The Politics of Corruption

Lecture 1: Welcome, and What Is Corruption?

Bogdan G. Popescu

bgpopescu@tec.mx

Tecnológico de Monterrey

The Course

What you will be able to do

Distinguish bribery, fraud, clientelism, patronage, state capture
Explain why corruption persists in some countries
Weigh what the evidence says corruption costs
Compare how some countries reduced corruption, and why
Read a study and say what it actually established

The path

Part I — concepts and evidence (Sessions 1–5)
Midterm review S6 · Midterm — Thu, Sep 24 · debrief S7
Part II — how corruption grew and receded (Sessions 8–10; S8 before the midterm)
Part III — corruption in a globalized world (Sessions 11–13)
Final review S14–S15 · Final — Thu, Nov 26
No class during Semana Tec: Sep 14–18 and Oct 26–30

Logistics

Meetings: Monday lecture · Thursday discussion and presentations

Term: Aug 10 – Nov 26, 2026 · no class Semana Tec (Sep 14–18, Oct 26–30)

Office Hours: by appointment — bgpopescu@tec.mx

Materials: course site, one page per session — slides and readings (PDF)

Readings: Required = done before class, examinable · Recommended = depth. Both are used for presentations

Exams: midterm Thu, Sep 24 · final Thu, Nov 26 — in class, closed book

Grading and rules

Component	Weight
Contributions	33%
Midterm exam	33%
Final exam	33%

Contributions — the average of:

Presentation — one 10-minute talk on an assigned reading
Presence — attendance across the term
Participation — what you contribute to discussion
Questions — two per session, before 11pm Wednesday
Quality of questions — judged on substance, not submission

Questions Every Session

Submit two questions on the session’s readings before 11pm Wednesday, ahead of the Thursday discussion. They guide it.

Each question should be between 50 and 100 words.

Begin by referencing a specific part of the text or its overarching claim. Then ask a critical question that opens discussion rather than testing recall.

Questions are graded on quality, not just submission.

Example Question

Note

Nye argues that corruption can sometimes help a poor country develop, because bribes let people get around slow official rules and finally get things done. But if bribes are what make slow rules profitable, why would any official ever simplify them? Someone who earns from delay has a reason to create more delay. Nye treats red tape as a fixed obstacle that corruption helps people escape. What if corruption is what produces the red tape in the first place? How would we tell those two apart?

Why is it good?

50–100 words
Points at one specific claim, not “the reading” in general
Asks a question instead of summarizing
Offers a rival explanation — corruption may cause the red tape, not cure it

Presentations

One per student: an assigned reading, on a Thursday — starting Aug 20, two or three of you each week

Format: 10 minutes

Structure: clear introduction, main points, conclusion

Critical analysis: go beyond summary — what the author does not address, the limits of the evidence, rival explanations

Close on a verdict: well supported · plausible but not established · not established by these data

Visual aids: legible text, relevant visuals, no overloaded slides

Preparation: practice for time; do not read verbatim from slides or notes

Engage: be ready for 2–3 questions from peers or the instructor

How presentations are graded

Criterion	Points
Critical analysis and verdict — the unstated premise, rival explanations, a defensible verdict	30
Content knowledge — the claim that matters, and the evidence behind it	20
Selection and focus — one line of argument, developed, within the time	15
Organization — introduction, main points, conclusion	15
Clarity of expression	10
Engagement and response — speaking to the room, handling questions	10

Analysis outweighs coverage. At ten minutes, choosing well is the skill.

Part I: The Puzzle — Four Cases

Today’s game: “Is this corruption?”

Four real situations — three from Latin America, one from the United States.

For each one, you will vote:

Clearly corrupt
Not corrupt
It’s complicated

Write your four votes down — we will return to them at the end.

Case 1 — A police stop on the street

Mexico

A driver runs a red light in the city
The official fine: money, points, a lost morning
The officer hints: “Podemos arreglarlo aquí”

Two hundred pesos change hands; no ticket, no record
Both sides walk away better off — today

Corrupt? Who exactly is the victim?

