The Concept of Systematic Corruption in American Political and Economic History

58 Pages Posted: 19 Dec 2004 Last revised: 5 Dec 2022

See all articles by John Joseph Wallis

John Joseph Wallis

University of Maryland - Department of Economics; National Bureau of Economic Research (NBER)

Date Written: December 2004

Abstract

The critical role of governance in the promotion of economic development has created intense interest in the manner in which the United States eliminated corruption. This paper examines the concept of corruption in American history; tracing the term corruption to its roots in British political philosophy of the 17th and 18th century, and from there back to Machiavelli, Polybius and Artistole. Corruption was defined prior to 1850 in a way that was significantly different from how it was defined in the Progressive Era. "Systematic corruption" embodied the idea that political actors manipulated the economic system to create economic rents that politicians could use to secure control of the government. In other words, politics corrupts economics. The classic cure for systematic corruption was balanced government. Americans fought for independence because they believed that the British government was corrupt. The structure of American constitutions was shaped by the need to implement balanced government. Conflict and debate over the implementation of balanced government dominated the political agenda until the 1840s, when states began moving regulatory policy firmly towards open entry and free competition. By the 1890s, systematic corruption had essentially appeared from political discourse. By then corruption had come to take on its modern meaning: the idea that economic interests corrupt the political process. What modern developing countries with corrupt governments need to learn is how the United States eliminated systematic corruption.

Suggested Citation

Wallis, John J., The Concept of Systematic Corruption in American Political and Economic History (December 2004). NBER Working Paper No. w10952, Available at SSRN: https://ssrn.com/abstract=629594

John J. Wallis (Contact Author)

University of Maryland - Department of Economics ( email )

College Park, MD 20742
United States
301-405-3552 (Phone)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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