Institutional Corruption and the Crisis of Liberal Democracy

Abstract

The inevitability and stability of liberal democracy is taken for granted in contemporary political discourse, although many of the architects of modern politics viewed democracies as fragile and prone to corruption and disintegration. A close look at the historical record reveals that a number of unique conditions enabled modern democratic states to be economically productive and socially cohesive - conditions that are not inevitable and which must be cultivated outside of the logic of democratic bargaining if the goods we associate with democratic governance are to resist corruption. Two of these conditions are paramount and warrant our attention more than ever today: first, a cultural commitment to “liberal ethics;” and, second, the ability to generate wealth without holding political power. When combined in the right way with democratic institutions these help explain the genius of western prosperity. However, democratic politics inherently generate forces that threaten to undermine these pillars of social cohesion and economic growth. In particular, democracy provides powerful incentives for rent seeking, grandstanding, and unsustainable borrowing. This paper explores the logics that give rise to these three phenomena, and further argues they are aggravated by complexity and the centralization of political power. The corrupting tendencies of democracy can be resisted, this paper concludes, through two principle means: investigative efforts that uncover and communicate abuses, and ideological commitments that limit the scope of political bargaining - both of which are necessary to preserve the “liberal” character of liberal democracies.

Keywords: Institutional Corruption, Liberal Democracy, Political Economy, Rent Seeking, American Politics, Open Access, Grandstanding