Value Sinks: A Process Theory of Corruption Risk during Complex Organizing.

Abstract

Theories and studies of corruption typically focus on individual ethics and agency problems in organizations. In this paper, we use concepts from complexity science to propose a process theory that describes how corruption risk emerges from conditions of uncertainty that are intrinsic in social systems and social interactions. We posit that our theory is valid across multiple levels of scale in social systems. We theorize that corruption involves dynamics that emerge when agents in a system take actions that exploit disequilibrium conditions of uncertainty and ethical ambiguity. Further, systemic corruption emerges when agent interactions are amplified locally in ways that create a hidden value sink which we define as a structure that extracts, or 'drains,' resources from the system for the exclusive use of certain agents. For those participating in corruption, the presence of a value sink reduces local uncertainties about access to resources. This dynamic can attract others to join the value sink, allowing it to persist and grow as a dynamical system attractor, eventually challenging broader norms. We close by identifying four distinct types of corruption risk and suggest policy interventions to manage them. Finally, we discuss ways in which our theoretical approach could motivate future research.