The very questionable case for good corruption

François Valérian, the head of private sector programmes at Transparency International has written a post for the blog of our colleagues at the Task Force for Financial Integrity and Economic Development. Here’s what he writes:

“A Wall Street Journal article and a BBC program have recently discussed the potential merits of corruption. This seemingly provocative topic is indeed thought-provoking, but not exactly along the lines that the publishers or contributors intended.

If we try to sum up the arguments that were developed, they are several. Corruption may be a way to circumvent bureaucratic inefficiencies, and to set a business or export goods more quickly, if not to simply survive like in the former USSR. The networks between government and business, with their unavoidable conflicts of interest and corruption risks, also produce business success. There are several cases of notoriously corrupt economies which are or were also fast-growing economies, when corruption is somehow centralized and predictable, like in Suharto’s Indonesia where the Suharto family’s financial demands were simply factored in by businesses as transaction costs, while Suharto made sure the economy was growing so that his own wealth was also growing. Lastly, those systems of centralized and predictable corruption, when destroyed by a change in power or political upheaval, may be replaced by decentralized corruption, the costs of which are significantly higher.”

Read the complete blog post addressing each argument here.

He concludes:

“There is no good corruption.”