How to stop corruption, curb kleptocracy


This week’s protests in Malaysia have again highlighted the political pathologies associated with rampant corruption and kleptocracy. Even in advanced liberal democracies like the UK, kleptocrats are using London’s property markets to launder ill-gotten gains.

In her latest book, The Quest for Good Governance: How Societies Develop Control of Corruption, Alina Mungiu-Pippidi explores how societies can control corruption and achieve good governance:

Over the past thirty years, fewer than ten societies have managed to achieve good governance. The “success stories” include Estonia, Chile, and Costa Rica but, perhaps surprisingly, do not include those countries which received the highest levels of international aid to target corruption, such as Egypt, Bulgaria, and Ukraine. Those countries…have actually made the least progress.

good-governanceToday, the anti-corruption industry has begun to go wrong, Mungiu-Pippidi observed. It suffers from the same problem as the development industry, she told the Legatum Institute (above):

Western societies tell others how corruption should be fought, but their methods are often wholly inappropriate to the societies they are advising. She invoked the example of legal protection of whistle-blowers, which may help in the West but will make no difference in a country where there is no rule of law. Instead of the force for change being external, civil society needs to put pressure on their government and act as a continuous critical monitor of standards.

For example, Transparency International sees itself as the flagship of the global fight against bribery and the corrupt elites who are hiding their wealth in offshore companies and tax havens, notes analyst Frederik Richter. But internally, Transparency does not live up to the principles it champions. The organization is doing business with corrupt companies, as uncovered last year, and camouflages income in its financial reporting in a way that renders public scrutiny of the accounts impossible.

There are gaping holes in the financial accounts of TI’s own multi-million euro anti-corruption conference. Richter and David Schraven report. In 2012, the event was held in Brazil and partly funded by German taxpayer money. Yet there is no comprehensive account for the event. Some corporate sponsoring was kept off-the-books altogether.

Borderline countries, where particularism and ethical universalism wrestle for supremacy, present the best opportunity for international anticorruption efforts to make a serious impact, Mungiu-Pippidi wrote for the National Endowment for Democracy’s Journal of Democracy:

Almost by definition, such countries are home to a critical mass of people who demand good governance. And here is where the current strategies of just adopting legislation in the area of whistleblowing or lobbying fail. In other words, in countries where sufficient conditions exist for an intervention, a sound good-governance program should be built on the lines of the classic strategy of increasing constraints on corrupt behavior while reducing the opportunities for it. RTWT

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