BOOK REVIEW

Why good government mattersBo Rothstein, The quality of government: corruption, socialtrust, and inequality in international perspective, Chicago:University of Chicago Press, 2011

Stephen Nathanson

Published online: 13 April 2013# Springer Science+Business Media Dordrecht 2013

In this relatively short (225 pages) but very ambitious book, the Swedish politicalscientist Bo Rothstein begins with a somewhat abstract, formalist criterion of “qualityof government” (or QoG, as he calls it) and proceeds to describe the many implica-tions and important results—both theoretical and practical—of accepting this criteri-on of QoG. Readers of this journal may be especially interested in Rothstein’s bookbecause corruption is one of the most serious factors that undermine QoG. Rothstein’stheory of good governance helps to illuminate what corruption is, how pervasive arethe harms it generates, and why it is so difficult to prevent or eradicate. But Rothsteingoes further in an attempt to show how quality of government affects levels of trustwithin societies and how levels of trust determine whether countries are or are notcapable of supporting welfare state institutions that have the potential to providesignificant benefits to their citizens.

In developing his views, Rothstein employs a wide array of research methods andstrives to meet high standards of methodological rigor. Among the various socialscience methods he employs are large scale correlation studies, scenario experiments,historical case studies, and game theory. For value and conceptual questions, hedraws on and responds to the theories and arguments of political philosophers.

Because the book contains discussions of so many important topics, I cannot dojustice to it by attempting a crude overview. Instead, I will briefly describe the mainfocus of each chapter.

In Chapter 1, Rothstein presents his criterion for determining the quality ofgovernment (QoG). His basic idea is that the level of quality of a government isdetermined by the extent to which its officials implement laws and policies in animpartial way. Impartiality is the central value. By implementing laws and policiesimpartially, governments avoid cronyism, nepotism, and other corrupt practices thatchannel valuable resources and special treatment toward favored individuals orgroups. The ideal of the “rule of law” is one aspect of this impartiality.

Crime Law Soc Change (2013) 60:107–114DOI 10.1007/s10611-013-9438-x

S. Nathanson (*)Northeastern University, Boston, MA, USAe-mail: s.nathanson@neu.edu

From one perspective, equal treatment in the sense of impartial treatment mayseem like a rather minimalist criterion. It stresses procedures rather than results.Rothstein favors this view in part because he aims to present a universally applicablecriterion of good government. To do this, he thinks it necessary to avoid a conceptionof QoG that leans too heavily on the values of a particular culture. Such a parochialview would have only limited applicability.

Chapter 2 shows that societies whose governments meet the impartiality criteriontend to possess many beneficial features. Using a wide variety of data sources, Rothsteindescribes the beneficial results enjoyed by countries that meet the QoG criterion (asrevealed in their commitment to the rule of law, low level of corruption, and governmenteffectiveness in providing goods and services). According to Rothstein, “[T]he higherthe level of QoG in a given country, the fewer babies die, the longer people live, thegreater people’s life satisfaction, the better the environment, and the fewer peopleunemployed or defined as living in poverty” (43). The evidence that he offers convinc-ingly shows that things go better in high QoG governments.

Chapter 3, dramatically titled “Corruption: The Killing Fields”, uses multiple datasources to show the strong correlation between low levels of government quality andpoor levels of health. When government officials serve themselves and members oftheir own circle rather than considering the needs of all their citizens, the result is, forexample, millions of people lacking access to clean water. Corruption, in addition toresulting in illegitimate benefits for some also leads to poor health and death at anearly age for many others. One lesson that Rothstein draws from this fact is that insome contexts, direct investments in health services may do less to promote goodhealth than investments in better governance practices.

Chapter 4 compares the degree to which democratic procedures create politicallegitimacy with the degree to which uncorrupt, impartial provision of services createslegitimacy. Rothstein argues that legitimacy is more effectively supported by the“output” of well-distributed governmental services than by the “input” processes ofvoting and other forms of political participation. Citizens in democratic countries areoften critical of their government and disparaging of its legitimacy while people whobenefit from well-run distribution of government-provided services tend to view theirgovernment more positively. Moreover, since democracy can coexist with corruptgovernments, democracy by itself does not guarantee good government or thebenefits that high QoG can bring.

