Waylaid Dialectic

November 23, 2010

The Trouble with Capitalism

Filed under: Social Justice,Theory — terence @ 7:25 pm
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I haven’t got anything against capitalism in principle. Private property and markets, coupled with collective action in the form of enabling, enforcing and ameliorating institutions and programmes seems like the least worst way of organising a modern economy. Actually, more than that, it seems like something that could probably do quite a good job of affording most people the good life. Or, at least, it would if it could ever actually exist. The trouble with capitalism is that, inevitably, some people either start or end up real rich. And with money comes power, and the ability to mold belief, and rig institutional arrangements to the benefit of elites.

Don’t believe me? Have a listen to this episode of Blogging Heads TV. Deeply depressing…

June 30, 2010

Aid and Corruption

Filed under: Aid,Governance — terence @ 5:01 pm
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“Power corrupts”, a commenter on Duncan Green’s blog wrote, “PowerPoint corrupts absolutely.”

Yes, well, we all know about PowerPoint, but what about aid? It’s taken as axiomatic by people such as Dambasa Moyo and Helen Hughes that aid creates corruption. But one of the many troubles with Moyo and Hughes’ work is that so much is taken axiomatic, and so little is argued on the basis of actual evidence.

Speaking of evidence, while one working paper certainly isn’t the final word, the findings of Nicholas Charron’s paper, Exploring the Impact of Foreign Aid on Corruption: Has the ‘Anti-Corruption’ Aid been Effective?, make for interesting reading.

The abstract:

Though many studies have referred to an ‘anti-corruption movement’ beginning in the 1990’s by major international organizations, none has empirically tested its effectiveness on corruption. The data show that from 1997 on, the impact of multilateral aid is strongly and robustly associated with lower corruption levels, while bilateral aid is shown to be an insignificant determinant. An increase in any ODA pre-1997 is associated with higher levels of corruption or has no impact at all. Using panel data from 1986-2006, this study reveals a more nuanced relationship between ODA and corruption than in previous studies and demonstrates that when disaggregating the time periods, there are sensitive temporal effects of ODA’s effect on corruption overlooked by earlier studies, and provides initial evidence of the effectiveness of the international organization (IO), anti-corruption movement in the developing world.

This would certainly correspond with the belief of many in the aid world that the aid game changed somewhat around the turn of the millennium, with less aid being given for overtly political reasons and a much greater emphasis being placed on aid quality.

June 25, 2010

Two Types of Corruption

Filed under: Governance — terence @ 2:04 pm

Just musing (inspired by readings on Melanesian politics)…

Two types of corruption in developing countries:

Venal Corruption: the simple stealing of social resources for your own or for your associates’ use. There’s a straight line from greed to this type of corruption. It’s also the type of corruption we see in the West. And it’s present in developing countries.

The Corruption of Conflicting Rules: Relatively rare in the West. When informal socially mandated rules come into conflict with the law of the land. For example, when the family members of a bureaucrat prevail upon that person to ‘take care of their own’ and focus a service on their area of origin.

In terms of morals, Venal Corruption is far worse than the Corruption of Conflicting Rules. The difference here is the difference between selfishness and decisions made in difficult situations.

In terms of consequences, both types of corruption can be equally detrimental to governance and the provision of public goods and services, and good governance.

In terms of what to do, strategies for tackling the two different types of corruption might be quite different. A strong audit office could be sufficient to check Venal Corruption. On the other hand, in some cases, the Corruption of Conflicting Rules might be incredibly difficult to eliminate save through wholesale social change or, at the very least, the redesign of formal institutions.

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