"The staggering rates of politicians being investigated and imprisoned means the acts of corruption were caught, deemed impermissible by the law, and prosecuted—in a sense, the system is working."

This may not necessarily mean the system is working. It could equally mean that the system is unjustly and corruplty pursuing previous power-holders in an act of political vengeance and self-promotion!

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Thanks for this great post.

My model had been that a main driver of corruption was the social expectation of corruption – basically the idea you quoted + the power of default behaviors and inertia:

“...in a context in which corruption is the expected behaviour, monitoring devices and punishment regimes should be largely ineffective since there will simply be no actors that have an incentive to hold corrupt officials accountable.”

Until reading this post I hadn't realized that this model doesn’t do a good job explaining the recent corruption in Peru though. There’s apparently enough accountability for Alan Garcia to kill himself rather than face up to it – that seems like a pretty well functioning accountability mechanism! The other corrupt politicians you list seem to be facing real accountability as well.

One way of reconciling this could be:

• The social expectations about corruption that are driving the current accountability mechanisms have emerged relatively recently (say over the past ~20-30 years)

• This batch of corrupt politicians grew up and absorbed more permissive social norms about corruption that existed prior to the emergence of the new ones.

• Their corrupt behavior reflected the prior permissive norms but was then met with the accountability from the new less-permissive norms.

This explanation would also be consistent with:

(1) More reported social concerns about corruption (because people care more about it)

(2) Higher reported corruption levels (more is being caught and reported because people care more about it)

Hopefully I’m not being too optimistic :)

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As a peruvian and a business owner, my subjective perspective is that corruption now is worse than ever. Not only has the president several running investigations for corruption, but his family, his ministers and appointed officials have also open investigations or in some cases have been convicted. (Take a look at the front page of any local newspaper to see what I mean: https://peru21.pe/, https://larepublica.pe, etc.)

The fact that those crimes get investigated or even that criminals are convicted is more a consequence that most judges are controlled by a different party/political faction than a signal of a strong institution in the country.

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Shoot - yes, that was the other lurking explanation: accountability mechanisms are being used not for the purpose of limiting corruption but instead for other corrupt purposes; and so the presence of these accountability mechanisms may not reflect a change in norms or expectations about corruption at all.

I'll hang on to some optimism with the trends in economic growth and the other factors Inés pointed to that have correlated with a reduction in corruption elsewhere!

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To play devil's advocate: corruption might have advantages. Probably it is easier and cheaper to pay off some official than going through a beaurocratic process that takes years and might cost more (for example when you want to build something).

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But perhaps that option really only serves to further entrench and confirm the wider system of corruption. It may be easier and cheaper to pay off an official, but it only plays to the system instead of challenging it.

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Very interesting piece. I wonder if Acemoglu's ideas about extractive vs inclusive institutions as barriers have any applicability in this case?

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I recall that part of Paul Romer's idea with charter cities was that higher quality/less corrupt governance of a separate country could be brought in to a place with lower quality governance. But there's a Catch-22 in that a place with low quality governance (like Honduras, which attempted something like this recently) the government is unlikely to respect any charter made by a prior administration.

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Very informative. I suspect comparisons to Chile and Uruguay are less illuminating that comparisons to Ecuador, Colombia and Venezuela, given the dominance of immigrant cultures in those countries as opposed to indigenous cultures in Peru and the other northern Andean countries.

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I greatly enjoyed this post. I'd be curious to hear any thoughts on Hernando de Soto and the Institute for Liberty and Democracy. I have read two of de Soto's books and his ideas sound appealing to me, but I've never heard any Peruvian perspectives on him or his institute.

I saw he ran for president at age 80 last year and came in 4th (11% of vote), so I suppose not wildly popular but not at the bottom of the candidates either.

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