f_0018883_16144 - THE BIG QUESTION Matt Nicholas UPFR NT...

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© 2010 World Policy Institute 3 DANIEL KAUFMANN ON STATE CAPTURE Crime and corruption do not always co-exist, share the same determinants, or respond to the same strategies and measures. A corrupt and authoritarian police state can control common crime, as in North Korea. Conversely, common crime can be a challenge to countries with satis- factory anti-corruption track records, like Chile. Crime rates tend to be higher where there is high unemployment, high socio-economic in- equality, and lax gun laws. Corruption thrives where civil liberties, free press, transparency, and contestable politics are absent. A function- ing rule of law matters for controlling both crime and corruption, but again differences emerge: an independent judiciary is crucial for combating political corruption; an effective po- lice is important for fighting petty corruption as well as common crime. There are also differ- ences between the determinants of common crime and organized crime, since the latter does relate to corruption. Most research on corruption focuses on de- veloping countries, which is unfortunate. When corruption indexes focus exclusively on cruder forms of corruption (what we think of as typical cases of bribery), they mask one of the most seri- ous governance challenges facing countries like the United States today—so-called legal corrup- tion and state capture by powerful corporations. (For evidence of this, one need only look to the undue influence exerted by Wall Street and mortgage giants over regulations leading up to the financial crisis, or by giant carmakers over THE BIG QUESTION HOW CAN NATIONSBREAK THE CYCLE OF CRIME AND CORRUPTION? At length Corruption, like a gen’ral flood (So long by watchful Ministers withstood), Shall deluge all; and Avarice creeping on, Spread like a low-born mist, and blot the Sun. —Alexander Pope, Moral Essays (ep. III, l. 135) If not quite as apocalyptic as Pope would have us believe, corruption and crime all too often drag nations into a cycle of deprivation and wanton greed—companies bribing bureaucrats in exchange for lucrative contracts, petty graft greasing the palms of low-level civil servants, and powerful politicians enriching themselves at the expense of their people and the advancement of society. How do nations, especially developing ones, escape this swamp? World Policy Journal asked a panel of experts to weigh in on the challenges. UPFR NT ©Matt Nicholas
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automobile safety regulators.) Indeed, research suggests that legal corruption and state capture in the United States are extremely high when compared with most countries in the world, and higher than any other industrialized OECD coun- try. Thus, contrary to popular notions, both developing and rich countries face corruption challenges, although their form may differ. The strategies to combat different manifes-
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f_0018883_16144 - THE BIG QUESTION Matt Nicholas UPFR NT...

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