Presidentialism, Parliamentarism, and Corruption

A Review Essay
EDCEL JOHN A. IBARRA Undergraduate Program in Political Science University of the Philippines, Diliman October 12, 2012

If men were angels, no government would be necessary. If angels were to govern men, neither external nor internal controls on government would be necessary. In framing a government which is to be administered by men over men, the great difficulty lies in this: you must first enable the government to control the governed; and in the next place oblige it to control itself. A dependence on the people is, no doubt, the primary control on the government, but experience has taught mankind the necessity of auxiliary precautions. James Madison, The Federalist, no. 51 One of the most important and most crucial decisions when drafting a constitution lies in determining the form of government. Two popular representative democratic choices have emerged during the past centuries: a United Statesstyle presidential system and a United Kingdomstyle parliamentary system. The former is characterized by a separation of the executive, legislative, and judicial 1

functions of government ( separation of powers), while the latter, in contrast, is characterized by a fusion of executive and legislative functions of government ( fusion of powers). Choosing from either of the two, any rational constitutiondrafting body ought to consider the perils and merits of both presidential and parliamentary setups, and they ought to choose the system whose merits prevail over its perils in the context of their country. To settle which system indeed has more merits vis--vis the other by examining what scholars have told us on the matter is the object of this paper; in particular, this paper focuses on the effects of a presidential or a parliamentary setup to the levels of corruption experienced by countries. If indeed corruption levels vary throughout presidential and parliamentary systems, choosing the setup that fosters lower corruption and, in so far as lower corruption translates into better governance (see Kaufmann, Kraay, and Zoido-Lobaton 1999a; 1999b), the system which allows for better governmental performance, amounts to a wise choice in constitutional design. A quick look on the literature on government systems and corruption reveals that levels of corruption do vary under presidential and parliamentary systems, but the scholarly community is dividedand the divide is uneven. On the one hand, a majority discovers that parliamentary systems tend to be associated with lower corruption. A minority, on the other hand, discovers the other way around, that presidential systems seem to foster lower corruption. While, judging from the sheer number of scholar-supporters, it might be safely concluded that parliamentary systems do foster lower corruption, they attribute this tendency to contrasting explanations. This needs to be straightened and clarified; for the time being, however, the existing theoretical literature is equivocal. Moreover, a relatively recent presidentialist challenge is posed by Alt and Lassen (2008). The study found internal variations on the levels of corruption within presidential
1. Most contemporary parliamentary democracies chose to establish a separate judiciary, borrowing the notion of judicial independence from the presidential system. (Before the United Kingdom Supreme Court started work in 2009, Parliament exercised judicial powers through the House of Lords. But while an independent judiciary was established, the court has limited power to conduct judicial review because of the doctrine of parliamentary sovereigntya manifestation of fusion of powersand, hence, it cannot fully hold Parliament accountable.) Indeed, some countries found that both systems have desirable features and have chosen to combine the two systems. A common variety is the semi-presidential model pioneered by the French. It is characterized by a dual executive: a popularly-elected president and a prime minister elected by the legislature.

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systems. What they missed is to compare how these internal variations fare with levels experienced under a parliamentary system. This gap is wide-open for future researchers to investigate. Of course, the arguments that emerge in this review essay are woven from the selected scholarly work. The author acknowledges that the works cited in this paper might not sufficiently sample the breadth of the literature. The selection of related studies is based upon the literature reviews of Kunicov (2006) in Democratic Institutions and Corruption: Incentives and Constraints in Politics and Treisman (2007) in What Have We Learned about the Causes of Corruption from Ten Years of Cross-national Empirical Research? All relevant studies cited in these two articles, including relevant citations therein, are cited in this paper. The organization of this review essay is as follows: the next section explores the variables at play and the approaches employed in the literature; the second section shows the empirical findings; the third lays out the theoretical explanations; the fourth explores why presidentialism deserves a second look; and, finally, the last section concludes with a review of the main points that transpired throughout this paper. VARIABLES & APPROACHES While there is an admission that corruption is notoriously difficult to define (Gerring and Thacker 2004, 300), the literature generally agrees on a definition along the lines that corruption constitutes a violation of legal and moral norms in the pursuit of self-enriching interests through public office. But even more difficult than defining corruption is establishing its empirical indicators. Persson and Tabellini (2003, chap. 3.3.1) acknowledge that as corruption is generally illegal, violators try to keep it secret. Kunicov and Rose-Ackerman (2005, 589) also concede that no objective, cross-country data exists for corruption. As such, the literature instead measure levels of perceived corruption. While these percep3. 4. Note that the author is ultimately limited to sources that could be freely accessed on the internet and those that the university library system hold or have access to. Gerring and Thacker (2004), Kunicov and Rose-Ackerman (2005), Panizza (2001), and Persson and Tabellini (2003) used Transparency Internationals Corruption Perceptions Index (CPI) and World Banks Control of Corruption Index (devised by Kauffmann, Kraay, and Zoido-Lobaton (1999a; 1999b)).

