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Functional psychology and behavioural functionalism emerged within psychology in the first half of the 20th century, to explain patterns in human behaviour as the result of response to external stimuli and adaptation to one’s environment . In political science, functionalist explanations of corruption appeared in the work of scholars such as Samuel Huntington (1968), who viewed corruption as a way to “grease the wheels” to get things done, especially for investors and companies. In this view, corruption is a way of quickly cutting through burdensome regulatory requirements, distributing resources, and generating economic growth (ibid). A fairly large but inconclusive body of literature has emerged within the field of economics on the greasing versus sanding the wheels debate, with authors finding evidence that both supports and challenges the greasing the wheels theory.
Marquette and Pfeiffer (2015) extend this logic to non-investors in a neo-functionalist argument, arguing that corruption can be viewed as a form of “problem-solving”, a useful way of dealing with problems that people face. However, as outlined in Table 1 at the conclusion of this section, functionalist explanations for corruption are generally unsatisfying and raise more questions than they answer since they often result in tautological arguments. For instance, it is very hard to know ex-ante when corruption will or will not be functional or useful, why some people act corruptly while others do not if corruption is functional, and which types of problems are more amenable to (functional) corrupt solutions. Rational choice approaches: Prisoners dilemma, principal-agent, and coordination approaches Rooted in methodological individualism, rational choice theory models human behaviour as the result of individual, self-interested preferences. People are calculating and strategic, and they carefully weigh the costs and benefits of certain actions before undertaking them. Moreover, individuals have fixed, well-defined, ranked, and consistent preferences, and they behave instrumentally to achieve those preferences.
The ultimate goal for individuals is to maximise utility: to attain whatever goal makes them happier, more satisfied, or better off, such as power or money. We can divide rational choice explanations for corruption into three sub-fields: collective action (prisoner’s dilemma) approaches; principal agent approaches; and coordination game approaches. First, corruption may be a particular type of collective action problem,a prisoner’s dilemma, wherein individuals have incentives to pursue their own self-interest, rather than work with others towards the collective good. Köbis et al (2016) label this as the “social dilemma”.Second, corruption may (also) be a principal-agent problem. This is a function of organising cooperative behaviour, which often requires delegation of responsibility for tasks both to and within formal institutions and organisations. Principals (i.e. citizens) give power to agents (i.e. bureaucrats) to act on their behalf, for instance to produce public goods like environmental protection or security. Agents are more likely to act in ways that maximise their own interests rather than those of the principal, particularly when information asymmetries exist and the principal cannot fully monitor the agent’s behaviour. This scenario is a particular problem since, if we assume that individuals are rational actors, opportunities for profitable rent-seeking (self-benefiting) behaviours are unlikely to be passed up . One of the most widely adopted definitions of corruption includes rational choice assumptions and a principal-agent perspective: the abuse of entrusted (or in some definitions, public) authority for personal, private gain. In this wording, agents are delegated responsibility for public goods provision on behalf of principals. However, instead of fulfilling their duty to the principal, agents act to realise their own preferences at the expense of the principal. Robert Klitgaard’s famous formula explaining corruption also adheres to rationalist logic: “Corruption equals monopoly plus discretion minus accountability”. In other words, we are likely to see corruption in situations where there are no means to hold who agents have exclusive authority over a good or service and discretion in making and applying the rules accountable. This is particularly relevant in the public sector, where government authorities (agents) often enjoy high levels of monopoly and discretionary authority over state resources and decision-making functions. As “corruption is a crime of calculation, not passion” (ibid), the ample information advantages enjoyed by government officials as rational actors provide them with opportunities to abuse their entrusted power for private (self-interested) gain.
The advocated solution to such a situation is to reduce monopoly powers through transparency measures, broaden authority via participation, and ensure accountability through enforced penalties (sanctions) for bad behaviour. Current anti-corruption measures largely mirror this logic . Corruption has also been modelled as a different type of collection action problem, a coordination problem, the function of prevailing norms. Corruption may be systemic and widespread not because the institutions that constrain unethical behaviour are weak, but rather because of the existence of pro-corruption social norms. In other words, informal institutions (social norms) provide incentives for individuals to be corrupt. Norms like kin favouritism shape preferences towards corruption rather than away from it, regardless of the material benefits endowed by corruption. In this type of context, corruption is the expected form of behaviour, the accepted way of doing things that reflects a logic of appropriateness rather than of consequence, akin to accepted forms of greeting or other behaviours in social groups or driving on the right (or left) side of the road. Rather than being a form of “rule breaking”, corruption is instead a form of “rule following” that depends on the behaviour of other players . The likelihood of sanctioning corrupt behaviour is low or non-existent, since there is no normative preference for holding violators to account, even where accountability institutions exist. If corruption is a normative issue, there are few benefits for acting ethically in a predominantly corrupt environment. In fact, in such contexts, not being corrupt may actually impose costs in the form of serious social sanctions .
Rather, the problem lies in getting all actors to realise the joint gains of non-corrupt behaviour (e.g. improved economic growth) by making mutually consistent decisions. These explanations for corruption have different policy implications. If corruption is a cooperation (prisoners dilemma) or principal-agent problem, then the incentive structure (structure of material payoffs) must be changed such that individuals have clear incentives to behave ethically, experience reduced opportunities to engage in corruption, and suffer punishment for bad (corrupt) behaviour. Such mechanisms include financial incentives to act cleanly, channels that ensure the free flow of information, accountability institutions, and monitoring and sanctioning systems. However, if corruption is instead a coordination problem, and thus a mutually agreed-upon behavioural preference (or norm), then individual normative ideas about correct behaviour must be changed. This can occur through enhanced information about both the social benefits of clean behaviour. Information about other actors’ preferences for such behaviour is required to inform people about how they ought to behave in social interactions.