______________ ___________________

Neoliberal Reform, Governance and

Corruption in the South: Assessing the
International Anti-Corruption Crusade
Ed Brown
Department of Geography, Loughborough University, Loughborough, UK;
e.d.brown@lboro.ac.uk

Jonathan Cloke
Department of Geography, University of Durham, Durham, UK;
j.m.p.cloke@durham.ac.uk

This paper presents a critique of current thinking on the causes and impacts of corruption and the
measures designed to combat it. It begins by exploring the evolution of the current preoccupation
with corruption and traces the growth in international initiatives designed to tackle the issue. It
then moves on to consider the assumptions underlying the dominant schools of thought on
corruption and alternative definitions of the phenomenon. The limitations of the dominant
neoliberal perspective are explored in detail, focusing particularly on its blindness to the
complex interplay between economic liberalisation, political power and institutional reform. An
alternative framework that locates corruption at the systemic level is proposed. The paper
concludes with some thoughts on potential directions for future geographical research on the
topic.

Introduction
Over the past couple of years, we have both become increasingly
interested in the political debates surrounding corruption. To a
certain degree, this interest was sparked by the specific context of
our related research interests in Nicaragua where the sheer scale
of the abuses committed during the government of Arnoldo Aleman
(19962001) have made it practically impossible not to be drawn
into debates about the issue.1 At the same time, however, we had also
been struck by the increasing reference to corruption in the rhetoric
of the major international/regional institutions, and the growing
importance attached to anti-corruption initiatives within the
institutional reform programmes funded by those institutions across
the region. Similarly, we had also observed the growing use of the
language of transparency and accountability by the Central American
governments themselves.
2004 Editorial Board of Antipode.
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Neoliberal Reform, Governance and Corruption in the South 273

This growing interest in corruption has not, however, been limited

to the Central American region. Far from it, in fact. As we shall
explore in detail below, the growth in importance of the issue in
contemporary Central America mirrors a wider global preoccupation
with combating corruption that has seen the founding of new inter-
national organisations devoted to the pursuit of transparency in polit-
ical life, the drafting and implementation of international legislation
designed to deal with the increasing internationalisation of crime
and, of particular interest to us, the formulation of national anti-
corruption initiatives in the majority of Southern countries, frequently
as part of programmes funded through the international financial
institutions (IFIs).
The fact that combating corruption has now become such a promin-
ent issue on the international stage should not really have surprised
us. It forms an integral part of the IFIs relatively recent rediscovery
of the importance of state institutions to the effective functioning of
markets (Fine, Lapavitsas and Pincus 2001). Corruption, so the argu-
ment goes, has the potential to undermine the effective operation of
market institutions and redirect and subvert policy reforms (Szeftel
1998:405406). Such arguments offer the IFIs a convenient explan-
ation as to why the pro-market economic reforms of the past two
decades in the South have not borne the fruit that they were supposed
to. As such, whilst the focus upon corruption reflects the renewed
importance attached to non-economic factors in the IFIs analyses
(which is to be welcomed), it also illustrates the limited nature of that
shift through the continued assumption that the third world state is
the source of corruption and that the appropriate role of institutional
reform is simply to create the conditions for free market reforms to
succeed.
The difficulty for us is that it is tempting, having located the
renewed international concerns about corruption within such a
context, to dismiss all anti-corruption efforts as merely part of the
rhetoric of a new Post-Washington consensus (on which see Brown
2000b; Fine 1999; Fine, Lapavitsas and Pincus 2001; Gore 2000) that
does not go nearly far enough in its disassociation from the market
ideologies of the 1980s. Such a reaction would, however, be a mistake
because it infers that corruption is unimportant. The fact that the
anti-corruption banner has been taken up by those promoting
neoliberal reforms does not negate the need for the issue to be
taken seriously by those opposed to that agenda, any more than say
the World Banks championing of administrative decentralisation
lessens the validity of arguments in favour of political decentralisation.
Corruption is undoubtedly important. It can be damaging in a
myriad of different ways. Economists generally concur on its negative
impacts upon efficiency, the climate for investment and overall levels

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of economic growth. Furthermore, corruption is regressive. It hurts

the interests of the poorest and most marginalised sectors of society
(the poor clearly cannot pay the back-handers frequently needed to
gain access to resources or decision-makers) and its impacts are felt
all the more profoundly in those societies where resources are most
scarce (Perry 1997a:22). Corruption also limits the effectiveness and
legitimacy of public institutions. Transparency International, for
example, estimate that 5% of public budgets go astray, suggesting
further strains on already over-stretched public budgets for social
services, infrastructural development and so on. Corruption also
subverts support for democratic reform and popular participation in
political life, and it breeds cynicism, criminality and distrust (Alatas
1993:199).
Given all of this, the fact that corruption is now being debated
openly at the highest levels is to be welcomed, although it should also
be clear that it is far too important an issue to be left to the
technocrats in the IFIs. As such, it is important that those of us
opposed to the dominant neoliberal model of development and
committed to a more progressive social agenda take the time to
consider the underlying assumptions of the current orthodoxy on
the nature and causes of corruption and the political implications of
the current efforts being made to address the issue worldwide. These
objectives form the major foci of this paper.
One thing that has puzzled us is that, despite the growing
international interest now being paid to corruption, there appears to
have been an almost complete lack of engagement with the issue by
geographers, radical or otherwise (a point also raised by Perry (1997a,
1997b) who has been a lone pioneer in this area). This is worrying
since it is clearly an issue that pervades many of the interests of
radical geographers (and, moreover, one that we all encounter to
differing degrees in our own daily lives). Corruption is a central,
and yet poorly understood, component in how power is manipulated
in order to maintain social position and economic advantage and yet
it has figured little in our conceptualisation of the state, inequality or
social division. Despite these silences, it is also clear that corruption is
an issue where a geographical perspective has much to contribute in
terms of (i) questioning the universalising assumptions of much main-
stream thinking on the issue, (ii) tracing and connecting the various
scales at which corruption operates and how it is being transformed
under the conditions of contemporary globalisation and (iii) exploring
how changing geopolitical circumstances have affected international
perspectives on the issue (to mention just three examples). These are
issues that we return to over the pages that follow.
The paper is organised into three main sections. First, the evolution
of the current international crusade against corruption is outlined and

