Corruption in Argentina

Towards an Institutional Approach

Natalia A. Volosin

• Publisher: Routledge
• Year: 2019
• eBook ISBN: 9781000649901
• Edition: 1
• Topic: Politics & International Relations
• Subtopic: Global Politics
• Index: Politics & International Relations

The book provides an institutional, historical, and sectorial analysis of Argentina's structural corruption. Looking back over the last 200 years, the book demonstrates that Argentina has historically addressed corruption through ineffective debates between public-private biases or a cultural-criminal approach reinforced by modernization theory, neither of which have helped tackle the problem. Instead, Volosin proposes meaningful institutional reforms to reduce opportunities for corruption and to increase monitoring incentives and capabilities.

The book argues that political economy hindrances for reform are as significant as reform itself and shows that in times of crisis or scandal, the need to move quickly to satisfy citizen demands forces politicians to promote unplanned changes that lack real teeth. Moreover, the machine's reach over most public and private actors precludes regime-undermining reform, which is precisely what is needed to meaningfully attack entrenched structural corruption. In order to combat serious deficits in the public procurement regime, Volosin recommends a micro-sectorial analysis of government procurement, supported by an innovative human rights strategy to help measure and disclose corruption's hidden social cost, raise awareness, integrate vulnerability criteria into the fight against corruption, and employ local, regional, and international litigation and monitoring tools to compel the political branches to perform structural change.

This innovative exploration into corruption in Argentina will be of interest to researchers working on public policy, administrative law, anticorruption studies, law and development, and governance both in Argentina, and beyond.

1 Institutional-sectorial approach

Culture versus institutions

The anticorruption field comprises several theoretical approaches. Irma Eréndira Sandoval-Ballesteros mentions incentive-based, micro-organizational, normative-legal, and political economy analyses.¹ Johann Graf Lambsdorff provides an in-depth study of economic and sociological approaches to the causes of corruption.² Aranzazu Guillán Montero classifies theoretical explanations of corruption in three major groups: cultural, functional, and actor-centered, and further classifies the third group between rent-seeking and principal-agent models.³

Within this myriad of alternative theories, there is one specific dispute that Latin American countries cannot escape, and that, as this book shows, can help understand, and eventually overcome, one of its worst exponent’s (Argentina’s) failure in fighting corruption: the dichotomy between culture and institutions. Mungiu-Pippidi explains this contrast with precision:

Why do some societies manage to control corruption so it manifests itself only occasionally as an exception, while other societies do not and remain systemically corrupt? And is the superior performance of this first group of countries a result of what they do or of what they are? Most current anticorruption strategies presume the former, which is why institutions from developed and well-governed countries are currently being copied all around the world… . Skeptics, on the other hand, endorse the latter view, believing in the cultural determinism of corruption and good governance.⁴

On the cultural end of the spectrum, several studies over the past twenty-five years have addressed correlations between societal values or national cultural variables and corruption, both in the public policy literature and in the business/management oriented texts, including research by Brian Connelly and Deniz Ones, Kathleen Getz and Roger Volkema, Bryan Husted, Marinilka Kimbro, Cecilia Lavena, Amir Licht et al., Natalia Melgar and Máximo Rossi, Alejandro Moreno, Seini O’Connor and Ronald Fischer, Martin Paldam, Hoon Park, Wayne Sandholtz and Rein Taagepera, Ben Scholtens and Lammertjan Dam, and Alberto Simpser.⁵

Rose-Ackerman and Palifka explain that the argument that the primary determinant of corruption is culture instead of economics or politics takes two forms.⁶ The first is related to cultural differences on the meaning of “corruption”: some societies may consider a bribe what other societies would take as an acceptable and maybe even normatively required gift. Anthropological studies on corruption make this sort of argument.⁷ The second recognizes the perils of corruption, “but believe[s] that the only route to reform is through a thorough-going change in prevalent social norms.”⁸

Of these two forms, I am interested in the one that acknowledges the perils of corruption but claims that it can only be affected by changing prevalent social norms.⁹ Kaushik Basu, quoted by the authors, explains that

[i]f we want to put a virtual end to bribery and corruption, what we really have to rely on are individual values and character traits… .

