Corruption Research Paper Example

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Abstract

This research paper discusses the nature and typology of corruption, including “conﬂicts of interest,” “regulatory and institutional capture,” the “revolving door” phenomena, and “gaming of systems.” It argues that incorporating an institutional corruption lens into the ﬁeld of global bioethics would help advance the global bioethics discourse. The paper concludes by reviewing key reform strategies – such as proscription, independent monitoring, incentive design mechanisms, transparency and disclosure initiatives, blinding, ethics education, deliberation and ethical persuasion – that may help mitigate speciﬁc instances of corruption and contribute to building institutional integrity and trustworthiness.

Introduction

The purpose of this research paper is to help readers understand the nature and manifestations of corruption, its relevance for the ﬁeld of global bioethics, and prospects for reform. After cataloging varieties of corruption – including “conﬂicts of interest,” “regulatory and institutional capture,” the “revolving door” phenomena, and “gaming of systems” – remedies and prevention strategies are introduced. Because corruption can take many forms, preventing and reforming it usually involves a multipronged approach.

Proscription, independent monitoring, incentive design, transparency and disclosure initiatives, blinding, as well as ethics education, deliberation and persuasion are identiﬁed as promising reform and prevention strategies. Studying and understanding corruption implies not only that there is a problem, but that the counterfactual is possible: a situation where the corruption does not exist. Understanding that things can be better and what that “better situation” can and should look like, is part of the solution to corruption and moving towards higher levels of integrity on the individual and institutional level.

Defining Corruption

It is tempting to think one will know corruption when one sees it. However in practice, deﬁning the concept and recognizing its manifestations can be challenging. In fact, the precise deﬁnition of the term remains rigorously debated. Notwithstanding, something can be generally understood as corrupt when it deviates from its purpose or its ideal state of being. In simplistic terms, corruption often implies something is broken.

There are at least two types of corruption: formal and informal corruption. Formal corruption involves a deviation from ofﬁcial rules, such as laws, institutional policies, constitutions or codes of conduct. The paradigmatic example of formal corruption is bribery, which involves a quid-pro-quo relationship where something of value is solicited, offered, or given to an individual, with a public or legal duty, to inﬂuence their actions. In medicine, this could involve a pharmaceutical company bribing a hospital or doctor to prescribe their drug over that of a competitor, something for which the Chinese government recently ﬁned GlaxoSmithKline (GSK).

Informal corruption is harder to deﬁne and recognize, as it involves a deviation from less tangible things such as ideals and purposes, rather than formal laws. It is often explained through two metaphors: the concept of magnetic deviation applied to a compass (Lessig 2013) and the concept of sickness. A compass can be understood as corrupted if it no longer functions as it is designed to function: to point towards magnetic north. This corruption can occur, for example, by placing a magnet adjacent to the compass, causing its needle to deviate away from magnetic north and towards a corrupted direction. Similarly, a sick, diseased, or decomposing body can be understood as a corruption from a sound or healthy state.

Inherent in both informal and formal corruption, is an argument that strategic forces and inﬂuences (such as placing a magnet next to a compass or pharmaceutical industry money presented to a doctor) are the root causes of deviations (that, is corrupting) from formal requirements, ideals, or purposes. These deviations, or corruptions, can occur on both the individual and institutional level. The concept of individual corruption is far older, dating back to the writing of Aristotle.

The term institutional corruption (IC) was coined by Dennis F. Thompson in 1995 and substantially advanced by Larry Lessig, starting around 2010. Both scholars developed the concept in the context of political corruption, using it as a lens for considering ethical concerns about the US legislative system (Lessig 2013; Thompson 2013). Current scholars are investigating how the concept applies to other sectors of society, such as think tanks, medicine, public health, ﬁnance, and academia.

Definitional Challenges: A Normatively Neutral Conception Of Corruption?

Part of the challenge of recognizing and addressing corruption, is deﬁning the ultimate purposes of institutions. Some corruption scholars argue for a normatively neutral conception of corruption. They propose that the purpose of an institution, and therefore the metric against which to judge corruption, is that which the institution deﬁnes for itself. In this sense, institutional purpose could be ascertained by, for example, simply reading an institution’s public mission statement (Marks 2014) and determining whether it is implemented. Corruption would then be measured as intentional deviations from self-espoused goals and purposes.

