The Global Take on Corruption, 2000-2009

Does corruption inhibit economic development — or is it just the cost of doing business?

December 9, 2009

Does corruption inhibit economic development — or is it just the cost of doing business?

Is corruption a global phenomenon?

“Corruption, like temptation, exists everywhere — but in poor countries it can kill. Money meant for drugs for a sick child, or to build a hospital, can be siphoned off into Swiss bank accounts.”

(Hilary Benn, then-UK Development Secretary, April 2006)

Why is corruption a key challenge in developing countries?

“Corruption is another word for severe underdevelopment, especially on the institutional level.”

(Dennis de Tray, vice president of the Center for Global Development and former World Bank official, March 2006)

Why are developing countries hurt most by corruption?

“Developing countries need to take ownership of the fight against corruption themselves — as they can least afford to be corrupt given their resource constraints.”

(Ngozi Okonjo-Iweala, former Nigerian finance minister, July 2007)

Are more laws the answer?

“I will make sure all laws on corruption are meticulously enforced. We have enough laws to fight corruption. All we need is the will and commitment to enforce them.”

(Umaru Yar’Adua, President of Nigeria, June 2007)

Would adequate enforcement necessarily change the situation?

“Enforcement alone will not cure corruption. How much we do and how much progress we make depends on the desire of both governments and civil society to create the right setting for sound, strong, sustainable development.”

(Paul Wolfowitz, then-World Bank president, April 2006)

What are the monetary benefits of fighting corruption?

“When governments do work — when they confront corruption and improve their rule of law — they can raise their national incomes by as much as four times in the long run.”

(Paul Wolfowitz, then-World Bank President, April 2006)

But aren't there times when corruption is inescapable?

“Bribes overcome any administrative barriers. The higher the barrier is, the bigger the number of bribes and bribe-taking bureaucrats.”

(Then-Russian President Vladimir Putin, April 2002)

Is oil a particular problem?

“Nearly every country with an economy dominated by oil is corrupt and dictatorial, whether in Latin America, Africa, the Caspian, South East Asia or the Middle East.”

(J. Robinson West, former U.S. Assistant Secretary of the Interior, February 2003)

Is corruption merely a problem in developing countries?

“Cronyism and corruption are more rampant in developed countries. The powerful countries use their influence on crony countries to get contracts for their companies. This is cronyism and corruption at the highest level.”

(Mahathir Mohamad, Malaysia’s former prime minister, March 2000)

What form does corruption take in the United States?

"Is the United States Russia? No. In many emerging economies, corruption is egregious and overt. In the United States, influence comes as much from a system of beliefs as from lobbying."

(Martin Wolf, Financial Times columnist, April 2009)

What's the view from the White House?

“My experience in growing up in Indonesia or having family in small villages in Africa — I think it makes me much more mindful of the importance of issues like personal security or freedom from corruption. I’ve witnessed it in much more direct ways than I think the average American has witnessed it.”

(Barack Obama, then-presidential candidate, March 2007)

Is corruption rampant in China?

“Corruption is China’s greatest economic blight, its biggest social pollutant — and an important political challenge.”

(Hu Angang and Guo Yong, researchers at Tsinghua University, November 2002)

Why is it so pervasive in the country?

“The odds of an average corrupt official in China going to jail are at most three out of 100, making corruption a high-return, low-risk activity.”

(Minxin Pei, director of the China program at Carnegie Endowment, October 2007)

What exactly is at stake for Beijing?

“We face destruction of our party and destruction of our nation if we fail to fight corruption and promote clean government.”

(Li Peng, then-chairman of China’s Communist Party, March 2001)

What challenges does Italy face?

“In Italy, business and politics have long been intimately, and often corruptly, entwined.”

(The Economist editorial, February 2003)

How does Russia size up the problem?

“We can dull the edge of this crime, to move it to the background. It may sound banal — but the poorer the country, the higher is the corruption level.”

(Dmitri Medvedev, then-Russia's deputy prime minister, December 2007)

How serious is the issue in some former Soviet republics?

“The distinction between organized crime and certain aspects of government activity is often indistinguishable.”

(Serhii Holovaty, former Ukranian justice minister, November 2000)

What's the situation in Afghanistan?

“Afghanistan has a bad name from corruption. We will do our best through all possible means to eliminate this dark stain.”

(Hamid Karzai, President of Afghanistan, November 2009)

Why does corruption usually flourish when an authoritarian regime collapses?

"When it's unclear who's in charge, rules become open to manipulation, and bureaucrats — uncertain about their jobs — tend to put their short-term interests first."

(Editorial in The New Yorker, April 2006)

Do Western-imposed policies sometimes make things worse?

“These IMF and World Bank policies breed corruption, extravagance and lack of priorities in our leaders — and indeed our people.”

(Editorial in Zambia’s Post, December 2002)

And finally, why will it be difficult to wipe out political corruption completely?

“Politicians still need money. They’ll just have to find ways to hide it.”

(French judge Eric Halphen, November 1999)

Takeaways

"We can dull the edge of this crime, to move it to the background. It may sound banal — but the poorer the country, the higher is the corruption level." (Dmitri Medvedev, then-Deputy Prime Minister of Russia)

"Nearly every country with an economy dominated by oil is corrupt and dictatorial, whether in Latin America, Africa, the Caspian, South East Asia or the Middle East." (J. Robinson West, former U.S. Assistant Secretary of the Interior)

"Developing countries can least afford to be corrupt given their resource constraints." (Ngozi Okonjo-Iweala, former Nigerian minister of finance)

"Corruption is another word for severe underdevelopment, especially on the institutional level." (Dennis de Tray, vice president of the Center for Global Development)

"Corruption is China's greatest economic blight, its biggest social pollutant and an important political challenge." (Hu Angang and Guo Yong, researchers at Tsinghua University)