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Neoliberal Reform, Governance and Corruption in the South 275

some explanations suggested for its growth. Second, the conceptual

basis of the dominant approaches towards the issue is explored.
Finally, a critique of mainstream perspectives is offered, focusing
particularly on their blindness to the complex interplay between
economic liberalisation, political power and institutional reform.

International Corruption Initiatives

As suggested above, the 1990s witnessed a massive expansion of
international interest in corruption; both in terms of exposing the
extent of its existence and in devising ways in which it might be
combated. Today it seems that every nation, every international insti-
tution and, increasingly, many individual organisations have their own
anti-corruption strategy. The most well known initiative came in 1993
when ex-World Bank employees founded Transparency International
(TI) and began the production of their annual corruption perceptions
index (Galtung and Pope 1999). Whilst this generates considerable
international publicity, it has been criticised on a number of levels.
Firstly, it is based upon the observations of a narrow group of respond-
ents (primarily international and regional business elites and some-
times very few of these per country), rather than detailed independent
research (Heywood 1997:425). Admittedly, this is an area where
primary research is fraught with potential problems given the sensitive
and shadowy nature of the activities involved. Secondly, it has tended
to focus upon the public sector and, hence, upon the officials who
accept bribes, rather than on the actions of the corporations who do
most of the bribery (although this emphasis is slowly changing within
TI). Whatever its limitations, the publication of the index has
undoubtedly done much to promote the anti-corruption agenda on
the international stage and governments certainly take some notice of
where they appear within the TI rankings. Some of the criticisms of
the corruption perceptions index, furthermore, have been addressed by
the publication of a new annual TI report, the Global Corruption Report,
which was launched at the 10th annual International Anti-Corruption
Conference in Prague (Transparency International 2001).
If we were to judge TI upon their ability to galvanise international
action on corruption then they have undoubtedly been successful.
Recent years have seen the establishment of a range of high-level
international initiatives. The most well developed of these is the
OECDs International Convention on Combating the Bribery of Foreign
Public Officials in International Business Transactions, which was
established in 1997 (OECD 1997). This convention attempts to
bring all industrial economies in line with the US, where it has long
been an offence for US citizens to bribe officials of a foreign govern-
ment. In a similar vein, building upon the UN Declaration Against

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Corruption and Bribery in International Commercial Transactions that

was passed in 1996, the UNs General Assembly passed a resolution
in December 2000 to initiate the design of a new international legal
instrument that will tackle a far wider set of issues than the OECD
initiative. These legislative initiatives have been accompanied by the
establishment of a series of major international conferences. The two
most important of these are the industry International Anti Corrup-
tion Conferences (IACC) and the governmental-level Global Forums.
The eleventh IACC and the third forum were both held in Seoul in
May 2003.
The most important mechanism whereby the anti-corruption
agenda has been promoted across the South, however, has been
through the institutional reform programmes of the IFIs. The
enhancement of transparency and accountability and the control of
corruption now appear as major agenda items at all Consultative
Group meetings between donors and individual debtor nations and
few of the arrangements established through that process do not now
include a programme of institutional reform designed to tackle those
concerns. These have been led by the World Banks focus upon
Good Governance; although other regional institutions such as
the Interamerican Development Bank (IADB)2 have also played
major roles. Individual donors (particularly USAID) have also
frequently funded particular components of institutional reform. As
a result, there has been considerable consistency in the measures
integrated into anti-corruption strategies across the South, which
can be firmly located within the continuing agenda of deregulation
promoted by the IFIs. Whatever the case for institutional reform,
therefore, the over-riding imperative for the IFIs always appears to
be to reduce the size of government through continued processes of
privatisation and market liberalisation.
Whilst this deregulatory approach provides the wider context within
which anti-corruption initiatives in the South should be situated, it has
normally been backed up by a range of measures designed to tackle the
issue more directly. These have included the following.

i Freedom of information legislation (particularly in relation to

National budgets etc).
ii Judicial reform.
iii Establishment or strengthening of the public institutions
with responsibility for the financial oversight of government
(eg Inspector General, National Ombudsman, Anti-Corruption
agency etc).
iv Civil service reform and professionalisation.
v Reform of the systems of public procurement.
vi Electoral reform.

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Neoliberal Reform, Governance and Corruption in the South 277

vii Finally, there is also an explicit recognition of the importance of

involving civil society in any anti-corruption strategy if it is to be
successful. This has led to public relations campaigns, the
establishment of hotlines and whistle-blower protection
(IADB 2001; USAID 1999; World Bank 1997).

To summarise, therefore, from a starting point where corruption

was far from the top of mainstream political agendas, within a decade
we have reached a situation where it is being debated at the very
highest levels, where new international legislation is being drafted and
where the issue is rapidly being integrated into the conditionality
exerted by the IFIs over most of the countries of the South. There
can be few states that do not now have some sort of anti-corruption
programme in place.

