Recently there has been a spate of commentary in the blogosphere that revives a set of tired old canards about corruption and development — the related claims (1) that the focus on corruption and governance in the development discourse is misplaced, because there isn’t a lot of evidence that corruption matters much for development, poverty reduction, etc.; and (2) that anticorruption is a fixation of wealthy, mostly Western countries, because it enables people in those countries congratulate themselves about their moral virtue and to look down on habits and practices in the poor, benighted South. Recent examples include Chris Blattman’s posts on his blog (here, here, and here), Michael Dowdle’s contributions to the Law & Development blog (here and here), and Jason Hickel’s post on Al Jazeera English, though there are others as well.
Sigh. Do we really need to go through this again? OK, look: Yes, there are still lots of unanswered questions about corruption’s causes and consequences, and its significance for various aspects of economic development. And yes, some anticorruption zealots have sometimes over-hyped the role of corruption relative to other factors. But the overwhelming weight of the evidence supports the claim that corruption is a big problem with significant adverse consequences for a range of development outcomes. And the evidence is also quite clear that the focus on corruption as a significant obstacle to development comes as much or more from poor people in poor countries as it does from wealthy Western/Northern elites.
A blog post is not the best format for delving into a very large academic literature on the adverse impacts of corruption. And so the posts to which I’m responding might be forgiven for generally failing to provide much evidence in support of their claims that corruption is relatively unimportant for development, and largely a Western obsession. But, let me at least take a stab at trying to move the conversation beyond unsubstantiated declarations to some assessment of the actual evidence, starting with the impact of corruption on development.
First things first: As everyone acknowledges, there’s a very strong correlation, at the country level, between corruption (measured in various ways) and per capita income. But I actually think that’s the weakest evidence of corruption’s adverse impacts, both because of problems with the data and because of the concern with reverse or spurious causation. The same goes for the relationship between corruption and economic growth, where the correlation in the quantitative data is less robust. That said, it’s worth noting some clever recent studies have found new ways to address the problems with identifying the direction of causality, and have for the most part found that corruption indeed has adverse effects on growth (see, for example, here and here).
But let’s put that aside and focus on the impact of corruption on other factors we think might be important for development:
- Most experts think that private investment (both foreign and domestic) is important for growth. There’s plenty of evidence that corruption has a strong negative effect on investment, operating like a particularly inefficient tax that reduces the amount and efficient allocation of private investment — though recent research has also suggested that the impact of corruption on investment is much worse in some regions than in others: Check out papers here, here, here, here, here, here, and here.
- What about education? Most of us think education is important for development and poverty reduction, as well as an intrinsically valuable development objective, correct? Corruption in the education sector is a huge problem, and has a substantial adverse effect on education outcomes. See papers here, here, here, here, here, and here.
- And then there’s health – another intrinsic development goal, as well as a contributor to poverty reduction and other desired development outcomes. Again, corruption in the health sector is rampant, and leads to substantial adverse effects on actual health outcomes — though in the very poorest, least healthy countries, simple income improvements may matter more than governance improvements. See studies here, here, here, here, here, and here.
- Think public investment in things like infrastructure and other public goods is a crucial for development? Most experts do. And corruption leads to significant inefficiencies in such investment: see here, here, here, and here.
- And what about the security of property rights — one of the factors that Blattman says dwarfs corruption in its significance for development? Turns out that public corruption undermines the security of property rights — partly because corruption drives firms and entrepreneurs into the unofficial economy (see here and here).
I could go on. But really, the argument that corruption is bad for development – including, by the way, in wealthy countries like the United States and Italy – is really pretty straightforward. If you believe that government interventions (things like provision of public goods and social services, protection of basic rights, preservation of functioning markets, etc.) are important for development, and you believe that there widespread corruption in many countries has substantially impeded effective government performance of these functions, then, voila, we have the case for corruption mattering (a lot) to development.
