Saturday, May 16, 2015
Randomized trials and corruption
There is a debate in the analysis of poverty between those in favour of
small incremental reforms based on randomized trials and those in favour
of big non-marginal reforms that change the structure of society. I
believe that the latter is the spirit of the critique of Martin Ravaillon
to the work of Duflo and Banerjee. Of course, small reforms are
welcome, but there is always a question about their external validity
and there are doubts that they can lend support to any particular theory
that may help change things at a larger scale. Perhaps something
similar can be said about the reform of politics and the reduction of
corruption. Actually the same Banerjee and other authors have some
articles that I am reviewing where they introduce similar randomized
trials, not only to reduce corruption but also to improve politics by
reducing patronage and ethnic-based appeals. Again, all these small
reforms would be welcome, but given that corruption reforms depend on
the solution to a collective action problem (people only tend to act
cleanly if others do so), it seems difficult that one can fix the
problem without sweeping reform and a societal ethical commitment to
fight it. Many well intentioned reform proposals on corruption based on
incentive theory have failed. There are positive experiences with large
scale corruption reform, such as those in many US states in the XXth
century or those in Sweeden in the XIXth century. These reforms were not
brief nor simple. In the case of the US, it is likely that corruption
did not disappear, but it mutated into something different: from machine
politics to the revolving doors, summarizing in the smallest possible
number of words something that took decades and different mechanisms in
different places. I am not sure that corruption and patronage can be
fixed by appointing an expert committee that concludes that the main
problem is in political parties, when political parties are needed to
fix de problem. Corruption is a political and economic problem that
affects the structure of society, and that is linked to inequality and
to excessive political power of big economic interests. Like with
poverty, it is hard to imagine that corruption is going to be fixed one
experiment at a time.
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