Archive for the ‘Corruption’ Category
The ‘fetcher bill’ – An Illinois case of destructive politics
Given my long time interest in political economy and the relationship between law, politics and economics I’m a fan of Daron Acemoglu’s and James Robinson’s blog ‘Why Nations Fail’ (I have not read the book yet). Like most theories, their theory can’t be used to explain every country and every place but the blog presents a wealth of case studies of destructive politics where the purpose of governing is to enrich politicians at the expense of the community, and the economic costs that that entails.
They depict a vicious form of politics that benefits from making it difficult for individuals to be productive, since putting up obstacles forces people to ask public officials for help to get around them. Which isn’t free.
Exactly how this process works differs from place to place, but the notoriously corrupt state representatives in Illinois proves a case in point with the use of ‘fetcher bills’ (hopefully this isn’t practiced anymore). Here’s an excerpt from the great Chicago journalist Mike Royko’s book ‘Boss’ about Mayor Richard J. Daley:
Money was there for those who wanted it, and many did. Lobbyists expected to pay for votes. Their generosity was matched by the legislators’ greed. If a day passed without profit, some legislators would dream up a “fetcher” bill. A “fetcher” bill would, say, require that all railroad tracks in the state be relaid six inches further apart. It would “fetch” a visit from a lobbyist, bearing a gift.
Mayor Richard J. Daley
Ending corruption from the top down
This week’s issue of The Economist praises Brazil’s president Dilma Rousseff for “tackling the excesses of patronage politics” but lambasts her for not doing more to deal with the underlying systemic corruption.
In a way she is though. As the notable Kenyan corruption-fighter John Githongo said, in his LSE public lecture “African Whistleblowers: fighting corruption from the inside”, eradicating graft in a country is virtually impossible as long as the sleaze goes all the way to the top. When the highest ranking member is corrupt and/or unwilling to do anything about graft it gives leeway for subordinates to try their hands at the business of influence-peddling and kickbacks.
But when that stops and the very top person says enough is enough, and clamps down on the people below him or her that he or she has the power to punish, it sends a powerful message about what is tolerable. These new signals then start to trickle down through the system. Before, when a reformist councilor, mayor or governor wanted to do something about corruption in their area, it was often the case that those who were corrupt had friends in higher positions than the councilor, mayor or governor that could put an end to their efforts. But if the most influential person of them all has turned from a corrupt friend to a reformist foe, it changes the rules of the game and empowers a new set of actors that have a nobler goal – clean and efficient government.
That’s why tackling the excesses of patronage politics is a good starting point in the fight against systemic corruption. The next step is to institutionalize the anti-graft efforts and make them more independent of the president’s person, but before such institutions are up and running, having a president scaring no-good ministers who are in politics to enrich themselves and their cronies can be very effective indeed.
Starting in Brasília is not so bad
What Rio’s failure and São Paolo’s success says about the importance of good governance
Rio de Janeiro has arguably one of the best settings in the world. A climate and scenic beauty that others would die for, add to that a long, rich history as imperial and national capital in the great nation of Brazil and it seems strange that a landlocked city in the mountains to the south of it is the country’s economic center and one of the world’s biggest metropolitan areas.
The City of Drizzle
While Rio is the marvelous city, São Paolo is the city of drizzle, a vast “bland labyrinth” populated by castles of fucking sidewalk, to paraphrase Philaphilia. How did drizzle beat beaches? While people move to big cities because of higher paying jobs, more jobs (and thus more job security) as well as better amenities such as education, health care, infrastructure, entertainment and culture, these benefits can be offset by congestion and other negative externalities in the way of crime and pollution. Like Klaus Desmet and Esteban Rossi-Hansberg stated in their article “Are the world’s megacities too big?”:
“How fast the benefits of efficiency and amenities erode with population size because of increasing congestion costs depends on the quality of governance, responsible for the provision of road infrastructure, sewage systems, clean water, and security.”
The rise of São Paolo on Rio’s behalf is of course a result of more than local cronyism in the latter, but the fact remains that Rio’s decades long slump, where the city managed to waste one of the best natural advantages on the planet (amenities so good that multinational corporations who needed to set up shop in São Paolo, due to the economic benefits of being there, advised against letting their employees even set foot in Rio, lest they would want to stay there forever, this according to The Economist), was largely thanks to poor urban governance that allowed crime to get out of hand, infrastructure to crumble and human capital to go to waste. And if poor urban governance could do this to Rio, just imagine what local mismanagement means for less geographically endowed cities.