Explaining the Growth of Interest in Corruption

Why, then, has there been such an explosion of interest in corruption
and such an expression of apparent political commitment towards
tackling the problem at global and regional levels? The knee-jerk
response would be that the international community has been forced
into tackling corruption because of an unprecedented increase in the
scale of the problem itself over recent yearsie corruption is becom-
ing ever more widespread.3 The World Bank seems convinced that
this is the case. Raghavan Srinivasan, their chief procurement adviser,
argued in 1996 that corruption has been going up geometrically over
the past ten years (cited in Hawley 2000). Such a view gains some
credence from anecdotal evidence of the inordinate number of high
profile corruption scandals there appear to have been over the recent
past (examples include presidential impeachments in Latin America,
the mass resignation of EU Commissioners and the growing number
of top-level corruption cases being brought against European polit-
icians, Clintons Whitewater scandal and the Enron and WorldCom
debacles).
We cannot assume from this, however, that corrupt behaviour is
necessarily generally on the increase. For one thing, there remain
considerable problems in defining what exactly is meant by the term
corruption itself (a point we return to below). For another, there is no
reason to suppose that an increase in headline-grabbing scandals
involving prominent political figures will necessarily be mirrored in
the levels of more everyday forms of corruption. Different types of
corrupt activities will undoubtedly follow different historical trends
(Johnston 1986). Furthermore, the obvious difficulties involved in
actually measuring the instances of specific acts of corruption means

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that there is little reliable evidence that might be used to determine if

corruption levels are worsening or whether there has simply been
increasing legal and public recognition of what had already been
taking place (Morris 1999) or perhaps even the conscious manipula-
tion of public fears over the issue. As Meny (1996:310) suggests, the
very nature of corruption means that estimates of its extent are as
much a matter of perception and feeling as they are a mathemat-
ical measurement of the phenomenon.
Even if it is not possible to say with any certainty that the world is
getting more corrupt, there are justifiable fears that it is getting
harder for individual national authorities to detect, let alone take
decisive action against, corruption. This is an important point. Econ-
omic globalisation has presented many opportunities for illicit
enrichment. Particular challenges include the difficulties of policing
the practically instantaneous transfer of finances across the globe in
the deregulated international capital markets, the intrinsically global
nature of many illegal activities themselves (such as the drugs trade)
and the increasing scale of international involvement in bidding
for lucrative public sector contracts and privatisation portfolios
(for further discussion of such themes see; Burbach, Nunez and
Kagarlitsky 1997; Castle 1997; UNRISD 1995; Williams, 1994). The
construction of a truly global political response to such challenges still
remains a long way off as the emergence of global legal and political
systems has lagged behind the pace of economic change. Meanwhile,
it is worrying that at precisely the time when these challenges have
intensified, the savage pruning of government in so many countries
has left the nation state ill-equipped to respond within its own borders
(see Bello 2002).
Other commentators have argued that changes within the global
political climate may have generated (or at least facilitated) greater
concern about corruption and a willingness to act. At their most
simplistic (eg Naim 1995), such analyses simply argue that over the
past two decades political and economic liberalisation (and the two
are almost always seen as intimately connected within such analyses)
have gradually made corruption less acceptable. In reality, the role of
organisations such as TI in challenging apathy and complacency and
raising the international profile of the issue is likely to have been
more important. Although, undoubtedly, the growth of interest in the
issue also reflects the ability of the IFIs to continually impose their
anti-state biases upon international political agendas.
One final factor that has played an important role in allowing the
anti-corruption agenda to become entrenched on the international
stage has been the gradual shifting of international geopolitical
priorities over recent years. During the Cold War, the major powers
(particularly the US) consistently prioritised strategic geopolitical

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Neoliberal Reform, Governance and Corruption in the South 279

concerns over the question of the integrity of their allies in the

developing world. In the Nicaraguan case, for example, successive
US administrations were happy to support the dictatorship of
Anastasio Somoza and his two sons (despite their blatant manipulation
of the countrys political system and appropriation of its financial
resources) because the Somozas provided solidly pro-US regional
leadership. Franklin Roosevelt is said to have once summed up the
US relationship with Somoza by avowing that he may be a son of a
bitch, but hes our son of a bitch.
Such geopolitical considerations did not disappear overnight with
the end of the cold war but the tolerance levels for corruption in the
twenty-first century are, at the very least, less straightforward. Blatant
disregard for open corruption and human rights abuses may well now
be more or less a thing of the past, but there are clearly still important
differences in the way in which the US and other world leaders view
corruption within governments considered as friends or enemies. The
Nicaraguan case is illustrative again. In the late 1990s, the US govern-
ment gradually became more and more embarrassed by the abuses
committed by the administration of Arnoldo Aleman. The difficulty
was that Aleman, who they had backed in the 1996 Nicaraguan
elections (despite questions over his amassing of a personal fortune
whilst mayor of Managua), was their preferred political option. He
was seen as a valuable and vocal regional ally and the only right wing
politician capable of dealing with the Sandinistas. He was also more
than happy to go along with the US-promoted agenda of liberalisation
and privatisation, which he then proceeded to manipulate to the
advantage of his family and supporters. When allegations of abuse
began to intensify in the aftermath of Hurricane Mitch in 1998, the
US administration initially dismissed them as politically motivated,
pointing instead to the success of the administrations National
Integrity Plan, which had been developed with US support. It was
only when Enrique Bolanos, then Vice President and architect of the
National Integrity Plan, turned on his former boss that the US saw
which way the political winds were blowing and changed sides.
Currently, they are vocal supporters of Bolanos wide-ranging anti-
corruption initiatives, which have recently seen Aleman incarcerated
(for more detail see Brown 2000a; NITLAPAN-ENVIO TEAM 2002;
Brown and Cloke forthcoming).
Despite the obvious complexities of the relationship between
domestic and external factors in the changing dynamics of a nation
such as Nicaraguas political culture, there are few contemporary
discussions of corruption that say much about the historical role of
the US or European colonisers in institutionalising particular political
cultures and practices. This reflects a wider trend within the

