Legislative oversight and curbing corruption : Presidentialism and Parliamentarianism revisited

Abstract

Scholars generally agree that corruption hinders economic development (Johnston, 1997; Hellman, Jones, and Kaufmann, 2000; Tanzi and Davoodi, 1997; Mauro, 1997; RoseAckerman, 1975, 1978). There are two main schools of thought regarding the causes of corruption. The first focuses on structural causes, including a country's history, sociopolitical context, culture and norms, values, and loyalties. This view is reflected in the work of Rose-Ackerman (1975), Kaufmann and Dininio (2006), Yao (2002), Johnston (1997), and Knack (2000), among others. While this body of work helps explain the drivers of corruption, as well as the extent and types of corruption, it is "...often difficult to translate into policy solutions for the reduction of corruption (Thomas and Meagher, 2004, p. 4). The second school, exemplified inter alia by Klitgaard (1998), Rose-Ackerman (1998), and Polinsky and Shavell (2001), focuses on behavioral causes and draws on new institutional economics, in particular the principal-agent theory, to explain corruption. Until recently, research has tended to overlook the role of legislatures in influencing corruption. However, recent work suggests that one of the principal factors determining a country's level of corruption is its form of government; that is, whether a country has a presidential or a parliamentary system. Yet there is no consensus on what exactly these factors are, nor on how they operate. Gerring and Thacker (2004) and Lederman et al. (2005) demonstrate that countries with presidential forms of government have higher levels of corruption than those with parliamentary forms. This runs counter to corruption theories that stress the importance of checks and balances and independent "institutions of accountability" (Doig and Theobald, 2000; Hope, 2000; Persson, Roland and Tabellini, 1997; Treisman, 2000). This latter group of authors asserts that the legislature is better able to hold the executive to account in presidential systems, in which the two branches of government are independent of each other, than in parliamentary systems, in which the two branches are fused. They argue that greater accountability reduces corruption. Pelizzo and Stapenhurst (2004) found that one of the differentiating factors between presidential and parliamentary forms of government is the number of oversight tools available to the legislature-legislatures in parliamentary systems tend to have more tools at their disposal than those in presidential systems. However, researchers have not considered whether more, and which, oversight tools result in better oversight and less corruption. In this thesis, I explore the issues raised by the studies mentioned above. I examine and answer (i) whether countries with parliamentary forms of government (Gerring and Thacker, 2004; Lederman et aI., 2005) are less corrupt than countries with presidential forms of government, or countries with presidential forms of government are less corrupt (Doig and Theobold, 2000; Hope, 2000; Persson, Roland and Tabellini, 1997; Trieisman, 2000); (ii) whether the availability of legislative oversight tools is a determining factor (Pelizzo and Stapenhurst, 2004) of legislative oversight itself, and lower corruption; and (iii) what other factors may explain differences in the degree of oversight and corruption. The overall objective of this thesis is specified in the following research question: Does legislative oversight reduce corruption and, if so, how and why? In particular, what are the differences regarding oversight in countries with parliamentary and presidential forms of government-and do these explain the lower levels ofcorruption in countries with parliamentary systems? The general question I ask is: "Is corruption reduced when the level of legislative oversight is raised?" In answering this question, I assume that the relationship between legislative oversight and corruption is a policy process; the desired policy outcome is reduced corruption and the input is legislative oversight. The underlying question is: how does the input affects the outcome? I also believe that legislative oversight comprises specific tools used by legislatures in a particular context; in other words, I examine oversight tools and contextual factors. To facilitate cross-country comparisons of legislative oversight, and to enable me to answer this overall research objective, I developed a comprehensive Legislative Oversight index. I then conducted statistical analyses to see to what extent this index could explain variations in corruption levels across countries. I found that the index is positively associated with lower corruption and that the relatively better score on oversight tools for countries with parliamentary forms of government is somewhat offset by the slightly better score- on contextual factors for countries with presidential forms of government. However, even allowing for this, I found that countries with parliamentary forms of government have greater oversight, and lower corruption, than those with presidential forms of government. In summary, this thesis has added to our knowledge in three ways. First, I have developed a set of useful methodological tools which enables more rigorous cross-country comparisons of legislative oversight and its components than was previously possible. The tools comprise an index of Oversight Tools, an index of Contextual Factors, and the combined index of Legislative Oversight, noted above. Second, using these tools, I have demonstrated that legislative oversight is an important determinant of corruption. I have shown that contextual factors are relatively more important, although oversight tools are relevant as well. Finally, I have developed a comprehensive conceptual framework which synthesizes different neo-classicist theories and explains the policy process between legislative oversight and corruption.