty corruption is when ordinary people have to make gift payments in order to access services that many of us take for granted. So, for example, when I go to the dentist, I can expect to be seen reasonably quickly. However, in many countries, the only way to receive treatment is to pay a little extra money to advance your place in the queue. Similarly, when you get a speeding ticket you can usually pay the police officer rather than pay the court. So, petty corruption involves small amounts of money. It involves ordinary citizens but, in particular, it involves payments for what most of us would consider routine services.
Now, why is this? Why are people more concerned by grand corruption than by petty corruption? One reason is that petty corruption happens all the time: when you apply for a visa, when you go to the doctor’s, or when you go to the clerk’s office of the city government. It’s everywhere and people simply become accustomed to having to pay these extra little fees. Some people actually consider some of these fees to be quite useful. The other major reason why petty corruption doesn’t concern people is that these extra payments do not make anybody rich. The small amount of money involved does not really exacerbate inequality in any way.
In contrast, grand corruption does make politicians and business people rich. In certain kleptocracies - that is government by stealing - leaders have amassed large sums of money in foreign bank accounts. This money is completely untouchable. Even if they’re thrown out of office, they are able to keep it because nobody knows where it is, how much it is, or how to access it. So people get so much more upset by grand corruption because it’s associated with inequality, whereas petty corruption isn’t.
GSDRC:
How does the inequality trap operate in practice?
Eric:
Mainly because ordinary people, poor people, simply do not have the capacity to break out of the trap. A lot of people work outside what we would normally consider the market economy. They live in the informal sector where there is very little legal protection or job security. They are ultimately at the mercy of larger, often corrupt forces that control their lives. They may be forced to engage in activities that, in a normal economy, would not be considered legitimate and with that comes tremendous risk.
People in the west assume that hard work, industriousness and education can free you from poverty. But if you operate in an informal economy, in a country with high levels of inequality, you don’t have this option. In many cases, success in life is perceived as resulting from luck, connections, or corruption rather than from hard work. In Romania and Albania, for example, national economies were wrecked when people participated in fraudulent lottery schemes because that was the only way they believed they could get rich. In Nigeria, much of the informal economy now operates through internet scams. This also happens in Russia. In countries that have weak, unfair legal systems, citizens are necessarily going to be pessimistic about the future. They are going to lose some of their moral compunctions about behaving in ways that they still think are wrong but may be necessary for survival.
GSDRC:
You found a link in Nigeria between how people perceive the government’s performance on corruption and its performance on tackling HIV / AIDS. How are these related and how do you draw that correlation?
Eric:
They are related in a couple of ways which form a general syndrome. First of all, as I mentioned before, countries with high levels of corruption simply have fewer resources to spend on social welfare programmes, such as combating HIV /AIDS. Also, corrupt officials are more concerned with furthering their personal wealth and taking money from the public treasury than with spending it on social welfare programmes. This leads people to the logical conclusion that if the money is being stolen, it is not being spent on human needs within the country. And particularly in many places in Africa, HIV / AIDS is a tremendous social need.
GSDRC:
How have your findings been received and what impact has the paper had on anti corruption programmes?
Eric:
Some of the impact will come after the book has been published, but I have been giving talks at various fora. I spoke at an international conference of legislators fighting corruption in Dhaka, Bangladesh last summer, in particular with an organisation called the Global Organization Against Corruption (GOPAC). My talk formed the basis of the establishment of the GOPAC charter for South Asia, and the press release that came out of that charter highlighted the need to fight inequality as a first, key step in combating corruption. So I’m hopeful that people will take this message on board and realise that you cannot battle corruption simply by establishing better institutions. Corruption is fundamentally a socio-economic problem. I was delighted to see that these legislatures acknowledged that they must begin at the bottom rather than at the top.
Every country that has successfully combated corruption has begun with a set of social welfare programmes not designed just to aid the poor, but to help everbody. The key social welfare programme that I have identified is universal, free, public education, because education creates trust and opens up greater opportunities for people to advance in an economic system. The problem, of course, is that universal free education is extremely costly. But then so is corruption. When I tell people that I see education as key to combating corruption they often say ‘Oh, but we can’t afford it’. My response is ‘You can’t afford not to have it.’
