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Who beats corruption?

Jeffrey D SachsJeffrey Sachs is Professor of Economics and Director of the Earth Institute at Columbia University.

by Jeffrey Sachs

Corruption undermines the quality of life for people around the world, not only in poor countries. The US currently is witnessing several corruption scandals. Even America’s Federal Emergency Management Agency, responsible for providing relief after natural disasters and man-made catastrophes, was in the hands of inept political cronies rather than professionals. When hurricane Katrina struck America’s Gulf Coast, that incompetence proved fatal.

All societies require an effective government that can provide vital and irreplaceable public services and infrastructure. Thus, governments are invested with unique powers, especially the powers of policing and judicial control. But these powers are also readily abused. How, then, to ensure that governments are law-abiding as well as strong?

The best answer, both in theory and practice, is to find ways to hold governments accountable to the people that they serve. Elections are obviously one method, though campaign financing can be a source of corruption. Politicians around the world trade favors for cash needed to win elections, and they often use that cash to buy the votes of desperately poor people.

Clear electoral rules and procedures can help ensure transparency, but accountability also comes from the broad society in between elections. Privately owned newspapers, independent radio and television networks, trade unions, churches, professional societies, and other groups within civil society provide a bulwark against despotism.

In the poorest countries, where illiteracy is high, desperate people are subject to government manipulation, and there is a lack of independent control through the media and professional organizations, governments face only weak control by society. They tend to be the most despotic and corrupt, not because poor people care less about good governance – on the contrary, their very lives depend on it – but because they lack the means to keep their government disciplined and law abiding.

The result is a trap in which poverty causes bad governance and bad governance causes poverty – a two-way spiral downward that can lead to such extreme deprivation that the government, lacking computers, telephones, information systems, and trained civil servants, couldn’t function honestly even if it wanted to. The end result can be collapse into a kind of anarchy, as in Liberia, Sierra Leone, and Somalia.

One measure of the quality of governance in over 150 countries is provided by Transparency International, an organization dedicated to strengthening civil society in the fight against government corruption. Transparency International produces an annual ranking of “corruption perceptions,” measuring the public’s view of the extent of corruption in a country.

In the 2005 rankings, Iceland scored as the least corrupt country, with the Scandinavian countries, New Zealand, and Singapore close behind. The US ranked seventeenth from the top, a not-so-glorious position for the world’s leading power. In general, the poorer the country, the lower the ranking: tied for last place are Chad and Bangladesh.

A bit of statistical analysis reveals further important patterns. First, Sub-Saharan African countries are less corrupt on average than countries at the same income level in other parts of the world. For example, Burkina Faso, Ghana, Mali, and Rwanda rank much higher than Bangladesh, Indonesia, Pakistan, and Vietnam. Yet the Asian countries’ economies have tended to grow much faster over the past generation. Corruption therefore cannot be the unique factor that holds Africa back. Africa’s problems have more to do with droughts, malaria, AIDS, and lack of infrastructure.

Poor countries achieve lower levels of corruption when civil rights are protected. When people have the freedom to assemble, to speak, and to publish their views, society benefits not only by increasing the range of ideas that are debated, but also by keeping corruption in check. It is no surprise that corrupt regimes routinely clamp down on the press, trade unions, and on professional associations. In Africa, less corrupt countries like Ghana also have much better protection of civil liberties than more corruption-prone countries like Chad and Ethiopia, which are also even poorer.

Finally, the data show that corruption is highest in oil and gas-producing countries. In general, natural resources like oil, gas, diamonds, and other precious minerals breed corruption, because governments can live off of their export earnings without having to “compromise” with their own societies. The natural resources are therefore not only a target of corruption but also an instrument of holding power. Many foreign companies, intent on cashing in, fuel the pathology of corrupt regimes by peddling in bribes and political protection.

The implications for action are clear. By strengthening civil society – through legal rights and long-term economic development – and instituting clear rules to ensure accountability, political despotism and corruption will be brought under control. We should be uncompromising, therefore, in our defense of civil liberties.

The rich world should offer impoverished regions like sub-Saharan Africa more economic support to break out of poverty. Of course, aid should be directed to specific needs – for example, malaria control, food production, safe drinking water, and sanitation – whose fulfillment can be measured and monitored to resist corruption. By raising living standards, we would also be empowering both civil society and impoverished governments to defend the rule of law.

Copyright: Project Syndicate, 2005.


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