The Marvelous City
Kafka’s Chinese castle
“The worst thing about Beijing is that you can never trust the judicial system. Without trust, you cannot identify anything; it’s like a sandstorm … Everything is constantly changing, according to somebody else’s will, somebody else’s power.”
These are the words of the famous Chinese dissident Ai Weiwei, who recently published a piece in Newsweek about the two-faced reality of life in contemporary Beijing. In an article that is sure to enrage Chinese authorities, he is talking about the corruption and the injustice of a fickle justice system where the lives of powerless citizens are in the hands of government bureaucrats who own the law.
A lawlessness that is especially pervasive on a local level, leading to many questions about the nature of local governance in China.
In such a large and diverse republic, it is not feasible, nor advisable, that all matters of importance should be decided in the capital, where people without intimate knowledge of varying local conditions design one-size-fits-all policies that will have immensely different consequences in different parts of the nation.
Just like in the similarly enormous USA, Chinese states and municipal governments should be given room to explore a wide range of ideas and act as laboratories of policy (Supreme Court Justice Louis Brandeis’ “laboratories of democracy” will have to wait for a while, but policy is a good start) so that effective state and local governments can, not only take local conditions into consideration, but also lead by example. Innovative localities can take charge of their own destiny and allow more economic and individual freedom by, for example, implementing local migration, school, labor and birth policies. Or, more humdrum, local property rights, environmental and safety regulations, building codes etc.
Thanks to decentralization, one state or city can show the rest of a region and the country the benefits of a new approach and force others to follow if they want to stay in the development game. A classic case of efficiency-increasing jurisdictional competition á la Charles Tiebout, where companies and citizens vote with their feet and leave corrupt backwaters to seek a new life in a better governed, and more successful part of the country. At least in theory.
In a reality where China lacks accountability measures, localization is likely to take a much darker turn. After the Chinese empire collapsed in the early 20th century, the country lost decades to civil war where the breakdown of central government led to the rise of a long line of regional warlords who did whatever they pleased with the territory they controlled. It was an intense form of legal sandstorm, where no one knew whose will or whim would affect your life.
This anarchy was what the communist party fought and defeated, which is why Beijing is incredibly rattled that a China of local chiefdoms may be resurgent, and that erratic and unjust local governments will undermine the people’s faith in the party’s ability to maintain stability and growth, prompting Beijing to try such extreme measures as capital punishment in order to discourage corrupt bureaucrats from abusing their powers. But with little effect, other than that local officials become less overt in their ransacking of the public purse and use of their powers over property rights and the legal system to enrich themselves. Since they know that there is no way for the federal anti-corruption authorities in Beijing to register every act of official misconduct in such a vast nation as China where millions of people are involved in corrupt activities. The capital’s resources will only allow them to go after the big game – people who have ended up in the Corruption Hall of Fame – leaving thousands of local emperors to continue undermining the people’s trust in the “harmonious society”.
The reason that countries like the US managed to rid its state capitals and city halls of corruption, and countries like Mexico failed, was because thousands of individual citizens could go above their local authorities’ heads when they misbehaved to get help from an accountable and independent federal judiciary and law enforcement that was beyond local governments’ control. Thereby, the US didn’t need to rely on a small group of anti-corruption officials to uncover and punish every local power-plot, but utilized the force of the masses as well as a free press of muckraking journalists. Without a strong and independent federal judiciary, local government officials all over America would have had no far-reaching independent authority to fear, and Americans would have had no far-reaching independent authority to rely on when some Peckerwood Caligula of a governor, mayor, city councilman or sheriff decided to interpret the law in accordance with his or her personal interests.
And herein lays the problem for Beijing. Hu Jintao desperately wants to rein in corrupt officials in order to protect the party’s autocratic hold on power, but the only way of doing that is to create an independent judicial authority that the party can’t control. A judiciary that may be intended to singlehandedly pursue cases of corruption, but that certainly would become a refuge for a thousand and one unforeseen complaints that the party would rather deal with behind closed doors.
Which is why Chinese law is likely to remain an ever changing sandstorm and why a majority of Chinese local governments will continue to be seriously flawed.
Beijing has more problems than smog and traffic