Of course, we should always be open to the possibility that our assumptions are wrong. All of the studies I linked to above are open to criticism, and the results are much more nuanced than I can convey in a blog post. And there are good studies out there (which I alluded to earlier) showing that the link between (perceived) corruption and economic growth may be more complex, and not as robust, as it is sometimes portrayed (see here, here, and here). Still, I think at this point, given just how much research so many serious people have been doing on this topic for the last 25+ years, it’s just irresponsible to throw out casual statements to the effect that it’s “just not true” (Hickel’s words) that corruption is a major obstacle to poverty reduction and development, unless you’re willing to back that up by engaging seriously with the hundreds of papers and reports that have tried to assess various aspects of this issue.
Oh, and what about this line about corruption being an obsession of Western/Northern countries? Sorry, but that doesn’t square with the evidence either. First off, it’s not the case that Western governments and multilateral institutions like the World Bank originally led the anticorruption charge. For years at the World Bank, until President Wolfensohn signaled a change of policy in the late-1990s (under pressure from scholars and civil society activists), corruption – the “C-word” – was something people just didn’t like to talk about. And for decades academic and civil society critics lambasted Western governments and IFIs for neglecting issues related to governance (including corruption), in their rush to fund big infrastructure projects, privatize, etc. Now, after all that pressure and criticism have finally had an impact — now that Western governments and IFIs have finally, in the last two decades, started to take governance seriously — we hear that this focus on government integrity is merely an “Anglo-American fetish” (Blattman) that “allows us in the West to celebrate our own special dedication to moral principles” (Dowdle).
As for citizens (especially poor citizens) in developing countries, if we want to know what they think about corruption, we could ask them–as indeed we have (see, for example, here, here, here, here, here, here, and here). And they consistently rank corruption as among their most significant concerns. Or if you don’t feel like looking at survey data, you can look at recent and non-so-recent events that demonstrate just how much citizens in developing countries care about fighting corruption in their own governments – from Tiananmen Square to Tahir Square. You might also consider the bravery and dedication of any number of developing country officials, activists, and organizations. (I suspect that people like Ana Hazare and John Githongo would be surprised to learn, from erudite American and European bloggers, that the fight against corruption is not really that important to developing countries, and that the anticorruption movement is just a manifestation of Westerners’ desire to feel better about themselves.)
Speaking of which, what should we make of this claim that the focus on corruption in developing countries is a way for rich Westerners to feel smug and superior (Dowdle’s claim), and to ignore the various ways that the North/West has contributed to the impoverishment of the Global South (Hickel’s claim)? Well, I’m not so sure I feel comfortable with evidence-free armchair psychoanalysis of a very large number of dedicated professionals and activists who have devoted themselves to anticorruption – but from personal observation, the people I’ve met at places like Transparency International, Global Witness, U4, UNDP, and the World Bank — as well as my colleagues in the academy who focus on research on corruption and development — don’t generally seem like apologists for the rich nations of the world. Quite the opposite, in fact. And by the way, these tend to be the same people who, in recent years, have been calling more attention to the role of Western countries in abetting, even promoting, corruption in poor countries – focusing on issues like asset recovery, the failure of rich countries to stop their firms from bribing foreign officials, the problem of tax havens, the need for greater transparency in the extractive sector, etc.
But as long as folks having this conversation feel free to engage in armchair psychoanalysis of others’ motives, I’ll throw out my own hypothesis about why so many academics in the blogosphere are drawn to the anticorruption-is-a-Western-obsession-that-doesn’t-matter-much-for-development canard: academics (and I speak as a member of the tribe) enjoy feeling like iconoclasts willing to speak uncomfortable truths to power. And in the development field, a certain type of academic particularly enjoys attacking anything that the major institutions (World Bank, U.S. government, OECD, etc.) seem to be for. That’s not a bad thing in and of itself – a contrarian cast of mind is often conducive to questioning received wisdom and pointing out contradictions, self-serving justifications, and the like. But in this case, I think it’s lazy and counterproductive.
There are important debates about anticorruption that we should have. Let’s have them, using the best available theory and evidence. Bring it on.