I wholeheartedly agree with your analysis, although I hope Mr. Wolfowitz’s efforts aren’t as doomed as you make them out to be.
Third world development is one of my pet issues, and I think the importance of corruption simply cannot be underestimated. Good governance is simply the trigger for everything else: property rights, the rule of law, entrepreneurship, investment, etc.
Your idea of the international community using EU-style incentives to push developing countries to get their act together is wonderful although, as you recognize, sadly unrealistic given the current political climate.
The last thing I want to point out is that even though your criticism of the US government’s aid policy is justified, I would venture that American aid money is more effective than aid coming from most other countries, since public aid is only a fraction of all aid coming from America, and private donors are more careful about how they spend their money.
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Professor, its all as you wrote recently in “After the Neocons.” They, Wolfowitz et al, say the international organizations are fatally flawed, eventhough they sometimes have to deal with them. You have pointed out one of those flaws, which Wolfowitz appears to be taking strident efforts to address.
But, it then comes down to a question of tradeoffs. Do we want to pay the overhead (corruption) to save lives? Develope the third world, etc? Are we more offended by creating kleptocratic billionaries or by not saving the starving children, etc? How much kleptocracy is tolerable? How much looting are you willing to put up with? 50%? 75%?
At some point we all will become neocons, if they survive their other mistakes. But this is not a mistake, only a matter of degree. A trade off will be negotiated, at some point. This is all negotiation even though Wolfowitz would not call it that. It all depends on who blinks first!
I agree with you on your analysis of the WB anti-corruption efforts would not amount to anything realistic. Africa and most of the developing world has received all manner of prescriptions to end their chronic poverty chiefly from the Bretton wood Institution: SAPS, PRSPs and now the governance and anticorruption agenda is featuring at the top of the MUST do things for Africa to get herself out of poverty.
What these institutions and the hands that control their purse strings have conveniently failed to do, especially on the issue of corruption, is to address the interdependence of corruption globally. Most of the money siphoned out of the public coffers end up in the western banks to fuel their economies. So much as we are aware that good governance is key for Africa to pull herself from the curse of poverty, the countries in the global north that continue to allow their banks to stash ill gotten wealth from the leaders of the global south should be held with the same wrath that is meted on the corrupt governments of the global south. This may be the way to deal fatal blows to corruption in the global South.
I believe Wolfwitz should take up this challenge. He should not continue to only attack the symptoms of global corruption that may seemingly be more manifested in the South while the truth is we need to address both the supply and demand side of the global corruption.
The governance and development nexus is not a new revelation it seems. I was surprised to find it deep in the text of Rostow’s ‘Stages of Growth’, though I was always told that this book marked the beginning of the now partly discredited ‘investment gap theory’ of development. Development has had a number of fads, each linked to entirely legitimate and credible theories, such as investment gap, and now governance. What continues to undermine development expenditure is the inability of donors to clarify their objectives and discipline their actions. The Prof. is correct that the donor banks have sometimes contradictory objectives between development and “push money out the door”. So too, bilateral donors are hampered by the need to use their money to pursue other foreign policy objectives, whether it be securing markets or undermining governments hostile to the donor country’s interests. I fear that the WB’s noble efforts to strengthen governance may be used as a chance to drive home an ideological line, that will render the whole strategy redundant and eventually discredited. I suspect Hilary Benn and the Brits are right on the money this time.
While I agree that fighting corruption is critical to development, Mr. Wolfowitz seems to be over-estimating the leverage power of the World Bank. A look at this week’s headlines about Chinese development aid to Africa shows that the World Bank has very little leverage power indeed. Mr. Wolfowitz seems not to understand that, while the fight against corruption is the right fight, it is also a very delicate fight. What corrupt government would choose aid conditioned on giving up its power over aid with no such strings attached?