Corruption in Latin America : How Politicians and Corporations Steal From Citizens

This book is the newest and one of the very few existing examinations of the full nature of corruption throughout Central and South America. In detailed chapters written by experts with extensive in-country experience, it reveals the political and economic roots and consequences of corruption in Argentina, Bolivia, Brazil, Colombia, Guatemala, Honduras, Mexico, and Peru. The editor’s introduction and conclusion texts synthesize their work and provides an over-arching view of corrupt practices and anti-corruption initiatives throughout Latin America. __Corruption in Latin America__ shows the extent to which corrupt practices engulf each of the countries discussed, the involvement of political and corporate entities in the pursuit of ill-gotten gains, and the drag on development caused by corruption in each political entity. The book will be of interest for social scientists, political actors and social activists involved in the fight against corruption in Latin America by providing in-depth analyses of the topic and discussing how best to pursue anti-corruption efforts through civil society actions, judicial endeavors, legal shifts, or elections. Dedication 5 Preface 6 Contents 8 About the Authors 10 Chapter 1: The Corruption of Latin America 14 Honduras and Guatemala 17 Abusing Public Trust 18 What the Indexes Report 20 Uruguay, Chile, and Costa Rica 23 Cultural Relativism and Functionality 30 Abuses of Trust 30 Reducing Corruption 32 The Book 34 A Final Word 37 Part I: Brazil 39 Chapter 2: The Underlying Causes of Brazilian Corruption 40 Introduction 40 Current Investigations into Corruption in Brazil 41 The Economic Consequences 44 Institutional History: The Cultural Incentive for Public Corruption and Low Labor Productivity 45 Public Sector Incentives for Corruption 55 Current Brazilian Characteristics and Mechanisms Enabling Corruption 59 Implications of Corruption for Economic Growth and Economic Policy Consequences 63 Implications of Corruption for Economic Growth 63 Implications of Corruption for the Conduct of Economic Policy 64 Conclusion 66 Chapter 3: Identifying Corruption Risk in Brazil: New Measures for Effective Oversight 68 Introduction 68 Measuring Corruption 71 Perception- or Experience-Based Indicators 72 Objective Measures of Corruption 72 Objective Measures: Bribes and Embezzlement in Interactions with Public Agents 73 Objective Measures: Corruption in the Context of Public Procurement 74 Objective Measures: Composite Indicators Reflecting Procurement Red Flags 75 Conceptual Framework: Indicators, Methods, and Datasets 77 Public Entity Risk Indicator (PERI) 79 Attribute 1 of PERI: History of Corruption in Municipalities 79 Attribute 2 of PERI: Anomalous Spending Patterns 80 Attribute 3 of PERI: Average Values of Cost Overruns 82 Supplier Risk Indicator (SRI) 83 Attribute 1 of SRI: History of Corruption or Irregularity of Firms and Its Partners 83 Attribute 2 of SRI: Incongruence Between Total Revenue from Public Contracts and a Firm’s Size 85 Attribute 3 of SRI: Existence of Probable Straw Man as a Partner 86 Attribute 4 of SRI: Interaction Between a Firm’s Revenue from Public Contracts and the Electoral Cycle 87 Political Connections Indicator (PCI) 88 Tendering Risk Indicators (TRI) 89 Attribute 1 of TRI: Length of Submission Period (Number of Days) Between Publication of a Call for Tenders and a Bid Submission Deadline 90 Attribute 2 of TRI: Number of Bidders 91 Attribute 3 of TRI: Frequency of Utilization of Different Types of Tender Procedure 92 Actionable Date Analyses for the Brazilian Public Ministry 92 Findings of the Interviews 94 Concrete Example of the Utilization of Data Analyses and Red Flags to Optimize Investigations: Automating the Identification of Firms Controlled by Kickback Brokers 95 Exploratory Data Analysis 96 Analysis of Local Governments 97 Analysis of Municipal Public Contractors 98 Interpretation of Results 101 Conclusions 101 Chapter 4: Corruption, Courts, and Public Opinion in Brazil 