Corruption is a major cause and result of poverty around the world, at all levels of society, from governments, civil society, judiciary functions, military and other services and so on. The impact of corruption in poor countries on the poorer members of those societies is even more tragic.
The issue of corruption is very much inter-related with other issues. At a global level, as globalization continues at rapid pace, with promises of prosperity, the “international” (Washington Consensus-influenced) economic system that has shaped this globalization in the past decades requires further scrutiny for it has also created conditions whereby corruption can flourish and exacerbate the conditions of people around the world who already have little say about their own destiny.
A hard thing to measure or compare though, is the impact of corruption on poverty issues, versus those inequalities that are structured into law, such as unequal trade agreements, structural adjustment policies, so-called “free” trade agreements and so on. It is easier to see corruption. It is harder to see these other more formal, even legal forms of “corruption.” It is easy to assume that these are not even issues because they are part of the laws and institutions that govern national and international societies and many of us will be accustomed to it—that is how it works, so to speak. Those deeper aspects are discussed in other parts of this web site’s section on trade-related issues.
That is not to belittle the issue of corruption, for its impacts are enormous too.
Table of contents for this page
This web page has the following sub-sections:
- Rich Countries involved in corruption abroad
- A Cold War Legacy: The Curse of Natural Resources; Inviting corruption
- Globalization, Multinational Corporations, and Corruption
- IMF and World Bank Policies that Encourage Corruption
- Corruption everywhere; rich and poor countries, international institutions
- Tackling corruption
- More Information
Rich Countries involved in corruption abroad
When asking why poor countries are poor, it is quite common to hear, especially in wealthier countries that are perceived to have minimal corruption (at least domestically) that other countries are poor because of corruption. Yet, corruption is not something limited to third world despots. Rich countries too have been involved in corrupt practices around the world.
As Professor Robert Neild from Trinity College, Cambridge University writes in Public Corruption; The Dark Side of Social Evolution (London: Anthem Press, 2002), “Rich countries and their agencies … commonly have been and are accomplices in corruption abroad, encouraging it by their actions rather than impeding it….” (p.209). Specific problems he highlights include:
- The impact of Cold War corruption (supporting dictatorships, destabilizing democracies, funding opposition, etc);
- Firms from rich countries bribing rulers and officials from developing countries to gain export contracts, particularly in the arms trade and in construction (even justifying it by suggesting bribery is “customary” in those countries, so they need to do it to, in order to compete);
- The “corruption-inducing effects of the purchase, by the rich countries and their international corporations, of concessions in Third World countries to exploit natural deposits of oil, copper, gold, diamonds and the like.” Payments made to rulers often violate local (and Western) rules, keeping corrupt rulers in power, who also embezzle a lot of money away.
- The drug trade. Neild suggests that international law and national laws in rich countries that prohibit drugs may serve to “produce a scarcity value irresistible to producers, smugglers and dealers.” Governments and civil society in the third world are often “undermined, sometimes destroyed” by the violence and corruption that goes with the drug trade. “This is probably the most important way in which the policies of rich countries foster corruption and violence. Yet the effect on the Third World seems scarcely to enter discussion of alternative drug policies in the rich countries.” Legalizing drugs, a system of taxation and regulation, comparable to that applied to tobacco and alcohol might do more to reduce corruption in the world than any other measure rich countries could take, he suggests.
Rich countries have been used to it, too:
Bribery may be pervasive, but it is difficult to detect. Many Western companies do not dirty their own hands, but instead pay local agents, who get a 10 per cent or so “success fee” if a contract goes through and who have access to the necessary “slush funds” to ensure that it does. Bribery is also increasingly subtle.… Until recently, bribery was seen as a normal business practice. Many countries including France, Germany and the UK treated bribes as legitimate business expenses which could be claimed for tax deduction purposes.
— Dr Susan Hawley, Exporting Corruption; Privatisation, Multinationals and Bribery, The Corner House, June 2000
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