Foreword

This last essay of the 2003 Christian Social Thought Series is dedicated to the subject of corruption. Similarly to our previous issue titled Inhabiting the Land—on the subject of immigration—the focus of concern remains fixed on the developing world. One of the principal causes for emigration from a home country is corruption. Whenever citizens are subject to political oppression, when they suffer of political or religious persecution, when they can no longer trust that their safety or property will be protected, when all economic activity is fettered and the rule of law is absent—each and all of these are symptomatic of systemic corruption. No good stewardship of one's assets and vocation can occur in a society in which systemic corruption reigns. Let us consider three alternatives.

The first is to try to change things in the direction of the common good, morality, and the rule of law. This alternative is always preferable if one can make such contributions and commit to these for the long run. Not everyone, unfortunately, can survive the wait in the same status quo of chaos in the interim. The second alternative is to participate in a revolutionary war, but the futility of this avenue has already been demonstrated in developing countries by guerrillas, applied theologies of liberation, and civil wars. More chaos seems to always follow such revolutionary attempts. The third alternative is to emigrate, and many believe that this is the most efficient way to distance one's good efforts from futility in the home country. Herein lies the relation between corruption and immigration.

The efforts of two scholars have come together for this essay. Osvaldo H. Schenone is a prominent economist in Argentina who has developed a body of work in institutional corruption. Samuel Gregg is a scholar of Catholic social thought and ethics in public policy, who departed from his native Australia to join the Acton Institute. Their joint efforts in this essay bring together, on the one hand, Christian theology as a foundation for the understanding of corruption and, on the other hand, economic theory as the instrument for analysis of the incentives, costs, and effects of corruption.

The problem of corruption is particularly difficult to eradicate because the costs that would be involved to achieve this are very high. The authors suggest that perhaps we should aim at minimizing corruption by means of personal involvement, and institutionally by means of limiting the discretionary powers of state authorities. The former places the responsibility of the fight against corruption upon each individual in a society, especially those in which corruption is rampant. The latter points to the rule of law and the necessity of checks and balances for agencies of the state.

The founders of the United States Constitution were very aware that temptation afflicts every man and that state officials are no different from any other person insofar as all men share the frailties of man's fallen nature. In fact, they assumed that it is imperative to watch the watchman himself, perhaps even more than ordinary citizens. As Lord Acton so poignantly reminded us, "Power tends to corrupt and absolute power corrupts absolutely." Those in power are, then, at the greatest risk of surrendering to temptation. This applies not only to state authorities with power, but also to the powerful in corporations, the authorities in religious organizations, the officers and directors of any private business venture and all those who have power without being

accountable to those they lead. Clearly, the unveiled corruption in corporations such as Enron demonstrates this. But this case also demonstrates that private institutional corruption cannot be sustainable in the long run. Profits will drop, employee salaries will not reflect the financial gains of the firm, shareholders will not receive just dividends, and so on. All of these symptoms will be noticeable in the long run and the solution in the market is always simple: Either perish or give in to the movers of a takeover.

Some interpret this mechanism as cold-blooded, or Darwinian. What must be recognized, instead, is that this market mechanism of ultimate accountability works as a morality check as well. This is not the case with public institutional corruption in nations in which there is either inadequate or non-existent accountability of the decisions and actions on the part of public officials to the citizens. This essay offers at least some clarifications and avenues for minimizing this sort of corruption.

Nonetheless, we must not forget that not-for-profit institutions, such as the Catholic Church, think tanks like the Acton Institute and others, too, may be prone to non-accountability deficiencies. It is easy to cast stones at others; the difficult task to take instead is to begin with oneself. Hence, each one of us must take a part in the solution by means of fraternal correction, of pointing out improper behavior that perhaps has not been fully reflected upon by the agent himself and, more generally, by getting involved in shaping the moral climate of every one of the spheres in which we belong. At the same time, each one of us must keep in mind that God sees all that mere persons cannot see. When someone raises a criticism, something that no person is eagerly disposed to embrace, let us not reject this but, instead, let us consider the possibility that our critic might just be the instrument that our wise Father has chosen to reach to us and to give us another chance at making the moral choice. Let us all be our brother's keepers and let us each remember that an open heart cannot be exercised without an open mind.

Gloria L. Zúñiga, Ph.D. Executive Editor Christian Social Thought Series

Introduction

Must I put up with fraudulent measure, or that abomination—the short-weight bushel? Must I hold the man honest who measures with false scales and a bag of faked weights? Micah 6:10–11

There is perhaps no greater problem that handicaps the flourishing of developing nations than that of corruption. Though corruption is associated with the original sin that marks the heart of every person, corruption is also a social scourge that debilitates the daily economic and legal transactions upon which all of us ultimately depend for our material survival. For many people, corruption is invisible, as it is often limited to specific sectors of the economy. For others, it is an omnipresent feature of their existence. In all cases, however, corruption is ultimately derived from the personal choices of individuals to violate the law that, as Saint Paul reminds us, is written on our hearts.

We must recognize that all societies, no matter how sound their moral and institutional cultures, are in some way marked by corrupt activities. The question is, what does the term corruption mean? By corruption, we do not necessarily mean crime per se. Tax evasion, for example, is a crime, but it is not corruption. However, bribing a tax-auditor is corruption because there is a voluntary transaction between the evader and the auditor with the intention of defrauding a third party (the government).2 Failure to stop at a red traffic light or to comply with the speed limit is a crime, but it is not corruption. Bribing a policeman to avoid the ticket is corruption.

Within much contemporary economics, corruption is often referred to in terms of increased transaction costs and disincentives. These are problems that we must comprehend if we are to understand the nature of corruption, but to think of corruption purely in this manner ignores the indispensable element of free choice that allows such activity to occur. Free choice allows us to regard corruption as a moral evil, not simply as an inefficiency. A sound theology of sin can speak directly to this dimension of corruption. These theological insights, however, should be accompanied by an analysis that explains how corruption slowly permeates the entire functioning of a society’s moral ecology, its economic processes, and its political and legal institutions. In adopting this interdisciplinary approach, we seek to:

1. define the nature of corruption, 2. explain its effects, and 3. outline ways in which the impact of corruption might be reduced and its precipitating factors might be held in check.

Our attempt is not to advance an all-embracing explanation and solution to the complex problem of corruption, not least because corruption will manifest itself in different ways in dissimilar cultures. Moreover, the research material available on corruption is, by definition, limited: Those involved in the practice do not usually lend themselves to study. For these reasons, this essay confines itself to a general theological and economic analysis of corruption, and an articulation of some principles that may facilitate its minimization. Nonetheless, we hope that these reflections will assist the reader to comprehend more fully the causes, nature, and effects of corruption. This is especially important for Christian leaders whose role is to guide the People of God in developing their own prudential responses to this problem. At the same time, we hope that this paper will remind the reader that corruption has real and immediate implications for man’s existence as a person living in society. Many of us live in societies in which some (including many Christians) are reluctant to use words such as evil or immorality. Many prefer to speak in ambiguous terms or to ascribe the causes of corruption to theories of popular psychology.

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