*Corruption: What Everyone Needs to Know*

by on April 5, 2017 at 1:04 pm in Books, Current Affairs, Economics, Political Science | Permalink

That is by Ray Fisman and Miriam A. Golden, an excellent book, the subtitle says it all.  And yes it does also cover how to stop or at least limit corruption.

1 rayward April 5, 2017 at 1:15 pm

Honesty, integrity, truthfulness, these are qualities that emanate from the top. Dishonesty, lack of integrity, lying, these are qualities that emanate from the top. And in either case, subordinates emulate the person at the top, who sets the example for others to follow.

2 derek April 5, 2017 at 1:23 pm

No they don’t. Politicians will steal, lie, cheat and send you down the river unless they fear the consequences. Successfully corrupt politicians get away with it because they manage to pay off enough people and/or paint themselves either as victims or drape themselves with some moral authority.

It always comes down to the electorate not tolerating the corruption. Unfortunately they often depend on the media telling them what is going on, and likely where corruption is rampant there is a cooperate media that provides the cover.

3 Bob April 5, 2017 at 3:28 pm

An informed electorate is an issue: Small local governments often have a lot of corruption, it’s just that people don’t get to see it.

But an informed electorate that doesn’t like corruption might still get stuck between a rock and a hard place: Look at Spain today: Your national options involves a corrupt conservative party, a new, unknown, slightly less conservative party, a corrupt left wing party, and a far left party that used to get money from Venezuela. There’s no such thing as real primaries that everyone can participate in. The fact that people dislike corruption is what gave them 4 national parties, but enough voting for your team (especially among people over 50) leads to a broken congress. Power from party leadership makes party renovation very difficult. New candidates inherit their predecessor’s taste for corruption.

4 Troll Me April 5, 2017 at 3:58 pm

So lets fire a minister of state over expensive orange juice at a hotel or call for the head of the CEO of the mint over a pack of gum, and not worry about million or billion dollar deals.

5 Anon7 April 5, 2017 at 4:59 pm

The electorate are just a bunch of hypocrites. It’s corruption when a public official trades favors for bribes but it’s the public good when a public official trades the votes of electorate for pork (preferably paid for by people in other parts of the state/country or the 1%).

6 ¯\_(ツ)_/¯ April 5, 2017 at 2:13 pm

‘A fish rots from the head’

Sir James Porter’s Observations on the religion, law, government, and manners of the Turks, 1768.

7 The Other Jim April 5, 2017 at 1:40 pm

Government corruption is the world’s leading cause of poverty, war, famine and despair.

And I guarantee you that an econ professor from Boston (God help us) does not care one iota about any of that. He will, however, use the topic to sell books and air his grievances about the result of the wildly historic 2016 US Presidential Election. In which, ironically, the most corrupt candidate of all time got her ass kicked.

8 Hua Wei April 5, 2017 at 1:45 pm

“In which, ironically, the most corrupt candidate of all time got her ass kicked.”

I guess it is true, he got fewer votes.

9 Cleveland Indians April 5, 2017 at 4:13 pm

We scored more runs than the Cubs in the 2016 World Series. But sports fans aren’t stupid enough to think it matters.

10 Hua Wei April 5, 2017 at 5:22 pm

Yep, people’s votes are not important.

11 Apso April 6, 2017 at 3:04 pm

Electors’ votes are important. That’s they rules of the game. If we don’t like the rules we should change them prior to playing.

12 Ray Lopez April 5, 2017 at 1:58 pm

There’s very little Third World corruption in First World governments. The Reagan Revolution tried to–and failed–to make the case that cutting corruption and “waste” will make Big Government smaller. It was a lie, as outlined by David Stockman’s excellent memoir, “Triumph of Politics”.

In the Third World, corruption is pretty standard: the going rate for building permits is about 10% unless you want to wait years and years for a permit. In Singapore, they eliminated corruption, among other things, by giving higher government salaries.

13 Nobody April 5, 2017 at 2:03 pm

I thought you were leading into “ironically, the most corrupt candidate of all time won.” Then I remembered who was posting.

14 The Centrist April 5, 2017 at 2:27 pm

So far, I have seen very little sign of his corruption. Don’t like his style, but that’s because he’s a vain New York reality TV dude and a real estate developer.

Still, there’s world of difference between being arrogant and being corrupt. In the election, voters clearly preferred* the loudmouth asshole over the hectoring Secretary of State who actually gave the impression that her foundation was set up for her and her minions’ political benefit.

* Does someone really have to explain the Electoral College system to Hua Wei, specifically how a couple of large states like Calif and NY skewed the popular vote in favour of Secretary Clinton?