tions might not reflect reality, the authors contend that they nonetheless give an acceptable analytical proxy. Meanwhile, form of government refers to the institutional arrangement through which government processes inputs and delivers outputs; of particular interest are presidential and parliamentary forms. As was stated above, a presidential form is characterized by separation of powers while a parliamentary form is characterized by fusion of powers. Separation of powers means that the executive functions independent of the legislature: the executive is elected by the people and works separately from the legislative branch (Gerring and Thacker 2004; Kunicov and Rose-Ackerman 2005). Fusion of powers, in contrast, means that the executive functions dependently upon and at the mercy of the legislature: the executive is elected by the members of the legislature and works under a confidence requirement (Persson and Tabellini 2003; Gerring and Thacker 2004). Interestingly, while Panizza (2001), Persson and Tabellini (2003), Lederman, Loayza, and Soares (2005), and Kunicov and Rose-Ackerman (2005) employ a binary treatment of the forms of government variable (strictly either presidential or parliamentary), Gerring and Thacker (2004) allow for semi-presidential systems. Their measure of form of government is a convergence of two factors: the degree of executive-legislative separation and the relative power of the executive. Hence, while France appears as parliamentary in Kunicov and Rose-Ackerman (2005, 605), it appears as semi-presidential in Gerring and Thacker (2004, 329). Gerring and Thacker (2004) also acknowledge that forms of government might not immediately affect corruption; as such, they measure the form of government in a country 20 years before the corruption data. The authors general agreement in the dependent and independent variables extends to their control variables. Across the literature, the most commonly controlled are: GDP per capita, colonial and legal origin (if the country is a former British colony), and religious belief (especially protestantism) (Persson and Tabellini 2003; Gerring and Thacker 2004; Lederman, Loayza, and Soares 2005; Kunicov and Rose-Ackerman 2005).

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The other control variables that appeared in one or two studies include: federalism, size of government, distribution of resources, socialist history, ethno-linguistic fractionalization, education, number of years as a democracy, and policies that possibly make way for corruption.

The authors are also united in their approaches, though the unity cannot be accounted to mere chance. The research question demands adherence to a particular approach. In this case, two possible approaches can be adopted: behavioralism and institutionalism. Behavioralism scientifically studies political behavior; a behavioralist research question could be along the lines: Do forms of government correlate to levels of corruption? Institutionalism, meanwhile, is an attempt to show institutions as determinants of political behavior; an institutionalist research question could be: How do institutional features in forms of government influence levels of corruption? The literature then may be divided into two groups: a behavioralist camp composed of Panizza (2001), Persson and Tabellini (2003), and Lederman, Loayza, and Soares (2005) and an institutionalist camp composed of Gerring and Thacker (2004) and Kunicov and Rose-Ackerman (2005). Because behavioralists tend to be more straightforward and parsimonious, the behavioralist camp focuses in trying to show the correlation between a specific form of government and levels of perceived corruption through number-crunching. The institutional camp, meanwhile, focuses in trying to show the same correlation not through number-crunching but rather by laying out theoretical explanations. Gerring and Thacker (2004) and Kunicov and Rose-Ackerman (2005), however, proceed further into number-crunching and empirically test their theories. In sum, there is no significant disagreement among the authors in the definition and operationalization of the variables, as well as in the methodology. All authors employ quantitation of the variables either to statistically show correlation, as with the behavioralist camp, or to empirically prove theoretical explanations, as with the institutional camp does. The result of the both campss numbercrunching is explored in the next section.