A Mexico City transit police officer signals a car to stop on Insurgentes Avenue. — Transit officer stopping a car, Mexico City

Photo: ProtoplasmaKid, Wikimedia Commons, CC BY-SA 4.0.

Case 2 — Despensas before the vote

Mexico

Election week, a low-income neighborhood
Party workers hand out grocery packages and store gift cards
Names are noted; benefits, it is hinted, depend on winning

2012: the “Soriana card” accusations — never proven in court
Nobody was coerced; campaigns give things away everywhere

Corrupt? A gift, a wage, or a purchase?

Case 3 — The revolving door

United States

A senior financial regulator supervises a major bank for years
Soon after they leave office, that bank hires them — at triple pay
Entirely legal after a short cooling-off period

Expertise should be employable; who else knows the rules so well?
But: did the prospect of the job soften supervision earlier?

Corrupt? Nothing was ever exchanged — perhaps.

Case 4 — La Estafa Maestra

Mexico

2013–2014: eleven Mexican government agencies awarded contracts to eight public universities
The universities were supposed to carry out public projects
- instead they subcontracted most of the work to private companies
- Of the 186 companies hired, 128 were shell companies or irregular firms, or could not be located

Journalists traced 7,670 million pesos of diverted public money

Corrupt? Here, almost nobody hesitates. Why?

Source: Animal Político & Mexicanos Contra la Corrupción y la Impunidad (2017).

Exercise 1 — Vote and defend

≈ 5 minutes

Prompt. In pairs: rank the four cases from most clearly corrupt to least clearly corrupt.

Compare your votes on the four cases.
Why is it corrupt, or why not?

Keep your test visible — we are about to stress-test it.

The four cases, side by side

	Case	Where	In one line
1	A police stop on the street	Mexico	red light · 200 pesos · no ticket, no record
2	Despensas before the vote	Mexico	election week · groceries and gift cards · names noted
3	The revolving door	United States	regulator supervises a bank · the bank then hires them
4	La Estafa Maestra	Mexico	contracts via public universities · shell companies · 7,670 million pesos

Rank these. Keep your test in one sentence.

What did our disagreement reveal?

Call out your pair’s test — let’s collect them.

Tests that usually surface, and where they clash:

Legality — some cases were illegal but small, others legal but vast
Harm — diffuse in some cases, brutal in others
Motive — some actors believed they were doing their jobs

So what? Intuition alone cannot draw the line. There is no neutral way to count corruption — before we can measure it, prosecute it, or reform it, we have to decide what counts.

Part II: Defining Corruption

How three institutions approach corruption

Institution	How it frames corruption	Where it draws the line
World Bank (1997)	“the abuse of public office for private gain”	the public sector
Transparency International	“the abuse of entrusted power for private gain”	public and private power
OECD (2008)	no single definition; specifies criminal acts — bribery of officials, trading in influence	prosecutable offences

All three come from reform institutions — built for measuring and prosecuting, not for settling what corruption is

Sources: World Bank (1997); Transparency International (2025); OECD (2008).

Stress test — the revolving door

Back to Case 3: the regulator supervises a bank, then the bank hires them.

Did corruption occur?

World Bank — only if they abused public office while still in government
Transparency International — only if they abused the power entrusted to them
OECD — taking the job is not, in itself, a bribery offence

Same facts. Not one definition gives a clean yes or no.

Three questions to ask about any case

When you think something might be corrupt, ask:

Three questions in sequence: who had power, how was it misused, and who benefited.

Case 1, the traffic stop: police authority → the ticket is never written → 200 pesos to the officer

The technical names for the same three: entrusted power → deviation from duty → private gain
Most definitions wrestle with the same three problems — but disagree about what counts as power, misuse, and gain
The hardest is the middle one: what standard tells us power was misused?

Three ways to define corruption

Three scholarly answers to that middle question — misused by what standard?

Approach	Conduct is corrupt when it violates…	Example
Public office	the formal duties of a public official	Nye (1967)
Public interest	the broader interests of society	Friedrich
Public opinion	what citizens generally regard as corrupt	survey-based approaches

But each standard creates a problem:

Public office: what if the rules themselves are corrupt?
Public interest: who decides what counts as the “public interest”?
Public opinion: what if citizens disagree?