103 Introduction 103 Corruption, Vicious Cycles, and the Importance of Attitudes Toward Corruption 105 Efficacy Against Corruption 108 Attitudes Toward Judicial Institutions 111 Some Correlates of Sense of Efficacy Against Corruption in Brazil 113 Conclusion 115 Chapter 5: Brazilian Corruption Overseas: The Case of Odebrecht in Angola 118 From a “Wild Company” to a “Empresário de Confiança” (1984–2002) 119 Odebrecht Takes Root in Angola 120 The Brazilian Government: From Financer to Enabler 124 Turning Generals into Entrepreneurs 129 Conclusion 132 Part II: Argentina, Bolivia, Peru 133 Chapter 6: Argentina’s Corruption Machine: Toward an Institutional Approach 134 Introduction 135 Public-Private Biases 138 Cultural-Criminal Approach 142 Institutional Approach 146 Institutional Framework 146 Corruption and Reverse Development 148 Argentina’s Corruption Machine 151 Typologies 151 State Capture 152 Bilateral Monopoly 155 The Chinese Trap 157 Kleptocracy 159 Taking Action and Future Research 162 Institutional Reform 162 Sectoral Analysis: Government Procurement 164 A Human Rights Strategy 165 Chapter 7: Criminalization of Corruption in Bolivia 169 Corrupt Use of the Judiciary 170 Fighting Corruption by Other Means 171 The Morales Regime and Corruption 173 The Criminalization of Politics 174 Petty Corruption: The Biting of Thousand Ants 176 A Systemic Approach to Corruption 177 Corruption in Latin America and Twenty-First-Century Socialism 178 A Turning Point in Criminalization 180 The Causes of Corruption and Politics 182 Conclusion 183 Chapter 8: Corruption, Organized Crime, and Regional Governments in Peru 185 Introduction 185 Oligarchs and Clans as a Corruption Syndrome in Peru 187 Corruption as a Public Problem 191 Political Decentralization 196 Biographies of Corruption 200 Building the Clientele 201 The Leader 202 Dense Family Networks 205 Campaign Financing 206 Slow Justice 207 Final Words 209 Part III: Mexico, Guatemala, Honduras 211 Chapter 9: Linking Crime and Corruption: The Case of Mexico 212 Introduction 212 Concepts: Controlling Society/Controlling the State 214 Literature Review 217 Linking Crime and Corruption 221 Crime → Corruption (Society to State) 221 Corruption → Crime (State to Society) 226 Mutual Causality and Third Factors 232 Limitations, Specifications, and More Questions 235 Conclusion 238 Chapter 10: How Organized Crime Controls Guatemala’s Judiciary 239 Introduction 239 Creating Constitutions and Precedents 242 The Judiciary During the Federal Republic of Central America 242 Judicial System of the Republic of Guatemala (1851–1985) 243 Political Constitution of the Republic of Guatemala of 1985 (Effective Today) 245 Peace Negotiations: Modernization of Justice 248 Law of the Judicial Career (Decree Number 41-99) 249 Law of Commissions of Postulation (Decree Number 19-2009) 250 Conflicting Laws in the Election Processes for Magistrates 251 An International Organization to Fight Impunity 252 Rampant Corruption in the Process of Election of Magistrates 253 The International Commission Against Impunity in Guatemala (CICIG): Making The Difference in Guatemala 259 My Fight Against Corruption 261 Corrupt Clerks at the Court 262 How Unethical Lawyers Misuse the Judicial System 263 Illegal Proposal by a Congressman to a Judge 263 Conclusion 267 Chapter 11: The Social Conditions of Corruption in Honduras: What They Are, What They Mean, and What Can Be Done About Them 269 Introduction 269 Corruption in Honduras: A Persistent Problem 270 Corruption as a Complex Adaptive System 273 Corruption Defined 276 Acting Against Corruption 278 What? 279 So What (Does It Mean)? 279 Now What (Do We Do)? 