Nathaniel M.

Laranjo
BA Political Science, 1R

Critique Paper for Institutionalism

The institutional context in which political events take place, as well as the results and effects
they produce, are what define Institutionalism. It highlights the degree of the institutional
environment in which political behavior takes place, the significance of the historical legacies
passed down to the present, and the wide variety of strategic orientations of actors to the
institutional contexts in which they find themselves. (Hay 2002, 14-15). Meanwhile, corruption
is a dishonest act or a criminal action committed by a person or group in a position of authority
to obtain illegal benefits or misuse that position for one's own gain. (Kaufmann, Vicente 2005).
This paper aims to discuss the relevance of the Institutionalism Theory, particularly the New
Institutionalism- Rational Choice, in explaining the existing problem of corruption, particularly
in the government. To comprehensively tackle this, this paper will present corruption and
Institutionalism separately before discussing them together.

What are Institutionalism and Corruption? How does Institutionalism relate to corruption and
corrupt behavior?

Issue of Corruption and its Global Occurrence

Worldwide, we are impacted by corruption which the World Bank defines as the abuse of public
power for private benefit. Corruption is dishonest conduct on the part of those in authority.
People who abuse their authority can be either individuals or members of groups, such as
corporations or governments. Giving or receiving bribes or inappropriate gifts, engaging in
double-dealing, and scamming are just a few examples of activities that might be considered
corrupt. According to Transparency International, the global average of Corruption Perceptions
Index (CPI) in 2021 was 43 out of 100 with zero being highly corrupt and 100 being very clean.
131 nations haven't significantly reduced corruption in the last ten years. 27 nations have the
lowest scores ever, and two-thirds of those have high corruption issues as their scores are
below 50. Transparency International's Global Corruption Barometer 2017 asked people in
various countries if they believe that particular institutions are corrupt. Globally, the estimates
presented that people perceived legislature and police forces to be the most corrupt.

Throughout the entire world, corruption takes many different forms. It has an impact on the
current political system, and the government, as well as cultural and sporting activities. There
are many different corruptible behavior patterns, each with unique traits in different contexts.
Many factors promote corruption to be practiced. The direct factors have to do with how
corruption is typically linked to state actions, wherein certain governmental activities provide a
favorable environment for corruption. Some factors directly endorsing corruption are
anomalies and loopholes in regulations and authorizations, taxation, spending decisions,
provisions for goods and services, and financing.

Corruption in the Philippines

A Hong Kong-based Political and Economic Risk Consultancy think tank revealed in a survey
that potential investors in Asia listed Indonesia as the most corrupt Asian country, followed by
Cambodia, Vietnam, and the Philippines as the fourth most corrupt. The Philippines experiences
numerous instances of corruption and criminality in all facets of civic life as well as across
numerous industries, according to GAN Integrity's Philippines Corruption Report 2020. The
state's judicial system, police force, public services, land administration, and natural resources
are all rife with corruption threats. Graft, plunder, bribery, favoritism, nepotism, impunity,
embezzlement, extortion, racketeering, fraud, tax evasion, lack of transparency, insufficient
enforcement of laws and government policies, and a lack of support for human rights are
examples of corruption in the Philippines and these forms of corruption are rampantly
happening under the umbrella of the government. There is an existing Republic Act No. 3019 or
the Anti-Graft and Corruption Practices Act but corruption remains rampant because this
becomes a norm and a habitual behavior already for many people and institutions.

Every aspect of life in the Philippines is affected by corruption, from the country's economy and
public services to its politics and law enforcement. Government and organized society become
distrusted as a result of corruption, which leads to hampered economic growth. Along with
having a terrible impact on people's lives, corruption also threatens the nation's institutions and
the rule of law. It gives criminals an unfair advantage over law-abiding residents, and corrupt
officials frequently enjoy impunity while stealing public funds. This damages public trust in the
government and increases social resentment towards those who abuse their positions and
possess power illegally. 

But what really is the root of corruption in the Philippines? The Spanish brought the practice of
corruption to the Philippines because of low salaries/wages and unfavorable working
conditions which created numerous possibilities for dishonest behavior and resulted in
widespread corruption in the colonial administration. (Quah, 1982a, p.158). (Woods, 2006,
pp.156-157) traced the roots of political corruption in the Philippines to the Spanish System of
governance. A family member, a close friend, or a supporter was chosen by the Spanish King to
serve as his governor-general. The governor-general and his subordinates had also anticipated
making money through graft and corruption because they weren't always qualified and
committed. The general public saw public service as a way to gain financial advantages, and it
was expected of public servants to increase their wealth at the expense of the interests of the
community.