15 ¯\_(ツ)_/¯ April 5, 2017 at 2:43 pm

Everyone is playing a game. A gala at a Trump hotel is not “graft” because “it’s Trump, come on.” A low bar becomes a new standard. Same with the very unique Trump trademark in China. That becomes “Chinese just know how these things work,” but that’s not “graft.”

When China awarded President Donald Trump a long-coveted trademark of the “Trump” brand this week, it appears to have violated the text of Chinese trademark guidelines. Chinese legal standards prohibit trademarks of the names of foreign leaders.

Trump secured exclusive rights for the use of his name for “building construction services” in China on February 14 after a 10-year legal battle. But he had little success in his quest for a Chinese trademark before he became the Republican nominee last summer.

16 Anonymous April 5, 2017 at 3:02 pm

Power allotted to his son-in-law and Bannon is not a sign of corruption and nepotism?

Yes, we do need to explain to Hua wei the electrocal college system , how a historically dysfunctional method ensures a non-democratic result.

17 Mark Thorson April 5, 2017 at 3:26 pm

Perhaps he can persuade the Chinese that they need an Electoral College too.

18 Gerber Baby April 5, 2017 at 4:05 pm

What’s corrupt about Bannon?

Oh year, you don’t like him. Got it.

19 Anon7 April 5, 2017 at 4:49 pm

Representation, party primaries, etc.are also “non-democratic” if you believe in a simple-minded notion of “democracy” so they should be abolished too.

20 Pshrnk April 5, 2017 at 7:41 pm

“So far, I have seen very little sign of his corruption”

@The Centrist here is link where you can find help.


21 Anonne April 5, 2017 at 8:05 pm

Of course you wouldn’t. He is doing so many of the things Hillary Clinton was accused of doing (pay for play, cozying up to Wall Street, mixing his personal business with government matters, etc.) but because he’s an “outsider” and a man, he’s been cut a lot of slack.

He lies every day about the pettiest of things, he has people who lied to Congress to get into their positions, and you see no corruption.

22 Hua Wei April 5, 2017 at 9:41 pm

You mean people voting skewed the popular vote? It seems plausible.

23 Nobody April 5, 2017 at 10:30 pm

Maybe I’m in the minority, but I think there’s meat on the Russia bone. Just like previous German chancellor Gerhard Schroeder was likely bought off and now works for on board for Gazprom, I think something similar is going on behind the scenes with the Trump administration. That 19% of Rosneft is just hanging out there and alot of effort is going into not investigating.

24 TMC April 6, 2017 at 8:41 am

So a guy who’s a billionaire, and 70 years old is worried about his next job?

25 Nobody April 6, 2017 at 3:33 pm

We all choose what to advocate, and what to be blind to. I think somebody at the top is cozy with Russians and is selling out American interests.

26 Thiago Ribeiro April 5, 2017 at 5:23 pm

Maybe the second most corrupt candidate of all time won. It means the system works.

27 carlospln April 6, 2017 at 12:12 am

Comment of the thread, TR!

28 Jan April 5, 2017 at 6:01 pm

Drip drip drip. Trump’s corruption continues to ruin this country and people’s faith in it while you sing the praises of the electorate that made it all possible. In some ways it’s delicious, but mostly it makes me sick.

Lucky for you, your boy won. So far it’s been nothing but an unmitigated disaster. I’m still waiting though. If this administration has any win at all (health care, Syria, North Korea, tax reform, immigration etc.) this calendar year I will be utterly shocked.

29 So Much For Subtlety April 5, 2017 at 7:21 pm

There is no sign of Trump corruption at all. Drip, drip? Of what? The mainstream media going utterly bat-sh!t crazy over their John Birch conspiracy theories? Someone who gave money to Trump once, met with a banker who went to school with Putin’s second cousin? The horror!

Unmitigated disaster? The world has not got any worse. Obama’s folly continues – but no new disasters have arisen. Look at Syria.

Illegal immigration is at record low levels. Obamacare continues to implode and the Republicans won’t get the blame for it. North Korea is about the same as ever. We will have to see if Trump gets his way on tax reform.

So far Trump has been extremely pleasing. He has annoyed the right people. He has exposed the impeachment-worthy corruption of the NSA et al by the Obama administration. He is appointing good people. Regulations are being rolled back. Pipelines built. Above all, none of the fears people expressed before the election have come true. Not merely the bat-sh!t crazy claims like he was going to put people in camps, but so far, no trade war.

