The Taint of the Greased Palm ( CORRUPTION)

[Dover]

NYT Magazine
by Tina Rosenberg

...just as sure as a new leader's pledge to clean up the corruption of his predecessor is the certainty that his successor will, in a few years, be doing the same. Presidents who come to office promising to fight graft almost always fail -- occasionally leaving office several million dollars richer themselves. Arrests are made -- but often only of political rivals. Anticorruption campaigns come and go -- and still it requires a 30 percent payoff to build a highway, buildings fall down because inspectors are bribed and drivers prepare for an assault on their wallets when they see a cop.

There is, however, a curious assortment of places where, in recent years, things have changed. Australia, now one of the world's cleanest nations, was a longtime Wild West of lawlessness. Singapore is now a model of probity, but in the 1950's it was awash in corruption. Bolivia is one of the world's most corrupt nations, but for a time a reformist mayor gave residents of its biggest city, La Paz, a reprieve. Ferdinand Marcos, of all people, cleaned up the Philippines' tax bureau. Even in many nations where fraud is rampant, some agency or region stands out for integrity.

Until a few decades ago, corruption-fighting programs consisted mainly of lamenting the human character. Academic studies of corruption were hindered by the reluctance of scholars to seem patronizing to third-world countries. When scholars did look at corruption, their major focus, absurdly, was the question of whether it was harmful.

Today, the costs of corruption are widely discussed, and they are stunning. Francisco Barrio, until April Mexico's anticorruption czar, estimates that graft costs his country 9.5 percent of its G.D.P. -- twice the education budget -- and Mexico ranks only in the middle of the corruption charts. Corruption also distorts spending. There is evidence that when levels of graft are high, governments spend less on education and health and more on public works -- projects chosen not for their value to the nation but for their kickback potential. Corruption greatly discourages foreign investment. And with globalization, its effects have become borderless: when the Bank of Credit and Commerce International went down in 1991, 40,000 depositors in Bangladesh lost their life savings.

As the world turns its attention from whether to fight corruption toward how, some surprising lessons are emerging:

• The most corrupt nations are indeed poor ones, but grand corruption can be found everywhere: illicit deals between top officials and big business have brought down governments in Japan and Europe. Money distorts America's political system as well -- that it is largely legal does not make it less corrupt.

• Big governments tend to be less corrupt. It might seem intuitive that a large role for government in the economy would provide a large opportunity for mischief, but in fact weak states often lack the mechanisms to fight graft.


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http://www.nytimes.com/2003/08/10/magazine/10CORRUPT.html