SYSTEMIC CORRUPTION. From Institutional Consequences to Systemic Transformation

Abstract

This article is the second contribution to the Corruption Series, which develops a new paradigm (analytical framework) for the study of corruption based on the analysis and integration of documentation produced by intergovernmental organisations. The first article addressed macroeconomic corruption, whose documented scale exceeds public debt in the four largest economies of the European Union, although this dimension has not been incorporated into economic, political or anti-corruption analysis. This second article examines the systemic dimension of corruption: what happens when its consequences simultaneously affect society as a whole. Drawing primarily on three decades of documentation from intergovernmental organisations, the analysis shows that corruption has consistently been linked to the deterioration of the market economy, economic development, productivity, democracy, the rule of law, human rights, social justice, competition, institutional stability and the security of societies. These consequences extend far beyond the individual conduct traditionally addressed by anti-corruption rules. The article integrates this institutional documentation with econometric evidence on resource misallocation and productivity losses and examines what happens when corruption reaches the institutions responsible for preventing, investigating, adjudicating and sanctioning it. It also introduces the concept of extractive minorities to analyse actors and networks that continuously benefit from the deviation of institutions from the purposes for which they were created. The analysis concludes that systemic corruption is not simply another category of corruption. When corruption simultaneously affects the economy, the distribution of resources and opportunities, democratic institutions, the rule of law and fundamental rights, it becomes a mechanism of systemic transformation and emerges as a structural cause of Western decline, including its economic decline.