Conditions for Corruption : Institutions, Executive Power, and Privatization in Argentina and Chile in the 1990s

Abstract: The question posed in this dissertation is why high-level corruption has been less widespread in Chile than in Argentina. It explores the hypothesis that political-institutional conditions have made Chile less vulnerable to high-level corruption than its neighbor. The analytical focus is on four institutional dimensions usually considered significant for explaining variations in vulnerability to corruption: power concentration, discretion, transparency, and intrastate accountability. The role and significance of institutional conditions emerge from an empirical study of the actions of decision-makers – largely executive officials – in connection with the launching and implementation of privatization during the 1990s (just the sort of situation normally offering manifold incentives and opportunities for corrupt behavior).The results of this study confirm the significance of political institutions in accounting for differences in vulnerability to corruption at high levels of the political hierarchy. The Chilean political setting proved more adverse to corruption than its Argentinean counterpart, with stronger intrastate accountability and a less pronounced concentration of power in the hands of the executive branch. Variations in the level of discretion in decision-making were found to be less influential than is usually suggested in the literature on corruption. Most notably, a higher level of transparency in Argentina was not associated with any lower level of corruption. The research findings indicate a more complex causal relationship than expected between transparency and corruption, with results varying according to level of transparency, time span considered, and degree of intrastate accountability and power concentration. The empirical analysis also yields revealing insights into the role played by particular institutional conditions in shaping contexts more adverse or favorable to high-level corruption. These insights are of value for theory development, and may be useful for purposes of institutional reform.