EVERYBODY, at least every civilized person, considers corruption a bad habit or practice, bad for business, bad for development bad for all of us.
But what is the truth, which hardly anybody mentions based upon today’s and historic facts about corruption?
To some people corruption is normal and inherent to business.
To some people corruption is a poverty problem and to others an African problem.
But is corruption really disturbing business as much as the “civilized” world wants us the developing world to believe?
Recently I met 2 actual opponents in their vision on development but agreed on corruption and they lay the foundations of the idea to write this article and investigate the real facts.
Because corruption and my opinion on corruption can be explained in many wrong ways, I will mention sources of my information, to show that some views are not or not only my opinions and views on corruption.
Let me introduce my respectable friends because of who I decided to write this article.
Professor Yifu Lin, former Chief Economist of the World Bank
Ha-Joon Chang, Political Economy of Development at the University of Cambridge
Both are world famous and well respected economist specialized in Development
Ha-Joon, has written a book called “Bad Samaritans” describing the development of today’s “civilized” and developed nations, blaming and “instructing” the un-or under developed world to apply compliance rules, standards and non corrupt practices.
Ha-Joon’s book gives examples in the history of development of the United States, United Kingdom, France, Germany, Japan, Korea and other countries about protectionism and corruption during their economic establishment, growth periods and activities which would today be described as corruption and he came to the conclusion is that all these countries were involved in activities they are telling us not to practice today.
Ha-Joon, in fact, states that a less open or closed economy is a better ground to start the economic development of a country than an open and free trade position.
Professor Lin, concluded the opposite in his New Structural Economics thesus: he stated that an open economy is key to development of any nation and gave many examples (without comparing the past like Ha-Joon) and reasons why an open economy was better for a developing economy. And fighting of corruption should come after development, he stated that China only started to take corruption serious in the last five years.
So one could conclude that both agreed on:
CORRUPTION HAS NOTHING TO DO WITH BLOCKING DEVELOPMENT
That is the reason why I started checking the true fact on corruption as a key factor to development and found the following, based upon facts of Transparency International in 176 countries.
The truth is that the largest “complainants” on corruption are themselves creating the image to be incorruptible but it’s a fact that:
1) None of the largest economically developed countries is in the top 10 of the least corrupt countries in the world! (total investigated 176 countries) and have an average score of position 15 and none of these countries scores higher than 8.3 out of 10 on confidence of non corruption.
2) The fast developing largest economies (Bricks + Turkey) have an average score of position 95.
3) The fastest growing economies in the world have an average of position 117
4) The fastest growing economies in Africa have an average score of position 115, doing even better than the world’s average fastest growing economies.
Several developed countries scoring within de top can be found on a list called the “Paradise Papers” involved in embezzling, tax evasion and money laundering but are scoring high on transparency on positions between 10 and 20, but score even higher on the list of Oxfam on countries with the most damaging tax policies by tax heavens: The Netherlands (4), Ireland (6), Luxemburg (7).
The UK as a whole is at position 11 but some of the territories, the Channel Islands Jersey and Guernsey, and the Isle of Mann are also exposed in the “Paradise Papers” as tax heavens and would independently obviously scored a position in the top 3.
Is it safe to state, based upon a statement of the same Transparency International, that a growing economy means growing corruption?”
Based upon the figures the least corrupt countries have an annual economic growth of between 0 – 2%, the middle positions on the list have an average growth of 4 – 8% and lower part of the list has an average growth of 8 – 12%.
Does that make it safe to state the more corruption the more growth?
I don’t think Transparency International will be pleased to state: corruption is an inevitable factor in the growth and development of an economy, but based upon the facts it looks like it.
Or should we see the correlation between growth and corruption in the line of: It rained four times on my birthday so it rains because of my birthday?
I can give my personal opinion on these things on this article:
First of all: To developed countries: Give developing countries the time to concentrate on development instead of all the pressure to concentrate on fighting of corruption because the statistics proof at least that corruption has (at least) not much to do with development of a country.
Secondly: To developing countries: start Scraping regulatory burdens (customs procedures, licensing, certification requirements, foreign government procurement policies, etc.) because they create a larger bureaucracy, bureaucracy creates interactions with officials and the more interactions with foreign officials, the greater the risk of corruption. So start canceling unnecessary rules and simplify the system.
Thirdly: My personal opinion has not changed, but I am highly in favour of point 1: I am still against corruption and think that corruption is undermining and jeopardizing a lot of governments efforts to develop a country and should be rooted out, but not at all costs.
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