Markets in everything: African dictator edition

Hmm…I had just been thinking about related ideas:

Sudanese billionaire Mo Ibrahim (of Celtel fame) has created a $5 million dollar cash prize for Africa’s most effective head of state.

Each
year the winning leader will, at the end of his term, get $5m (£2.7m)
over 10 years and $200,000 (£107,000) each year for life thereafter.
"We need to remove corruption and improve governance," Mr Ibrahim said.

…The Mo Ibrahim Prize for Achievement in African Leadership will
be launched in London on Thursday… It will be available only to a
president who democratically transfers power to his successor.  Harvard
University will do the measuring to see just how well the president has
served his or her people during their term in office.

Here is more, and thanks to Pablo for the pointer.  The prize sounds too small, relative to the lure of corruption, but I see no reason not to try this idea.

Comments

For many politicians, this could be too small a prize, but it still raises the price of being a corrupt politician, and apparently, raises it a lot. I have to believe that there are a lot of people at the margin of honesty and corruption where a $5m prize can make a difference. My main question is how the winner is decided upon. How do you think it should be decided ideally? More corruption could enter via a kind of nepotism if another politician or group of politicans decide that question.

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I think an important issue to throw into the ring is when the actual $5mm is awarded. Is it days/months after a democratic election? What's the time frame? It seems that unless you explicitly state that there must be some time in between when power is handed off and when the money is given there would be an incentive to 1. hand off power peacefully; 2. get $5mm soon after and then 3. decide, hmm, that the whole power thing wasn't such a great thing to give away and now maybe it should be taken back, by force if necessary.

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It sounds like a good idea and the prize is sufficient for a head of state not to corrupt himself. The problem is the people who support this leader. They also get a lot of money from corruption. If the head of state fights these kind of problems, he could end up losing support and the chair - and maybe even the head.

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Is this really a market?

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Putting on my amateur sociology hat, I would say that aside from the $5 million there may be an incentive if the prize has significant prestige and honor associated with it. Winning the prize would get the leader of perhaps a lesser known country international press coverage and invitations to events and junkets in London and New York where praise is heaped upon him. Ultimately, this incentive depends on African dictators caring about what foreigners think of them which may or may not be realistic. For Kim Jong Il, for instance, it is almost certainly irrelevant.

I hope Andrei Schleifer is not going to be on the panel deciding who the winner is...

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i think this is a great idea idea. go ahead and pay they politicans to do good, they what is the need to go bad?
Also like he said it would at least drive the price of corruption up. that alone would make people less likely
to attempt to corupt an offical.

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"The prize sounds too small, relative to the lure of corruption"

Ah, but the winner need only steal less than his peers, as opposed to not at all. It may be worth $5m to some leaders to do so and thus may reduce corruption for some.

-Kevin

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