Construction of a prominent luxury apartment tower in São Paulo was halted in 1999 after allegations surfaced that it failed to meet the appropriate height-to-land-area requirements, and worse, was being built to a dangerous height that might imperil planes on the flight path to the Congonhas Airport. This alleged flaunting of seemingly reasonable construction rules naturally raised questions among paulistanos about the efficacy of regulation in the city. A few years later, a city building investigator was arrested. On his modest civil service salary, he had managed to buy up more than one hundred properties over seven years on the job. Perhaps the issue was not just ineffective regulation, but corruption as well?
This example leapt to mind as I read Paul Lagunes’s smart book on corruption and anticorruption efforts in the “built environment” of the Western Hemisphere, the environment made up of human constructions that house and connect society in residences, office buildings, and roads. As Lagunes points out, examples of corruption in this environment are all too frequent, including the Walmart scandal that broke in Mexico in 2012, Lava Jato in Brazil in 2014, and bribery in New York City’s property oversight department in the early 2000s (this last case a salutary reminder that corruption is not the province of Latin Americans alone).
Lagunes’s argument is straightforward: the successful promotion of integrity among nonelected officials working to regulate construction can be achieved through added oversight (the “eye” in his title) combined with the credible threat of top-down sanction (his “whip”). In this, he builds on the work of many previous scholars, such as Cesare Beccaria ([1764] Reference Beccaria and Young1986), Jeremy Bentham ([1843] Reference Bentham2011), and Gary Becker (Reference Becker1968), who have highlighted the importance of altering the cost-benefit tradeoff that tempts some people into criminality. On purely theoretical grounds, then, there is not much new in this volume.
The novelty of this fine book, though, comes from its rigorous method. In painstaking detail and with great critical self-awareness, Lagunes designed and tested anticorruption interventions in the Mexican city of Querétaro, across Peru, and in New York City. The book itself does not engage in much of the usual preening about the laboriousness of the author’s method, but Lagunes clearly spent thousands of hours designing the experiments; managing local teams; locating and evaluating primary documents, such as building plans and inspection certificates; and then using a variety of quantitative tests to tease out the effects of his experimental interventions.
As a consequence, the book, and particularly chapters 4 to 6, which detail his experiments, will serve as an excellent didactic primer on experimental design for graduate and undergraduate courses on research methods, as well as a good practical guide for scholars of corruption who may be contemplating experiments of their own. The chapters reflect deep attention to matters such as the ethics of experimentation, the impact of interventions on the affected populations, potential confounding variables, tradeoffs involved in using placebos and controls, potential spillovers, and the possible displacement of corruption from the experimental cases into other public works.
In chapter 4, Lagunes evaluates how oversight via audits, combined with the possibility of sanction, affected the performance of permit reviewers in the Department of Buildings of Querétaro, Mexico. Assessing one hundred building applications, of which half received treatment and half were in the control group, the experiment began by alerting officials that a set of permit applications would be subject to the author’s scrutiny. Eight weeks later, the building secretary spoke with his staff about their reviews, ensuring that the permit reviewers knew not only that their work was being watched but that they were potentially subject to their boss’s wrath. The experiment convincingly demonstrated that officials responded to audit, but only after the implicit possibility of sanction by the building secretary was introduced.
Chapter 5 moves to Peru, where Lagunes worked with a prominent civil society organization, Proética, and with Peru’s comptroller general to evaluate the costs and benefits of anticorruption monitoring of public works run through a single government program (the Programa de Mejoramiento Integral de Barrios) executed by two hundred districts nationwide. The goal here was quite different from that in Querétaro: investigating whether the combination of audits and sanction had a negative effect on government efficiency and whether it was cost-effective. A series of letters to district officials was used to alert them to audits and the possibility of sanction. The “treatment” districts were found to complete their public works at a similar pace as the control group, but at a significantly lower cost, suggesting that the intervention more than paid for itself and had few obvious externalities.
Chapter 6 shifts to New York City, where a major scandal in 2002 uncovered a multimillion-dollar scheme whereby property owners paid bribes in exchange for reduced property tax assessments. Perhaps because the scandal was uncovered and its mastermind pursued by law enforcement 19 years before The Eye and the Whip’s publication, Lagunes (and chapter co-author Yanying Hao) leave aside the sanction component of the eye and whip combination in this experiment. Examining 211 properties undergoing major reforms that would require assessment, they divided them into a control group, a proactive audit group, and a conditional audit group, which received an audit only if the assessed value of the properties changed significantly. The experiment ended in a null result, which they interpret as a sign that “if there is corruption in New York City’s property tax system, then it is sufficiently contained to avoid detection by our methods” (116).
The chapters jointly leave little doubt that oversight and sanction have a clear causal effect on the behavior of nonelected regulators. The studies leave some wiggle room around whether the interventions have curbed corruption or simply eliminated inefficiencies, and there is, of course, also a lingering question about what happens when the investigators go home after their experiments are over. But my larger concern about the book relates to the experimental turn in political science, and more specifically, in the study of anticorruption in Latin America.
Two issues are worthy of discussion from the perspective of readers of this journal. First, the descriptions of the people involved in curbing abuses in the built environment will seem strangely sterile to scholars of Latin America. We learn little about how corruption functions on the ground beyond the tacit assumption that, left to their own devices, bureaucrats everywhere will be venal. There is little differentiation between syndromes of corruption across countries and little effort to evaluate the personal goals, wills, or strategies of any bureaucratic actor or organization in particular. Partly, this may be a vestige of the medical origins of experimentalism, with its focus on treating the disease rather than addressing the origins of the disease or the characteristics of the patient. But this approach leads to a strangely clinical, politics-free perspective on the very human, and therefore complex, dynamics of corruption and anticorruption.
A second issue arises frequently in discussions of experimentalism: the question of what lessons to draw, and what lessons can be drawn, from a series of narrowly focused experimental interventions. Careful experimentalists are understandably reticent about drawing comparative lessons across their studies for fear of extrapolating beyond the precise causal findings their experiments reveal. Lagunes’s cases also were not designed for explicit comparison across the three country experiments: each country experiment tackles a distinct issue. That said, the book does lay out some important claims that will be of broad interest, especially because they are backed by convincing evidence: “that the eye and whip approach contributes to improved compliance with existing regulations and results in the more efficient use of public resources” (118), that the eye without “at least the implicit threat” of the whip is ineffective (12), and that the costs of conducting audits is more than offset by the efficiency and spending gains (12, 100).
These criticisms are in no way intended to detract from the intrinsic contributions of this carefully designed, refreshingly concise, and meticulous book. If anything, they suggest a need to better integrate methods in the study of regional corruption dynamics. Lagunes has already shown himself also to be a skilled corruption researcher, conducting incisive interviews with key anticorruption officials and organizing a multimethod investigation of the Lava Jato probes across Latin America (Lagunes and Svejnar Reference Lagunes and Svejnar2020). Further integration of these diverse research traditions, and dialogue across them, will inevitably enrich the study of corruption across the hemisphere and presumably beyond. In the meantime, The Eye and the Whip stands out as a rare three-country exploration of what works in tackling this pervasive and insidious challenge.