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Old institutionalism in particular. While the some in the behavioralist camp included explanations for the correlation, they do not explain as comprehensively as the institutionalists because of their fidelity to parsimony. (Such fidelity to parsimony is evidenced by their preference to quantitation: because figures are more straightforward, they paint the political phenomena more parsimoniously.)

EMPIRICAL EVIDENCE Having established the variables and the methodologies, only the actual research is left. Empirically, Panizza (2001), Gerring and Thacker (2004), Lederman, Loayza, and Soares (2005), and Kunicov and Rose-Ackerman (2005) find that parliamentary systems tend to be associated with lower levels of perceived corruption. In addition, Gerring and Thacker (2004) find that: (1) perceived corruption tends to be at lowest under a parliamentary-unitary form of government, (2) parliamentary-federal or presidential-unitary forms experience intermediate corruption, and, (3) presidential systems coupled with a federal form of government boost levels of perceived corruption. Furthermore, Kunicov and Rose-Ackerman (2005) affix that presidential systems coupled with a proportional representation systems (especially closed-list) cultivate the highest levels of perceived corruption; lowest levels appear in parliamentary-plurality systems. Meanwhile, Persson, Roland, and Tabellini (1997) and Persson and Tabellini (2003, chaps. 2, 4, 7) seem to be the only scholars who find presidential systems to be associated with lower levels of perceived corruption. In Persson and Tabellini (2003, chap. 7), they maintain this observation but acknowledge that the trend of lower perceived corruption seems to be significant only in old and established presidential regimes. Nevertheless, with more scholars finding lower perceived corruption in parliamentary setups, it is safe to conclude that empirical evidence correlates parliamentary systems to lower corruption. Exactly how parliamentary forms curb corruption is examined in the succeeding section. THEORETICAL EXPLANATIONS Forms of government determine levels of corruption by presenting constraints (or indeed inducements) to corrupt political behavior of public officials. Constraints to corruption usually work through accountability mechanisms. Accountability mechanisms refer to the procedures through which public officials are punished (to varying degrees) for their wrongdoingrent-seeking in this particu8. Only Persson and Tabellini (with Roland 1997; 2003) was summoned to defend presidentialism across the works of Lederman, Loayza, and Soares (2005), Kunicov and Rose-Ackerman (2005), Kunicov (2006), and Alt and Lassen (2008).

lar case. Indeed, accountability mechanisms are the common causal explanation that surface in the literature. Three accountability mechanisms are identified: elections, institutional checks and balances, and degree of centralization. Elections are the simplest accountability mechanism. Lederman, Loayza, and Soares (2005, 7) posit that the simple presence of fairly-conducted elections assures that politicians can be held accountable in reoccurring periods for their actions while in office; hence they can be punished for corrupt behavior. Persson and Tabellini (2003) and Gerring and Thacker (2004) extend this argument in presidential and parliamentary systems. Persson and Tabellini (2003, chap. 2.4.1) assert that presidential systems make it easier for voters to identify who is to be punished because the distinctions on the responsibilities of the executive and the legislative branches are clearly drawn by virtue of separation of powers. But Gerring and Thacker (2004, 318) disagree. They argue that intergovernmental competition, or the conflict of interest between the executive and the legislative, blurs rather than clarifies lines of accountability. Gerring and Thacker (2004) extend their argument by highlighting political parties in parliamentary systems. They posit that parties are much easier to monitor and be held accountable than individual candidates in elections (Gerring and Thacker 2004, 321). Kunicov and Rose-Ackerman (2005), while supporting parliamentarism, disagree with that point. They share the same fear with Persson and Tabellini (2003) that strong parties may act as cloaks to the corrupt behavior of its members (especially under closed-list proportional representation elections) (Kunicov and Rose-Ackerman 2005, 57985). In brief, there is no disagreement that the presence of fair and competitive elections reduces corruption. The only contention is the effectiveness of the electorate in actually holding corrupt public officials accountable under presidential and parliamentary setups. Elections, however, are inadequate to hold government accountable (as Madison remarks in the opening quote of this essay), especially if officials are protected by term limits. This is precisely the reason why the founding fathers of the United States (and of presidentialism) designed institutional checks and balances as a subsequent to separation of powers. Persson and Tabellini (with Roland 1997;
9. Accountability mechanism essentially points to the same system as checks and balances, but checks and balances is often associated to the presidentialism and delimited to institutional checks and balances. Accountability mechanism is preferred to avoid this ambiguity.

