Bureaucracy and Corruption

This chapter explores the relationship between bureaucratic organisation and corruption. We focus on the human relations aspects of bureaucracies, such as recruitment, promotion and salaries. We distinguish between ‘grand’ corruption, for example, bending a procurement process to favour a firm, and ‘petty’ corruption, for example, giving a bribe to a police officer or a teacher, and argue that different human relations aspects are important for these two types of corruption. Merit-based recruitment systems prevent grand corruption because, unlike political appointments, they separate the careers of politicians and administrators, thus creating a coordination problem among these actors and, in turn, making it difficult for them to engage in corrupt activities. For petty corruption, interactions between politicians and administrators are less relevant. To curb this type of corruption, other bureaucratic features become more relevant: wages, penalties, and audits.