Corruption crusaders are kill-joys — frauds have more fun

That cheeky headline grabbed your attention, so listen to me vent. Back now in Britain for the latest break in my travels — after Spain and before Japan — I have come to spend a few days with friends by the seashore in Sussex. Pebble-beaches, grey skies and whipping cold wet winds make quite a changc from the sandy Mediterranean beaches of Malaga. Nevertheless the English seaside, to which my grandparents once retired after a long service in Her Majesty’s diplomatic service, has in its unspoiled places its own savage beauty.

One evening, we caught the train to Brighton to attend a salon put on by the University of Sussex. The topic was ‘Does Britain have a corruption problem?’ Salons are a hot ticket in London these days but to judge from the panel on offer, the University has a way to go before it can match the best shows.

Perhaps they wanted to make the topic accessible to a broad audience, but the panel rattled off the bog-standard wisdom on the topic without challenging the audience to look at an old topic with fresh eyes. For a university that once prided itself on thinking outside the box and offering provocative programmes that transcended rigid disciplinary boundaries, this struck me as disappointingly conventional.

So, after two hours of relative banality, during which the panel handled soft-lob questions like whether it was wrong for MPs to expense moat-cleaning or how rule-bending by developers could be reined in, I decided to stir the pot. Taking the microphone, I asked the panel if they were even considering the right question. I asked them instead to consider ‘Is corruption a problem?’

I’m not suggesting it isn’t. But I do think that any scholar who approaches a topic with a presumption about the premise is showing no more profundity than a religious fundamentalist who takes the Bible as fact and proceeds to make arguments from that base. Only one of the three panelists could even muster an attempt to answer my question, and it was a pretty wan effort. She said that when New Zealand suffered an earthquake, nobody died, whereas when Haiti did, hundreds did, since corrupt builders had cut corners and erected unsafe structures. Ouch. My colleague and I looked at each other, our jaws dropping simultaneously at her minor oversight that New Zealand also has a per capita income nearly seventy times greater than Haiti’s. Kiwis may bve an honest bunch, but they also have the wherewithal to give everyone decent housing.

The economic argument against corruption is that it mis-allocates resources from productive uses to private consumption, thereby slowing the rate of growth. That sounds sensible enough, but for the fact there’s actually not a lot of evidence to support the claim. Sure, Duvalier’s Haiti, Mobutu’s Zaire and Marcos’s Philippines saw their wealth squandered by corrupt rulers who built lavish palaces and stashed mountains of cash in Swiss bank accounts. But South Korea was just as corrupt, and its economy grew explosively. In fact, if you look at the histories of today’s developed countries, you could make a case that their most dynamic periods also happened to be their most corrupt. Tell me that America in the late nineteenth-century age of the railway barons, when it leapt over all its rivals to become the world’s biggest economy, would have scored well on a Transparency International ranking, then try not to laugh.

America, and other developed countries, are nonetheless much less corrupt today than they were then. Hooray for them. But could it be that their development is what made it possible for them to reduce corruption, and not the other way around? Research has found that good public-sector salaries and effective tax-collection agencies always and everywhere reduce corruption. Both take money. To get more money, governments needs to develop their economies. That’s what every developed economy has done, and most of us living in the West can look back on our own histories and see pasts replete with corruption in our own early development.

When asked which countries scored highly for honest politics, the Transparency International representative at the salon said the Scandinavian countries and New Zealand routinely topped the list. I pointed out these were all countries with a Protestant religious heritage. That may matter — not because Protestant Christians are less corrupt than other religious groups but because historically, they enforced social order differently. North European countries tended to evolve more individualistic cultures that revolved around nuclear families from a much earlier date than those of Catholic Europe, where extended families remained the norm. As a result, Northern societies had to early on develop public structures, like impartial courts and contract laws, to enforce agreements among strangers.

I once worked in a hospital run by Catholic nuns. When they needed to hire new junior staff, they didn’t put an advert in the wanteds. They gave the job to a relative of an existing employee. Nepotism? Yes. Corrupt? Perhaps. But it was also an efficient way to run a business, because it reduced transaction costs: the nuns didn’t spend any time (and money) litigating employees they needed to fire for non-performance. They left it to some grandmother to whip the child back into shape.

Having lived and worked in several countries that don’t come out terribly well on the Transparency International list, I’m well aware that there are many ways to make a society function — sometimes pretty well — in the absence of an effective and well-endowed state. Some of this comes off as corruption. It’s not that I think corruption crusaders are button-up bores, though I doubt many of them have partaken much of the strangely-enjoyable game of negotiating ‘on-the-spot fines’. But I do think the study of corruption merits a subtler interpretation than the superimposition of a First-World model on a context which differs in many ways. With a little imagination, you can discover fascinating new vistas of old lanscapes.

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