Classification following Heidenheimer (1970).

Nye’s public-office definition

Nye (1967): corruption is a deviation from the formal duties of a public role for private gain.

Strength: gives us a clear benchmark — what are the official duties and rules?
Limitation: it makes formal rules the standard for deciding what counts as corruption

But what if the rules themselves permit favoritism?

Legal ≠ necessarily honest

Lobbying, patronage, preferential access, or conflicts of interest may influence public decisions without violating formal duties.

Change the measure, change the picture

Bar chart of Corruption Perceptions Index 2024 scores for six Latin American countries, ranging from Costa Rica at 58 down to Venezuela at 10, with Mexico at 26 highlighted.

Bar chart of the share of public-service users who paid a bribe in the past year, 2019, for the same six countries, ranging from Costa Rica at 7 percent up to Venezuela at 50 percent, with Mexico at 34 percent highlighted.

So what? 26/100 on perception, 34% on experience — these do not contradict each other; they measure different things. “Corruption” is an umbrella: next we name the parts.

Part III: A Vocabulary of Corrupt Acts

Mapping the terrain: what does the actor do?

Three families of corrupt act, by what the actor does: exchange (bribery, extortion, influence trafficking, clientelism, patronage, vote buying), appropriation (embezzlement, fraud), and system manipulation (state capture).

These are mechanisms, not mutually exclusive boxes — one scandal can involve several at once

Author’s illustration. The individual terms are standard in the literature; the grouping by mechanism is the author’s.

What is being exchanged?

Money or favors → decisions

Bribery: giving a benefit to influence an official decision
Extortion: demanding a payment through threats or coercion
Influence trafficking: selling access or influence over a decision-maker

Benefits → political support

Clientelism: repeated benefits in exchange for political support
Patronage: public jobs in exchange for political loyalty
Vote buying: money or goods in exchange for a vote

The key question: what is the exchange?

Lobbying: trying to influence a decision through permitted advocacy
Influence trafficking: selling improper access or influence
Case 1 — mordida: Was the payment offered, demanded, or forced?
Case 2 — despensas: Were the goods given in exchange for votes?

Appropriation: embezzlement and fraud

Embezzlement: diverting resources you were entrusted to manage
Fraud: deception — phantom firms, fake invoices, ghost workers
Often no victim on the spot, so no complaints — detection needs audits

But fraud can be collusive too: fake bidders are an exchange
La Estafa Maestra combined diversion, deception, and collusion

Thomas Nast cartoon of the Tweed Ring standing in a circle, each man pointing at the next. — “Who stole the people’s money?” — everyone points elsewhere

Thomas Nast, Harper’s Weekly, 1871. Wikimedia Commons, public domain.

System manipulation: state capture

Firms or elites shape the rules themselves, not their application
Laws, decrees, court doctrine — written to order (Hellman, Jones, & Kaufmann, 2003)
Ordinary bribery bends existing rules; capture rewrites them

Once capture succeeds, the conduct it protects becomes legal
A clean example: a beverage association drafts the sugar-tax rules; congress adopts them verbatim

No bribe is needed. The rule itself is the payoff.

The four cases, classified

Designated summary slide — our vocabulary applied:

Case	Best label	Illegal?	Entrusted power abused?
1. Police stop	petty bribery / extortion	yes	yes — police discretion
2. Despensas	vote buying / clientelism	the practice: yes; the 2012 case: alleged	yes — via party machine
3. Revolving door	influence trafficking	no	anticipated, not proven
4. Estafa Maestra	embezzlement + fraud	yes	yes — budget authority

Alleged, documented, unethical, illegal, convicted — different claims; keep them apart

One “no” entry in the Illegal? column — hold that thought

Exercise 2 — Name that act

≈ 5 minutes

Prompt. Classify each scenario with one vocabulary term; be ready to defend your choice:

A mayor puts a campaign worker on the payroll as “special advisor”; he never appears at work.
A customs officer charges $20 to process legal imports faster.
A health official’s hidden firm wins the ambulance contract via fake bidders.
A construction group funds the campaign of the legislator writing the procurement law; the final text exempts contracts like theirs.

