Tag Archives: corruption
Cross-posted at Global Dashboard.
Corruption is generally vilified as an unmitigated evil. It disenfranchises the poor, weakens public services, reduces investment, and holds back whole societies. And yet, in some instances, corruption can actually be very useful, lubricating business in a way that promotes growth, creates jobs, helps smooth the introduction of needed reforms, and reduces poverty.
What explains this paradox? (more…)
Greece is not a fragile state, but its governance problems share many of the same characteristics. The state’s struggles to enact reforms are an important case study in how politics, corruption, and elite self-interest can triumph over good ideas:
In exchange for the bailout money that Greece needs by March to avoid what could be a catastrophic default, the country’s foreign lenders have demanded radical changes to make the state more efficient and bring in more tax revenue. But . . . good intentions and directives can easily be evaded or sabotaged by the political class, if its members have not signed on. (more…)
This chart (courtesy of the Economist) shows the strong correlation between corruptiuon and human development. Transparency International’s annual Corruption Perceptions Index (CPI) measures the perceived levels of public-sector graft by aggregating independent surveys from across the globe. The United Nations’ Human Development Index (HDI) measures a combination of health, wealth, and education.
Although there is a broad correlation between the two indicators, the relationship is not a simple one across the whole spectrum of countries. Instead, there appears to be three categories of development levels:
- At the bottom, there is mainly failed states, very poor countries, and places where governments have a history of excessive intervention in the economy (Turkmenistan, Venezuela, Cuba).
- At the top, there is the richest countries in the world, including most of the OECD and places such as Singapore, Hong Kong, Barbados, Bahamas and Qatar.
- When the corruption index is between approximately 2.0 and 4.0 there appears to be little relationship with the human development index.
The above suggests that:
- Reducing corruption when it is above a certain abysmal level has substantial payoffs.
- Once this level has been crossed, however, countries can make substantial development progress even with relatively high levels of corruption (meaning an excessive focus on the issue may be counterproductive at times).
- Once countries are somewhat developed (putting them at around higher middle income level status), reducing corruption again becomes critical; states rarely become wealthy with mediocre institutions.
Democracy in Africa has a great post discussing the recent fuel price rise in Nigeria. Patronage and identity politics often matter more in fragile states than electioneering, at least as the latter is understood in more developed, homogenous countries.
Whatever well-meaning technocrats (including Nigeria’s respected ex-World Bank Finance Minister Ngozi Okonjo-Iweala) may think, the ending of fuel subsidies has less to do with correcting a structural imbalance in the national economy, and more to do with the maths of patronage politics. . . .
The agenda here is not an economic one but a political one that is informed by the logic of rent and patronage. The Goodluck Jonathan administration suffers from an unfortunate conjunction of deficiencies of two strategic commodities; legitimacy and cash. Having become President ‘against the grain’ of the unwritten pact of regional power-rotation among the political elite, Jonathan must manufacture that consensus post-facto, which is expensive, as it requires the stuffing of dissenting mouths with Naira bills, issued via lucrative government contracts. . . .
This is a political problem, not just a developmental one, because the patronage system of government – on which elite cohesion depends – is based on the issuance of contracts (and thus, kickbacks and leakage) for big infrastructure projects.
Kickbacks are what the political elite ‘eats’, and without them the machine grinds to a halt. So the problem facing Jonathan was where to look for funds to keep the consensus going. . . . the government opted to pass the buck onto the public by availing itself of the huge sums that were tied up in the fuel subsidy. Given the choice of alienating the elite or the public, the Jonathan administration chose the former. . . .
The Jonathan administration may appear to be more vulnerable than ever, but it is worth noting that the President now has funds that may enable him to co-opt support and re-establish his position. . . .
Just to be sure, it is instructive that Jonathan, like Yar’Adua before him, has ethnicised the top leadership of the military. . . . Note instead that the strategic posts of Chief of Army Staff (CoAS) and National Security Advisor (NSA) are occupied by faces from areas which strongly support Jonathan. The appointment of Azubuike Ihejirika represents a major boost for the Igbo south-east and represents the region’s first top command appointment since the Biafra war. Similarly, NSA General Andrew Azazi is from Jonathan’s home state of Bayelsa. . . .
Despite the public demonization of the President in recent days, the issue is not that Jonathan is an especially mean person or bad President – he is certainly an improvement on some figures in Nigeria’s past – but that the system is remarkably impervious to reform. . . .
So Jonathan alone is not going to make or break Nigeria. The problem is more structural – Nigeria’s government-centred political economy, built on top of a fundamentally unwieldy constitution, has grown too expensive for its own resources and incapable of playing the role that it has carved out for itself. Spatially, central government has been retreating towards Abuja for some time now, ceding more leeway to powerful state governors while it walls itself in to the capital– a glitzy, CCTV-monitored national-scale version of the Government Reserve Area (gated estates) that exist in most Nigerian towns – where it can feed off oil revenues without having to be bothered with actual governance.
Cross-posted from Global Dashboard.
Mexico, like many places around the world, has numerous immensely imaginative one-liners to characterize corruption. Here is a sample:
- “El que no transa, no avanza” (“Whoever doesn’t trick or cheat, gets nowhere”)
- “No roba, pero se le pega el dinero” (“He doesn’t steal, but money sticks to him”
- “Fulano de tal es honesto, pero honesto, honesto, honesto, ¿quién sabe?” (“So-and-so is honest; but honest, honest, honest, who knows?”
- “Político pobre, pobre político” (“A politician in poverty is a poor politician”)
- “No les pido que me den, sólo que me pongan donde hay” (“I am not asking for money, just to be appointed where I can get some”)
- “Vivir fuera del presupuesto es vivir en el error” (“To live outside the federal budget is to live in error”)
- “Amistad que no se refleja en la nómina no es amistad” (“A friendship that is not reflected in the payroll is no friendship at all”)
- “Con dinero baila el perro, si está amaestrado” (“Properly paid and trained, a dog will dance”)
- “No les cambies las ideas, cambiales los ingresos” (Don’t bother to change their ideas, just change their incomes”
Does anyone have any slang from a different country to share?
This chart (based on an index produced by the Economist Intelligence Unit and the Nuclear Threat Initiative) highlights why people working on security issues worry about fragile states. As the New York Times reports,
Experts warned that terrorists could buy or steal the makings for nuclear arms from the world’s secretive maze of atomic storage and production sites, which are said to number in the thousands. . . .
The report said nearly a quarter of the nations with materials that can fuel atom bombs scored poorly on social factors because of “very high levels of corruption.” And it warned that several of those “also scored poorly on the prospect of political instability over the next two years.”
That bleak combination, the study concluded, “significantly increases the risk that nuclear materials might be stolen, with help from corrupt insiders or in the midst of government distraction or political chaos.”