Chapter 5 discusses the difficulties of avoiding and dislodging corruption. Althoughmany decry the presence of corruption, it is actually the lack of corruption that ispuzzling. Why would people who hold governmental positions impartially distributebenefits to all their citizens rather than keeping them for or channeling them to people intheir own families, tribes, or political parties? Since good governance requires impartialtreatment and since all people are partial to some rather than others, the task of“establishing impartial and universal political institutions” might seem impossible tocarry out. Officials who are “interest-based actors” have no reason to support thecreation of “impartial and universal institutions…that…are [meant] to serve the ‘com-mon good’” (106). Once we see this, we should not be surprised—even if we remaindismayed—that “systematic corruption is the rule around the world, not the exception”(218). In spite of this, some societies have succeeded in establishing uncorrupt in-stitutions. Why and how does this happen? Rothstein provides a brief history of how

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Sweden made the transition from partialist, corrupt practices in the 19th century tobecoming a paradigm of impartial, good governance (111–118). No single reformbrought this about, but a host of changes altered people’s expectations about how theirfellow citizens act. Only when people assume that others are uncorrupt will they believethat they themselves can act honestly without being fools.

Chapter 6 focuses on welfare states. Rothstein asks “why Western industrializedcapitalist countries have developed such very different systems for social protectionand social insurance” (121). One might think that the differences between, say,Sweden and the United States are ideological, i.e., that most Swedes strongly support“redistributive” institutions while many Americans reject them and see capitalistmarkets as the best system for producing and distributing goods. Rothstein rejectsideological beliefs as the whole explanation. Though important, they are not decisive.Two powerful factors are the level of trust that people have in their own governmentand the level of trust that they have in their fellow citizens. Even people who supporta welfare state ideology will not support a strong welfare state unless they believe that“taxes are collected in a fair, incorrupt, transparent” way and benefits are distributedin an “impartial and competent manner” (128). Likewise, if people regard their fellowcitizens as untrustworthy people who will exploit the system, then this view of othersas free-riders will undermine people’s willingness to pay taxes to provide welfarestate benefits. Ambitious welfare state programs will exist only when people trustboth their government and their fellow citizens.

Chapter 7, “The Low Trust—Corruption—Inequality Trap”, is so full of importantideas that it is especially hard to summarize. In it, Rothstein considers the centralquestion of how social trust develops and why, if does not exist, it is so difficult tocreate it. According to Rothstein, quality of government is an important cause ofsocial trust. If a society’s government is trustworthy, he claims, most people in thatsociety will tend to think that their fellow citizens are trustworthy. At the same time, ifgovernments are corrupt, people will tend to distrust most others in their own society.“The result of this distrust”, Rothstein writes, “is that everyone in the group stands tolose, though they know that if they could trust each other they would all be better off”(148). Pervasive distrust is a trap, he says, from which it is difficult to escape. In partof this chapter, Rothstein explains how inequality undermines trust by making theinterests of people so divergent. As a result, “social trust will not increase becausemassive social inequality prevails, but the public policies that could remedy thissituation cannot be established because there is a lack of trust” (162). Rothstein alsogives reasons why universal welfare state benefits—i.e., benefits distributed toeveryone—are superior to means-tested programs (such as income supplements forpeople below a certain income level). Means-tested programs reflect a lack of trust inrecipients and generate efforts to verify the claims made by people seeking to qualifyfor a benefit. At the same time, these verification processes generate hostility amongthe targets of the investigations because government officials, trying to insure thatrecipients are not engaging in fraud, intrude on the recipients’ lives in ways that theyfind offensive. As a result, distrust breeds more distrust. Universal benefits do nothave this defect since there is no need to verify that people qualify for benefits.Finally, Rothstein criticizes the view that social trust emerges from citizen participa-tion in private groups, a view defended by Tocqueville and recently revived byRobert Putnam. Rothstein criticizes this view. He claims that good government is

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more the cause of social trust than the result of trust that might emerge from privateorganizations and relationships.

Chapter 8 describes two social experiments that Rothstein and his colleaguesdeveloped to provide experimental evidence for the view that people’s experiencewith honest or corrupt officials is responsible for their levels of trust (or distrust) inother members of their society. The chapter includes a detailed methodologicaldiscussion of how to devise and carry out experiments of this type.

In Chapter 9 Rothstein provides a different type of evidence for his view, ahistorical case study that compares Jamaica and Singapore. While very similar inthe 1960s, these societies are now quite different. Singapore, a non-democraticsociety with very low corruption, is a great economic success. Jamaica, by contrast,has a democratic political system but has sunk into terrible corruption and sufferedmany social woes as a result. The case study provides a different type of evidence forRothstein’s view about the centrality of QoG.

