The Mysteries of Corruption

So here's a response from Sarang in the comments to my post on bad public policy in Venezuela etc.:

I see James's point as having two parts: 1. stickiness of unsustainable legacy policies, 2. ex ante awfulness of legacy policies -- e.g. an effective retirement age of 45. I want to shelve (1) b'se it is not actually a puzzle. My claim is just that group conflict is a contributor to 2, because norms forcing people to pretend that policies are universally good can act as a (weak) curb on the worst kinds of explicit plunder. (So can people feeling uncomfortable about stealing from others, which is likelier when group conflict is weak.)

I agree with this framing.  (1) is not a puzzle, the puzzle is (2).  I also agree with Dave's comment that a great deal of suboptimal policy can be tolerated when there is a large (or rapidly growing) surplus to share.  There's a big measurement problem here that I doubt will ever be satisfactorily resolved.

I also think Sarang's point about ideological cleavages vs. group-based cleavages probably explains a lot.  But the question still seems mysterious to me.  Sometimes bad policy is simply rejected outright by the vast majority of people—a good example is Santorum's effort to prevent the National Weather Service from providing daily forecasts to the public (the point being to channel money to the for-profit "forecasters" who free-ride on the NWS's data).  Santorum's shitty bill went nowhere and was subjected to widespread scorn.  It's a great outcome, but it's mysterious to me why we are so much better at resisting garbage like that than we are at preventing, say, the "synthetic fuel" scam, another Santorum special.  (Santorum would have to be ranked as one of the worst public servants of all time if he hadn't been drummed out of office by a double-digit margin, cutting short his shit-stained career.  By the way, isn't it odd that a man whose only selling point is his squeaky-clean moral code was such a venal piece of shit when he was in office?  Maybe get a few blowjobs on the side and don't fuck the taxpayers so hard next time.)

Anyway I will think more about it, and maybe read some of the literature (though I bet it is very annoying).  Many of these problems seem eminently solvable if we were to bring resources to bear on them, but I'm well aware that hasn't gone so well in the past.