Institutional Corruption as a Problem of Institutional Design: A General Framework

Even though developed to explain institutional dysfunction in Congress, the concept of institutional corruption has been applied to different types of organizations and industries. This application has generated insights about the problems affecting different sectors, but it has also raised questions about the accuracy of using the concept in other, non-Congress, contexts. This paper argues that the concept of institutional corruption has broad applicability, but it needs some conceptual adaptation when used in contexts different from the original one. By analyzing the institutional corruption features with this adaptation in mind, this paper proposes a more general framework for the theory that is broadly applicable to different settings while retaining its internal coherence. To do so, this paper approaches institutional corruption from the lens of organizational design. In this perspective, institutional corruption will be described as a type of failure in achieving the institutional purpose that happens because of the institutional design, rather than because of unsatisfactory performance. This paper explains the institutional mechanisms that cause this failure, and concludes with some theoretical implications of the framework proposed.