The responsibilization paradox: The legal route from deresponsibilization to systemic corruption in the Australian financial sector

Abstract

Recent corruption scandals suggest that the legal structures developed to responsibilize corporations might paradoxically enable the systematization of corruption across entire industry sectors. This study uses grounded theory methodology to develop a preliminary theoretical model of the correlations between the law, responsibilization, and the causes of systemic corruption. Through a qualitative examination of documental evidence from the case study of the recent Australian banking scandal, this article conceptualizes a two-way process of ‘legal deresponsibilization’. On the one hand, legal dysfunctions fail to effectively support the situational and cultural goals of responsibilization. On the other hand, the pursuit of such goals transforms the law in ways that can lead to the deresponsibilization of both corporations and the state. The article suggests that structural reforms are needed to correct this process and the underlying systemic imbalances between the legal promotion of financial interests and that of countervailing values of integrity and accountability.