There are different
views on the concept of democracy as there are different views of corruption,
where the latter is defined as “the abuse of public roles (office) or
resources for private gain” (Johnston, 1998, p. 174), whilst there are also as
many views on the relationship between them. It is considered that more
democratic and greater developed countries are less prone to corruption
(Treisman, 2000). However, this statement is not completely reliable (as
corruption is still a hidden phenomenon) and such a theory is not supported by
a statistically unambiguous statement on specific aspects or differences
between countries. The relationship between the democratic system of government
and the ability of citizens to hold elected representatives accountable is
similarly not straightforward. In practice, citizens struggle to control the
corruption of people in power through elections or other such forms of
democratic participation. Due to this, corruption within democracies can be
perceived as a form of exclusion conducted through democratic institutions and
practices, preventing citizens from making decisions that will ultimately
affect them. This article examines the areas in which the citizen
decision-making process suffers from corrupt activities, and consequently
undermines the democratic order itself by creating exclusion. The first
section points out the globalization phenomenon as a root for the appearance
of corruption under democratic institutions and practices. The second
considers the problem of lobbying, defined as “a form of legislative subsidy -
a matching grant of policy information, political intelligence, and
legislative labour to the enterprises of strategically selected legislators”
(Hall and Deardorff, 2006, p. 69). The next section highlights the issue of
funding political parties (permissive campaign finance laws). Lastly, the
final section raises question over how corruption depends upon electoral
systems, which, according to the findings of McCann and Redlawsk (2006), are
perceived by the public as the least corrupt activities. Whereas lobbying and
funding of political parties should be examined on an individual level, in so
much as they are the vehicle of formation and promotion of citizen’s political
preference, the electoral system should be regarded on an aggregate level,
containing the rules on how the formatted preferences are cast, embodied by
the government of the state. The main aim of this research is to evaluate the
effect that corrupt activities have upon democracy, alongside possible
alternate solutions and the efficiency of their implementation, concluding
that such democratic practices and institutions are a “necessary evil” for a
and the Decline of Authority in Governments
The phenomenon that helps to explain how corrupt
activities take place under democratic systems of government can be explained
from the following perspective. Electoral democracy is arranged and designed
in a way that implements policies for a clearly defined territory, along with
the irrefutable approach that elected governments are supposed to be
accountable to the electorate. However, in the context of economic
globalization, the ability of democratically legitimised state power to create
laws and implement policies within their state is reduced (Das and DiRienzo,
2009). Meanwhile, as the ability of governments and parliaments to implement
their own policies has been steadily declining as a result of globalization,
democratic decision-making processes have gradually become subject to erosion
by transfer of responsibilities to administrative, regulatory, and specialised
institutes of authorities. These "guardian" organisations are
characterised by a large degree of autonomy and professionalism, but also lack
public accountability and control (Rose-Ackerman, 1978), making them
potentially dangerous from the standpoint of oligarchy and corruption. As a
result, the on-going process of globalization exists at the root of how
corrupt activities can take place under democratic norms without violating the
law, but undermine democracy itself. Identifying the source of the problem can
help to abolish the erosion of democratic norms, and strengthen institutions in
order to minimise the harm of corruption.
Interests of Corporations
Democracy, as well as social decisions,
increasingly becomes a matter of relations between political institutions and
economic power, and less representative of the relations between citizens and
elected representatives. Some researchers propose that “lobbying and corruption
Braddon and Hartley, 2013, p. 173)
. It is distinguished
according to the level of development, meaning that corruption tends to occur
when the level of development is low, whilst such activity can be translated
into lobbying when the level of development is sufficiently high (Harstady and
Svensson, 2009). Moreover, regardless of the development of the state, lobbying
tends to be a much more effective instrument for political influence than
corruption (Campos and Giovannoni, 2007). Many thousands of organisations lobby
to influence, as evident in the policy of the European Union and at the level
of national parliaments of many European states. However, unlike the U.S. or
Canada with their historical traditions and legal norms of lobbying, lobbying
in Europe is not regulated and therefore is perceived as secret, suspicious and
Klaus Beckmann and Carsten Gerrits
(2008, p.1) argue that if we compare the effects of corruption and lobbying as
alternative modes of rent-seeking activity, the latter is worse as lobbying
represents wasteful, directly unproductive activity
“reducing social welfare relative to the corrupt status quo”, if corruption is
fought. However, such claims can be considered invalid; lobbying itself is a
legal action and does not contain an explicit corrupt deal that carries the
informing of selected representatives. In other words, it creates a bridge
between the electorate and those who were elected, acquainting them with the
opinion of certain segments of the society. Moreover, plurality of interests is
one of the main principles of a democratic society (Dahl, 1989), where people
are free to organize and promote their interests in the policy creation
process. Corporatism represents one of the ways in which interest groups are
involved in the policy-making process that is institutionalized in many European
countries, together with lobbying, another widespread phenomenon. This is why
the lobbying itself should not be regarded as a type of corruption, as it is a
legal form of influence technology.