Chapter 10, the final chapter, is no mere summary of things past. I will describeonly two of the several topics discussed. One, discussed only briefly, concerns theexistence of “legal corruption”. Legal corruption occurs when public policies aredesigned and/or implemented with the goal of promoting private interests rather thanpublic interests. In such situations, the law permits actions that intentionally ignorewhat is good for the society as a whole (207). The second topic concerns markets.Although he credits market systems with achieving the most efficient forms ofproduction and distribution of goods, Rothstein rejects the “invisible hand” idea thatmarkets are self-sustaining, i.e., that if individuals strive for their own good, the netresult will be an effective market system that benefits all. This pro-market view hasbeen broadened to include the idea that it is human nature for people to strive for theirown individual good. If this view of human nature is true, then people in governmentwill use their offices to promote their own private interests and the interests of theirown tribe, clan, family, etc. If we accept the view of human nature promoted byadvocates of market systems, we must conclude that corruption in government isinevitable and cannot be eradicated. But, Rothstein argues, widespread corruptionundermines market economies. For a market economy to work, it needs a governmentthat is run by people who do not use their positions to benefit themselves and groupsthat they are partial to. For markets to run well, there must be people in governmentwho “act according to a logic different from the logic that market agents use whenoperating on the market” (209). Efficient markets can only exist if the standardmarket psychology is false, i.e., if public officials act impartially and have as theirprimary goal the promotion of the public good rather than their own private good.Only in this way can they gain the trust of their citizens, and, as Rothstein has arguedthroughout, only in this way can their societies produce trust among their membersand provide the individual and social benefits that are generated in a trusting societyby an effective government. Markets need uncorrupt governments, and uncorruptgovernments need people who are not seeking profit for themselves.

In this summary, I have tried to sketch the rich array of topics discussed byRothstein as well as some of his main conclusions and the methods he uses toestablish them. Since my summary is far from a complete account, readers willneed to go the text itself to gain a better sense of Rothstein’s views andmethods.

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Like any complex discussion of multiple topics, Rothstein’s book makes a strongercase for some points than others. In concluding, I will consider three areas where Ifind his views problematic.

1. Why welfare state institutions are relatively weak in the United States

In chapter 6, Rothstein asks why the welfare states in different Western industri-alized capitalist countries differ in significant ways. In particular, he asks why theUnited States, “one of the world’s richest and, among developed nations, mostreligious societies also has the highest percentage of newborns who do not reachtheir first birthday” (121). Infant mortality is offered here as one instance of the manyareas in which the U.S. welfare state lags behind others. His explanation, drawing onTheda Skopcol’s book Protecting Soldiers and Mothers, suggests that the U.S.government was “delegitimized” among people in the labor movement because ofthe widespread corruption involved in an early “welfare” program that providedpensions to Civil War veterans. As a result, the labor movement, a natural welfarestate supporter, did not trust the federal government to implement programs fairly andeffectively. Here again, a lack of trust leads to low QoG.

This bit of history seems too weak to explain the high level of distrust ofgovernment in the U.S. and the strong opposition to the welfare state. A moreplausible cause of this is the size and diversity of the U.S. population. With acontinuous history of large scale immigration by many different ethnic, racial,and religious groups, the U.S. has lacked the cohesion that exists in strongerwelfare states. Rothstein later cites research that shows that societies withgreater ethnic diversity provide fewer public goods. One study describes thenegative relation between ethnic diversity and the amount of government-generated public goods as “one of the most powerful hypotheses in politicaleconomy” (220–21). This factor, while not discussed in Chapter 6, provides abetter explanation of why the level of social trust required for a strong welfarestate has been lacking in the United States.

In addition, U. S. history provides other powerful causes for distrust of the federalgovernment. From the start, Americans were divided about the distribution ofauthority between states and the federal government. Divisions over slavery and raceexacerbated these divisions and ultimately led to the Civil War and its legacy of over700,000 deaths. Almost a century later, the federal government again sent troops intoSouthern states, this time to enforce school desegregation, and it imposed regulationsof elections to guarantee voting rights for Black citizens. Racial divisions still showup in regional differences in voting patterns and in the different voting patterns ofWhites, African-Americans, and Hispanics.

