March was a great month for the anticorruption community: two books and one report appeared that, in contrast to much that is published on corruption and related topics, are useful, insightful, and worthy of a careful read.
1) There is now no better introduction to the field of corruption studies than Ray Fisman and Miriam Golden’s Corruption: What Everyone Needs to Know, published in late March by Oxford University Press in an affordable paperback edition. In nine readable chapters the authors summarize the main issues – what corruption is, why it is so harmful, the challenge of measurement, the forces behind it, and most importantly what can be done to reduce it. The only group of readers that the book will disappoint is opportunistic politicians looking for quick and easy fixes. There are, the authors remind readers at several points, “no easy fixes for a problem that been around for millennia.”
Theirs is not a counsel of despair, however. Policy reforms can make a difference: higher salaries for public servants, the creation of an independent anticorruption agency, a “big bang” approach like Georgia’s wholesale dismissal of traffic police are three that are featured. But such reforms can backfire, they warn, without complementary changes in the larger environment. Wage hikes must be accompanied by more stringent enforcement of antibribery laws else the result may simply be to raise the bribe price. Quoting Gabe Kuris’ ISS study, they caution that anticorruption agencies will succeed only if they have built “alliances with citizens, state institutions, media, civil society, and international actors.” With perhaps the disastrous results from disbanding the Iraqi army in mind, they discuss what could have befallen Georgia had its traffic police been let go under different circumstances.
Specialists will find nits to pick. John Githongo never chaired the Kenyan anticorruption agency (he ran a unit in the President’s office); corporate interests are not the only ones that capture government agencies (labor and environmental interests can exercise undue influence over policy too); Switzerland long ago scrapped anonymous, numbered accounts. But these are quibbles in what otherwise has to rank as the best one volume introduction to corruption and what can be done to fight it.
2) In the decade plus since my former World Bank colleagues Joel Hellman, Geraint Jones, and Daniel Kaufmann first advanced the idea that in some countries the forces of corruption are so powerful that they can be said to have “captured” the state’s policymaking machinery, the notion of “state capture” has been booted around academic and policymaking circles. Unfortunately not always with the greatest definitional or analytical clarity with the result that there is now a confusing mass of writing on what it means for a state to be captured and how it can be freed. Thanks to the OECD, those looking for a source that makes sense of the welter of material on state capture now have a single volume to consult. Preventing Policy Capture: Integrity in Public Decision Making, available here (free to read online, $20 to download) continues the high standards one has come to expect from OECD publications on governance, nicely synthesizing the massive literature Hellman and colleagues have inspired.
Just as Fisman and Golden warn that isolated interventions will not reduce corruption, the OECD authors stress that freeing a state from the bonds of corrupt interests requires a set of “actions that complement and reinforce each other.” If anything, anti-capture policies are even trickier to implement than anticorruption policies, for, as the OECD warns, if not carefully constructed they can compromise fundamental democratic values of free expression and the right to petition government. One of the volumes many strengths is that it never loses sight of these risks.
3) Perhaps the most salutary result of the international anticorruption movement is the spotlight it has cast on the massive theft of resources from poor countries by corrupt leaders. There is no better guide to what has been dubbed “kleptocracy” than Cambridge Professor J.C. Sharman’s The Despots Guide to Wealth Management, just out in an inexpensive paperback edition from Cornell University Press. The author of the leading text why tiny offshore jurisdictions were for so long able to help tax evaders and drug lords hide their money, Professor Sharman explains why kleptocracy — a practice wealthy nations once tolerated and one still facilitated by their banks, lawyers, and accountants — is now widely condemned.
Despite the sea change in attitudes, and accompanying changes in domestic and international law, however, corrupt money still gushes out of developing countries. Wealth Management is laden with pithy summaries explaining why efforts to halt the flow have failed. (Sanctioning international banks in the hopes concerns about a loss of reputation will deter them doesn’t work since “they appear to have little reputation left to lose.”) Most importantly, Professor Sharman offers realistic recommendations for ending what has now become the most visible, and detestable, consequence of grand corruption.