30 Hua Wei April 5, 2017 at 9:43 pm

“Obamacare continues to implode and the Republicans won’t get the blame for it.”
I thought there was something about repealing it.

31 prior_test2 April 6, 2017 at 3:00 am

‘There is no sign of Trump corruption at all.’

Nepotism, on the other hand ….

32 So Much For Subtlety April 6, 2017 at 5:07 am

Hillary Clinton used to say when Bill was campaigning that the voters got two for the price of one. Trump is clearly a better businessman because he is offering three or more for the price of one. What a bargain!

What were Hillary’s credentials for being put in charge of medical reform again?

Surely you agree that it *was* a bargain, right?

33 prior_test2 April 5, 2017 at 1:52 pm

Sounds like a how to manual, considering the subtitle.

34 Mark Thorson April 5, 2017 at 1:55 pm

And yes it does also cover how to stop or at least limit corruption.

A comprehensive book would cover how to profit by and optimize the yield from corruption.

35 Ray Lopez April 5, 2017 at 2:01 pm

+1. In the Philippines, the standard bribe given for voting for a candidate (and rival candidates actually exchange paid off voters lists after the election to make sure voters did not cheat them at the ballot box by voting for their rival) is between $5 and $20 a voter, depending on the office. Of course the politicians expect and do recoup their losses once in power, by accepting bribes.

36 Daniel Weber April 5, 2017 at 3:09 pm

You can ensure no one is double-dipping by taking conflicting bribes, but how do you check that they actually voted the correct way?

37 Jan April 5, 2017 at 6:04 pm

That’s always been my question–surely there is some drop-off. Of course the majority of people abide by agreements they enter into, even if their politicians don’t.

38 Li Zhi April 5, 2017 at 2:14 pm

The Amazon “Look Inside” allows us to view the summary of Ch. 9, “What can be done to reduce corruption”. The 6 bullet points are laughable. (Incredibly, two involve the use of technology!). The authors choose to define corruption only for the public sector (and private sector bribes of public sector workers). The latest US election has highlighted the jaw-dropping mental defect which allows people to ignore the (well established) facts, when they conflict with their desires. I wonder if this book addresses the truth deficit that some cultures embrace. Lying and corruption seem to me to be clearly related. I wonder if the book includes examples of the cronyism prevalent in the Trump White House? I wonder if the book addresses the possibility that the opposite of corruption isn’t a rule-based meritocracy, but a tribal based winner takes all system. Isn’t corruption a step between “Family first, Family always” and “All men are created equal”?

39 Li Zhi April 5, 2017 at 2:22 pm

I didn’t see anything in the Table of Contents to indicate the authors acknowledge the corruption of the US legal system. Pay to play. Book seems mostly about corruption of politicians. Seems quite a distorted world-view.

40 Bob April 5, 2017 at 3:36 pm

It’s a pity that people forget private sector corruption: We don’t just bribe government officials, we can bribe people in big corporations in charge of procurement, because in practice they respond to nobody.

What’s crazy is how cheap those bribes are: Food drugs and hookers costing a few thousand can net seven figures a year contracts. Government employees are far more expensive than a CTO.

41 Troll Me April 5, 2017 at 4:13 pm

Don’t forget to mention the tax deductible nature of those bribes.

42 rayward April 5, 2017 at 2:46 pm

Liars assume everybody lies. Of course they would. Dishonest people assume everybody is dishonest. Of course they would. Corrupt people assume everybody is corrupt. Of course they would. The problem is that lying and dishonesty and corruption will spread like a pandemic. Third world countries are like that. And first world countries can be if the top government official lies, is dishonest, and is corrupt.

43 JWatts April 5, 2017 at 3:08 pm

“And first world countries can be if the top government official lies, is dishonest, and is corrupt.”

Sure, we’re all aware that President Clinton committed perjury and was impeached and disbarred for it. But do you really think that this is the foundation for First world corruption?

44 JWatts April 5, 2017 at 3:46 pm

On a more serious note, the Trump administration (and mostly Trump) strikes me as incompetent, prone to exaggerating or outright lying. But every administration in my life time has been caught lying about something substantial. And frankly most of Trump’s lies seem to be so minor that they are irrelevant. Claiming the biggest attendance ever when it wasn’t is ridiculous, but it’s fundamentally trivial. This is an increase in quantity not in scope.

However, the Trump administration hasn’t shown any signs of actual corruption. No one has been caught excepting money for favors.

The Clinton Foundation has proven that you can oversee the donation and distribution of hundreds of millions from foreign donors as long as you don’t directly benefit. Both Clinton’s got paid a total of millions by Wall Street, large foreign banks and other groups for speeches and their daughter gets $300K per year to be an ‘advisor’ to an internet company. Those are all considered acceptable in modern politics.

