What we talk about when we talk about corruption

I agree with Bill Gates: corruption is a second order development issue at best. A commenter pushes back:

I think both Gates and Blattman are being a bit blithe on the issue of corruption–or at least constraining the issue to an unhelpfully narrow conception of corruption. I agree that the problem of graft or illegally channeling public funds into private bank accounts is a pretty minor problem in the overall scheme of things.

But if we think of corruption in the broader sense of subverting democracy and making holders of public office accountable to people other than the public they purport to represent, I think that not only is corruption a serious problem, but that aid bears a large part of the blame.

A number people have asked me this so I’ll clear up my view.

I agree that subverting democracy and institutions, or wholesale pillaging of the nation (a la Mobutu), is a big problem. It is one facet of the governance problems that are fundamentally the cause of poverty and instability–personalized, authoritarian, unaccountable rule. Which also usually happens to be corrupt.

If that’s what World Bank president Jim Kim or others mean by ‘corruption’ then I’m all for tackling it. But that’s not what the word means, what many people understand it to mean, or what the policy solutions seem to tackle.

Merriam-Webster defines corruption as “dishonest or illegal behavior especially by powerful people (such as government officials or police officers)”. This (in my view) conjures bribery and fraud more than an overcentralized, autocratic kleptocracy. I’m guessing this is what it means to the average voter, aid worker, or unfortunate citizen of one of these regimes.

A focus on bribery and diversion of aid money is precisely what a lot of aid agencies and donors worry about, because the people that give them money hate that theft, petty or large-scale.

Their answers and policy solutions are revealing. Anti-corruption commissions for example. That is not a solution to the fundamental problem. Most anti-corruption policies obscure the real challenges. Band-aids for cancer patients.

In fact, aid donors themselves have fed the problem, giving absolute sovereignty to the head of state, channeling funds through central government, making a handful of ministries powerful gatekeepers, and sending good money after bad.

10 thoughts on “What we talk about when we talk about corruption

  1. Thanks for responding at such length to my earlier comment. I guess the salience of “corruption” depends a lot on what question you’re trying to answer. If the question is, ‘Given the fact that aid funds will flow, how should we spend those funds and what issues should we focus on?’ then I entirely agree with your view that anti-corruption programs shouldn’t be a high priority.

    But the context of the Gates letter is different. He’s supposedly answering some variation of the question ‘is foreign aid worth it at all?’ not ‘how should we prioritize among different uses of aid funds?’ In that context the broader question of whether aid fundamentally corrupts democratization is much more relevant.

  2. I sense a common strand that runs through initiatives that elevate corruption, CEO compensation, money-in-politics, etc. as as high-priority issues. In both cases, I sense a desire to again turn development into a morality play, where the corruption/rent-seeking is not just the symptom but the disease. All that is missing is the right ‘institution’, the right piece of legislation, the right leader, to cure our ills. Is it not very convenient that the supposed cancerous agent requiring treatment is also the most visible and most viscerally repugnant symbol of greed and immorality?

    While I don’t deny (who would?) the preference for less rather than more corruption, etc., where in the history of development can we point to as an exogenous force beyond the margin? Phase changes in growth have been catalyzed, historically, by the 1% or very close to it — with corruption and anti-competitive practices that would put many today to shame*. While it makes good sense to value political enfranchisement, limited corruption, etc., evidence suggests these are pleasing byproducts rather than root causes. As a caveat, I’d note that I am not suggesting there is *no* margin for agency at the level of institutional reform or pressure. I am, however, arguing that this margin is far, far smaller than many would like to believe, and that these beliefs emerge from a naive conflation of how growth happens, how countries change due to their growth, and how we’d like to believe the world works (do good, get good). What if the ’cause’ of growth is a fortunate combination of monopolists (i.e., self-checking faction) capitalizing on a fortunate combination of resources and external demand? Is the problem corruption, institutions, or a world that forces people to work in places that haven’t been so fortunate?

    *In theory, one could argue that while the 1% did fine for the US, England, Singapore, etc., in the past, now the bar has been raised and institutions / policy are the difference-makers. I am open to suggestion, but I don’t believe that case has been made, nor the the more relevant case that intervention at the institution/policy level can substantively and sustainably affect development.

  3. Chris I know you believe in aid. I do too but, as you view anti-corruption efforts I view aid in the same light. Band-Aid. (nothing wrong with band-aids, quite helpful in fact).

    Which makes me wonder about Gates. His “aid” in several areas is very successful. But is it aid or full scale war on those areas from which his foundation focuses upon?

  4. Chris, when you say you seen these as small problems, what numbers would you point to? In India where I do most work the govt spends about $40B / year on its lead social programs and estimates it loses around half of that to graft, so for that specific context I would disagree with you and with Bill. I’m not sure we have reliable numbers elsewhere, though. I’m curious what informs your opinion.

  5. @MushamukaD Mobutu-style corruption is obviously hugely harmful, but increasingly rare since the end of the cold war. My concern is more general, and includes Mobutu but also includes Kagame, Museveni, ATT, etc. The point is that a government run and financed according to a donor consensus embodied in a PRSP is a government beholden to international technocrats and not its citizens. This is true even if said government is exceedingly “clean”. I think this is “corrupt” in the same way we consider a US government run according to moneyed special interests corrupt.

  6. This debate suffers from a serious absence of evidence. Chris, you claim that bribery is “petty” theft. Petty for who? It may be small compared to GDP, but in my research in Kenya, losses to bribery and police theft can be quite large for a poor person, equivalent to or larger than shocks like homes burning down, cattle or people dying, and medical emergencies like car accidents. Several micro-business owners that we observed for more than a year pay 10-20% of their daily income to police. I daresay that may have more impact than even our beloved, proven deworming! It’s not a moral argument.

    And this “petty” corruption is entrenched in state institutions that have accepted theft of public funds for personal use as “no big deal.” It’s inseparable from the institutional corruption you seem to actually care about. Again, we could use some actual evidence on the cost of leakage on the lives of the poor. I would guess it’s substantial, but shouldn’t we get away from guessing and at least try to base these positions on evidence as best it can be collected?

    Is there really nothing we can do? I find Dan Ariely’s research on lying compelling. Which is troubling, because that means that one important thing we can do about corruption is to care about it, to create a discourse that makes it impossible to think of yourself as a “good” person while stealing from the public. This debate itself, as it rises up to louder and louder mouthpieces, does not help.

  7. “Most anti-corruption policies obscure the real challenges. Band-aids for cancer patients.” Hear hear! (And see http://bottomupthinking.wordpress.com/2013/10/11/anti-corruption-efforts-perfecting-the-art-of-isomorphic-mimicry/)

    And an even bigger ‘Hear hear!’ for Chris P’s morality play observation.

    Ref Paul N, I believe international aid is a v small part of India’s budget these days. So whilst the systemic thefts from their social spending programmes may indeed be a ‘big problem’, there is v little donor money being lost.

    My complaint (and my reading of Blattman’s) is the excessive focus on tightly audited expenditure of donor money at expense of achieving significant worthwhile results. Many donors would apparently prefer to waste money on failing projects (e.g. driven by expensive intl consultants) than have 10% stolen from otherwise highly successful projects.