280 Conditions 280 Patterns 280 Simple Rules 281 Patterns of Corruption in Honduras: What They Are and What They Mean 281 Honduras’ Simple Rules 282 Social Conditions in Honduras 283 Patterns 284 Options for Action on Corruption in Honduras 287 Conclusions 289 Part IV: Conclusion 291 Chapter 12: An Anticorruption Strategy for Latin America 292 Political Will 293 Latin American Anticorruption Court 294 Investigating Commissions 295 Accountability and Transparency 297 Changes in La Paz 298 Technological Fixes 300 Leadership 301 Further Reading 304 Corruption 304 Angola 306 Argentina 306 Bolivia 307 Brazil 307 Chile 308 Costa Rica 309 Guatemala 309 Honduras 310 Mexico 311 Peru 311 Uruguay 312 Index 313 Front Matter ....Pages i-xiv The Corruption of Latin America (Robert I. Rotberg)....Pages 1-25 Front Matter ....Pages 27-27 The Underlying Causes of Brazilian Corruption (Marislei Nishijima, Flavia Mori Sarti, Regina Célia Cati)....Pages 29-56 Identifying Corruption Risk in Brazil: New Measures for Effective Oversight (Rafael Braem Velasco)....Pages 57-91 Corruption, Courts, and Public Opinion in Brazil (Nara Pavão)....Pages 93-107 Brazilian Corruption Overseas: The Case of Odebrecht in Angola (Mathias Alencastro)....Pages 109-123 Front Matter ....Pages 125-125 Argentina’s Corruption Machine: Toward an Institutional Approach (Natalia A. Volosin)....Pages 127-161 Criminalization of Corruption in Bolivia (Ronald MacLean-Abaroa)....Pages 163-178 Corruption, Organized Crime, and Regional Governments in Peru (Lucia Dammert, Katherine Sarmiento)....Pages 179-204 Front Matter ....Pages 205-205 Linking Crime and Corruption: The Case of Mexico (Stephen D. Morris)....Pages 207-233 How Organized Crime Controls Guatemala’s Judiciary (Claudia Escobar)....Pages 235-264 The Social Conditions of Corruption in Honduras: What They Are, What They Mean, and What Can Be Done About Them (Kai Enno Lehmann)....Pages 265-286 Front Matter ....Pages 287-287 An Anticorruption Strategy for Latin America (Robert I. Rotberg)....Pages 289-300 Back Matter ....Pages 301-320 This Book Is The Newest And One Of The Very Few Existing Examinations Of The Full Nature Of Corruption Throughout Central And South America. In Detailed Chapters Written By Experts With Extensive In-country Experience, It Reveals The Political And Economic Roots And Consequences Of Corruption In Argentina, Bolivia, Brazil, Colombia, Guatemala, Honduras, Mexico, And Peru. The Editor's Introduction And Conclusion Texts Synthesize Their Work And Provides An Over-arching View Of Corrupt Practices And Anti-corruption Initiatives Throughout Latin America. Corruption In Latin America Shows The Extent To Which Corrupt Practices Engulf Each Of The Countries Discussed, The Involvement Of Political And Corporate Entities In The Pursuit Of Ill-gotten Gains, And The Drag On Development Caused By Corruption In Each Political Entity. The Book Will Be Of Interest For Social Scientists, Political Actors And Social Activists Involved In The Fight Against Corruption In Latin America By Providing In-depth Analyses Of The Topic And Discussing How Best To Pursue Anti-corruption Efforts Through Civil Society Actions, Judicial Endeavors, Legal Shifts, Or Elections. Edited By Robert I. Rotberg. Includes Bibliographical References (pages 301-309) And Index. "This book is the newest and one of the very few existing examinations of the full nature of corruption throughout Central and South America. In detailed chapters written by experts with extensive in-country experience, it reveals the political and economic roots and consequences of corruption in Argentina, Bolivia, Brazil, Colombia, Guatemala, Honduras, Mexico, and Peru. The editor's introduction and conclusion texts synthesize their work and provides an over-arching view of corrupt practices and anti-corruption initiatives throughout Latin America. Corruption in Latin America shows the extent to which corrupt practices engulf each of the countries discussed, the involvement of political and corporate entities in the pursuit of ill-gotten gains, and the drag on development caused by corruption in each political entity. The book will be of interest for social scientists, political actors and social activists involved in the fight against corruption in Latin America by providing in depth analyses of the topic and discussing how best to pursue anti-corruption efforts through civil society actions, judicial endeavors, legal shifts, or elections"--Publisher's description