Starting in the 1990s, academics and policymakers working on issues of political and economic development began to recognize that corruption was a routinely overlooked but vitally important factor affecting the quality of a country’s governance, its economic growth, and nearly all standard measures of human well-being. The past three decades have seen the rollout of numerous high-profile initiatives by national and international policy organizations, especially development organizations such as the World Bank, as well as international conventions and agreements aimed at curbing corruption. However, this global anticorruption push has to date yielded largely meager results, raising the question of what went wrong.

In his highly thought-provoking new book, Controlling Corruption: The Social Contract Approach, noted governance expert Bo Rothstein argues that anticorruption efforts are being hindered by a misconceptualization of the problem. Most existing initiatives are based on the principal–agent theory of corruption control, which holds that principals (government leaders and decision-makers) must construct policies that raise the costs of engaging in corruption so that rationally self-interested agents (officials and bureaucrats) are incentivized toward probity. The key flaw in this approach, Rothstein suggests, is that it depends on principals being benevolent rather than also being rationally self-interested. Rothstein instead proposes an approach to corruption control based on the “social contract theory” (p. 20). A social contract—to summarize an idea with a long history—is an agreement about what citizens can expect from the state, such as public services, and what the state can legitimately require of citizens, such as taxes (p. 21). According to this theory of corruption control, citizens in countries with a functional social contract will refrain from corruption because they expect that most other citizens will do the same—people follow the principle of reciprocity more than utility maximization—and because they believe the government will deliver on its promises (p. 25).

The book’s main chapters, which draw heavily on Rothstein’s past writings on corruption control, assess various features of an effective social contract and how they develop or fail to in different countries. Chapter 2 explains that even though Protestant countries have less corruption on average, this has to do with their early establishment of fiscal social contracts to finance religion, and not the content of the religion itself. Chapters 3 and 4 explain how Sweden developed a functional social contract in the nineteenth century, highlighting both the key role of the external shock of losing a war and endogenous political processes. Chapters 5–8 are more theoretical than historical; they analyze the social contract role played by universal basic education, meritocracy and gender equality, public sector auditing, and welfare policies, respectively. Chapter 9 summarizes the main arguments and lays out conclusions.

The greatest strength of this book is that the author produces a well-informed and convincing case for social contract theory as the best overarching framework for anticorruption efforts. Showing his mastery of the subject matter and the secondary literature, Rothstein makes a series of points that sharpen our understanding of corruption control and help us see how it is connected to the broader social contract between a government and its citizens. For example, he cites both empirical and theoretical evidence to refute the idea that corruption is the result of certain cultures being more accepting of government wrongdoing; anticorruption is not a Western imposition on other cultures, although it does need to be driven domestically and adjusted to each country’s unique situation. Rothstein shows that corruption is also not the result of a lack of formal rules but rather dwells in the “standard operating procedures” or norms of a society, suggesting the need to focus on institutional change (p. 13). Moreover, he rightly notes that corruption is often better understood as a collective action problem than a principal–agent problem. When citizens trust that most others (and the state) will “play by the rules,” they will do so also, and a social contract that controls corruption and provides public services can be established. This logic suggests that governments should not focus narrowly on changing incentives for corruption-related crimes but rather make broader “credible commitments” to destabilize the status quo and shift society to a new equilibrium of probity (p. 24).

Nevertheless, this study has two significant weaknesses. The first is a troubling circularity or lack of clarity regarding the causality among various important factors. For example, an effective social contract supposedly leads to lower corruption, and a prerequisite of such a social contract is that the government is trusted to provide services impartially (p. 21). Yet it is simultaneously argued that impartial governance is the definitional “opposite of corruption” and is itself the end goal of anticorruption reforms (pp. 6–7). Universal public education is at times described as the first step to a social contract, a key feature of a social contract, and the result of a social contract, as well as a factor that both reduces corruption and partly results from low corruption (p. 89). Gender equality both helps reduce corruption and results from impartial governance, which, again, is the definition of not being corrupt (pp. 97–101). We are told that auditing is a good tool for building social trust, but then its success is described as depending on the existence of social trust (p. 125). The causal problems in this book are most frustrating in the discussion of democracy, which Rothstein argues is not essential to controlling corruption and does not predict low corruption (pp. 7–8). Fair enough, except that we later learn that democracy is “a central part of a social contract” (p. 112). Teasing out the causality among these factors is admittedly difficult, but proposals for what should be done to control corruption would be strengthened by a clearer idea of what leads to what and how.

The second weakness is that the book does not adequately address the question of what motivates corruption control efforts. Rothstein criticizes the principal–agent theory for assuming that principals are selflessly opposed to corruption, but arguably in both the principal–agent theory and in his social contract theory, the key question is the same: What motivates a government’s leaders to curb corruption when corruption could benefit them personally? This book gives a partial answer by citing cases—nineteenth-century Sweden and Denmark—in which a substantial military defeat threatened a country so fundamentally that it incentivized drastic reforms. However, as Rothstein acknowledges, this finding is neither generalizable nor actionable for countries seeking to reduce wrongdoing. A fuller answer would likely have to accept that there are multiple reasons to curb corruption. Democracies like Taiwan and South Korea have reduced corruption under pressure from citizens empowered by elections, independent judicial systems, and other democratic institutions. In other cases, unaccountable autocrats have curbed corruption to advance state-building reforms that could strengthen their regime, such as Xi Jinping in China and Paul Kagame in Rwanda.

Despite these criticisms, I wholeheartedly recommend Controlling Corruption for both experts and newcomers to the topic. The theoretical framework it proposes is the product of decades of insightful thinking and research about what remains one of the most important yet stubborn and poorly understood governance problems. This large contribution by Rothstein will doubtless move the debate forward in fruitful directions.