The Eye and the Whip (PDF)

In order for transparency measures to fight corruption, they must be paired with enforcement.

Levels of corruption vary greatly around the world, with certain regions suffering from it more than others. Why is it pervasive in some countries, how does it weaken critical regulations, and why is it so hard to root out? In The Eye and the Whip, Paul Lagunes applies field experiments to analyze corruption in three countries: Mexico, Peru, and the United States of America.

He begins by stressing that vulnerabilities to corruption exist where government officials hold power over both the provision of goods and the imposition of costs. Vulnerabilities turn to actual threats when officials calculate that the benefits of abusing their power are greater than the penalties associated with getting caught. Therefore, controlling corruption requires increasing the probability of detecting malfeasance through enhanced monitoring - what Lagunes calls "the eye" - and then applying the appropriate penalty in response to wrongdoing-what he calls "the whip." However, in the places where he conducts extensive fieldwork, which include a city in central Mexico, urban districts in Peru, and two boroughs in New York City, the common policy response to corruption typically emphasizes only the first of the two mechanisms. From bribes extracted for public works contracts to property tax evasion, corruption in these and other areas will persist as long as the authorities are unwilling to impose serious penalties after becoming aware of the problem.

After examining how corrupt transactions unfold and why corruption appears immune to transparency, Lagunes leverages local collaborations to test a series of approaches that help promote accountability. Offering rigorous, evidence-based recommendations for improving public administration, The Eye and the Whip will be essential reading for anyone searching for effective tools to battle this age-old scourge.