Controlling Institutional Corruption: Introducing a Modified Principal-Agent Framework

Recent years has seen a decline in liberal democracy, faith in public governance, and trust in politicians: in prominent democracies slogans such as ‘drain the swamp’ have been aimed towards a perceived ‘rigged’ political system. To better understand this phenomenon of growing political unrest, this essay explores how an institutional corruption perspective could capture new forms of political undue influence that risks undermining popular belief in democratic institutions. Complementing the historical focus on individual moral vices with an institutional analysis also has implications for anti-corruption policy, where I argue that the Principal-Agent anti-corruption framework should be modified in order to address the underlying mechanisms for institutional corruption. Specifically, four areas should be addressed in a modified Principal-Agent framework: (a) recognize that institutional ethics derives from the relevant population; (b) include the principals in the formulation and follow-up of institutional ethics; (c) advance the principles of informed voter consent and; (d) build on the appearance standard. In conclusion, this essay argues that moving beyond corruption seen as moral and ethical shortcomings in individuals can increase the understanding of how a political process in democratic society can be steered away from its intended purpose––how it can be corrupted.