However, it is possible that the
outcomes of lobbying may represent corrupt activity. The problem is hidden
within the fact that, when considering the presence of lobbying, policy-making
processes might be influenced only by certain (particularistic) interests that
are promoted by interest groups. Such ideas do not necessarily represent the
preferences of the whole public, or at least its majority. On the other hand,
the provision of arguments by interest groups in a persuasive manner,
exchanging for a certain favour out of policy, does not seem unconvincing since
it is an unequal exchange. As conventional wisdom suggests, regular corruption
scandals in the U.S., European Union and other countries at the highest level
where prominent lobbyists and government officials are implicated, presumes the
possibility of bribery that resultantly corrupts the nature of lobbying. This
is where the notion of Legislative Subsidy (Hall and Deardorff, 2006) comes
from, as lobbying is somewhat a subsidy for entrepreneurship of legislator,
requiring a high position of legislator and aiming not to convince him or her,
but to instead subsidise the resources of those legislators, whose preferences
are shared with interest groups. Nonetheless, the alternative proposes to ban
lobbying activity, which would harm the democracy in a more severe way than
lobbying itself, potentially being perceived as a disregard of the human right
of self-expression and determination. Whilst democracy promotes a right to be
involved with the decision-making process, especially if the person is directly
affected by the authority’s decision, this would undermine popular
Elections and competition between
political parties also conform to the main features of democracy, the
competition of candidates for political offices and of political parties for
votes being at the heart of the democratic process. In addition, political
parties play a major role in the concentration of the political will of
citizens, through the nomination of their candidates in the elections; this is
why it is believed that democracy is impossible without political parties
(Dahl, 2000). Financial sources are vital in order to ensure the existence of
political parties, as well as participation in the competition of political
ideas and positions during election campaigns, to mobilize the potential
electorate. In a competitive atmosphere of democracy, it follows that political
parties and candidates feel the constant need for funds (Kallen, 2009).
Consequently, political competition becomes less centred upon the competition
of ideas and ideologies, and more upon the economic component. This creates a
noticeable imbalance since the parties become increasingly dependent on
external financing, and accordingly, drift away from their electorate and
become more vulnerable to corruption and undue influence. Despite the political
system or the system of parties and their ideological orientation, political
corruption ensuing from party funding is a constant problem; almost every
European democracy faced a serious problem of equitable division of funds and
their adequacy for parties (Sorauf, 1992).
There are several ways for political
parties and electoral campaigns to be financed. In addition to membership dues
and state aid, an important (and often controversial or scandalous) role is
played by private gifts and donations. However, the problem of private
donations and gifts as funding for campaigns and parties increases in
importance and topicality, as in many countries there is a steady decline in
membership of political parties (Bartle and Bellucci, 2009). Unregulated
funding of political parties carries risks, such as an increase in political
nervousness. For example, the principle of "one man - one vote" is a
subject to question due to possible unequal financial contributions. This idea
is challenged by Ortiz (1997), who introduced the concept of democratic paradox
of campaign finance reform. The main principle concentrates on the concept that
any kind of economic inequality among candidates, or in other terms different
financing possibilities possessed, do not influence their success in the
elections. Any voter in a properly functioning democratic regime votes
according to independent judgement. This puts the civic capabilities of the
voters on the agenda, but not the possible sources of funding for the parties.
Furthermore, the risk factor is hidden
in the perception that money transferred to the political parties, such as
private donations, helps to buy access to state institution or officials if
elected. Although, such funding does not directly "buy" a policy, it
creates a link to those in power who possess an ability to affect the policy or
decision-making process (Johnston, 2005). As previously mentioned, in such a
scenario elections cease to be a competition of political programs and ideas,
but become increasingly dependent on the success of the candidates and parties
in finding sponsors. This leads to the race of populism and propaganda, pushing
political debate by the wayside. Consequently, political parties and
politicians risk being co-opted to represent particularistic interests and not
the interests of the public, undermining basic democratic principles.
