EXCERPTED FROM Corruption and Politics in Latin America: National and Regional Dynamics edited by Stephen D. Morris and Charles H. Blake Copyright © 2010 ISBNs: 978-1-58826-718-4 hc 978-1-58826-743-6 pb 1800 30th Street, Ste. 314 Boulder, CO 80301 USA telephone 303.444.6684 fax 303.444.0824 This excerpt was downloaded from the Lynne Rienner Publishers website www.rienner.com 00Morris_FM.qxd:Layout 1 6/24/10 11:01 AM Page v Contents Preface vii 1 Corruption and Politics in Latin America 1 Stephen D. Morris and Charles H. Blake Argentina: The Dawn of a New Era or Business as Usual? 29 Charles H. Blake and Sara Lunsford Kohen Bolivia: Traditional Parties, the State, and the Toll of Corruption 55 Daniel W. Gingerich Brazil: Corruption as Harmless Jeitinho or Threat to Democracy? 89 Matthew M. Taylor Cuba: Corruption at a Crossroads 113 Sergio Díaz-Briquets and Jorge Pérez-López Mexico: Corruption and Change 137 Stephen D. Morris Venezuela: Corruption in a Petrostate 165 Leslie C. Gates v 00Morris_FM.qxd:Layout 1 6/24/10 11:01 AM Page vi vi Contents The Anticorruption Agenda in Latin America: National and International Developments 193 Florencia Guerzovich and Roberto de Michele Are the Politics of Corruption Changing? 219 Charles H. Blake and Stephen D. Morris List of Acronyms 233 References 237 The Contributors 273 Index 277 About the Book 287 1 Corruption and Politics in Latin America Stephen D. Morris and Charles H. Blake In a word association game, mention “Latin American politics” and the response is often “corruption.” It does not take much of a cynic to see the parallels. News from the region frequently spotlights scandals involving sitting or former pres- idents; the unexplained wealth of politicians and high-level bureaucrats; elab- orate, multimillion-dollar schemes of graft and kickback; illegal campaign funds intricately siphoned through labor unions, phantom companies, or the bureau- cracy; under-the-table bribes by multinationals to acquire lucrative government contracts or concessions; electoral fraud and vote buying; huge payments by drug traffickers framed by violent threats (plomo o plata [bullets or money]) to police, military officials, or prosecutors; and illegal arms sales by top military officials—to mention just a few of the real cases spanning the past decade.1 Petty bribes to police and bureaucrats are less newsworthy only because they are considered routine. This book examines the nature of political corruption in contemporary Latin America. We address questions relating to the types of corruption found in the region, the factors shaping corruption—particularly the impact of recent political and economic changes, the consequences of corruption, and the na- ture and effectiveness of recent reforms. Does corruption grease the wheels of Latin American politics, facilitating its operation as some contend, or does it un- dermine democratic rule and worsen the region’s perennial problems of poverty and inequality? Do citizens condemn, condone, or simply acquiesce to the cor- rupt behavior of their politicians and others? To what extent is corruption in- grained in the Latin American culture? Are the new democracies effectively addressing the problem? This introductory chapter sets the stage for an exploration of these and re- lated questions in Argentina, Bolivia, Brazil, Cuba, Mexico, and Venezuela, as well as at the regional level. In this chapter, we discuss the concept of corruption, 1 2 Corruption and Politics in Latin America the different forms corruption can take, and the various analytical approaches used in the study of this rather exotic political phenomenon. We present data gauging the levels of corruption and its impact among Latin American countries, briefly reflect on corruption’s historical and cultural roots, and examine the more recent studies of corruption, which tend to concentrate on political insti- tutions and corruption’s link to democracy, the economy, and public opinion. We also explore the new nomenclature related to corruption and anticorruption ef- forts as well as the policy relevance of recent studies. The chapter concludes by highlighting the challenges that remain and the questions addressed in the sub- sequent chapters. Conceptualizing Political Corruption: Types and Patterns Political corruption is broadly defined as the abuse of public power for personal gain (Nye 1967). Long-time corruption scholar Michael Johnston (2005, 11) defines it more precisely as the “abuse of a trust, generally one involving pub- lic power, for private benefits which often, but by no means always, come in the form of money.” The contingencies in Johnston’s definition point to the broad array of forms and patterns that corruption can take and hint at some of the his- toric difficulties