Under this conception, corruption could actually be a good thing. For instance, one might want to corrupt or disrupt an institution with a harmful purpose. Imagine corrupting the maﬁa’s ability to perpetrate a harmful crime, thereby maximizing social welfare. Corrupting the institution of the maﬁa, in this case, could be a public good.

Corruption And Bioethics

To date, the ﬁeld of bioethics has largely focused on the ethics of individuals. It asks what a person should or should not do on matters related to health. For example, there is a large body of literature elucidating which principles, ends, and virtues should guide clinicians, scientists, or ethics committee members in their care of individual patients, treatment of human research participants, or allocation of scarce medical resources.

However, bioethics regularly fails to consider that often, good people cannot make good decisions when in bad systems or bad institutions. The emerging ﬁeld of institutional corruption, in many senses, asks that the bioethical discourse better consider the role of external inﬂuences and systems on the institutions housing bioethical decision makers and in turn how corrupt systems and corrupt institutions can corrupt the decisions of individuals, consciously or not.

Varieties Of Corruption: Conflicts Of Interest, Regulatory Or Institutional Capture, The Revolving Door, Gaming, And Distrust

Bioethical decisions occur in a wide range of institutions, including hospitals, governments, regulatory bodies, patient advocacy groups, think tanks, universities, pharmaceutical companies, biotechnology ﬁrms, and research ethics committees or institutional review boards (IRBs). All of these systems have the potential for corruption and therefore to corrupt the decision making of their members. Corruption can take at least three forms in institutions: conﬂicts of interest, regulatory or institutional capture, and gaming. These three form will be explained using research ethics committees (RECs) and Institutional Review Boards (IRBs), as an example, herein referred to collectively by the international term REC.

RECs are gatekeepers that decide whether testing a drug, vaccine, or device is ethical in a proposed group of people. Previously, small RECs reviewed individual drug trials proposed for conduct in single-sites. Since the 1980s, however, the research landscape has globalized and involves multisite trials. A trial could, for example, now take place in ﬁve countries spanning several continents and in multiple hospitals per country. This trend, of multicite trials, often requires a larger, centralized, and more robust REC that can handle multicite and transcontinental research. To keep up with this demand, RECs began merging with and acquiring (M&A) other RECs to form larger institutions. This centralization, growth and M&A activity required an inﬂux of capital and other resources. Private equity ﬁrms often ﬁlled the capital need. Herein entered the ﬁrst type of corruption concern.

The corruption concern, in this case, pertains to conﬂicting interests, missions, and purposes. The mission of an REC, as deﬁned by governments and the RECs themselves, is to protect human research participants in clinical trials, by reviewing and approving or disproving research proposals. RECs are constituted to fulﬁll a public good. The mission and values of a private equity (PE) ﬁrm, in contrast, include securing high returns on investments (ROI) and positioning funded entities to be resold (or ﬂipped) within 3–5 years for a proﬁt. Moreover, akin to credit rating agencies, many RECs’ are ﬁnanced through fees paid by the entities they are governing and regulating (Miller 2013). Applying an institutional corruption lens raises the question of whether the role of the PE ﬁrm, whose purpose is related to maximizing proﬁts, weakens an REC’s ability to achieve its public good purpose of protecting research subjects. IC theory also raises questions of whether ownership structures and ﬁnancial models matter for gatekeepers and certain public good oriented institutions, an important question not usually asked or addressed in bioethics.

Conﬂicts of interest need not be ﬁnancial. Quests for prestige and professional advancement through high volume publications in top academic journals are examples of other types of conﬂicts of interest, particularly in academia, that can corrupt an individual’s decision making. This may have been the case with Robert Slutsky, a National Institutes of Health funded scholar and a junior research cardiologist at the University of California-San Diego, who was dubbed a wunderkind and a “must hire” as a result of his proliﬁc publication record. Unfortunately, several publications included falsiﬁed data and were based on studies that he never conducted. Despite Slutsky’s unusually high publication rate, arguably implausible without fraudulent behavior, the academic system took years to notice the problem.

A second corruption concern is that of regulatory, cultural, or institutional capture. Returning to the REC case, competition among RECs is increasing. As a result, pharmaceutical companies can “shop” around for a preferred REC. This shopping may serve as the magnet that deviates the REC away from its purpose of protecting research subjects (its magnetic north), towards the interests of their potential “client” to win their business. The worry is that RECs may adopt inappropriate speed and leniency in protocol reviews driven by this competitive spirit. Just as pharmaceutical companies used to throw extravagant events and give gifts to doctors to inﬂuence their prescription practices, RECs now fund extravagant parties at industry events to court pharmaceutical and biotechnology company clients. Applying an IC framework raises the question of whether these system inﬂuences routinely deviate an REC away from protecting research subjects towards the interests of the industries and sectors, in a process known as institutional or regulatory capture.