While these factors are overlooked by Rothstein, they lend credence to his overallclaim that the strength of welfare states programs is linked to levels of citizen and distrust.

2. Quality of government as impartial implementation of laws and policies

Rothstein’s central criterion of QoG is impartial implementation of laws and policies.Although he provides a powerful empirical defense of the importance of QoG, there arereasons to think that his conception of QoG as impartial implementation is not quite right.

As Rothstein notes in Chapter 1, his QoG criterion is a proceduralist theory. Hesees this proceduralist feature as a virtue because it does not appeal to substantive,

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culturally-dependent values and thus can serve as a universally applicable criterion ofgood government.

It is interesting that the two competing theories that Rothstein discusses most are alsoproceduralist views. Supporters of democracy stress the use of election procedures todetermine which substantive government activities accord with voter choices whileadvocates of market systems hold that the market process of voluntary transactionsautomatically (i.e., by an “invisible hand”) generates results that reflect consumer values.

While Rothstein provides strong arguments against these competing forms ofproceduralism, he does not consider whether proceduralist views in general mightbe unsatisfactory. Can we really identify good governments only by looking atwhether they follow certain procedures (whether impartiality, elections, or markettransactions)? Or must we look at the outcomes of government activity to determinethe quality of government?

A strong indicator of the need to specify outcomes is that Rothstein’s main defenseof his own view consists of appeals to the beneficial outcomes that are correlated withimpartial implementation of laws and policies. In Chapter 2, “Quality of Government:What You Get”, Rothstein cites a host of studies that link formal QoG with a higherquality of life for citizens. Presumably, if impartial implementation did not lead tobetter lives for people, the claim that it is the essence of good governmental would bemuch weaker. Perhaps it wouldn’t be plausible at all. While we might admire anhonest, uncorrupt government, we might not accord it a high quality rating if itsconscientious impartiality did little to benefit its citizens.

But if outcomes (rather than procedures) determine quality of government,then we need to identify which outcomes are worthy of pursuit, and doing thisrequires value judgments that may vary in different societies. Rothstein’s ownconception of good lives are made clear by the studies that he cites to supporthis view QoG makes people better off. All of these studies provide measures offactors like health, longevity, subjective satisfaction, and low unemployment.Rothstein’s key defense of the QoG impartialist view (quoted earlier) is that“[T]he higher the level of QoG in a given country, the fewer babies die, thelonger people live, the greater people’s life satisfaction, the better the environ-ment, and the fewer people unemployed or defined as living in poverty” (43).Similarly, lower levels of QoG lead to bad results for citizens. In Chapter 3,“Corruption: The Killing Fields”, Rothstein shows that indicators of corrupt,“partialist” implementation of policies are strongly correlated with higher levelsof infant and maternal mortality and lower life expectancy.

Given these particular conceptions of human well-being, we might label Rothstein’sbasic values as secular and utilitarian (in the sense of Bentham and Mill). Long, healthy,satisfying lives are the central, desirable features of well-governed societies and identifythe basic values that Rothstein’s arguments appeal to. This is not to say that proceduralimpartiality is unimportant, but its importance consists in its tendency to achieve thetypes of results that Rothstein sees as valuable. These same values are accepted by theresearchers whose studies provide the data for Rothstein’s arguments.

These values, however, are not universally recognized as the most important goalsof governmental activity. A religious society might view maximal levels of piety asits highest value, and if it did, it would reject the measures of well-being thatRothstein appeals to. Instead, it might study levels of attendance at religious services

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and the degree of faithfulness to religious obligations. Similarly, libertarians who seeindividual freedom (understood negatively as freedom from coercion by government)as the highest value might well accept lower levels of health and physical well-beingif that is the price of greater freedom. For example, they would prefer that motorcy-clists be free to ride without a helmet even if this policy yielded higher fatality ratesand more serious, costly injuries for riders.

What these examples reveal is that Rothstein’s conception of QoG is not neutral withrespect to the value of different outcomes and thus lacks the sort of universality that heaims for. While both religious and libertarian societies could satisfy Rothstein’s proce-dural impartiality criterion, the governments that they would support would lack manyof the things that Rothstein regards as features of good government. This suggests thathe is not a proceduralist after all but is instead a secular/utilitarian promoter of humanwell-being who champions procedural impartiality not for its intrinsic value but ratherfor its success in achieving his conception of human well-being.

