Corruption: quantitative or qualitative differences?

The appearance of corruption indices with broad temporal and geographical coverage (e.g. Transparency International’s Corruption Perceptions Index, the Word Bank’s Control of Corruption indicator, and various corruption indices of the Varieties of Democracy project) has resulted in a surge in cross-national large-n studies of corruption (for reviews, see Lambsdorff Reference Lambsdorff and Rose-Ackerman2007; Dimant and Tosato Reference Dimant and Tosato2018). These studies have significantly enhanced comprehension of the country-level patterns, drivers, and effects of corruption. However, the majority of these studies—often implicitly—apply a unidimensional approach to corruption assuming that corrupt acts are relatively homogenous (Graycar Reference Graycar2015; Andersson Reference Andersson2017; Ang Reference Ang2020b) and that corruption varies among countries in terms of quantity, rather than quality (Johnston 2006).

This problem has caught the attention of many students of corruption. Some scholars have taken on to delineate different corruption patterns at the country level (e.g. Johnston 2006; Mungiu-Pippidi Reference Mungiu-Pippidi2006; Grzymala-Busse Reference Grzymala-Busse2008). Others have sought to discern different forms of corruption. The most salient distinction lies between petty and grand corruption. Petty corruption refers to smaller bribes typically paid by citizens to low-level bureaucrats, whereas grand corruption involves a systematic and large-scale appropriation of public goods by high-level state officials (Rose-Ackerman and Palifka Reference Rose-Ackerman and Palifka2016). Graycar’s (Reference Graycar2015) more nuanced classification framework identified types of actions (e.g. bribery, extortion), activities (e.g. procurement, appointing personnel), sectors (e.g. construction, energy), and places (e.g. countries, regions).

Regime types

Corruption manifests in diverse forms and is driven by distinct factors across different political regimes (Johnston 2006). To analyse such regime-dependent factors, it is necessary to establish a broad typology of political regimes. In line with the influential multi-dimensional approach to democracy, the latter is defined as a political regime which consists of five interrelated constituent elements: democratic election, political participation rights, civil rights, horizontal accountability, and effective power to govern (Merkel Reference Merkel2004). At the other end of the spectrum, (closed) autocracy is defined as a regime in which ‘the chief executive is not subjected to de jure multiparty elections’ (Lührmann and Lindberg Reference Lührmann and Lindberg2019: 1109). Finally, the encompassing term hybrid regime denotes the grey zone between autocracy and democracy (Wigell Reference Wigell2008). Hybrid regimes are diminished forms of authoritarianism or democracy and share certain features of both ideal types (Bogaards Reference Bogaards2009).

This article focuses on corruption in competitive authoritarian regimes. Competitive authoritarianism is a particular type of hybrid regime ‘in which the coexistence of meaningful democratic institutions and serious incumbent abuse yields electoral competition that is real but unfair’ (Levitsky and Way Reference Levitsky and Way2020: 51). Competitive authoritarianism has been increasingly prevalent worldwide (Levitsky and Way Reference Levitsky and Way2020; Diamond Reference Diamond2021; Guriev and Treisman Reference Guriev and Treisman2022). Although some analysts have argued that such regimes have an inherent transitional character, and converge either towards democracy or autocracy (Acemoglu and Robinson Reference Acemoglu and Robinson2013), it appears that they have certain socio-political anchors that may stabilise them, at least over the medium run (Guriev and Treisman Reference Guriev and Treisman2022). Unlike some other types of hybrid regimes, in competitive authoritarianism political power is centralised, and the government is relatively free to implement policies and use the state apparatus for their own goals. However, unlike in fully authoritarian contexts, governments in competitive authoritarian settings face significant constraints both in domestic and international arenas (Levitsky and Way Reference Levitsky and Way2002, Reference Levitsky and Way2020; Guriev and Treisman Reference Guriev and Treisman2022).

