More on Constitutional Institutional Design and Corruption

Lynne Kiesling

Yesterday when I was channeling my inner Jenny Holzer on the relationship between political power and corruption, I quoted James Madison in the comments:

In framing a government which is to be administered by men over men you must first enable the government to control the governed; and in the next place oblige it to control itself.

Not surprisingly, since we share many perspectives, Ed Lopez used the same quote to illustrate his comment about corruption and public choice in his post on the Blagoevich matter on Tuesday. Ed’s post is very thoughtful and insightful, and I encourage you to read it.

Will Wilkinson read Ed’s post too, and Mike Munger’s, and Steve Horwitz’s that I linked to in my original post. Will is splitting a very fine hair among positions that are in substantial agreement:

Look at Blago! He’s a politician! They’re all alike. Neener! Except, they aren’t. And some places are better governed than others, with less incompetence, waste, and corruption. …

Generally, we’re more likely to get relatively good government in a cultural climate that encourages good government. Ridiculing as naive norms of anti-corruption and civic responsibility doesn’t undermine belief in the efficacy of government so much as expose the one who ridicules as a defector in a crucial cooperative game, undermining his reputation as a sincere advocate of the public interest. It is valuable and necessary to point out that certain institutional arrangements are unstable and invite corruption, and should therefore be reformed. But people are more likely to listen to you if they believe you believe reform is possible.

I largely agree with Ed, Will, Mike, and Steve, but I do think Will is creating a false dichotomy in his fine-hair-splitting. “Norms of anti-corruption and civic responsibility” are not substitutes for institutions, like a constitution, that recognize the inducement to corruption that is inescapable when some subset of a population has legal power to determine outcomes. The point that I think Will is missing is that the incentive is inescapable, even if the actual corruption does not occur.

Put another way: institutions matter. Formal and informal institutions matter. Constitutions that define and limit the role of government and norms of civic virtue are institutional complements in creating relatively better government than we would have in the absence of these institutions. But the reason that we need the formal institutions, and particularly formal institutions that define the scope and limit of government power and action, is that civic virtue is often insufficient to deter elected representatives from following the lure of the ever-present corruption incentive.

And I still think that the difference between graft and special interest lobbying is one of degree and not of kind.