Scenarios overlap — but some labels fit the defining mechanism better than others.

Answers — best label first, then the detail that gives it away.

Patronage — a public job repaying political loyalty — and fraud the moment he draws a salary. Giveaway: “never appears at work” — a ghost worker on the payroll. Not bribery: nobody outside the office pays anything.
Bribery. Giveaway: the imports are legal, so the $20 buys a place in the queue, not an illegal outcome. Call it extortion if the officer creates the delay he is selling relief from. Common miss: “it’s just a fee” — a fee goes to the treasury; this goes into his pocket.
Fraud. Giveaway: the fake bidders — the competition itself is staged. Sitting on top of it: embezzlement, since the money is public, and the official secretly owns the winner. Common miss: “bribery” — nobody pays anybody here; the official is on both sides of the deal.
State capture. Giveaway: the payoff is the rule. No bribe changes hands, and it may be entirely legal — which is exactly where Part IV picks up.

If they rank these by seriousness, the room usually splits: 4 moves the most money and may break no law; 2 moves the least and plainly does.

So what? — The legal cases remain

One of our four cases was legal; no prosecutor could touch it
How these acts combine varies from country to country — a theme we return to later in the course

So what? If corruption can be perfectly legal, illegality-based definitions miss it entirely. So what do we call the legal cases?

Part IV: Legal Corruption

What if corruption is legal?

Back to Case 3 — the regulator who later joins the bank:

No bribe. No stolen money. No rule necessarily broken.
But the regulator knows the bank might hire them later
So today, they may regulate the bank less aggressively
Later, the reward comes as a normal salary

Why is this a problem?

The system can distort public decisions without anyone explicitly breaking the rules.

Thompson (2018): institutional corruption

Corruption can exist even without a corrupt individual.

The problem lies in the incentives built into the institution, not necessarily in a secret deal or guilty intent.

Definitions decide what we see

There is no neutral way to count corruption.

Today’s single idea, three consequences:

Definition → measurement: CPI counts perceptions; barometers count experiences
Definition → law: OECD-style offences reach bribes, not revolving doors
Definition → reform: punish individuals, or redesign institutions?

Legal corruption is invisible to every illegality-based measure
What your country counts shapes what it fixes

Conclusion — six things to take away

Corruption is contested by design — four cases
Definitions are choices — public office, entrusted power, or specified offences
Three questions travel anywhere — who had power, how was it misused, who benefited
The real fight is over “misused” — formal duty, public interest, or public opinion
Three families of act — exchange, appropriation, system manipulation
Some corruption is legal — and invisible to every illegality-based measure

Look back at your four votes from the opening: which one changed, and which definition changed it?

References

Animal Político & Mexicanos Contra la Corrupción y la Impunidad. (2017). La Estafa Maestra: Graduados en desaparecer dinero público. https://www.animalpolitico.com/estafa-maestra/

Heidenheimer, A. J. (Ed.). (1970). Political corruption: Readings in comparative analysis. Holt, Rinehart and Winston.

Hellman, J. S., Jones, G., & Kaufmann, D. (2003). Seize the state, seize the day: State capture and influence in transition economies. Journal of Comparative Economics, 31(4), 751–773. https://doi.org/10.1016/j.jce.2003.09.006

Nye, J. S. (1967). Corruption and political development: A cost-benefit analysis. American Political Science Review, 61(2), 417–427. https://doi.org/10.2307/1953254

OECD. (2008). Corruption: A glossary of international standards in criminal law. OECD Publishing.

References (continued)

Thompson, D. F. (2018). Theories of institutional corruption. Annual Review of Political Science, 21, 495–513. https://doi.org/10.1146/annurev-polisci-120117-110316

Transparency International. (2019). Global Corruption Barometer — Latin America & the Caribbean 2019: Citizens’ views and experiences of corruption. Transparency International.

Transparency International. (2025). Corruption Perceptions Index 2024. Transparency International. https://www.transparency.org/en/cpi/2024

United Nations. (2003). United Nations Convention against Corruption. United Nations Office on Drugs and Crime.

World Bank. (1997). Helping countries combat corruption: The role of the World Bank. World Bank.