Ideas to Action:

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Corruption and Development: An Impolitic View

December 8, 2006
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By Dennis de Tray

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How has the West fared in fighting corruption in developing countries? Not well, according to CGD vice president Dennis de Tray. In a Nov. 16, 2006 speech to the 1818 Society, de Tray offered an impolitic critique of the World Bank’s strategy on corruption. While corruption is a barrier to development, de Tray said that the Bank must think differently about it - first by acknowledging that not all corrupt leaders are alike. Suharto, for example, brought Indonesia from near collapse to a functioning state, even as he and his family siphoned off millions of dollars. Categorizing all corrupt leaders as "bad" is wrong, de Tray argued, the reality is more nuanced. The Bank needs to realize that elites run most developing countries, politically and in business. It is seen as corruption when these elites enrich their children; de Tray provocatively asks how their behavior is different from the Wal-Mart clan enriching themselves.

De Tray offers eight principles that could serve as the basis of a new approach to fighting corruption. Chief among them:

  • Realize corruption is only one of many constraints to development
  • "More of the same, but this time we're serious" is not a new approach
  • Ring-fencing donor projects may make donors happy but is a cop-out when it comes to fighting the corruption that matters
  • Be clear on goals: is it serving the poor now or building institutions? The two are often at competing ends
  • And simply require recipients of foreign assistance to inform their citizens of how much they got, what it was supposed to do, and what the outcome was.

Bottom line: No one likes corruption, but not liking it and doing something about it are two very different things.