Related to regulatory capture is the concern about the “revolving door” phenomenon (Salter 2014). The revolving door concept refers to concerns that individual regulators and evaluators will be unjustly lenient in their evaluation and governance of institutions that have the power to offer them a job or contract, at a much higher pay.

There are plenty of cases of gatekeepers and regulators taking jobs in the companies and industries they once governed. Take the current directors of both the pharmaceutical and biotechnology industry trade associations, they are both former politicians. Additionally, in 2004, the majority of lobbyists hired by the pharmaceutical industry to educate politicians and shape legislation walked through the revolving door; at least half of them had previously worked for the US federal government (Brody 2007).

A fourth type of corruption involves gaming of systems. For example, many pharmaceutical companies sell HIV/AIDS and other potentially life-saving therapies at signiﬁcantly discounted prices, or even donate them for free, to countries with lower purchasing powers (Miller and English 2014). The idea is to help increase access to essential medicines for patients in emerging economies. Unfortunately, some grass roots players will obtain the free or discounted drugs and resell them in wealthier countries for a proﬁt, through a process called drug diversion. Drug diversion represents a gaming of tiered-pricing systems set up by pharmaceutical companies and governments.

Returning to the example of the role of private equity ﬁrms in running the ethics committees that review and approve drug research in humans, PE money may actually improve an IRB’s ability to achieve its mission by for example providing needed money to train and educate its members. However, the role of PE, if widely understood, could also weaken stakeholder/public conﬁdence and trust in an IRB/REC. Some deﬁnitions of corruption include arguments that signiﬁcant distrust eventually weakens an institution’s ability to fulﬁll its intended purposes. Therefore, under these deﬁnitions, strategic economies of inﬂuence that weaken trust in or the trustworthiness of an institution are also corrupting.

Preventing And Remedying Corruption: Proscription, Independent Monitoring, Incentive Design, Transparency And Disclosure, Blinding And More

Because corruption can take many forms, preventing and reforming it usually involves a multipronged approach. Strategies such as proscription, improving independent monitoring capabilities, incentive design mechanisms, blinding strategies, mobilizing civil society activism, and professionalization can have measurable impacts on reducing speciﬁc instances of institutional corruption. These tools largely share a common strategy of identifying and counteracting improper systemic inﬂuences that can weaken an institution’s ability to achieve its purpose or its trustworthiness.

Concerns about regulatory capture aside, the most obvious strategy for addressing corruption is to ban it. Take the concern in healthcare innovation that clinical trial sponsors hide unfavorable clinical trial results from the public, as an example. In an attempt to minimize this practice of biased reporting, the US Congress passed the Food and Drug Administration Amendments Act (FDAAA), requiring the registration and results reporting of all interventional clinical trials other than phase I trials, in a public registry run by the National Institutes of Health (NIH). The law made it illegal, in a sense, and penalized the hiding of certain types of clinical trial results. The law is far from perfect, but it has measurably advanced the process of improving transparency in clinical trial disclosures.

Governance initiatives can also occur on the private or quasi-public levels. Before the FDA passed FDAAA, the International Commission for Medical Journal Editors (ICMJE), attempted to address the concern about biased clinical trial results reporting by requiring registration of all clinical trials (a more robust standard that the US legal standard) as a condition for publication in member journals. The ability to publish in a top-tier medical journal proved a powerful incentive for many researchers and trial sponsors to comply with the ICMJE’s transparency standards.

In many ways, the ICMJE initiative can also be understood as a type of independent monitoring or incentive design mechanism. There is a wider-angle of incentives that may motivate better behaviors by individuals and institutions, including the promise of a better reputation, greater public trust, lower risks of litigation, the ability to attract and retain a better workforce, tax breaks, or even the ability to charge more for a product that can be advertised as ethically produced (such as fair trade products like chocolate and coffee). Or course, incentive design mechanisms are not without their own limitations.

Eliciting behaviors through incentives may backﬁre for at least two reasons. First, some scholars argue that market incentives may crowd out intrinsic motivations and nonmarket norms that are important for producing a desired behavior, in this case for people doing the right thing. Richard Titmuss (1997) argues this may have been the case with blood donations in the USA. Voluntary blood donations decreased around the time commercial blood banks began offering to pay for blood to augment the blood supply.

