Legislative Vetoes and Corruption: The Effect of Formal Checks on Governance

What keeps corruption in check? Politicians have incentives to both avoid and actively oppose corruption when voters can hold them accountable for it. But to punish malfeasance voters have to know about it, and corrupt actors don’t want such information to be easy to find. Moreover, we argue that the very people best positioned to observe and block corruption—legislators with influence in the policy-making process—also are well-positioned to benefit from corruption. We thus focus on political elites and explore the conditions affecting the corrupt exercise of influence in the policy-making process. To that end, we look at the role of institutional checks in the legislative process and conclude, contra conventional wisdom, that as the number of checks increase so also should corruption increase, all else equal. This conclusion follows from the argument that checks give the individuals who control them influence and, importantly, an incentive to collude with other veto players in order to channel public resources to private ends. As long as the benefits of collusion (e.g., among coalition partners or even copartisans) outweigh the costs, increasing the number and potency of checks only increases opportunities for corruption. We find, testing our claim against data from a sample of 97 countries, strong support for our hypothesized relationship between institutional checks and corruption.