2003, chaps. 2, 4, 7) and Panizza (2001) have confidence in the founding fathers wisdom and initially hypothesize that the presence of checks and balances in presidential setups significantly reduces corruption. But Gerring and Thacker (2004, 325) undermine institutional checks and balances by pointing out that it fails, or at least is acted poorly, precisely because under a presidential system, these institutions are formally separated and independent from each other. Having a formal division translates to having a mountain range or a wide river between institutions, making the process of checking and balancing a lot harder and, consequently, a lot more ineffective. Kunicov and Rose-Ackerman (2005, 5856) add that since sovereign executive power is exclusive to and centralized in the presidency, presidents also have within them undivided power over rents, creating an environment highly susceptible to corruption. In contrast, parliamentary systems, as Panizza (2001) and Lederman, Loayza, and Soares (2005, 8) put, allow for stronger and more immediate checking and balancing of the executive by the legislature, thereby presenting constant and unimpeded constraints to corruption. In brief, while checks and balances is often thought to be the distinguishing feature of presidential systems, many in the literature (indeed, everyone but Persson and Tabellini (with Roland 1997; 2003, chaps. 2, 4, 7)) admit that the actual checking and balancing of congress to the president is weaker and more sluggish compared to the checking and balancing of the parliament to the prime minister and his cabinet. The third accountability mechanismcentralizationis introduced by Gerring and Thacker (2004). Centralization refers to how formal institutional power is distributed throughout the government. If sovereign power is vested in fewer institutions, the result is a more centralized government, but if sovereign power is distributed to more institutions, the result is a less centralized or a more decentralized government. Fusion of powers in parliamentary setups centralizes power into a single institution. Such supremacy of a single institution (parliamentary
10. Panizza (2001) is initially deceived by the checks and balances argument and hypothesized that presidential systems experience lower corruption; but later in the research, he reframes the checks and balances thesis to favor parliamentary systems following his empirical results. 11. The concept is not limited to core-periphery relations alone; indeed, it looks on how power is distributed both vertically (unitary or federal) and horizontally (parliamentary or presidential). Hence, parliamentary-unitary setups exhibit the highest degree of centralization while presidential-federal setups exhibit the highest degree of decentralization.

sovereignty), in turn, necessarily establishes a hierarchical arrangement. This hierarchy allows for fewer opportunities for independent actors to influence governmental decisions (fewer veto players) and, consequently, the likelihood of corruption becoming prevalent is lowered. Separation of powers, on the other hand, distributes overlapping powers into multiple institutions, thereby creating more entry points for independent veto players, and hence, more opportunities for corruption. Kunicov and Rose-Ackerman (2005) disagree. They fear centralization because while centralization may indeed constrain corruption of those subordinate within the institutional hierarchy, it simultaneously widens openings for corruption within those highest in the hierarchy. But Kunicov and Rose-Ackerman (2005) do not see centralization in parliamentary systems as Gerring and Thacker (2004) do. Instead, they see centralization as inherent in a presidential system, as it is in this form of government where a great deal of powerexecutive, quasi-legislative, and quasi-judicial in natureis concentrated to a single person-institution: the president. In brief, the degree of centralization determines the number of entry points for independent veto players and, consequently, the opportunities for corrupt practices. Yet, while a hierarchical arrangement limits the opportunities for corruption of subordinate institutions, it nonetheless allows for a substantial leeway to those in the tip of the pyramid. But exactly which form of government is more centralized is a matter of contestation. It was shown that in each of these three accountability mechanisms, the literature is deeply divided. More importantly, it leaves us with three questions of great significance: (1) in which form of government the electorate is more effective in actually holding corrupt officials accountable, (2) in which form of government checks and balances are more pronounced, and lastly, (3) in which form of government is more centralized. Resolution to these questions will determine, at least theoretically, which form of government indeed presents more effective constraints to corruption; for the time being, precisely because the existing theoretical literature does not resolve these core questions, it is dismissed as equivocal. A SECOND LOOK ON PRESIDENTIALISM While the scholarly community obviously favors parliamentary systems, Alt and Lassen (2008) in Political and Judicial Checks on Corruption: Evidence from 9

