Missing Links

Bad Medicine

The war on corruption is leaving the world worse than we found it.

About a decade ago, the world witnessed a corruption eruption. As democratic winds swept the world, the dirty deals of once unaccountable dictators and bureaucrats came out into the open. During the Cold War, kleptocratic dictatorships often traded their allegiance to one of the two superpowers in exchange for its countenance of their thievery. With the superpower contest over, such corrupt bargains dried up. And, thanks to the information revolution, the slightest hint of corruption at the highest levels quickly became global news.

Once people learned so many politicians had been on the take — often in cahoots with business leaders — it was only natural that there would be a public outcry for a "war on corruption." Countries enacted anti-corruption legislation, corporations adopted stern codes of conduct, and nongovernmental organizations such as Transparency International were launched to "name and shame" countries into action. National watchdog agencies, complete with powerful anti-corruption czars, sprouted everywhere. From Germany to Peru to South Korea, corruption scandals entangled seemingly untouchable former heads of state, and around the world an unprecedented number of top government officials and business executives were ousted or jailed. If you were running for office and challenging a powerful incumbent, you almost certainly ran a "clean-hands campaign," labeling your opponent as a corrupt fixture of the old order. For those in the trenches, the crowning event of the war on corruption was the 2003 U.N. Convention Against Corruption, endorsed by more than 100 countries.

Unfortunately, the reports from the frontlines are not encouraging. "The last 10 years have been deeply disappointing," says Daniel Kaufmann, one of the leading experts on anti-corruption efforts. "Much was done, but not much was accomplished. What we are doing is not working." In fact, it may be hurting. Today, the war on corruption is undermining democracy, helping the wrong leaders get elected, and distracting societies from facing urgent problems.

Corruption has too easily become the universal diagnosis for a nation’s ills. If we could only curtail the culture of graft and greed, we are told, many other intractable problems would easily be solved. Although it is true that corruption can be crippling, putting an end to the bribes, kickbacks, and payoffs will not necessarily solve any of the deeper problems that afflict societies. In fact, this false belief can make it harder, if not impossible, to rally public support for other indispensable efforts. Necessary tax reforms, for example, become impossible to pass when the general assumption is that any new public revenues will inevitably evaporate in corrupt hands.

The corruption obsession also crowds out debate on other crucial problems. A country’s bankrupt educational system, malfunctioning hospitals, or stagnating economy cannot compete with headlines about the latest corruption scandal. These problems may be aggravated by corruption, but they are created by conditions that often have little to do with the behavior of dishonest government officials. Even when such social ills rise to the top of the national agenda, the fight against corruption still tends to inform the public debate. Inevitably, the public’s understanding of what it would take to tackle other national priorities becomes clouded by the corruption obsession.

But perhaps the worst collateral damage caused by this fixation is the political instability it can create. Electorates already have many good reasons to be disappointed with their elected officials. The corruption curse feeds people’s unrealistic expectations about what is required to improve their standards of living and set a country on a more prosperous path.

Popular impatience, exacerbated by the belief that nearly everyone at the top is lining their pockets, unreasonably shortens the time governments have to produce results. Since 1990, 11 Latin American heads of state were impeached or forced to resign before the end of their terms. In each case, corruption was a factor. Although justified in a few instances, in others the country’s lack of progress was widely interpreted as just another manifestation of corruption. It fed the fiction that if voters could simply get rid of the current crop of venal officials and find an honest leader, progress would ensue. Italy’s Silvio Berlusconi, Venezuela’s Hugo Chavez, and Russia’s Vladimir Putin all came to power, in part, because of public disgust for the corruption that preceded them. Yet all three countries remain corrupt and are waiting for their promised progress.

There is no doubt that corruption is a scourge. But there is also no doubt that many countries crippled by corruption are not sinking. Hungary, Italy, and Poland are just a few examples of countries where prosperity has coexisted with significant levels of corruption. China, India, and Thailand are not only not sinking, they are prospering despite widespread corruption.

Of course, it would be vastly superior for all these places to have an honest and independent judiciary, respect for the rule of law, and a sound educational system. But these are outcomes, not prescriptions. They represent hard-won progress from sustained efforts at all levels of society, typically over generations. Simply telling these countries to shake off the shackles of corruption — as foreign investors, politicians, leaders of multilateral institutions, and well-known journalists so often do — is worse than no advice at all. We should be encouraged by the fact that so many forces are aligned together in the fight against corruption. But before we engage the enemy, we should take the equivalent of the Hippocratic oath, and promise to first do no harm.

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