scholars have faced in coming up with a precise, workable def- inition of the term.2 Most people equate corruption with bribery, where an illegal payment is made to a government worker in return for some type of of- ficial, state-sanctioned, authoritative act that has a selective and tangible im- pact and that in the absence of the secret payment would not otherwise have been made. Kickbacks and extortions operate much like bribes. A kickback is simply paid after the service is rendered, usually from a portion of the govern- mental award itself, whereas in extortion the public official threatens to use state power (whether used rightfully or not) to induce the payment of the bribe. Corruption also includes graft and embezzlement, where public officials appro- priate public funds for alternative uses. In such cases, there may be no exchange between citizens and public officials as occurs with a bribe. Fraud is closely re- lated to graft, but refers normally to the various, often complex and imaginative schemes orchestrated by public officials to appropriate public funds, frequently with civilian accomplices. This may include setting up fake companies, listing ghost workers to pad payrolls, overcharging the government on contracts, or fixing the books to hide the disappearance of public funds. Corruption also en- compasses such diverse activities as nepotism, favoritism, and conflict of inter- est where public-sector jobs or benefits go to family, friends, or others of the decisionmakers’ choosing. An important form of corruption entails state capture whereby special interests literally take control of state institutions through a range of mechanisms. In such cases, the state institution pursues the interests of the private group rather than the public’s. This is particularly problematic when organized crime controls the police or public prosecution agencies through Corruption and Politics in Latin America 3 bribes and intimidation. Finally, within the partisan and electoral arenas, corrup- tion encompasses illegal campaign contributions and expenditures, electoral fraud, and vote buying. Beyond taking different forms, corruption can also occur at virtually any level or site within government or society. Distinctions are often drawn between upper- and lower-level corruption, with the former involving presidents, minis- ters, members of Congress, governors, and other high-ranking officials, and lower-level corruption involving civil servants or the police. Upper-level corrup- tion is often referred to as “grand corruption,” in contrast to “petty corruption” that occurs at the lower levels. This distinction among levels generally overlaps with a related difference based more on policy phase than hierarchical location (J. Scott 1972a). Here, the term political corruption tends to refer to corruption occurring at the policymaking stage, which usually entails the violation of sec- ond-order norms (the often unwritten guidelines determining how politicians should make decisions that are just, fair, and impartial), whereas bureaucratic corruption involves the implementation of policy and relates to the violation of first-order norms (the written rules and laws that are the product of politicians’ decisionmaking) (Bardhan 2006; Warren 2004). Even within these two broad spheres, it is still possible and useful to classify corruption by simple reference to its institutional location within the political system (e.g., judicial, executive, legislative, partisan elections, police, etc.). Additional distinctions disentangle state and societal forms of corruption. Societal corruption refers to practices of bribery, extortion, fraud, nepotism, fa- voritism, and so on, which occur within societal organizations and are largely in- dependent of the government. The private sector is certainly not immune from the type of behavior found in the public sector, but such practices are rarely included under the umbrella of political corruption. The state versus society formula can also be used to tease out the direction of corrupt influence captured in the distinc- tion between bribery and extortion. Societal interests often use illegal payments (bribes) to capture or colonize the state—“state capture,” as noted previously— illegitimately influencing state policies and thereby turning that segment of the state into a tool serving particular or specialized interests rather than those of the broader society. The direction of influence involved in state capturing, however, contrasts situations where a powerful state, or sectors of the state, use (and abuse) state power to demand and capture rents from private actors: a form of corruption commonly denoted as extortion. When drug traffickers, for instance, have half the police on their payroll