Institutionalism and its Assumptions

Institutionalism is the emphasis on the institutional context in which political events occur as
well as the outcomes and effects they cause. It emphasizes how much political conduct is
influenced by the institutional setting in which it occurs, the importance of historical legacies
carried into the present, and the vast range of strategic orientations that actors have toward the
institutional contexts in which they find themselves. (Hay 2002, 14-15). What are the
Institutions? According to Old Institutionalism, these institutions are only government
structures. However, in the New Institutionalism, institutions gained a lot of faces. The
environment, formal rules, informal conventions, beliefs, paradigms, codes, cultures, and
knowledge are also characterizations of institutions. (March and Olsen, 1989). Aside from these,
institutions are also collections of standard operating procedures and structures that define and
defend interest. (March, James, and Olsen, 1983).

Institutionalism Theory has two kinds: Old and New Institutionalism. The Old Institutionalism
studies formal government institutions and outlined the state in terms of its political,
administrative, and legal structures. Meanwhile, New Institutionalism suggests that political
behavior cannot be understood without reference to the institution within which such behavior
occurs. (Immergut 1998: 6-8). Another assumption of this Institutionalism is that both formal
and informal rules enable effects on the behavior of individuals and groups (March and Olsen,
1989) and these institutional rules do not only shape but also constraints human behavior. New
Institutionalism encompasses different meanings of institutions. It also has four types namely
the Rational Choice (RCI), Historical (HI), Sociological (SI), and Discursive (DI). The RCI assumes
individual choices are founded on logical standards of self-interest, HI tackles Path Dependency
in which policies that are historically practiced will persist unless there is a Punctuated
Equilibrium, SI says norms and cultures affect the political behavior of individuals and DI
provides a more dynamic method of approaching institutional transformation while providing
insight into the function of ideas and speech in politics.

This paper will focus on the assumptions of Rational Choice Institutionalism and how its
assumptions will make sense of the existing issue of Corruption. To further elaborate RCI, it
pertains to a theoretical method for studying institutions that claims actors use institutions to
their best advantage. (Knight, 1996). RCI also presupposes that political actors operate inside
institutional frameworks with a predetermined set of interests and preferences and these
preferences affect their political behavior. Actors engage in highly instrumental behavior to
maximize their preferences through strategic cost-benefit analysis and systematic foresight.
(Shepsle, 2005). Moreover, (Shepsle, 1987) also said that Rational Choice Institutionalists
employ a characteristic set of behavioral assumptions. They typically assume that the actors
have a set of preferences or tastes typically adhering to more precise conditions like the
transitivity principle who behave entirely instrumentally in order to maximize the attainment of
these preferences and do so in a highly strategic manner that presupposes extensive calculation.

How can RCI explain the issue of Corruption?

The logic of the explanation of Rational Choice Institutionalism is that self-interest influences
the behavior of a political actor inside an institution. Moreover, in RCI, interest-driven actors
also utilize institutions in order to attain advantages for themselves. The most common location
of corruption is in the government. In the context of government corruption, what motivates
corrupt government officials to practice corruption is their own interest to advance their
personal economic status. Government offices are not supposed to be corrupt, however, it has
already been a stable pattern of behavior in many government institutions to practice
corruption. Corruption is existent because people inside many government agencies practice it
and this is highly related to government officials having their own interests to advance their
wealth which are conflicting with the supposed function of the government which is to deliver
for the good of the public. That is a conflict of interest and according to the Organization for
Economic Co-operation and Development (OECD, 2003), it is one of the main causes of public
sector corruption. (OECD, 2003) also added that conflict of interest occurs when a public
official's private interests collide with their obligations to the public and could improperly affect
how they carry out their official duties and responsibilities. The actors, in addition, also utilize
the government and its rules as instruments to carry out corruption. Governmental Corruption
obstructs the mandate of the state to serve the people which will result in a weakened public
trust.