Titmuss argues the fee incentive (or commercialization and marketization of blood) crowded out the internal sense of duty and altruism to donate blood and in the end reduced the participation of altruistic donors and the overall blood supply in the USA (in contrast to the United Kingdom who has maintained a voluntary donation system). On the other hand, scholars such as Sen, Huffman, Lowenstein and colleagues (forthcoming), have empirically shown that offering ﬁnancial incentives does not “crowd out” intrinsic motivations that are important to producing a desired behavior, at least not in the context of offering ﬁnancial incentives for weight loss. Second, it is impossible to design a system whereby it always pays to do the right, good or uncorrupt thing. As such, incentive design mechanisms are always limited in scope.

Accreditation, certiﬁcation, rating, ranking, indexing, auditing, reporting, and other labeling systems can also be helpful reform strategies (Miller 2013a, b). They aid in deﬁning quality standards for products, services, and institutions, and signaling to stakeholders the degree to which the standards are met. They also help to bridge asymmetries of information, which can exacerbate corruption and distrust (Stiglitz 2009). These quality improvement initiatives are not immune to the corruptions discussed above, particularly conﬂicts of interest and the revolving door phenomena. To address concerns about revolving doors, it may be good policy for governance entities to ban monitors and evaluators from accepting employment in regulated industries for a year or more after stepping down from their review roles, and vice versa (sometimes called a cooling off period). It might also make sense to rotate those that review, evaluate, or monitor entities to reduce the likely they develop biasing personal ties with the employees of particular companies. These systems are closely related to professionalization efforts and can also be thought of as transparency initiatives.

The spirit behind transparency and disclosure initiatives can be largely summarized by Justice Louis Brandeis’ famous remark in 1913 that, “sunlight is the best disinfectant.” Disclosure initiatives do not ban a problematic practice, but rather assume that publicly naming and faming good practices, and/or shaming bad ones, can incentivize change, where needed, and that practices that cannot withstand public scrutiny are likely problematic. This was part of the spirit behind the creation of the Physician Payments Sunshine Act in the USA, which requires many drug, biological, and medical device manufacturers to report payments and gifts they make to physicians and teaching hospitals to a public database. Many experts suspected that forcing disclosures of conﬂicts of interest could reduce them. Interestingly, patients and other physicians were not morally outraged upon learning their physicians or colleagues accepted gifts from drug companies (Hampson et al. 2006). They often viewed them as well-earned badges of honor and signals of expertise and competency. When proscription, disclosure, and transparency strategies fail, blinding can be a solid alternative reform tool.

Blinding is often used to address conﬂicts of interest. It works by concealing the biasing information from the relevant decision maker (Robertson 2013). For example, several scholars have argued that blinding pharmaceutical funding in clinical trials may help reduce risks that the results of clinical trials are biased in favor of the funder. In this case, these scholars advocate for an independent entity to collect funding for clinical trials from a wide range of sources, including different companies and universities, and for the money to be pooled and dispersed from a single fund. When an institution needs a clinical trial conducted, they ask the independent blinder to select the entity to conduct the trial and to fund it from the blinded single pool of money.

Finally, ethics education, deliberation, and ethical persuasion should likely be a part of all reform strategies. There is some evidence to suggest that successful reform entails people understanding not only what to do, but why it is important to do it. They may also need to understand and have hope that change is possible, to prevent disengagement. Studying and understanding corruption may, counter to intuition, provide some of this hope.

Conclusion

Reviewing the nature and typology of corruption shows that deﬁning and recognizing corruption are not as easy as one might think. In general terms, corruption occurs when a person or an institution deviates from formal standards or from the informal ideals and purposes that justify their existence. The root causes of these deviations can include systemic “conﬂicts of interest,” “regulatory and institutional capture,” the “revolving door” phenomena, and “gaming of systems.”

Inherent in the concept of corruption is the prospect for reform. Diagnosing something as corrupt suggests not only that there is a problem, but that the counterfactual is possible: a situation where the corruption does not exist. This hope, that things can be better and the clear vision of what that good can and should look like, is part of the solution. Additionally, tools such as regulatory proscription, independent monitoring, incentive design mechanisms, transparency and disclosure initiatives, blinding techniques, as well as ethics education, deliberation and persuasion – can also help mitigate corruption and foster institutional integrity and trustworthiness.

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