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neoliberal dominated development mainstream that has delegitimised

historical and global analyses of development.
The general trend within the current anti-corruption mainstream
has, instead, been to present the problem of corruption as something
entirely endogenous. The general tone (if not the specifics) is not far
removed from the political modernisation theories of the 1950s and
1960s, with corruption in the South frequently presented as symptom-
atic of a backward level of political development. There is pre-
cious little recognition of the complexity of the formation of regional
and national political cultures, the importance of the interactions
between the global and the local and, in particular, of the continuing
role of strategic interests in determining what and who are labelled as
corrupt. In short, there continues to be a pervasively paternalistic
slant to much of the way in which corruption in the South is
characterised. This reflects the way in which the topic has traditionally
been constructed within studies of development to which we now
briefly turn.

Corruption: A Problem of the South?

Strangely enough, corruption is a theme that only cropped up from
time to time in post-war studies of development. The dominant
approaches in the 1960s were either to depict corruption as a
symptom of development (corruption was said to intensify as society
grappled with changes in its value systems: Perry 1997a:38) or, more
often, as a symptom of political backwardness. For example, Samuel
Huntingdon (1968:59) argued that when the leaders of juntas and
revolutionary movements condemn the corruption in their societies,
they are, in effect, condemning the backwardness of their societies.
Interestingly, the phenomenon was not necessarily always viewed in
an entirely negative light. Leff (1964), for example, argued that in
certain circumstances corruption could be beneficial for economic
development (for a contemporaneous critique see Myrdal 1968:
951955; for other treatments see Bardhan 1997; Khan 1997; Goudie
and Stasavage 1998).
In more general terms, corruption was seen as a peculiarly South-
ern phenomenon. Northern industrial societies had, it was argued,
grown out of such behaviours (see Goodman 1974 for an early
rebuttal of such views). As such, corruption was seen as a symptom
of immature societies who needed tutoring by those institutions and
peoples who had already learned to live by the norms of the modern
developed state (Williams 2000:ix). Much analysis, therefore, looked
to the historical experiences of Northern countries in analogous
periods of their own history.

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Neoliberal Reform, Governance and Corruption in the South 281

The inadequacy of this approach should not need reiterating here.

We have already seen that corruption is certainly not the preserve of
the worlds poorest countries. Furthermore, in these global times it is
impossible to talk of corruption in the South without touching on the
role played by Northern TNCs within case after case of tendering or
taxation irregularities (Hall 1999). The basic problem is that for all of
the realisation of the continued presence of corruption in Europe and
North America, there is still an assumption that Northern political
systems are the pinnacle of political development. Thus, in spite of
the recognition that the Norths political evolution was unique and
unrepeatable, that experience continues to constitute the model of
modern statehood to which all Southern nations are supposed to
aspire (Theobald 1999:492).

Assessing the International Anti-corruption Crusade

In addition to the misplaced emphasis upon corruption as a peculiarly
Southern phenomenon, there are also some important questions to
ask about the actual impacts of the flurry of recent legislative activity.
For one thing, much of this legislation owes a lot to the national
anti-corruption systems developed in the United States. Yet internal
critiques of those systems conclude that despite all of the energy spent
in establishing the anti-bribery legislation, on average only one case
has been brought a year. It seems that what changed following the
introduction of US legislation was how companies bribe, not whether
or not they did (Hawley 2000). Such conclusions should be enough to
sound some warning bells.
It is also worrying that far too frequently Northern governments
have passively supported (ie not acted against) their own firms when
they have been implicated in corrupt activities abroad, even when the
evidence against them has been overwhelming (Hall 1999).4 In add-
ition, rhetorical commitments to combating corruption have often
been extremely thinly based. British Chancellor of the Exchequer,
Gordon Browns, vocal support for the regulation of offshore bank-
ing, for example, does not sit well with the decision to sell off the
Inland Revenues buildings to a company registered in Bermuda,
Mapeley Ltd (Inman 2002). Finally, many of the organisations
promoting anti-corruption campaigns in the South leave much to be
desired in terms of their own monitoring, evaluation and auditing
procedures. Hawley (2000), for example, discusses both the
limitations of the World Banks monitoring of its own activities and
the massive impacts of lobbying on the distribution of the 45% of the
Banks activities that are subject to international competitive bidding.
Recent revelations about bribery in the contracting decisions of the
IADB are even more worrying (see Andersen 2002).

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Building upon these concerns, Szeftel (1998:415) comes to the

depressing conclusion that
despite all the conferences, commissions and conditionalities,
corruption has continued to flourish and even to grow. In the
nature of the subject, evidence is necessarily anecdotal and
impressionistic but no one claims that corruption is less of a
problem in 1998 than it was in 1990, and most would consider
that it has increased in frequency and scale.
The basic problem is that the growth of interest in controlling corrup-
tion has emerged from within a development mainstream which
unthinkingly accepts the neoliberal mantra of pursuing liberalisation,
deregulation and privatisation as goals in their own right, despite
mounting evidence of their role in accentuating the opportunities
for corruption. A more detailed exploration of the relationship
between corruption and neoliberalism forms the major focus of the
final part of this paper. To put that discussion within an appropriate
context, however, the next section first explores the wider debates
within the academic literature over the meaning of the term
corruption itself and the various schools of thought on its causation.