Corruption in competitive authoritarian settings

Both empirical (Rock Reference Rock2009; McMann et al. Reference McMann2020) and theoretical (Mungiu-Pippidi Reference Mungiu-Pippidi2006) accounts underpin that democracy and corruption exhibit an inverted curvilinear relationship. In fully authoritarian settings, the regime enjoys a nearly uncontested power monopoly. It can seize public assets at will and has little incentive to share the gains by allowing other groups to benefit from corruption. Therefore, while corruption is pervasive, it typically remains limited to areas that directly benefit the ruling elite. In democracies, the presence of formal and informal institutions that uphold public integrity and accountability contributes to the attainment of the lowest levels of corruption. In hybrid regimes (including competitive authoritarian ones), the ruling elite’s power monopoly is challenged but accountability institutions are not fully in place, which makes way for higher levels of corruption.

However, while by and large, competitive authoritarian (and in a broader sense, hybrid) regimes are the most prone to corruption, a closer examination sheds light on interesting patterns: the prevalence of different corruption types varies largely in such contexts. Evidence shows that some forms of petty corruption are effectively curbed by such regimes (Hollyer and Wantchekon Reference Hollyer and Wantchekon2015; Ang Reference Ang2020a; Ligeti et al. 2020; Rochlitz et al. Reference Rochlitz, Kazun and Yakovlev2020).

By contrast, grand corruption typically flourishes in competitive authoritarian settings (McMann et al. Reference McMann2020), often to an extent characterised by state capture, whereby (a large share of) state institutions are captured by the ruling elites and laws and policies are formulated to their benefit (Hellman et al. Reference Hellman, Jones and Kaufmann2003), rather than to pursue the public interest. State capture may occur through influencing law and policy making, influencing policy implementation and/or disabling accountability institutions (Dávid-Barrett Reference Dávid-Barrett2023). As such, state capture may play a crucial role in maintaining political power. Yet, competitive authoritarian rulers are not always keen to (fully) capture the state: Singapore, for instance, has been effective in curbing not only petty but also grand corruption (Quah Reference Quah1999; Abdulai Reference Abdulai2009).

What factors may explain these counterintuitive outcomes? Although country-level studies are of limited use when it comes to describing and explaining within-country corruption patterns, some insights may still be applicable to the latter ambition. Firstly, many studies have analysed how institutions and actors may constrain corruption (for a review see Dimant and Tosato Reference Dimant and Tosato2018). Secondly, some contributions have focused on corruption in hybrid and authoritarian settings specifically, analysing the role of ideological commitment (Hollyer and Wantchekon Reference Hollyer and Wantchekon2015), the time horizon and the type (i.e. personalistic or single-party) of the regime (Chang and Golden Reference Chang and Golden2010), and political will for anti-corruption measures (Quah Reference Quah1999; Fritzen Reference Fritzen2005; Abdulai Reference Abdulai2009) as drivers of corruption. A few other contributions have sought to describe and/or explain different patterns of corruption (e.g. Johnston 2006; Mungiu-Pippidi Reference Mungiu-Pippidi2006) and state capture (Grzymala-Busse Reference Grzymala-Busse2008; Innes 2014) in various contexts, including competitive authoritarianism.

Accountability costs

Accountability costs refer to punishments inflicted by democratic institutions and pro-democratic actors vis-á-vis the government and are influenced by various factors. To enumerate these factors, I use the metaphor of North (Reference North1990), who argued that institutions (including laws, regulations, and norms) can be thought of as the rules of the game, whereas organisations are players in the game. Both institutions and organisations (and in a broader sense, actors) may inflict accountability costs that regimes must bear for corruption. Notably, while the distinction between institutions and actors is sometimes blurred, it is useful to discern them theoretically. Accountability costs inflicted by institutions are incurred in a mechanistic manner, often in the form of binding rules or shared norms; by contrast, in the case of accountability costs inflicted by actors, the agency of particular persons and organisations plays an important role. It is also useful to discern the domestic and the international arenas. These dimensions delineate four potential sources of accountability costs (Table 1).

Table 1 The four factors influencing accountability costs of corruption types.

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Firstly, formal political institutions, such as elections, political and civil rights, and independent legislatures and courts, strongly influence accountability costs associated with corruption types.Footnote ¹ Arguably, these institutions may incur varying costs for different types of corruption. For instance, independent legislatures may only constitute constraints for those types of corruption for which they possess a legal mandate to intervene. Whilst competitive authoritarianism is characterised by diminished democratic institutions, these institutions are nonetheless present to some extent and may act as constraints on the regime’s power (Levitsky and Way Reference Levitsky and Way2002; Guriev and Treisman Reference Guriev and Treisman2022). Informal institutions, or norms, also matter. Societies are characterised by a level of permissiveness towards corruption in general (Lavena Reference Lavena2013) and also hold beliefs about the moral acceptability of distinct types of corruption. For instance, people may be indulgent concerning bribing bureaucrats but largely condemn extortion in education.

