Corruption and the Executive Office in Latin America

The Argentine Vice-President, Amado Boudou, has appeared in court this week in order to respond to allegations of corruption. Vice-President Boudou, during the period when he was Minister of the Economy (2009-2011), is accused of helping to illegally halt bankruptcy proceedings by Argentina’s tax bureau against the company Ciccone. For this service, Federal Judge Ariel Lijo claims that the management of Ciccone was pressured into handing over a 70 per cent stake in the firm to business associates of Boudou. At the time, Ciccone had a lucrative government contract to print pesos and Boudou is accused of taking control of the company for a bargain basement price via a shell company, while benefitting from numerous tax exemptions. His president, Cristina Fernández, already under pressure over spiraling inflation, has refused to comment, while the Vice-President has strenuously denied all wrongdoing.

Regardless of the outcome of this particular case, it does provide me with an opportunity to reflect on a problem that seems particularly prevalent in Latin America: corruption in the executive office. Repeatedly, across the region, politicians in Latin America have been accused, and often indicted and impeached, for corruption and graft while occupying the very highest political offices of the state.

Only last month, Guatemalan ex-President Alfonso Portillo was sentenced to five years in prison in the US for taking bribes from Taiwan. In April in El Salvador, it was announced that evidence had emerging linking former president Francisco Flores to illegal and hidden bank accounts. Not to mention the case of Luis González Macchi in Paraguay or Alberto Fujimori in Peru. Indeed, given this level of corruption in the highest political office, it is no surprise that many Latin American countries languish in the bottom half of Transparency International’s annual Corruption Perception Index.

But do we have any explanations for why we witness persistent corruption in the executive office across Latin America? Some suggest the root cause lies in history and the evolution of a permissive political culture across the region.[1] Others suggest the explanation can be found in the design of Latin American political institutions.[2] Specifically, it is Latin America’s combination of PR electoral systems and presidentialism, which gives rise to corruption. Latin American executives often need to deal with uncooperative legislatures and so at times, corruption can appeal as the easiest way for the executive to pursue their agenda. The prototypical example of this dynamic can be found in the Mensalão scandal in Brazil.

Of course, while this type of graft is quite probably a problem in many other regions of the world, what makes the Latin American case particularly interesting is the often very public judicial and legislative battles to bring this wrongdoing to heel. One thing is for certain. These public exposés of corruption in Latin American presidencies will most likely increase the demand, and space available, for radical outsider populist candidates. But as Kurt Weyland has argued, it is often these types of outsider populist presidencies where the executive is most forced to engage in corrupt practices.[3] Vicious cycle?

[1] For example, some of the chapters in Walter Little and Eduardo Posada-Carbó (eds.) 1996. Political Corruption in Europe and Latin America. Palgrave Macmillan.

[2] See Jana Kunicová and Susan Rose-Ackerman. 2005. Electoral Rules and Constitutional Structures as Constraints on Corruption. British Journal of Political Science, 35: 573-606.

[3] Kurt Weyland. 1998. The Politics of Corruption in Latin America. Journal of Democracy 9 (2): 108-121.

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