Association for Public Policy Analysis & Management

Although corruption and inequality have generally been observed to be positively related, this study finds a statistically significant inverse relationship between levels of corruption and inequality in Mexico after 2000 - that is, upon the loss of the presidency of the Revolutionary Institutional Party (PRI) after seven decades in power - until present-day. Given the distinctive shock that may have prompted the conditions for this paradoxical relationship, a possible explanation is that the PRI’s loss of monopoly over power and opportunities for corruption allowed more players to engage in “competitive corruption”, allowing greater avenues for mitigating inequality through corrupt practices. In other words, while the players changed and the rewards expanded, the rules of game stayed fundamentally the same, a dynamic that continues to the present-day, rendering most anti-corruption efforts ineffective and insufficient.

The study regionally tests the hypothesis that Mexico’s mechanisms of redistribution are closely tied to deep-rooted corrupt networks and dynamics that continue to be reinforced by the historically dominant PRI power structure. Thus, with the lack of effective channels for mitigating inequality at large and proper oversight mechanisms at the top, incentives may remain too entrenched to reject corruption as a “mode of business” altogether, making "hard" anti-corruption measures ineffective and risking backfire as they squeeze opportunities for the poorest. If the trend observed nation-wide holds true at the regional level, a strategy to realign incentives is critical in Mexico – one where corruption leads to more inequality and anti-corruption efforts leads to less.