Not long ago I wrote a review of Lawrence Cockcroft’s new book, Global Corruption: Money, Power and Ethics in the Modern World. So I was happy to find out that one of the most liberal-thinking Russian businessmen, Alexander Lebedev, has proposed a promising list of anti-corruption measures that ought to be imposed on a global level. Lebedev calls for the complete elimination of offshore jurisdictions, as well as nominee ownership of companies and trusts, and the creation of “a new multinational organization” empowered for anti-corruption investigative powers. I deeply respect Lebedev, who through his famous Novaya Gazeta newspaper uncovered more fraud in Russia than all other Russian civil activists combined. But I believe these recent proposals are too complicated to be realized and too ambitious to start with.
Efforts to take on “international” corruption ought to begin by distinguishing between ordinary bribery and the regular misuse of state powers. The vast majority of those working to unveil corrupt practices do not seem to care much about this, but there is a clear difference between low-ranked policemen, bureaucrats, and public servants, on the one hand, and their masters, on the other. This difference is two-fold. First, those on the bottom do not adopt and do not change the rules of the game, operating into the environment designed by others, while the guys on the top create and recreate the very framework of corruption. Secondly, those on the lower levels are usually unable to accumulate amounts of money large enough to be taken out of the country and spent on real estate or on establishing companies overseas. The money of those who govern, however, flows freely out of their countries.
It would make sense, then, to shift focus from low-level corruption (which, by the way, is not so damaging for the economy since the “profits” are reinvested domestically) to what goes on at the top. This is the type of corruption that initiates massive flows of illegal funds from the so-called “developing” world to the rich nations. These flows, in turn, corrupt the officials and financial authorities in the developed world and make them dependent on corrupt regimes, and allow these regimes to believe they are omnipotent. This may be clearly seen these days, as the Western powers behave very cautiously rather than punish Putin’s Russia for invading Ukraine. To change this, I would propose a simple scheme.
There is no need for a global anti-corruption body. As Lebedev rightly observes, none of them proved to be effective enough in recent years. What is needed is a kind of rating agency that would assess corruption in different countries, to which the national governments would be obliged to pay attention. This work could be managed by Transparency International if it is strengthened by officials from the less corrupt countries in the world. Once the rating is completed, the governments of the United States, the European Union nations, Canada, Australia and some other rich countries would ban all the individuals from, say, the 100 most corrupt countries, as well as the companies controlled by those individuals, from opening accounts in their banks and from acquiring assets and real estate within their borders. If someone standing behind a company or a trust is proven to have links to corrupt practices, the property may be confiscated. The goal, I believe, is not to fight the corruption in the Third World, but to contain it there.
Under this scheme we can expect a two-fold reaction. First, the ruling circles of the peripheral nations will rethink their politics. These days they are looting their nations in order to secure a wealthy life in Europe or elsewhere after they leave power. If they are deprived of the ability to store their money or to buy houses and assets in the rich countries a completely new situation will arise, simply because none of them would spend tens of millions of stolen dollars in politically unpredictable countries. Therefore the elites of the nations in question will be forced to develop some rule of law to secure their own survival. The main motivation for limitless bribery will be undermined.
Second, if the rich nations will prohibit any ownership of accounts and property by all citizens of the states that are considered corrupt, the losers will be businessmen of these states. Even if they accumulate their wealth in a proper manner, they would be limited in how they could use it. This would provoke a sharp conflict between the business community and the ruling elite in corrupt countries, where the two groups are currently united in pursuing their goals of mutual enrichment. And pressure from the oligarchs will in any case carry more weight in these nations than a push from civil society. In other words, such a measure may lead the business community to switch allegiance from the corrupt government to that of civil society.
In sum, there is no chance to unite the world in the fight against corruption the way it was united, as Lebedev reminds us, in the fight against apartheid. But there exists a clear possibility to keep corrupt practices out of the rich countries of the world, denying the citizens of corrupt nations from joining the First World in terms of visas and property ownership. The message, in effect, is this: Either you make your nation less corrupt, or you spend all of your live in the environment you have created. I think that such an approach, if implemented, could greatly advance the goal of making the whole world more just and humane.