If we want to really get at corruption, what we need to build up are values of honesty and integrity in society… . Honesty, prosocial preferences and a sense of right and wrong constitute a part of the human psyche … even though we can create societies were such traits are barely visible.¹⁰

In the specific Latin American context, Guillán Montero explains that cultural conceptions:

[S]ee corruption in Latin America as an endemic problem which reflects deep cultural traditions – including legacies of patrimonial, corporatist and populist states – and prevailing values of particularism, formalism and discretionality; … limited economic opportunities and vulnerability of the middle classes; … low political trust; … and the presence of strong personal ties of family and friendship.¹¹

This cultural approach, which, as we will see in Chapter 2, is key to Argentina’s futile debates on corruption, is opposed by institutional conceptions presented by theorists such as Susan Rose-Ackerman, Lawrence Lessig, Michael Johnston, Johann Lambsdorff, Andrei Schleifer and Robert Vishny.¹² Institutional theories posit that corruption occurs because of, and as a reaction to, a particular set of social, political and/or economic rules and structures. These analyses vary in both subtle and more substantial ways depending on just how much (and exactly what) they include as relevant variables to provide incentives and opportunities for corrupt behavior to emerge.

Within the vast institutional literature on corruption, I embrace Rose-Ackerman’s approach. Her theory acknowledges the relevance of cultural norms. In the first edition of her groundbreaking book Corruption and Government (1999), she claimed, for instance, that “the definition of bribes and gifts is a cultural matter.”¹³ In the second edition of the book (2016), written with Bonnie Palifka, she makes a detailed assessment of the cultural argument. The authors argue that while legal rules and cultural norms help determine whether a transaction is either a price, a bribe, a gift or a tip (categories that Rose-Ackerman had already addressed in depth in 1999), these are not fixed standards, neither in space nor in time:

[i]f a payment is legally a bribe but is viewed as a tip, should the law be changed to remove the offense, or does the payer’s tolerant attitude undermine important policy goals? In other words, cultural or social practices are not immutable and can be normatively unacceptable.¹⁴

Furthermore, Rose-Ackerman and Palifka expressly assess the concept of “trust,” which is typically used within cultural studies of corruption. They distinguish between generalized, particular, and institutional trust and claim that while some types can sustain corruption (for instance, that between public officials and their friends and family), other types (trust in the impartial behavior of institutions) “make honest and competent government possible.”¹⁵ Carlos Nino makes this same distinction regarding Argentina when noting that behind corruption “there is often a moral that privileges family and friendship over public interest.”¹⁶ Rose-Ackerman and Palifka also show how, in a given context, trust can be not just a cultural variable based on inherent traits of integrity and honesty but also a product of rational, self-interested calculation.¹⁷ Finally, they study both virtuous and vicious cycles between cultural values and corrupt opportunities and conclude that corruption can undermine honesty, which, in turn, yields more corruption.¹⁸

The question remains, however, as to whether anticorruption efforts necessarily demand a change in cultural or moral traditions. As Rose-Ackerman explains, a despaired option suggests that “countries cannot escape their history” because corruption is determined by “deep cultural, historical and social factors.”¹⁹ This view, in turn, comes in two forms. The first is cultural essentialism, which has been defined as the notion that “a particular putative culture – a people‘s putative culture – forms the basis of the identity of each individual born of that society, in an immutable, irrevocable manner.”²⁰ In Chika Mba’s words, “[f]or the cultural essentialist, a culture and its practices are not merely emblematic of a people’s identity; every individual member of any given society possesses a uniquely shared ‘cultural identity.’ ”²¹

Samuel Huntington’s division of the world in seven or eight civilizations is a clear-cut example of modern cultural essentialism: “[c]ultures can change, and the nature of their impact on politics and economics can vary from one period to another. Yet the major differences in political and economic development among civilizations are clearly rooted in their different cultures.”²² These comprehensive, long-lived cultural identities, “broadest cultural entities,” or cultures writ large are dynamic but only in an evolutionary sense.²³ Within these terms, Latin America is thus described as having “a distinct identity which differentiates it from the West.”²⁴ In Huntington’s words,

[a]lthough an offspring of European civilization, Latin America has evolved along a very different path from Europe and North America. It has had a corporatist, authoritarian culture, which Europe had to a much lesser degree and North America not at all. Europe and North America both felt the effects of the Reformation and have combined Catholic and Protestant cultures. Historically, although this may be changing, Latin America has been only Catholic. Latin American civilization incorporates indigenous cultures, which did not exist in Europe, were effectively wiped out in North America, and which vary in importance from Mexico, Central America, Peru, and Bolivia, on the one hand, to Argentina and Chile, on the other. Latin American political evolution and economic development have differed sharply from the patterns prevailing in the North Atlantic countries. Subjectively, Latin Americans themselves are divided in their self-ident...

Table of contents

• Cover
• Half Title
• Series
• Title
• Copyright
• Dedication
• Contents
• List of tables
• Foreword
• Acknowledgments
• Disclaimer
• Introduction
• 1 Institutional-sectorial approach
• 2 Why Argentina?
• 3 From state building to state capture
• 4 From liberal democracy to kleptocracy
• 5 Modern kleptocracy (2003–2015)
• 6 Now what?
• 7 The procurement abyss
• 8 A human rights strategy
• Index