The biggest corruption scandal the Philippines has ever had is the Marcos Corruption. Through
21 years of power, ousted Philippine President and Dictator Ferdinand Marcos Sr. and his family
were able to accumulate a vast amount of public wealth used to sustain their extravagant living.
Although estimates of the family's illicit riches vary, the majority of sources accept a range of
between US$5-10 billion for assets amassed during the long years of the Marcos presidency.
(Davies, 2016). Given the sharp collapse of the Philippine economy in the early 1980s,
Ambassador Stephen Bosworth estimated in a 1985 report to the House Committee on Foreign
Affairs of the United States Congress that the Marcoses had stolen an estimated $10 billion
(Quinn, 1985). This figure was supported by the then-Philippine Solicitor General during the
Cory Presidency. The stolen money was used by the Marcos family to buy numerous properties
locally and overseas. The Marcoses bought almost fifty mansions in the Philippines alone and
for a fact, Marcos Sr.’s wife, Imelda, has an astonishing collection of 2,100 pairs of shoes. In the
book of Jovito Salonga entitled “Presidential Plunder”, Marcos developed mechanisms to aid his
corruption activity and one of them was the issuance of Presidential Decrees and Orders which
allowed himself, his family, and his cronies to accumulate wealth.

In the above example, Ex-President Marcos practiced corruption. But what influenced this
politician to commit corruption? RCI suggests that the behavior of an individual in an
institutional setting is driven by his own interests and preferences. Therefore, Marcos was in his
own interest to advance his and his family’s wealth which motivated him to practice corruption
inside the government. One might argue that other factors aside from self-interest and
preference could have actually influenced his corrupt behavior but any reason he might have for
committing corruption, he still preferred to steal the public’s money because corruption, from
any angle, is financially beneficial to the corrupt actor. He's interested in increasing his family’s
financial status and that interest had driven him to steal around $5-10 Billion of public funds.
His preference to enrich the purse of his family is visible in the Marcoses’ extravagant and lavish
lifestyle. This also signifies that; indeed, the corrupted public funds are used for personal gain
and are utilized to satisfy his greedy interest. Moreover, the dictator also used his powers as
President to support his illegitimate activity and this shows that he was able to utilize the
institutions, the government, and its rules, in order to attain advantages for himself and his
family. Marcos’s corruption happened under the government, specifically in the top executive
office. Corruption inside the government institutions, especially since the corrupt actor was the
country’s top official, impedes the state's capacity to deliver public good. The $US5-10 billion ill-
gotten wealth had depleted the economy. If had not been corrupted, this vast amount of money
could have aided many Filipino families in alleviating poverty considering that 49% of Filipinos
during Martial Law were living under the poverty line. (IBON Foundation, 2016).

Conclusion and Summary

Corruption is a dishonest act or a criminal action committed by a person or group in a position

of authority to obtain illegal benefits or misuse that position for one's own gain. The
composition of government expenditures may be distorted by corruption. Government agencies
and officials may be tempted by corruption to make decisions about spending less on the basis
of the general welfare and more on the basis of the chance to demand bribes. Corruption
hampers the growth of the country as it takes away opportunities supposed to nurture the
welfare of the general public. Institutionalism, on the other hand, stresses the importance of
institutions in shaping the political behavior of the people. Institutions in New Institutionalism
take many forms, these can be government agencies, organizations, and formal/informal rules,
but the common ground of these forms is that they all can influence the behavior of individuals
in politics. Corruption is a systematic crime often committed by people inside an organization in
which this organization is already embedded with corruption. Therefore, it would be better to
examine corruption at an institutional level.

To conclude,

References

Hay, Colin (2002) Political Analysis: A Critical Introduction, 1 st ed. (Red Globe Press)

Kaufmann, D., Vicente, P. (2005) Legal Corruption. Pp. 2-3

Bardhan, Pranab (1997), Corruption and Development; A Review of Issues, Journal of Economic
Literature, 35, pp. 1320-1346

World Bank Group (2022). Combating Corruption, (World Bank Pres Review)

Jurado, Emil (March 12, 2010). The Fourth Most Corrupt Nation. Manila Standard Today.
Archived from the original on March 14, 2010. Retrieved August 21, 2010.

Quah, Jon S. T. (July 21, 2011). Curbing in Asian Countries: An Impossible Dream. Emerald
Group Publishing. Pp. 115-117.

The Philippines Corruption Report. Gan Integrity. Retrieved 2021-10-17.

March, J. Olsen, J. Rediscovering Institutions: The Organization Basis of Politics. (New York: The
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March, J., James, G., and Olsen, J. (1983) The New Institutionalism: Organizational Factors in
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Knight, J., Sened, Itai (1996) Explaining Social Institutions. Ann Arbor, MI: University of
Michigan Press. Pp. 95-120.

Knight, J. (1992). Institutions and Conflicts. Cambridge University Press.