Normally I would think this (as well as the low approval numbers) would doom the Trump administration. But in this case, the frothing at the mouth by the other side, will probably protect Trump. The rush to call Trump a liar about issues that are still in doubt is undermining a lot of the oppositions legitimacy. The New York Times has lost any claim to being the paper of record.

It’s interesting, in a analytical sense, that the very behavior that got Trump elected, is continuing on both sides.

45 thfmr April 5, 2017 at 4:12 pm

Nicely said.

46 Troll Me April 5, 2017 at 4:17 pm

Are Trump hotels and Trump airplanes charging the market rate?

I bet Trump never gives the US taxpayer any sort of discounts that his marketers would regularly promote to others to increase volume.

Only a few million here and a few million there.

47 prior_test2 April 6, 2017 at 3:03 am

‘but it’s fundamentally trivial’

Accusing millions of people to have voted illegally is not trivial, yet springs from the same source.

48 Ricardo April 6, 2017 at 11:55 am

Trump has categorically rejected guidance to divest himself of his businesses and place his assets in a blind trust. One can reasonably wonder why he refuses to behave like a civil servant working for a first world government. If a new Trump Organization project gets approved in China in record time, is that a mere coincidence or is that the Chinese government trying to buy favor with the Trump family? Trump’s own poor judgment has opened himself up to these lines of inquiry.

49 if your mission April 5, 2017 at 4:15 pm

is to single-handedly render MR comments intolerable with a relentless torrent of idiocy–congratulations, you’re succeeding.

50 Troll Me April 5, 2017 at 4:18 pm

Nazi snowflakes don’t like it when people talk back?

51 indeed April 5, 2017 at 4:38 pm

All your political opponents are Nazis. Kindly step into this shower chamber, would you?

52 spencer April 5, 2017 at 4:32 pm

Probably the most extreme example of corruption in the US is all the former members of Congress and past administrations working as Washington lobbyist.

Also, we have made it legal to contribute to political campaigns, but it sure buys access to power.

53 Bill April 5, 2017 at 4:54 pm

Corruption can be difficult to define.

Here are three examples. Tell me which, if any, represent corruption.

1. Individual A is a government official in a position of trust and receives money to do something he would not otherwise have done. Corrupt or not corrupt.

2. Individual A is a government official in a position of trust and does not disclose his financial interest in a business which benefits from policies this person determines but the person would have determined the policies that way whether or not he had a financial interest in the business. Corrupt or not corrupt.

54 Bill April 5, 2017 at 7:21 pm

Forgot the third one.

3. Individual A is a government official in a position of trust who does disclose his interest in a business and persons who would seek to influence that person purchase goods or services from those businesses.

Bonus points:

Which one(s) apply to Trump.

55 Anonymous April 7, 2017 at 8:39 am

Few complex matters are reducible to categorical yes or no answers. Given this: 1) likely corrupt, though it is possible to construct a scenario in which the official was going to make a decision that is popular but is known by the official to have a negative outcome because the alternative is career suicide, and taking the money allows him to make the decision he knows to be ‘correct’ because it affords him a safety net.
2) depends on features of the governing laws, and on definitions. Not corrupt on condition that it is not a legal requirement to disclose or to possess those interests.
3) only if the official is in fact influenced by the purchases. Of course, whether or not an outside observer could determine the truth of the matter can range from easy to impossible, but that’s slightly beyond the scope of the prompt.

I’m not touching the bonus. 🙂

56 chuck martel April 5, 2017 at 5:52 pm

Sure, there’s corruption in the governmental sector but it’s penny-ante compared to the shenanigans regarded as normal in the corporate/capitalist realm. Officers and management literally loot corporations but as long as they share a pittance with the shareholders everything is just fine. If a normal employee fouls up on the job they’re soon looking for another. If a CEO runs his corporation into bankruptcy he gets a golden parachute bigger than the yearly budget of Belize.

57 Matt R April 5, 2017 at 8:47 pm

“The greatest trick the devil ever did was convincing you he didn’t exist.”

What if the devil–debt–convinced you parts of him were good? Debt is the key to corruption because it allows politicians–and their constituents–to make no hard choices.

58 Jack April 5, 2017 at 9:13 pm

Would be nice to know what makes this book “excellent” other than Professor Cowen’s say so. The author does not seem to have any real practical experience other than a year at the world bank so i am pretty dubious that this book has much in the way of real insights.

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