INSTITUTIONAL CORRUPTION: A FIDUCIARY THEORY M.E. Newhouse* Dennis F. Thompson developed a theory of “institutional corrup- tion” in order to explain a phenomenon that he believed the Congres- sional ethics rules failed to address: Congress’ systematic deviation from its proper purpose as a consequence—not merely of individual wrongdo- ing—but of the influence of several general systemic features of the legis- lative process. Researchers at Harvard University’s Edmond J. Safra Center for Ethics have recently deployed the language of institutional corruption broadly in analyses of various other public and private insti- tutions, such as regulatory agencies, banks, pharmaceutical companies, and think tanks. The states of affairs that researchers have identified as “institutional corruption” fall into four categories: 1) breaches of fiduci- ary duty, 2) fraud or otherwise unfair commercial practices, 3) destruc- tive firm behavior, and 4) mistake, inefficiency, or incompetence. This Article reveals that only the first of these represents a true application of Dennis F. Thompson’s theory of institutional corruption, which was originally developed in the context of Congressional ethics. Research projects that deploy the terminology of institutional corruption in non- fiduciary contexts are certainly valuable, but they do not address the subject matter of institutional corruption, properly understood. INTRODUCTION ................................................. 554 I. INSTITUTIONAL CORRUPTION: PAST AND PRESENT ......... 556 A. The Origin of Institutional Corruption Theory ....... 556 B. A Model of Institutional Corruption ................. 559 C. The Challenge ..................................... 562 II. RECENT “INSTITUTIONAL CORRUPTION” RESEARCH ........ 569 A. Fiduciaries ........................................ 570 B. Frauds ............................................ 573 C. Fiends ............................................. 575 D. Fools .............................................. 576 III. THE NATURE AND LIMITS OF INSTITUTIONAL CORRUPTION ........................................... 578 * Fellow, Edmond J. Safra Center for Ethics, Harvard University; B.A. University of Washington; J.D. University of Washington School of Law; Ph.D. Harvard University. Thanks are due to William English, Justin O’Brien, Mark Somos, Malcolm S. Salter, and Dennis F. Thompson for helpful advice and feedback. 553
INSTITUTIONAL CORRUPTION: A FIDUCIARY THEORY
Jul 06, 2023
Welcome message from author
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Related Documents
