Businesses On The Ballot?

As reports of corrupt politics in developing countries seem to reach newsstands with alarming frequency, Eric D. Werker ’00, an assistant professor of Business Administration at Harvard Business School, has a rather radical plan he thinks will clean up the political scene.

His proposal outlines a specific strategy for ridding local politics of corruption and bringing more accountability to these important offices: allowing corporate entities to run for public office.

“Running a local government is not rocket science,” Werker said, “so the question becomes how to shake up the system enough to get competent leaders governing in the interest of the population. When no individual can break this pattern, it seems you want to start thinking outside the box.”

Werker said that he has received mixed reactions from his colleagues, and a primary criticism seems to be that this plan would simply give official sanction to businesses’ intervention in government.

But Werker said he maintains that according to his plan, businesses would not have free reign over the areas they would govern.

“Giving a corporation the license to run a region is very different from giving it the option to run for office,” he said. “In the latter case, they remain accountable to the voters, not just the bottom line.”

Columbia University Professor Raymond J. Fisman—Werker’s long-time friend and recent research associate—said that while the proposal is far from perfect, he hopes that it will at least gain consideration from political systems around the world.

“Municipal politics stink worldwide, and it’s a pretty broken system in a lot of the world,” Fisman said. “What we’re trying to do is throw out an idea that is not in most discussions about how to fix the problem; not to say that this the final answer, but to at least stimulate debate about what types of mechanisms may or may not work.”

Worries persist among online bloggers and Werker’s colleagues about the idea of opening local elections to non-human entities.

One aspect of the plan that has drawn direct criticism is the idea that a company’s worries about earning a bad reputation from allegations of corrupt governance will act as enough of a check on its power.

But according to Lakshmi Iyer, who is also an assistant professor of Business Administration, recent events—such as the scandals surrounding Enron and the Arthur Andersen accounting firm—indicate that bad publicity isn’t a sufficient deterrent from corruption.

Fisman said he would encourage critics to make realistic comparisons to the system of municipal democracy as it stands today.

He said that given the current nature of politics, voters would most likely have to choose between a corporation and a politician of similar ethics.

Fisman likened elections under his proposal to a choice between, for example, Swiss auditing giant KPMG, and a candidate like Robert Mugabe, the notoriously corrupt President of Zimbabwe.

“You’re not necessarily picking between Ghandi and KPMG,” Fisman said.

Both Werker and Fisman cautioned that their idea is unlikely to be an over-arching solution that would fix all of the perceived problems with politics today.

“It would have to be structured in order to give the office power over administration but not legislation,” Werker said, “and to limit the ability of whoever would hold office to change the rules of government to serve their own self-interest.”

—Staff writer Nathan C. Strauss can be reached at strauss@fas.harvard.edu.