Secondly, still within the domestic arena, organisations and actors also influence accountability costs. Shifting from the neo-institutionalist perspective, some recent contributions have emphasised the role of actors who inhabit institutions (e.g. Voronov and Weber Reference Voronov and Weber2020). In the context of competitive authoritarianism, Guriev and Treisman (Reference Guriev and Treisman2022) argue that well-informed, educated elites may effectively oppose the government. Furthermore, other pro-democratic actors and organisations, such as independent media outlets (Bhattacharyya and Hodler Reference Bhattacharyya and Hodler2015) and civil organisations (Treisman Reference Treisman2000), may also exert significant pressure on the government and thereby influence the accountability costs of corruption.

Thirdly, accountability costs are also shaped by binding rules imposed by international and intergovernmental organisations. For instance, the EU has specific rules about how member states can access and spend EU funds (White Reference White2010). The European Anti-Fraud Office also has a mandate to investigate cases that involve suspicions of fraud. For example, in response to allegations of extensive clientelism in the allocation of EU funds, in 2022 the European Commission initiated a rule of law procedure against Hungary, which lead to the withholding of a substantial portion of the EU funds that the country was entitled to receive (Stevis-Gridneff et al. 2022).

Fourthly, international actors may also influence accountability costs by incentivising the implementation of provisions enhancing accountability through various formal and informal means, such as conditional aid. In the frame of the European Neighbourhood Policy, for instance, the EU pressured neighbouring countries to implement various pro-democratic measures, including some that promote accountability and transparency (Lavenex and Schimmelfennig Reference Lavenex and Schimmelfennig2011). The EU also pressed prospective members to implement anti-corruption measures (Kartal Reference Kartal2014; Ristei Reference Ristei2010).

Notably, competitive authoritarian regimes may seek to lower accountability costs through various ways. For instance, such regimes often fuel political polarisation and partisan sentiment to reduce electoral retribution for corruption (Hajnal Reference Hajnal2024). They may take measures to discredit independent civil organisations, critical media outlets, and international organisations involved in anti-corruption. Finally, they can dismantle and undermine formal accountability institutions, such as the judiciary.

In some instances, the discussed factors may influence overall accountability costs independently from one another. In other cases, they interact. For instance, competitive authoritarian regimes may have relatively well-elaborated legal anti-corruption frameworks and powerful anti-corruption bodies. However, in the absence of more general accountability institutions, these tools are either futile or applied by the regime to harass the opposition and other critics. The case of Ukraine also illustrates the above point. Under the leadership of Petro Poroshenko, the country implemented comprehensive anti-corruption legislation. However, weak accountability institutions, including the National Anti-Corruption Bureau and the Specialised Anti-Corruption Prosecutor's Office, hindered the proper functioning of these laws. The judiciary, plagued by corruption and inefficiency, further compromised anti-corruption efforts. In sum, despite the presence of anti-corruption measures, accountability costs generally remained low (Freedom House 2018; Kramer 2020).

Transaction costs

Transaction costs of corruption in general terms are defined as ‘the costs of searching for partners, determining contract conditions, and enforcing contract terms’ (Lambsdorff Reference Lambsdorff2002: 221). Adopting the concept to the present framework, I use the term to refer to costs that the government must bear to oversee (sets of) corrupt transactions to manipulate resource allocation through corruption.

I propose that transaction costs of corruption depend on two characteristics of corrupt transactions. Firstly, they are influenced by the distance between the supplier of corruption (i.e. the public official who abuses their position) and the topmost political leadership in the hierarchical structure. Arguably, involving more middlemen increases transaction costs. Secondly, transaction costs depend on the average volume of corrupt transactions: it is less costly to oversee (sets of) transactions if the average volume of single transactions is high. Notably, transactions are not necessarily monetary but may involve the exchange of other assets (e.g. jobs, concessions, permits, etc.). The figure below illustrates two corruption types, one with high, and another with low transaction costs (Fig. 2).

