In the 1990s, mainstream development theorists and aid agencies finally began to accept the reality that if they wanted to know why some states fail, or why so many countries are tormented by persistent poverty, they needed to factor corruption into their equations. The Berlin-based Transparency International (TI), founded in 1993, deserves much of the credit for this shift. TI launched the first of its famous Corruption Perceptions Index (CPI) series in 1995, and the Financial Times took the cue by nominating that year as the International Year of Corruption. The World Bank, which had previously all but banished the “c” word from its policy documents, followed TI’s lead after its President, James Wolfensohn, accepted in a landmark 1996 speech that the Bank needed to deal with “the cancer of corruption.” Now the Bank considers corruption to be the single greatest obstacle to economic and social development in the world. The ripple effect from this change of heart has magnified the profile of the problem throughout the diverse fields of international development policy.

By any measure, this is good news. As many iconoclastic critics of business-as-usual development policy argued as long as half a century ago, ignoring the broad social and political frameworks within which economic policy exists is like expecting a fish tank to hold water without a bottom or sides....