John Taylor, Professor of Economics at Stanford University and developer of the "Taylor Rule" for setting interest rates | Stanford University
John Taylor, Professor of Economics at Stanford University and developer of the "Taylor Rule" for setting interest rates | Stanford University
As the world approaches the end of a significant election year, concerns about democracy's health are rising. Among the threats to democratic systems are discontent with political parties, disinformation, and a shift toward authoritarian discourse. Corruption is also cited as a major issue affecting democracy.
A 2020 global survey highlighted dissatisfaction with democracy in countries plagued by misgovernance. In Latin America, many citizens view corruption as their country's top problem, which correlates with declining trust in democratic institutions.
Saumitra Jha from Stanford Graduate School of Business collaborated with Eduardo Rivera of MIT and Enrique Seira of Michigan State University to investigate this connection. "We confirmed that corruption does have a causal impact on undermining support for democracy," Jha states.
Their research focused on "apex corruption," where high-level politicians misuse public office for personal gain. They compiled data on major corruption scandals in Latin America from 2008 to 2018, such as Brazil's Operation Car Wash. Surveys indicated that apex corruption decreased trust in democratic institutions and increased authoritarian preferences.
The researchers conducted a field experiment in Oaxaca, Mexico, before the 2021 congressional elections. Participants viewed videos depicting corruption involving then-President Andrés Manuel López Obrador's family and opposition leaders. The first video significantly impacted viewers' trust in democracy and fellow citizens.
To counter apex corruption effects, participants watched a video promoting national pride through Mexico's landmarks and history. However, its impact was limited. "I found it deeply emotive," Jha says, but it did not offset apex corruption effects.
Another approach involved exposing participants to financial markets to test if shared economic gains influence attitudes toward democracy. This exercise increased support for democracy among those who participated.
Despite perceptions associating corruption with developing countries, research shows similar views in the United States and Latin America. "I was surprised to see that," Jha notes regarding Americans' belief that private interests corrupt democracy.
Jha remains hopeful about reversing high-level corruption's impact on democracy. "If we see leaders being explicitly honest...their prominence can change the equilibrium," he explains.
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