Putting corruption in perspective

By. Andrew M. Mwenda

Stealing public funds. About 80,000 children die of preventable diseases each year in Uganda because public officials have stolen money for immunization

Kampala.

Two weeks ago, I said on the NTV News Night show that the existence of corruption in a country does not automatically impede its ability to develop, thereby letting loose the dogs of intellectual (actually mostly emotional) war on twitter, with some accusing me of endorsing corruption. Yet many successful countries had high levels of corruption during their transition from poverty to riches.

In 1996, the most successful nation, South Korea, arrested two of its former presidents – Chun Doo-hwan and Roh Tai-woo. Both admitted to having stolen more than $650m (about Shs2.3b) each while in office and offered to refund part of the money. Why did South Korea develop in spite of the leaders being thieves?
It is understandable when people think corruption undermines development. There was a lot of corruption in Mobutu’s Zaire that corresponded with state and economic failure. This leads people to confuse such correlation with causality. And it sounds like common sense.

However, a lot of common sense is actually common nonsense. As the Nobel laureate in economics Robert Solow said, just because the tire is flat does not mean the hole is at the bottom. Development is too complex a process to be reduced to a single cause.

To avoid being misunderstood, let me state clearly that I hate corruption. It is morally repugnant. For example, 80,000 children die of preventable diseases each year in Uganda. So in 10 years you have death of 800,000 children, the scale of the Rwanda genocide. This is unacceptable. And often, it is because public officials have stolen money for immunisation.

So morally, we all must stand in angry and determined resistance to corruption. But we need to be clear that we are dealing with a moral issue and not a growth impediment. What is morally wrong is not necessarily injurious to development.

The case study

Let me take an extreme on morality and development. Mass murder is a horrible human wrong but it does not stop economic development. The world’s richest nation, USA, grew rich while exterminating native Americans. This is not to say the genocide of native Americans is what caused America’s transformation.

Rather it is to underline the point that economic development is not a moral process. A country can develop economically in spite of its leaders and elite being venal and sadistic. The history of the West’s rise to global dominance is littered with war, exploitation and repression at home and genocide and oppression of colonised peoples abroad.

Therefore, if corruption undermines development in Africa, we need to establish the specific form in which this happens. Prof William Easterly has a persuasive argument in his book Elusive Quest for Growth, comparing Indonesia under Gen Surhato (which was corrupt but performed well economically) with Congo under Gen Mobutu Sese Seko (which was corrupt and its economy virtually collapsed).

He argues that corruption is harmful when decentralised but unharmful (or beneficial) when it is centralised. Prof Mushtaq Khan makes an almost similar argument comparing South Korea under Gen Park Chung Hee and Pakistan under Field Marshal Mohammed Ayub Khan in his paper, A Typology of Corrupt Transactions in Developing Countries. However, both arguments are speculative and their illustrations are suggestive but not conclusive.

The historian-philosopher Will Durant said the present is the past rolled up for action; the past is the present unrolled for understanding. So let us peep into history to illuminate the present. Most of what we call corruption today was only codified so by Western nations (Europe and her offshoots in Australia, New Zealand and North America) over the last 100 years or so.

And this was mostly after these countries had transformed from poor agricultural societies to rich industrial nations. Many of the practices classified as “corrupt” today were actually normal and/or legal during the West’s intense period of economic transformation. We cannot for sure say they facilitated transformation. But it is clear they did not impede that process.

For example, using public office for private gain was perfectly normal and legal in all Western nations in the mid to late 19th century, in some countries up to the early 20th century. Most politics was organised around prependalism that is, public officials sharing government revenues with friends, relatives and supporters.

The “spoils system” (where elected officials would reward their supporters, friends and relatives with government jobs and public contracts) did not end in America until the 1930s. In the UK up to the late 19th century, one could buy a military commission.

Economic transformation led to the emergence of new social groups, which began to make new demands upon the state. This restructured the basis of state legitimacy from repression and patronage to service delivery. But this process was gradual. It got to where we see today after these nations became rich, with government revenues able to provide a large basket of public goods and services to most citizens.