Conflict of interest in government: Avoiding ethical and conceptual mistakes

Abstract

Conflict of interest is among the most regulated forms of official behavior. In the United States, the vast bureaucracy of the Office of Government Ethics (OGE) is almost entirely devoted to controlling conflicts of interest. Ethics rules for state agencies and state legislatures are ubiquitous. But this profusion of effort has failed to solve the problem. According to one comprehensive survey, conflict of interest regulations in European countries abound, but “the landscape is highly fragmented [among] various ethics commissions, ethics inspectorates, ethics commissioners, integrity officers… No EU- and national administration is equipped with the necessary resources, skills, and tools to monitor COI in an efficient and effective way” (European Parliament, 2020, pp. 8–9). Surveys show that conflict of interest is a major concern of citizens. There may well be more conflicts of interest now than several decades ago (Cox & Thomas, 2018; Shepherd & You, 2019; Wike et al., 2021). Conflict of interest is among the least well understood of dilemmas of public office. By exposing errors about conflicts of interest, we hope to enable officials to confront these conflicts more honestly, citizens to judge official conflicts of interest more fairly, and regulators to do their job more competently.

Conflicts of interest compromise not just integrity and competence but democracy itself. Democratic processes importantly determine the public interest. Democracy requires officials to exercise their judgment to advance that public interest (Boot, 2022). Officials who are not motivated to act in the public interest thus threaten democratic governance. Contrary motivations arise because officials also have their own interests, often coming from their private lives, that may not be compatible with public interests. The juxtaposition of these two kinds of interests—a primary public interest dictated by their official role and a secondary interest influenced by private life—create the tension that is known as conflict of interest.

A conflict of interest is thus best understood as a set of circumstances that is reasonably believed to create a substantial risk that an official's judgment of a primary, public, interest will be unduly influenced by a secondary interest which typically though not exclusively involves financial gain (Thompson, 1993 see also chapter 2 of Institute of Medicine, 2009). A conflict of interest thus increases the risk of corruption. We have learned from common experience that secondary private interests can taint official's judgment about how best to advance the public interest. Comparative scholars note that while attention in the US has focused on the danger of private sector interests, in the parliamentary and Westminster systems, the burdens on MPs independent judgments often come from the party itself, for instance from a Prime Minister who controls the salaries and opportunities of many MPs (Stark, 2008, p. 129).

When secondary interests—be they from public or private sources—dominate, an official acts corruptly. Conflict of interest rules are intended to protect against this risk of corruption. Conflict of interest regulation also aims to maintain public confidence in public officials. Efforts to regulate, however, can go wrong in two different ways. They can underestimate the risk by missing cases that should be regulated. Or they can overestimate the risk by counting cases as conflicts that should not be problematic (typically by discounting the harms of prohibition).

While most mistakes about conflicts of interest underplay its risks, mistakes that overplay the need for regulation are also troublesome (Stark, 2003). First, they can have the effect of discrediting legitimate regulation and provoke backlash against concerns about conflict of interest. Second, exaggerating conflicts of interest may lead to cumbersome rules that discourage capable individuals from entering public service. Third, these mistakes may lead to restricting liberties that public officials should enjoy (Thompson, 2009).

We hope that a clearer understanding of the mistakes we have described proves useful to those whose are responsible for formulating and managing conflict of interest policies. Ethics officers, administrators, and others in positions of authority not only write and enforce policies regulating conflicts of interest, but they must also engage in difficult conversations to explain the content and reasoning behind those policies to those who must comply. We also hope that our analysis will help officials who are at risk of conflicts to better understand the problem, seeing more clearly when the risk is underestimated and when it is overestimated. It may be that psychological tendencies of confirmation and attribution bias tempt officials to embrace the mistaken honesty, motive, and constituent interest excuses when considering their own conflicts of interest. Finally, a clearer understanding of the mistakes about conflict of interests should help citizens, journalists, watchdogs, and other members of the public better judge the conduct and trust-worthiness of public officials.

Understanding these mistakes is important because avoiding conflict of interest is important for democracy. By virtue of their roles and powers, officials face distinctive situations in which their public responsibilities (their primary interests) often clash with their private activities (their secondary interests). Despite these clashes, officials have a special responsibility to act in the public interest. Public office is replete with conflicts and many cannot be avoided. Conflict of interest is a chronic condition that needs to be correctly identified and effectively managed. That is more likely when officials and citizens avoid the mistakes we have described above.

Both authors declare that they have no conflicting interests to disclose. Additionally, we did not receive funding from any sponsoring organizations to conduct research for this article.