Conceptual Issues: Defining Corruption

There remains considerable confusion over what exactly corruption
means (Johnston 1998:89). Much of this confusion arises from the
fact that the term is used as a basic descriptor for a myriad of
behaviours loosely linked by some sense of the breaking of laws, illicit
personal enrichment or the abuse of power/privilege. Several ways of
distinguishing between different types of corruption have been
attempted.
The most widespread approach is to classify corrupt activities by
type or, rather, degree. Doig and Theobald (2000:13), for example,
distinguish between Grand and Petty corruption. This distinction is
also frequently associated with the question of how national and local
scales of corruption differ, although Wade (1985) reminds us of the
inherent connections between abuses committed at different geog-
raphical scales. Robinson (1998:3) distinguishes between Incidental
corruption, relating to the individual acts of politicians, public officials
or, we would add, business elites; Institutional corruption, denoting
whole institutions where corruption appears to be the norm; and
Systemic corruption, where corruption seems entrenched within a
whole society.
Another simple and yet profoundly important distinction can be
drawn between economic and political motivations for corrupt
behaviour. The former, which currently dominates most mainstream

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writings on the subject, depicts corruption as abuses committed in pur-

suit of private (or, indeed, corporate) financial advantage, whilst the
latter involves the manipulation of the political system towards a parti-
cular set of political/ideological goals. However, the nature of such
politically motivated corruption will vary according to the type of polity
in question, and its purposes (Heywood 1997:442). Accordingly, the
political motivations for corruption are much more difficult to pin down
(and, as a result, they are frequently left out of the equation).
Whilst most authors at least recognise the complexity of defining
corruption, by and large, they still end up utilising one of the over-
simplified definitions that dominate the literature. The most well
known of these (used by both the World Bank and TI) depicts
corruption as the abuse of public office for private gain (World
Bank 1997:8). There is something to be said for the simplicity of this
definition, but it also embodies some serious deficiencies. First, it
suggests that corruption involves the pursuit of private individual
gain with the inference that the advantage gained is both personal
and monetary in nature (which is patently not the case in all
circumstances). Second, it fails to deal adequately with political cor-
ruption in those circumstances where individuals use their position
to pursue particular ideological objectives. Third, and perhaps most
importantly, the definition assumes that corruption is a phenomenon
of the public sector. This interpretation obscures the rising possibili-
ties for private sector corruption caused by market-led economic
reforms and has little to say about the complex linkages between
abuses in the private and public sectors.
Even if we overlook these deficiencies and accept the limited main-
stream definition of corruption as the abuse of public office, powers
or resources for private benefit, we are still left with some fund-
amental questions. Who, for example, defines what is meant by abuse
and how do we differentiate between public and private interests?
Attempts to answer these questions can be divided between those
which have tried to identify some universal objective standards of
behaviour for those in public office and those which have argued for a
more relativistic approach (reflecting more subjective criteria such
as cultural norms and public opinion). The former has tended to
dominate but, even here, there has been little agreement on what
criteria should be used to define the accepted standards of behaviour
which corruption deviates from. The criteria suggested have included

i a basic legal definition (ie corruption is defined through the

breaking of the law);
ii the articulation of a set of norms for the formal duties of a public
role (ie corruption occurs when those norms are broken);

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iii the identification of when the actions of individuals subvert the

public interest for private gain.

The legal definition does little more than sidestep the definitional
problem since any law pertaining to corruption must already have its
own a priori definition of the phenomenon. Furthermore, legal sys-
tems differ from country to country and national legislation is cer-
tainly not neutral, objective and non-political (Williams 1999:512).
The norms of public office definition, moreover, tends to assume
that the same set of rules operate in different political systems and
cultural settings and by default it is always Western expectations and
standards that are presumed universal. Finally, the public interest
definition to a degree confuses corruption with its consequences
(Philp 1997:440) and suffers from the problems already noted
in defining what the public interest might be (Johnston
1996:281283).
In response to these limitations, a number of efforts have been
made to articulate a more subjective or relativistic approach that
explicitly recognises the diversity of cultural and political understand-
ings of corruption and how such understandings change over time.
Nevertheless, such views, more often than not, constitute little more
then a critique of the objective standards definitions, rather than a
real attempt to articulate an alternative, culturally sensitive, definition
of corruption (Johnston 1996:282). This is not really that surprising
since to suggest that the very definition of corruption is malleable and
may change over space and time is not exactly conducive to the
elaboration of criteria for assessing its occurrence and impacts in
divergent settings.
So where does that leave us? As Marquette (1999:1215) laments,
no matter how many times it is prodded, poked at or pulled apart,
more questions than answers seem to arise from the literature. In
essence, too much is expected of corruption as a single term, it cannot
encompass so many different types of behaviour and motivations
(Williams 1999:511). There is, therefore, no adequate one-line defin-
ition of corruption and its multi-faceted nature means that there
probably never will be. It is tempting to suggest that the term should
be abandoned all together. Ultimately, however, much like the con-
cept of development, corruption, whilst undoubtedly flawed, is here to
stay.
The most important point, therefore, is to recognise its fluidity of
meaning. To this end, analysis might more usefully centre around the
more specific phenomena that comprise corruption or, at the very
least, there should be greater cross-fertilisation between the compet-
ing ideas of corruption, clientalism and rents to produce alternative
hybrid terms (Hutchcroft 1997). Ultimately, however, the definition