3. Legal corruption

Not until the last chapter does Rothstein raise the question of whether there couldbe such a thing as “legal corruption”. That is, could there be a system that is corrupteven though its laws and policies are implemented impartially? Rothstein says thatthe idea of legal corruption “seems like an oxymoron”, but then cites DanielKaufman’s defense of its non-contradictory nature. For Kaufman, Rothstein writes,“The term legal corruption covers situations when public policy is thwarted or‘captured’ by various private interests instead of serving the common or publicinterest…” (207). Having introduced this issue, Rothstein describes four things thathe will do in this final chapter. While the rest of the chapter contains a great deal ofimportant material, the problem of “legal corruption” simply disappears without ananswer.

In spite of its absence from the discussion, the possibility of legal corruption posesa serious threat to Rothstein’s specific form of proceduralism. His account of corrup-tion as partialist implementation of existing laws and policies overlooks the possibil-ity that illegitimate partiality—in the form of concern for favored groups rather thanthe public good—is not limited to the implementation stage of policies but can alsoenter into the processes by which laws and policies are created. If the legal corruptionis possible, then any adequate theory of QoG must be able to justify a low QoG ratingfor governments that apply their laws and policies in an impartial manner but arenonetheless corrupt because the laws have been designed to promote the interests ofparticular sub-groups rather the public interests of the society.

Kaufman introduces the idea of legal corruption because he thinks that standardviews of corruption and the rule of law are biased against developing nations that lackmature legal systems. According to Kaufman, the idea that “the governance andcorruption challenge…[is] a monopoly of the developing world…has been disposed[of] completely” (208). Corruption is a serious problem in the developed world aswell, but if we lack a concept of legal corruption, we will be unable to call attention tothe forms that corruption takes in highly developed, legally mature societies.

Since Rothstein is so critical of excessive economic inequality, it is odd that heignores Marx’s familiar claim that the function of governments in capitalist societiesis to serve the interests of the capitalist class rather than the multitude of people who

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earn their living by labor. If governments are in the service of the wealthy, then legalcorruption will be the norm.

This is certainly a problem in the United States, where the law allows legislativeand regulatory processes to be heavily influenced by corporate lobbyists and wherewealthy people can use their financial power to influence elections. Even if it isunusual to call these things corruption, many people see these activities asundermining the democratic political processes. As a result, trust in governmentsand political processes is severely diminished.

Conclusion

If these criticisms are correct, they suggest the need for a reformulation of Rothstein’scriterion of quality of government to make clear the importance of outcomes and toallow for a concept of “legal corruption”.

If Rothstein stays with his formal, procedural criterion of good government, thatwould force him to embrace two unwelcome implications of it. The first is thatgovernments could receive a high QoG rating even though (as Kaufman suggests)their laws and policies (though impartially implemented) are designed to promote thepartialist interests of particular sub-groups rather than the public good. The second isthat governments receive a high QoG rating (because they implement their impar-tiality) even though the goals that they pursue (such as religious piety or maximalfreedom) result in lower levels of human well-being when this is understood byreference to the secular/utilitarian outcomes that Rothstein cites as favorable effectsof QoG.

The better approach, I believe, is for Rothstein to include outcomes that enhancehuman well-being as part of his QoG criterion. Good government, then, would beidentified by its goals and results. This is not to deny that impartial implementation oflaws is important, but what makes them valuable is their role in promoting the goal ofhuman well-being. In addition, he could broaden the notion of procedural impartialityso that it applies not only to the carrying out of laws and policies but also to theircreation. This would allow Rothstein to accept Kaufman’s broader notion of corrup-tion, which allows for the recognition of corruption at both the policy creation stageand the policy implementation stage.

A theory of this sort would face some additional challenges, both by appealing tovalues that are not universal and by requiring criteria for distinguishing betweenlegitimate and illegitimate forms of influence in the creation of laws and policies.Since not all promotion of self-interest is illegitimate, it may not be easy to devise acriterion for corrupt practices in the policy formation process. Despite these chal-lenges, this revised view accords more fully with the values at the heart of Rothstein’swork.

Even if my criticisms are correct, Rothstein’s The Quality of Government succeedsin revealing the ways in which the quality of governmental institutions matter.Readers interested in theory, in practice, or both can learn a great deal from thisimpressive work and can be inspired by Rothstein’s commitment both to rigorousresearch and to promoting governmental policies that enhance the well-being ofsocieties and individuals.

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