from Development Channel

A Game of Inches: The Uncertain Fight Against Corruption in Latin America

A boy holds a sign which reads, "No more corruption" during a demonstration demanding the resignation of Guatemalan President Otto Perez Molina, in downtown Guatemala City, May 30, 2015 (Reuters/Jorge Dan Lopez).

August 10, 2016

A boy holds a sign which reads, "No more corruption" during a demonstration demanding the resignation of Guatemalan President Otto Perez Molina, in downtown Guatemala City, May 30, 2015 (Reuters/Jorge Dan Lopez).
Blog Post

Harvard’s inimitable Matthew Stephenson this week published a thought-provoking blog post comparing anticorruption efforts in Asia and Latin America. Crudely summarizing Stephenson’s argument, a few years ago many looked to Asia as the gold standard in anticorruption efforts, in part because of the success of independent and effective anticorruption agencies (ACAs) in the region. But recent news of political meddling with Hong Kong’s ACA, brazen kleptocracy in Malaysia’s state development fund, and efforts to water down reform in Indonesia all suggest that the pendulum is swinging in a less positive direction. By contrast, Stephenson is optimistic about the important gains made in recent years in Latin America, including by Guatemala’s International Commission Against Impunity (CICIG), Brazil’s Car Wash investigation, elections in Peru and Argentina that highlighted voter frustration with corruption, and Mexico’s “3 out of 3” reforms.

As Stephenson was careful to note, it is dangerous to generalize across regions. The on-the-ground details in each country get in the way of blanket statements about how regional anticorruption efforts are playing out. I agree, and I would go further. An additional caveat that the anticorruption community should keep in mind—even while celebrating successes—is that the effectiveness of anticorruption efforts is only really evident over the long haul. This is in large part because by their very nature, anticorruption reforms tend to generate significant pushback. Anticorruption reforms are never really complete: even independent and well-functioning institutions can decay over time, under pressure from the powerful interests that benefit from, and are empowered by, corruption. Incipient anticorruption reforms are even more vulnerable to regression.

Latin America has indeed been making enormous strides forward in recent years, under a remarkable set of homegrown anticorruption campaigners, but resistance appears to be building against those who would reform the system.

In recent years, a cautiously optimistic story could be told about Brazil, in light of the incremental anticorruption gains of the past generation. But recent developments suggest that these gains are under threat. Clientelistic parties and opponents of reform in both the Rousseff and Temer administrations have introduced proposals—both via decree and through legislation—that would weaken prosecutors and judges and considerably undermine the transparency of court cases, institute a tax amnesty law for repatriation of foreign holdings, restrict corporate leniency agreements, and limit plea bargaining. Although some of these proposals are framed as a seemingly reasonable effort to block the “abuse of authority,” they would have a chilling effect on the nascent—and still very uncertain—efforts to tackle corruption in Brazilian politics. Equally important, a set of necessary anticorruption reforms pushed forward by prosecutors, and placed on the legislative agenda with the support of 2 million citizens, has been stymied by congressional foot dragging. Acting president Michel Temer, who has now been mentioned twice in the Car Wash investigation, has adopted what is at best an ambiguous attitude toward anticorruption efforts, appointing a cabinet that is staffed by a number of unsavory characters, and failing to exert even an ounce of energy in support of reform.

In Guatemala, the UN-backed CICIG is in danger of becoming a victim of its own success. The easy criticism is that due to the presence of an international body like CICIG, Guatemalan institutions have not been under pressure to reform themselves. This is too facile, if only because there was never any sign that Guatemala’s institutions would be able to reform on their own, and CICIG’s presence seems to have empowered Guatemala’s prosecutors. The remarkable former attorney general, Claudia Paz y Paz, moved against some of the most powerful figures in Guatemalan history, and the prosecutorial service has gained new staff, prestige, and resources. Yet the genocide case against former president Efraín Ríos Montt was overturned by the high court, and there are fears that the court might be similarly timid in addressing corruption charges against former President Pérez Molina and his vice president. Meanwhile, President Jimmy Morales has been slow to build on anticorruption successes, and in fact, the early days of his administration have been marked by a surprising willingness to compromise with questionable elites. One of the few barriers to regression has been the mobilization of the Guatemalan public, which has encouraged the appointment of a few reformers in the Morales administration, and which will be essential to ensuring the success of a planned judicial reform package to be drafted later this year.

In Mexico, the “3 out of 3” reforms were a huge deal, not least because for months they seemed to be destined for the trash bin, after Institutional Revolutionary Party (PRI) legislators delayed their consideration and then attempted to sink them with a poison pill. As my colleague Shannon O’Neil pointed out, voter concern with corruption was one of the driving forces behind the PRI’s historic loss in the June gubernatorial elections, and the effort to move forward on the reforms may have been the PRI’s attempt to get out ahead of the corruption issue before the 2018 presidential elections. Yet just this week, news has emerged of the Mexican first lady’s luxurious vacation digs in Key Biscayne, which it now turns out are owned by a company that will be bidding for Mexico’s port business. This after another contractor sold the first lady her $7 million Mexico City mansion in a controversial transaction two years ago. Old habits die hard, even though public asset disclosure requirements in “3 out of 3” were aimed at curbing exactly this type of abuse.

There is no reason to be a sourpuss. Latin Americans should be justifiably proud of the remarkable gains of recent years, and Stephenson is right to point out their relative success compared to the current backsliding in Asia. But the common thread running through the recent Brazilian, Guatemalan, and Mexican country experiences is the importance of citizen engagement: without public pressure, politicians tend to revert to old practices.

Before he became one of the most famous judges of all time, Sérgio Moro wrote an academic paper on the Mani Pulite investigations of corruption in Italy, which noted that “judicial action against corruption is only effective with democratic support.” He concluded this after observing that when public attention turned away from the corruption investigations in Italy, politicians did all they could to make prosecutors’ lives more difficult: they strengthened evidentiary protections, decriminalized accounting fraud, reintroduced parliamentary immunity, and reduced statutes of limitations in corruption cases. It is probably unrealistic to expect Latin American publics to remain engaged on anticorruption: at some point, there may just be too much bad news, or the news may be too destabilizing to everyday governance, or the corruption effort will be seen as a partisan crusade, or the news that there is corruption in high places will no longer galvanize a weary public. Efforts to eradicate corruption will always be a game of inches, and the politicians who would like a return to the old status quo in Latin America have only just begun to fight.