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Neoliberal Reform, Governance and Corruption in the South 285

of corruption depends upon the context of the phenomena being

studied and the disciplinary and philosophical/ideological orientation
of those studying it. Perhaps, therefore, some of the most interesting
directions for thinking about corruption relate to (i) the development
of alternative conceptualisations of corruption reflecting different
types of political system and different conceptualisations of the
state5 and (ii) charting how discourses of corruption change over
time and space.
The problem is that, whilst these debates might take us nearer to
a more malleable and responsive understanding of corruption, they
do not provide easy answers. As such, they have tended to be side-
lined within the current anti-corruption efforts, which have been
dominated by a new set of ideas on corruption with their roots in
economic, rather than political, analysis. These neoliberal approaches
have almost exclusively focused upon the public sector as the major
source of corruption, which is explained through the rent-seeking
behaviour of individual public servants. Some of the more elaborate
theoretical work has been in the form of principalagent theory,
which focuses on the inter-relations between the top levels of govern-
ment and the public officials charged with the implementation of
policy.
As Williams (1999:507) argues, however, such approaches do not
attempt to define corruption but rather focus upon explaining the
economic imperatives and political circumstances which encourage
breaches of the rules and norms of public office. As such, whilst they
may provide useful insights into understanding why corruption
occurs, they contribute little to the clarification of the concept itself.
If anything, they merely confuse the issue by not interrogating the
phenomenon directly. Instead, they employ one or other variant of
the public office definitions in a one size fits all fashion. Such
analyses are, like many recent forays by economists into the realms
of the other social sciences, based upon highly questionable concep-
tualisations of human motivation and a very poor understanding of
the state. Their major objective is limited to explaining how the
activities of public servants distort the efficient functioning of mar-
kets. Any real attempt to understand corruption must, however, also
ask other questions, not the least of which is how the freeing of
markets may distort the efficient functioning of political systems and
government institutions (Hutchcroft 1997:643). We now move on to
consider the origins of the neoliberal perspective on corruption in a
little more detail.

Neoliberalism and Corruption

Even the earliest, most econocentric, contributions to the neoliberal
counter-revolution in development thinking of the early 1980s

2004 Editorial Board of Antipode.

286 Antipode

advanced some claims for the anti-corruption benefits of economic

liberalisation (see, for example, Bauer 1984:35); although it was not a
particularly highlighted component of their analysis. In essence, their
argument was very simple. Most of the time opportunities to engage
in corrupt activities arose from market distortions introduced by state
intervention. Explanations of why this occurred centred around the
rent seeking analysis popularised by Kruegar (1974). This suggested
that state intervention (through exchange rate control, subsidies,
quotas and so on) distorted markets and created opportunities for
state bureaucrats to extract economic rents from their monopoly
position (see Colclough 1991; Moore, 1991; Riley 1998; World Bank
1997). Accordingly, from this perspective, it was argued that the
greater the reduction in state intervention, the fewer opportunities
for corruption there would be (Williams 2000:xii). As a result, since it
was assumed that economic liberalisation would deal with the prob-
lem, direct anti-corruption measures were not considered of parti-
cular importance. There is clearly a logical flaw here. Even if we were
to accept that markets are automatically distorted through the crea-
tion of rents via state intervention, it does not follow that rents would
be allocated as if markets were perfectly competitive if state interven-
tion is removed (Hutchcroft 1997).
It was not until the mid-1990s that the World Bank, for example,
began to focus more specifically upon combating corruption directly.
This arose out of the Banks rethink on its antagonism towards the
state at the beginning of the 1990s, as the absolutely crucial role of
state institutions in the successful outcome of its market-led reform
agenda became clear even to the Bank (even if only in terms of
explaining its many obvious failures). This recognition led to the
new emphases upon governance, democratisation and institution
building within the Bank; in the process directly linking the argu-
ments for economic liberalisation with those for the transformation of
political systems and state sector reform (Szeftel 1998).
As this new policy direction was consolidated, the Bank began to
look beyond the efficiency of state institutions to also consider their
transparency and openness to public scrutiny as they increasingly
identified corrupt individuals or departments as serious impediments
to the reform agenda. Accordingly, a 20-member working group on
corruption was set up under Mike Stevens (Riley 1998). This group
published their findings in World Bank (1997) and had a big influence
upon the 1997 World Development Report. Nevertheless, despite the
fact that the Banks interest in corruption arose as part of a renewed
interest in the role of the state, most World Bank pronouncements on
corruption still suffer from a very obvious anti-state slant. Thus, whilst
the Bank now has a much more mature recognition of the complex-
ities of the relationship between the state and the private sector and

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Neoliberal Reform, Governance and Corruption in the South 287

