Combat Government Corruption through Deregulation.

Rising corruption in the United States highlights the link between complex regulations and bribery as officials exploit discretionary power. Experts suggest that reducing government size and simplifying rules can limit opportunities for corruption and promote transparency across states.

Corruption investigations and trials involving political figures are ongoing in various parts of the United States, including Hawaii, Mississippi, and Washington, D.C. These scandals are not isolated incidents, but part of a broader global trend. The latest international corruption index reveals that corruption is worsening worldwide, with the United States recording its worst score to date. Since corruption often stems from government officials trading favors for compensation, its no surprise that the solution may lie in reducing the power and scope of the state.

Widespread Corruption in U.S. Politics

In Hawaii, Lt. Gov. Sylvia Luke is under federal investigation for allegedly accepting $35,000 in bribes while serving as chair of the state's House Finance Committee. Meanwhile, three officials in Jackson, Mississippi, including former Mayor Chokwe Antar Lumumba, are facing trial for allegedly accepting bribes related to plans for a new convention center in the city. Additionally, D.C. Councilman Trayon White has been accused of accepting bribes to steer city contracts. In each of these cases, government officials are believed to have used their political influence to profit from business decisions, contributing to a growing problem of corruption across the U.S.

Global Trends in Corruption

According to Transparency International, a Germany-based anti-corruption organization, corruption is on the rise globally, even in established democracies. The 2025 Corruption Perceptions Index (CPI) highlights this troubling trend. The U.S. has seen a decline in its score, now ranking slightly below France and slightly above South Korea. This decline in transparency and accountability is concerning, particularly for the United States, as it suggests that corruption is becoming more widespread, even in countries with long histories of democratic governance. Transparency International advocates for stronger anti-bribery laws and condemns the state persecution of independent watchdog groups. However, the organization's findings also underscore a significant issue within Europe, where excessive regulation has led to a decline in governance. Thirteen countries in Western Europe and the EU have seen a sharp drop in their corruption scores, while only seven have made notable improvements. This regulatory burden, especially within the European Union, has increasingly become a source of frustration for economic actors.

The Link Between Regulation and Corruption

The EU's regulatory environment is growing more complex and burdensome, with critics noting that the amount of new regulation in recent years is overwhelming. Oscar Guinea and Oscar du Roy from the European Centre for Political Economy noted in 2024 that the accumulation of new regulations in recent years has reached staggering levels. This growing complexity is contributing to corruption, as excessive bureaucratic processes create opportunities for bribery and illegal dealings. Transparency International suggests that administrative red tape, such as licensing requirements, prolonged decision-making, and contract delays, creates opportunities for government officials to extract bribes. In many cases, government officials may sell exceptions or expedited processes to business owners seeking to bypass the normal procedures, perpetuating a cycle of corruption. This is not just an issue in the EU; it is also a significant concern in the U.S.

Regulations and Bribery in the U.S.

A study published in the European Journal of Political Economy in 2020 by Oguzhan Dincer from Illinois State University and Burak Gunalp from Turkey's Cankaya University explored how federal regulations influence corruption levels across U.S. states. The researchers found that the enforcement of regulations provides government officials with the power to demand bribes from businesses. This power allows officials to extort bribes from companies seeking licenses to enter a particular industry, or from existing firms that benefit from collusion with regulators to maintain favorable conditions. The study also found that regulations and the discretionary power given to government officials create incentives for businesses to operate outside the official economy, leading to further corruption. The data revealed a clear and positive relationship between federal regulations and corruption levels, suggesting that as regulations increase, so does the likelihood of bribery and unethical practices.

Reducing Corruption Through Economic Freedom

The research also revealed an important finding: states with greater economic freedom tend to have lower levels of corruption. In particular, states with fewer regulations, lower taxes, and more flexible labor markets perform better in terms of honesty and transparency. Matthew D. Mitchell and Vance Ginn from the Fraser Institute, which publishes the Economic Freedom Index, have long argued that limiting government intervention promotes economic prosperity. This study adds another layer to that argument, showing that deregulation and limiting government intervention can also reduce corruption. The study's authors concluded that reducing the size and scope of government at the state level can mitigate the negative effects of federal regulations. By allowing businesses to operate with less interference from the state, the potential for corruption is reduced, fostering a more honest and transparent environment.

The Need for Regulatory Reform

Steve Swedberg, a regulatory expert at the Competitive Enterprise Institute, recently observed that dense, opaque, and discretionary regulatory systems create perverse incentives for corruption. He noted that limiting the discretionary power of government officials is one of the most effective ways to curb corruption. Swedberg suggested that regulations should be subject to sunset provisions, expiring after a certain time unless justifiable reasons for their continuation are presented. This would help prevent regulations from accumulating unnecessarily over time, and ensure that each rule remains relevant and effective. Furthermore, Swedberg advocated for limiting the costs that regulators can impose on businesses, which would reduce the financial burden on companies and lessen the opportunities for bribery. By making the regulatory environment more predictable and less subject to arbitrary decisions, corruption could be reduced significantly.

Conclusion: A Smaller Government for a Cleaner System

Whether through deregulation, limiting discretionary power, or reducing bureaucratic interference, the key to tackling corruption is to reduce the size and scope of government. As long as government officials retain the power to impose regulations and make decisions that affect businesses, there will always be a temptation for bribery and corruption. To combat this problem, policymakers must focus on creating a regulatory environment that is transparent, predictable, and as minimal as possible. In this way, corruption can be significantly reduced, creating a cleaner, more honest political system.

Sources:

• Transparency International
• European Centre for Political Economy
• Fraser Institute
• Fight Government Corruption With Deregulation

Author: Olivia Parker
Olivia Parker is a journalist and editor with over 8 years in media. She focuses on culture, arts, and social issues, skilled in feature writing and critical reviews.