Finally, unregulated financing of
political parties can be regarded as not fully transparent and some funding of
political parties is openly illegal and corrupt in their nature; such as
sponsorship from illegal sources, or receiving (or requiring) gifts or
sponsorship in exchange for services, orders, or a change in attitude of state
institutions (Malbin, 1980). Such practices undermine the trust of citizens as
there is no guarantee of fair representation, and as a result, their
participation in the democratic processes decreases.
A ban on private donations could be suggested
as another measure. However, this would undermine democratic legitimacy;
private donations to political parties or specific election campaigns have
their place in the legal field, as they represent an important segment of
participation in political life, being a means of political expression in a
democratic society where citizens have the right to lobby their own private
interests. Although these so called forms of "legal corruption" (La
Raja, 2008) do not seem completely transparent, their eradication would raise
questions concerning democracy in a state itself.
The changes in campaign finance laws
are commonly established due to corruption scandals as they happen in Western
Europe. As an alternative to unregulated private donations, some
countries (and three quarters of all European
countries) have introduced a regulated system for campaign financing, in which
political parties are required to publish information on the sources of some,
or all, without the exception of gifts and donations (Smilov and Toplak, 2007)
for an increase in transparency. However, the drawback of such an approach is
concentrated on the probability that
such regulations can be used in order to control
the opposition parties. Moreover, revealing this information and publishing
sponsors exposes the political positions and preferences of both individuals
and companies, and this can lead to repression. Regulations themselves may
limit participation and adherence to democracy, while new or weak political
parties can be extruded from the arena of political life (Cutler, Cohen and
Witten, 1986), although they represent some sectors (segments) of population.
A radical option of abolishing any kind of control over
the finding of parties could be successful, but only in
countries with a
traditional approach and the case-law system, such as Britain (where there is
no direct state funding of political activity), and Ireland (Lees-Marshment,
2008). In these countries the legal system has evolved without disturbances and
interruptions, and this has contributed to the occurrence of a high level of
legal and political culture that does not require a clear definition by law,
and is based on precedents, customs or morals, and cultural and ethical norms.
As a result, a high level of legal and political culture appears more effective
in terms of producing an anti-corrupt atmosphere, rather than enforcing strict
regulations and punishment.
The final possible option would be to
establish a mixed system of private and direct or indirect state funding of
political parties, in order to reduce their dependence on private sponsors and
balance the position.
Therefore, it is very important to notice that the
purpose of any regulation is not to control political life, but to support
democracy. Policies on funding the political parties serve for the democratic
development, not by setting the fight against corruption as the main goal, but
as a support and improvement of open political competition among strong and
responsible parties. Providing core funding and participation for private
interests of individuals and groups in the funding of political parties and the
political process as a whole, is a vital aspect of democracy building. All
aspects mentioned above demonstrate the need for an equal balance between
providing sources for political campaigns and control over corruption.
an illustrative example, two main political parties in Mexico (National Action
Party and Institutional Revolutionary Party) were convicted of receiving opaque
funding for political campaigns. Nonetheless, according to the Mexican public
opinion, "the real scandal [was] not the money the parties may have raised
on the side, but the huge amounts they [were] given up front from public
finance in Mexico, 2003)
. Concern was raised over the
fact that 90% of money required for campaigns came from taxpayers, and only one
tenth from private sources. Such regulations are designed to avoid money from
illegal drug businesses entering the political life and decision-making process.
However, the problem with campaign money coming from taxpayers lays in the fact
that such money "keeps alive a number of small parties that have no other
apparent life" (
Campaign finance in Mexico, 2003)
. As a result, Mexican campaign funding rules illustrate
the problems described above, noting that both private and public campaign
funding possess a threat to the transparency of elections and consequently, the
validity of their results and effectiveness in terms of representativeness and
purposeful money expenditure, respectively. Moreover, even if the mixed funding
system were present (as in the Mexican case: 90% for public and 10% for private
funding), the problem may not be solved. Thus, the question regarding the
proportions of private and public funding allowed is raised as is their
appropriateness, according to the specific country’s features that conclusively
determine the success of the funding scheme chosen.
