Jacques Chirac, the former President of France, has been ordered to stand trial on corruption charges dating back to when he was the mayor of Paris. He is not the first mayor, nor will he be the last to be charged with corruption. Indeed, corruption appears to be a systemic problem for elected officials in cities around the world. Surprisingly, there have not been many more current and former mayors and other municipal politicians who have faced trials.

Bribery and other forms of corruption are likely commonplace at the municipal level of government because of the enormous wealth transfers which are possible. There are fortunes at stake, and there likely are many players eager to do whatever is necessary to benefit from the political decisions.

The two primary sources of wealth transfer are re-zoning and outsourcing.

Property values can increase dramatically when land is re-zoned towards more valuable uses. Developers and other land owners spend large sums of money to influence these decisions.

Outsourcing contracts can generate large profits, especially when they are single-sourced.

If municipal politicians, as well as those in more senior levels of government, have any desire to tackle the systemic corruption, they could choose to do the following. Whenever approval is granted to re-zone a parcel of land, the city should be paid an amount between 80% to 95% of the estimated increase in the value of the land. It should not be too difficult for external and independent appraisers to provide such estimates. This “fee” would greatly diminish the monetary benefit for developers or other proponents of the re-zoning, thus reducing the amounts of money available to “buy” the re-zoning. But there would still be some profit left to encourage efforts for re-zoning which could prove to be beneficial for both the city and the developers. Re-zoning decisions likely would be made more on the basis of what is good for a city.

As for outsourcing, all contracts should be awarded through a competitive bidding process overseen by an independent third party. Furthermore, the successful bidder should be required to put up a bond for at least 50% of the value of the contract. If the bidder cannot fulfill the contract for any reason, the city would be entitled to cash in the bond. Oftentimes, successful bidders return to the city demanding additional payments, otherwise, they threaten to abandon half finished projects.

I also would suggest that the national tax authorities engage in more frequent audits of municipal politicians and their families. The targets for the audits should be anyone for whom the cost of their lifestyle persistently and significantly exceeds their reported income.

Without such reforms, corruption will continue to be a fact of life in most cities.