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Fig. 2 Examples of corruption types with high or low vertical transaction costs.

For instance, in the case of clientelism in infrastructure procurement, transaction costs are typically low: suppliers of corruption, that is, public procurement agencies, are close to the chief executive in the hierarchy, whereas the average volume of transactions is high, as infrastructure procurement contracts typically involve relatively large amounts of money. By contrast, low-level bribery in the police constitutes an example of high transaction costs corruption types: (potentially) corrupt police officers are relatively far from the topmost political leadership, whereas bribes are low.

Political benefits

The previous two subsections focused on the costs that regimes must bear for enabling or practising different types of corruption. On the other side of the balance, corruption types may also yield political benefits for the regime through one or more of the following three ways.

Firstly, corruption may directly contribute to the enrichment and empowerment of the ruling elites. Nepotism and favouritism in public procurement, for instance, allow for the establishment of large business empires overseen by the topmost leadership and their inner circles. Such conglomerates grant elites economic leverage, which in turn yields more political power (Acemoglu and Robinson Reference Acemoglu and Robinson2013). One widespread mechanism through which this may happen involves funnelling corrupt gains seized through public contracting into party and campaign finance. Notably, a similar mechanism is also prevalent in democracies, whereby business organisations buy political influence in exchange for party donations (Johnston 2006, chap. 4; the main difference being the distinction between business and political elites). In a similar vein, certain types of corruption may lead to the empowerment of the ruling elite by enabling them to take control over legislation and/or policymaking and implementation in certain areas and utilise it to pursue their own purposes, that is, capture the state (Dávid-Barrett Reference Dávid-Barrett2023). For instance, extortion in commerce regulation agencies may allow ruling elites to create an uneven playing field favouring politically aligned enterprises.

Secondly, certain corruption types may contribute to clientelist vote-buying through machine politics (Hicken Reference Hicken2011; Gans-Morse et al. Reference Gans-Morse, Mazzuca and Nichter2014; Nichter Reference Nichter2014). Ruling elites may apply corruption to trade particularistic benefits in exchange for political support. While vote-buying may occur through simple exchanges of votes and money/goods, it often involves establishing and maintaining clientelistic networks for longer periods. These networks financially depend on the regime and are therefore poised to support it. For instance, public sector jobs may be awarded in a particularistic manner, in exchange for maintained political support, rather than merit, as was the case in Argentina (Auyero Reference Auyero2012). Clientelistic networks may also be sustained by granting concessions in lucrative state-controlled sectors (see Sect. “The framework in practice: two cases from Hungary”, Case B) to politically aligned businesses and individuals. Such corrupt transactions involving ‘unjustified restriction of access to public contracts to favour a certain bidder’ (Fazekas Reference Fazekas2017, p. 405) are referred to as political favouritism. Regional favouritism constitutes a specific type of the latter, whereby the regime favours politically aligned sub-governmental entities (i.e. regions and municipalities; for a review, see (Reszkető, Váradi and Hajnal, 2022). Similarly, corruption may also be used to co-opt potentially critical interest groups (Guriev and Treisman Reference Guriev and Treisman2022).

Thirdly, certain corruption types may also yield political benefits by boosting economic growth and thereby stabilising the regime. Most corruption types yield adverse economic effects, but some types favour growth: so-called ‘access money’ involves bribes paid by large corporations to politicians, allowing them to deregulate markets, win contracts, and access other privileges. In an analogy with drugs, access money is similar to steroids, in that it produces long-term adverse effects (e.g. distorted competition, higher inequality), but boosts the performance of involved corporations and hence contributes to economic growth (Ang Reference Ang2020b). Economic growth yields political benefits for competitive authoritarian regimes as it can enhance stability. Ang (Reference Ang2020a) argues that the combination of the predominance of performance-boosting types of corruption and—mitigating its adverse effects—large-scale redistributive policies enabled China a high growth rate and relative stability over the past decades. Notably, the three presented sources of political benefits are not mutually exclusive; certain types of corruption may yield more than one type of political benefit. The presented explanatory framework is summarised in Fig. 3.

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Fig. 3 Summary of the explanatory framework.