After the euphoria surrounding Barack Obama?s presidential victory, winter has once again descended on Chicago. At 6.15 am on December 9 , the FBI arrested Rod Blagojevich, Illinois? Democratic governor, for political corruption punishable by up to 30 years in prison.
The governor?s position is a powerful one. As the chief executive of Illinois, Blagojevich has the ability to dole out political favours and fill vacancies. Thanks to relentless investigations by the lead government attorney for northern Illinois, Patrick Fitzgerald, there is reason to believe Blagojevich has accepted and solicited money in exchange for several favours.
One allegation is that he tried to sell Obama?s vacant Senate seat to the highest bidder. Two prominent contenders for this position have been Valerie Jarrett, a senior Obama advisor, and Jesse Jackson Jr., son of the renowned civil rights activist and politician. Records of phone conversations capture Blagojevich complaining about the Obama team?s refusal to pay to install Jarett. These records are evidence also of Blagojevich?s mastery over the art of profanity.
The unfolding scandal, termed Blagogate, is a reminder to Americans that corruption is not just a problem for developing countries. While the Watergate scandal still dominates the imagination, recent examples range from Jack Abramoff?s outrageous lobbying deals to Halliburton?s questionable oil-drilling contracts.
Illinois, in particular, has been fertile ground for corruption. Five past governors have been charged with crimes and three of them have served time in prison. As for Blagojevich, even before the arrest, his approval ratings were so low that he had earned the title of ?America?s least popular governor.?
Political corruption is the exploitation of political power by government agents for personal gain. Despite the negative connotations of the term, economists have demonstrated that corruption is not automatically bad. For example, if countries are saddled with bureaucratic red tape, bribes can help businesses get started more efficiently.
The Blagojevich case does not fall into this mould. Rather than increasing efficiency, this kind of corruption undermines the principles of fairness and equal access upon which the American political system is built. It is true that the US has an effective set of incentives to prevent small-scale corruption?you would be hard-pressed to find a policeman who would waive a speeding ticket in exchange for a bribe. But incentives against large-scale corruption, arguably the more insidious kind, are inadequate.
Another fallout of corruption among political elites is increased disaffection among regular citizens. We see this in the stoic cynicism displayed by Indian voters, who are under no illusions about the integrity of their leaders. I observed similar resignation on a recent visit to Chicago?s Cabrini-Greene housing project for low-income families. Amidst the gloom and desolation of high-rises set amidst concrete courtyards, residents described how their fates were decided by illicit financial deals between real-estate developers and local politicians. Sociologist Sudhir Venkatesh has documented other forms of corruption in Chicago?s public housing authority.
It is hard to eliminate corruption in the US because it can be indistinguishable from legal lobbying. If a corporate contribution to a campaign is followed by a favour from a politician to that corporation, it is difficult to prove that the contribution was made in exchange for the favour. So the legislature must continue its bipartisan effort to tighten and reform lobbying laws.
Finally, Blagojevich should do the right thing, even at the cost of his bargaining power. Budd Dwyer, a Republican from Pennsylvania, responded to allegations of corruption by publicly committing suicide in 1987. No one would wish for such a dramatic response. But it would help if Blagojevich were to voluntarily resign from his Governorship before impeachment proceedings begin.
?The author is a post-doctoral fellow and instructor in economics at the University of Chicago