the continued importance of certain forms of state intervention, it is

still able to make the incredibly bald claim that
any reform that increases the competitiveness of an economy will
reduce incentives for corrupt behaviour. Thus policies that lower
controls on foreign trade, remove entry barriers to private indus-
try and privatise state firms in a way that ensures competition will
all support the fight. (World Bank 1997 cited in Hawley 2000)
Ultimately, whilst the Bank has recognised the importance of strength-
ening public institutions, the electoral and judicial systems and nur-
turing a civic culture to the struggle against corruption, the neoliberal
assumption that most corruption can be explained by the rent-seeking
behaviour of individual public servants and that this can be overcome
through the dual processes of economic liberalisation and deregulation
remains the dominant perspective (World Bank 1997).
Thus, the anti-corruption efforts of the late 1990s and beyond can
be seen as part of a particular model of state reform that, despite all
of the recent talk of a Post-Washington consensus, remains fund-
amentally antagonistic towards the state. The state is only supported
to the degree that it can more effectively administer its own demise
(Brown 2000b; Hawley 2000). Riley (1998:138) summarises such con-
cerns effectively,
Cynics would argue that the corruption issue is just another
means for the Bank to secure its real goal: greater structural
adjustment in those states whose adjustment programmes have
been stymied by political pressures. The Banks new policy plays
down other means of reducing corruption.
Even if we were to take a little less cynical a view, it is clear that the
general thrust of the anti-corruption programmes within the Good
Governance agenda are sharply contradicted by the wider economic
restructuring policies prescribed by the same institutions. Those insti-
tutions now deemed vital to transparency and governability were
frequently amongst the first state institutions to suffer under the
cutbacks in state expenditure central to the economic reform pro-
grammes. As such, they have found themselves required to meet
renewed demands for improved standards of public scrutiny whilst
counting upon extremely limited resources;6 these institutions are
frequently also under consistent attack from those anti-democratic
elements within local elites upon whom structural adjustment
depends for its implementation (Szeftel 1998:415).
One of the central problems is that, whilst the IFIs have rediscov-
ered the importance of the state, they have a very limited conceptual
understanding of what the state is, how its institutions function and

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288 Antipode

how they relate to civil society. The continuing assumption that public
officials are primarily motivated by self-interest, for example, does not
sit well with the case for the creation of new public bodies within
institutional reform programmes. In other words, why are the workers
within anti-corruption offices likely to be any less corrupt than other
public sector workers who are allegedly so prone to rent-seeking
behaviour?
Even the Bank has now been forced to admit that economic liberal-
isation has provided new opportunities for corruption. The widespread
cuts in state spending over successive years have increasingly under-
mined the ability of the state to regulate itself and weakened its political
credibility. The social costs of economic reforms have heightened the
distance between the increasingly technified business of government
and the task of meeting the basic necessities of the poor. In a similar
vein, it is clear that a state bureaucracy which has been severely
retrenched, is poorly paid and treated as an enemy by the modernising
forces of neoliberalism is unlikely to be a major tool in the fight against
corruption. Well-motivated, secure state employees are much less likely
to engage in petty corruption.7 In addition, the liberalisation of financial
markets has meant that individuals no longer have to provide any
economic justification for money transfers, which has made the fruits
of corrupt activities much harder to track down.
All too often, the role of international actors in shaping the nature of
corrupt practices has also been overlooked.8 In the Banks own language,
the expansion and liberalisation of foreign trade and investment can act
as important sources of rent-seeking behaviour. Perhaps the most
obvious example of the opportunities which economic reform has
given for illicit enrichment, however, comes from the hundreds of
privatisations of state businesses and services that have occurred across
the South. These privatisations have frequently been extremely poorly
handled and there have been many instances when public services have
been sold off before a workable framework for regulation of the sale has
been drawn up, resulting in blatantly corrupt bidding processes, asset
stripping, sales at well below market value and so on (Bayliss 2000). As
Williams (2000:xii) suggests in many cases, privatisation amounted to
little more than the licensed theft of state property. In addition, once
public services have been privatised the new systems of contracting out
and securing concessions has offered many opportunities for bribery
and illicit earnings (see Hall 1999).
The most ironic thing is that the nature of neoliberal adjustment
has made the IFIs belief that the state is the source of most
corruption a self-fulfilling prophecy. In many of the most heavily
indebted poor countries, the richest and most accessible source of
income for elite groups is now through IFI loans provided to the state,
which becomes the preserve of elite families and their clients. As

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Neoliberal Reform, Governance and Corruption in the South 289

privatisation programmes and market liberalisation are forced

through, the local elites own the companies that profit most from
these activities, especially privatisations, where external companies
may be uninterested in debt-ridden and inefficient state monopolies
which subsequently fall into national hands at knock-down prices. The
loans provided for such privatisations remain the responsibility of
the state (for which read the poor whose taxes go to service external
debt payment in regressive tax regimes where VAT is a major source
of state income).

Conclusions: Assessing the International Anti-corruption

Crusade
In the introduction to this paper we suggested that the current cru-
sade against corruption should be welcomed for highlighting a phe-
nomenon that has important impacts upon issues of equity, poverty
and empowerment. Nevertheless, despite the significant financial
resources being ploughed into anti-corruption initiatives across the
South, clear indications of their success remain few and far between
(Szeftel 1998). Merely the fact that the issue is being openly debated
on the international stage has, however, had some positive impacts.
Politicians, for example, do not like seeing their government appear
at the top of the TI indexes. Furthermore, local journalists, civil
society organisations and the judiciary have suddenly found them-
selves with a range of international allies in their struggle to expose
deep-seated corruption in their countries. Our point, therefore, has
not been to downplay the importance of corruption or to deny that
anti-corruption efforts have yielded some fruit in certain areas, but
rather to explore some of their limitations. In this final concluding
section we summarise our main argument and offer some future
directions for potentially productive engagement by geographers
with the issues raised.
In this paper we have argued that the international crusade against
corruption has been hampered by its tendency to treat the issue as
one requiring essentially technical solutions in the form of particular
types of economic policies and/or institutional forms. There is fre-
quently insufficient recognition of the complexities of even defining
corruption in different political and cultural settings (and an increas-
ing tendency towards the universalising of Western norms and values)
and, even more worrying, very little critical political analysis of the
origins, dynamics and impacts of corruption in divergent settings.
These are tasks where geographers are extremely well placed to
make important contributions in terms of accentuating the import-
ance of how different types of corruption operate at different
geographical scales and how they are influenced by the dynamics of