Elections are the main mechanism in a
democracy allowing citizens to participate in politics by choosing their
representatives, through party identification and self-expression in the voting
process. For example, majoritarian and proportional electoral systems contain
different electoral formula (the way in which the votes are translated into
seats), ballot structure (Closed-list or Open-list) and district magnitude (low
and high). Academic literature proposes different arguments in favour of either
proportional or majoritarian (Faller, Glynn and Ichino, 2013) systems in terms
of the higher levels of corruption they possess.
Despite some shortcomings of the
majoritarian system, such a system is regarded as more accountable in
comparison to the proportional system, as voters are directly linked to the
elected officials, thus helping them to impose the responsibility on certain
politicians for corrupt behaviour (Torsten, Tabellini and Trebbi, 2003). As for
proportional representation, scholarly findings vary concerning the different
ballot structures used. For instance, how do we know that candidates in
Closed-list were chosen without the help of corrupt means? One possible
solution would be to provide rewards and positions within a party to the
bureaucrats as an exchange for information on corrupt behaviour of party leaders
(Gingerich, 2009). Such a claim is supported by Vincenzo Verardi (2004, p.8),
who stated that politicians’ position in the Closed-list ballot depends on “the
preferences of the leader of the party”, which gives a basis for interparty
competition and possibility of corruption. Nonetheless, such an approach is
challenged by Chang and Golden (2006) who find that proportional representation
provides a higher risk of corruption in Open-list systems compared to
Closed-list; however, only if District Magnitude is taken into account.
Following on from this, an increase in District Magnitude (more than 15) under
Open-list in the proportional system corruption increases, but decreases under
Closed-list with high District Magnitude. However, if the District Magnitude is
low (below 15), Closed-list ballot structures tend to be more corrupt.
In addition to this, Myerson’s (1993)
game-theoretic analysis, that explores the effectiveness of different electoral
systems for reducing government corruption, confirms the notion that
proportional representation is more effective in fighting corruption.
Simultaneously, plurality voting is “partly effective” due to the more
vulnerable strategy for every individual to cooperate with like-minded voters,
whereas the initiative to fight corruption is low. At the same time, Myerson
concludes that Borda voting
tends to be absolutely
ineffective, as regardless of whether corruption is present in a party,
affirmative voters may divide their support among several affirmative parties.
Moreover, Borda voting guards vote share of corrupt parties, as the voters give
their preference to a number of parties. Proportional representation and
approval voting possess similar effect: they equip the voter with the freedom
to choose noncorrupt parties or join like-minded allies. It creates a zone of
competition for the parties that are similar in their manifestos, but differ in
corrupt behaviour, where voters are predisposed to choose the latter. As a
result, the noncorrupt parties receive the majority of the votes, which leads
to the establishment of noncorrupt government.
despite the shortcomings listed above, democratic institutions and practices
such as lobbying, funding of political parties and electoral systems are a
“necessary evil” within democracy. Regardless, such practices possess high
opportunities for corrupt behaviour due to their institutional features. The
proposed alternatives possess a more serious threat to democracy and its main
principles, as most of the alternatives (as in lobbying cases) disrupt the
citizens’ right for self-expression and political participation, resulting in
the whole system becoming less accountable and efficient. As a result, some
anti-corruption measures can themselves cause political disputes (with
allegations of corruption being used as a tool against political opponents), or
even become a way to limit civil rights and liberties. Nonetheless, certain
tools for controlling lobbying and funding of political parties (mixed system
of financing) can help limit the influence of the private sector on the
political life, and ensure the viability of the politics. As for electoral
systems, proportional representation is the least corrupt form and in a
presence of high District Magnitude, Closed-list ballot structure should be
chosen in order to prevent corrupt behaviour (the same corruption reducing
effect is presented for approval voting), whereas proportional voting with low
District Magnitude should be based upon Open-list ballot structure.
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unproductive profit-seeking (DUP) activities are defined as ways of making
profit (i.e., income) by undertaking activities that are directly (i.e.,
immediately, in their primary impact) unproductive, in the sense that they
produce pecuniary returns but do not produce goods or services that enter a
conventional utility function or inputs into such goods and services. See
Bhagwati, Jagdish N. (1982).
unproductive, profit-seeking (DUP) activities
. The Journal of Political
Economy, pp. 988-1002
Each voter ranks the
candidates. A candidate receives a score of
m − k
for appearing in
place. The candidate with the highest aggregated score wins the election. See
Davies, J. (2011).
Complexity of and
Algorithms for Borda Manipulation.
Association for the Advancement of