Tuesday, October 11, 2005

Corruption: the relationship between official power and personal power

The Xpatriated Texan provides some additional insights on the incentives behind corruption. He considers the position of individuals who are entrusted with extensive power in their official role, but are not given much personal power (in the form of a high salary). This can be especially important in the case of old-fashioned graft, but I think it is less important with respect to the more subtle forms of corruption that I emphasized in my earlier post on How Power Corrupts.

Apparently, in New Jersey, a member of the legislature oversees the disbursement of billions of dollars, but has an income that is less than the median income of the state. Here in PA, the legislature gets a handsome compensation, so I didn't think that this was a problem for them. However, I've long thought that this disparity was important when it comes to the officials who actually implement the law--such as the cops. Here in Pittsburgh, I've gotten the impression that cops can be a bit resentful of the wealthier citizens of the community--especially the proto-professionals at Carnegie Mellon University. It seems obvious that a person's salary should be proportionate to that person's power.


Xpatriated Texan said...

I appreciate the note.

I want to make clear that the purpose of my post was not to say that you could magically get rid of corruption by upping someone's salary. It is simply part of an inherent gut-level cost-benefit analysis that everyone does.

Someone offers you fifteen thousand dollars a week for a year. If you get caught, you'll lose the fifty thousand annual salary. But if you can get away with it for only four weeks, you'll have more than doubled your salary - tax free.

If someone offers you fifteen thousand dollars a week for a year and getting caught will cost you a hundred and fifty grand, well, it takes a lot longer of not getting caught to make it pay.

There are many reasons for corruption, of which financial gain is only the easiest to understand.

I'll keep an eye on your blog. It should be interesting.


Adam said...

Definitely, it is not all about the person's salary. The flip side of the analysis is that corruption can be reduced by reducing the power of the official. Otherwise, there's always the potential for better monitoring.

I think that increasing a person's salary will also loose its effecitveness once that person is making enough money to live comfortably; if a person wants excessive wealth, no salary will satisfy him. However, if a person feels like he isn't getting proper compensation for his work (compared to what others earn) then I think it would be easy to take a bribe.

Higher salaries will also attract more candidates for a position, which will help as long as we can effectively discriminate among trustworthy and untrustworthy individuals.