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290 Antipode

particular national/local political cultures (not to forget the influence

of globalising tendencies upon both the opportunities for corruption
and the political dynamics of individual societies). In addition, a more
empirical exploration of the success or failure of different policy
instruments and anti-corruption strategies across the South, that also
remains sensitive to political and cultural difference, is an urgent task.
One of the key lessons to be learnt from the experiences of anti-
corruption initiatives so far is that there can be no generalised
programmes of economic, legal and institutional reforms that will
provide solutions to what are much more complex questions about
political systems and cultures. Corruption is not simply about rent-
seeking and economic advantage, it is a far more complicated issue
that the dominant institutional and procedural approaches appear
unable to deal with. The issue needs, for example, to be placed within
a wider politico-historical context which looks at the utility of cor-
ruption as a means of maintaining power structures and systems of
political control in particular national contexts with consequent
effects on the potential impacts of any programmes of institutional
reform (see Khan 2001). For such issues to be addressed successfully,
however, will also require a much more detailed examination of the
relationship between different state forms and corruption and a
critical engagement with alternative theories of the state (Das 2000).
Similarly, any analysis of corruption in the South must also address
the questions of external intervention and the geopolitics of North
South relations, issues that have been conspicuous by their absence
from current analyses. One phenomenon, for example, which is
markedly under-represented in the literature on corruption is the
continued politicisation of bilateral, unilateral and multilateral aid.
USAIDs lead role in the fight against corruption in the Americas is
somewhat problematic, for example, given the blatant political focus
of their bilateral and regional programmes and their role in furthering
the interests of US corporations (see Brown 2000a). This continua-
tion by new means, of the old Cold War practices of using aid as an
extension of foreign policy, remains completely at odds with the
demonising of public sector corruption in the South.
Another important point is the question of popular participation
within anti-corruption initiatives. This is one of the areas where the
importance of extra-economic/institutional issues has been recognised
by anti-corruption programme planners. Nevertheless, whilst there is
frequent reference to the importance of popular participation within
such schemes, there has been too little consideration of the complex
political questions involved in encouraging such participation in
conditions of high inequality, political polarisation and a lack of transpar-
ency in government (Alams (1997:425) discussion of countervailing
actions may prove instructive in exploring how anti-corruption initiatives

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Neoliberal Reform, Governance and Corruption in the South 291

can incorporate and empower local communities). Furthermore, in

many cases, the impacts of other elements of the neoliberal agenda
(declining social spending, the differential impacts of liberalisation
and deregulation etc) have actually worked against popular participa-
tion through fostering a lack of trust in new institutions and apathy and
indifference towards the increasingly technified political process
(similar sets of concerns have dominated critical responses to the
question of civil society participation in the design of poverty reduction
strategy papers within the HIPC process: see Marshall and Woodroffe
2001; World Bank 2002).
In essence, the anti-corruption crusade needs to be shorn of its
anti-state bias. Its concentration upon the public sector as the major
source of corruption (an attitude which has found its way into the very
definition of corruption) is a fundamental weakness. This is not, of
course, to say that the state cannot be a major source of opportunities
for corruption. Few would argue that corruption was not a pervasive
problem in the heavily regulated economies of the old soviet world for
example. Much, therefore, remains to be done in terms of exploring
the relationship between different elements/types of corruption and
specific state forms. What we have tried to counter here, however, is
the view that the state is inherently more prone to corruption than the
private sector. The lack of recognition, for example, of the opportun-
ities for corruption that privatisation and liberalisation have embo-
died over the past two decades has been quite remarkable. It is little
wonder that the implementation of packages of institutional reforms
within such poorly understood contexts has produced so few demon-
strable successes. The IFIs, for all of their talk of partnership and
local ownership, promote or indeed attempt to implement a natural
path to developmentbe it in the form of market liberalisation,
sustainable resource use, appropriate institutional forms or appropri-
ate relations between state and civil society. The struggle against
corruption is far too important for it to be relegated to a constituent
part of this agenda of social engineering.

Endnotes
1
We explore the Nicaraguan case in detail in a second paper presently under
preparation.
2
The IADBs perspective on corruption is spelt out in IADB (2001); although see also
Andersen (2002).
3
The recent claims about the increasing incidence of corruption worldwide run
against the accepted wisdom of much of the established literature, which argues that
over the decades corruption has tended to decrease in response to increasing eco-
nomic growth and improving living standards (see, for example, Bardhan 1997:1329).
4
See Hawley (2000) on British companies in Pakistan, and Palast (2000) on the
Balfour Beatty case in Lesotho.

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292 Antipode

5
Johnston (1996:321323) suggests one potentially fruitful avenue of research in the
identification of a set of alternative definitions of corruption reflecting contrasting
settlements of contested political issues (such as the boundaries between individual
and collective rights, private and public roles, and market, state and patrimonial forms
of resource allocation).
6
Obviously the anti-corruption initiatives provide finance for the relevant authorities,
but these are finite resources with limited time spans. In the long term, these institu-
tions will have to be funded by internal resources. Furthermore, the external resources
provided are rarely grants. As such, they add to the receiving countrys overall level of
indebtedness.
7
The issue of motivation is further compounded when state employees see the high
salaries paid to external experts brought in under the auspices of the technical
assistance loans of the institutions.
8
One exception to this is recent work on governance by the World Bank that has
explored how large firms seek to buy private benefits from the state (see Hellman,
Jones and Kaufmann 2000).

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