American State Governments make the case that not all presidential systems are inherently more corrupt; indeed, they argue that there is an internal variation among presidential setups. They empirically find that a divided government (different parties control the executive and the legislative) fosters lower corruption compared to a unified government (a single party controls both the executive and the legislative). Meanwhile, a unified government with an elected judiciary match lower corruption levels seen under a divided government. More interestingly, the authors make a bold claim that a divided government coupled with an elected judiciary may be substitutes in curbing corruption (Alt and Lassen 2008, 56). They explain that divided governments create party competition that make it harder for the executive to control the legislative, addressing the fear of an all-powerful executive under presidential setups expressed by Kunicov and Rose-Ackerman (2005). In addition, party competition also encourages stronger checks and balances on the executive by the legislative, undermining the weakerchecks-and-balances thesis put forward by Gerring and Thacker (2004), Panizza (2001) and Lederman, Loayza, and Soares (2005). Whether these internal variations within presidential systems potentially equal or better corruption levels experienced in parliamentary systems is an empirical question for future researchers. CONCLUSION At the least, we have learned that levels of perceived corruption vary within presidential and parliamentary setups. For starting (or restarting) liberal democracies, choosing the system that fosters lower corruption and, consequently, in so far as lower corruption translates into good governance, the system that allows for better governmental performance, becomes crucial in determining the countrys expected path of development. However, whether parliamentary systems fare better than presidential systems or the other way around, has not yet been settled, both theoretically and empirically. Theoretically, the explanations are equivocal: the literature is deeply divided in its causal explanations. Empirically, the internal variations of levels of corruption found by Alt and Lassen (2008) have yet to be compared against parliamentary systems. But the safest bet for starting liberal democracies is to adopt a parliamentary setup. Existing presidential democracies, 10

meanwhile, need not change into parliamentary democracies. Persson and Tabellini (2003) reveal that established presidential regimes experience lower corruption than parliamentary regimes. Gerring and Thacker (2004), in addition, notes that it might take some time for constraining mechanisms embedded in forms of government to take effect. In this light, maintaining the presidential system might bear fruit and be significantly less corrupt over time. It does not mean, though, that presidential democracies have to wait in vain. Political institutions, such as forms of government, are important determinants of corruptionas underlined by the literaturebut they are not the sole determinants. In the end, it is an agential question to the public official: it is ultimately up to him if he choses to betray the mandate entrusted to him by the people. REFERENCES
Alt, James E., and David D. Lassen. 2008. Political and Judicial Checks on Corruption: Evidence from American State Governments. Economics and Politics 20 (March): 3361. Gerring, John, and Strom C. Thacker. 2004. Political Institutions and Corruption: The Role of Unitarism and Parliamentarism. British Journal of Political Science 34 (April): 295330. Kaufmann, Daniel, Aart Kraay, and Pablo Zoido-Lobaton. 1999a. Aggregating Governance Indicators. Unpublished paper, World Bank. . 1999b. Governance Matters. Unpublished paper, World Bank. Kunicov, Jana. 2006. Democratic Institutions and Corruption: Incentives and Constraints in Politics. In International Handbook on the Economics of Corruption, edited by Susan Rose-Ackerman. Cheltenham: Edward Elgar. Kunicov, Jana, and Susan Rose-Ackerman. 2005. Electoral Rules and Constitutional Structures as Constraints on Corruption. British Journal of Political Science 35 (April): 573606. Lederman, Daniel, Norman V. Loayza, and Rodrigo R. Soares. 2005. Accountability and Corruption: Political Institutions Matter. Economics and Politics 17 (March): 135. Panizza, Ugo. 2001. Electoral Rules, Political Systems, and Institutional Quality. Economics and Politics 13 (November): 31142. Persson, Torsten, and Guido Tabellini. 2003. The Economic Effects of Constitutions. Cambridge, MA: MIT Press. Persson, Torsten, Grard Roland, and Guido Tabellini. 1997. Separation of Powers and Political Accountability. Quarterly Journal of Economics 112 (November): 1163202. Treisman, Daniel. 2007. What Have We Learned about the Causes of Corruption from Ten Years of Cross-national Empirical Research? Annual Review of Political Science 10 (June): 211 44.

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