The issue of corruption resonates in developing countries. In the Philippines, for instance, the slogan of the coalition that is likely to win the 2010 presidential elections is "Without corrupt officials, there are no poor people."

Not surprisingly, the international financial institutions have weighed in. The World Bank has made "good governance" a major thrust of its work, asserting that the "World Bank Group focus on governance and anticorruption (GAC) follows from its mandate to reduce poverty - a capable and accountable state creates opportunities for poor people, provides better services, and improves development outcomes."

Because it erodes trust in government, corruption must certainly be condemned and corrupt officials resolutely prosecuted. Corruption also weakens the moral bonds of civil society on which democratic practices and processes rest. But although research suggests it has some bearing on the spread of poverty, corruption is not the principal cause of poverty and economic stagnation, popular opinion notwithstanding.

World Bank and Transparency International data show that the Philippines and China exhibit the same level of corruption, yet China grew by 10.3 percent per year between 1990 and 2000, while the Philippines grew by only 3.3 percent. Moreover, as a recent study by Shaomin Lee and Judy Wu shows, "China is not alone; there are other countries that have relatively high corruption and high growth rates."

Limits of a Hegemonic Narrative

The "corruption-causes-poverty narrative" has become so hegemonic that it has often marginalized policy issues from political discourse. This narrative appeals to the elite and middle class, which dominate the shaping of public opinion. It's also a safe language of political competition among politicians. Political leaders can deploy accusations of corruption against one another for electoral effect without resorting to the destabilizing discourse of class.

Yet this narrative of corruption has increasingly less appeal for the poorer classes. Despite the corruption that marked his reign, Joseph Estrada is running a respectable third in the presidential contest in the Philippines, with solid support among many urban poor communities. But it is perhaps in Thailand where lower classes have most decisively rejected the corruption discourse, which the elites and Bangkok-based middle class deployed to oust Thaksin Shinawatra from the premiership in 2006.

While in power, Thaksin brazenly used his office to enlarge his corporate empire. But the rural masses and urban lower classes - the base of the so-called "Red Shirts" - have ignored this corruption and are fighting to restore his coalition to power. They remember the Thaksin period from 2001 to 2006 as a golden time. Thailand recovered from the Asian financial crisis after Thaksin kicked out the International Monetary Fund (IMF), and the Thai leader promoted expansionary policies with a re distributive dimension, such as cheap universal health care, a one-million-baht development fund for each town, and a moratorium on farmers' servicing of their debt. These policies made a difference in their lives.

Thaksin's Red Shirts are probably right in their implicit assessment that pro-people policies are more decisive than corruption when it comes to addressing poverty. Indeed, in Thailand and elsewhere, clean-cut technocrats have probably been responsible for greater poverty than the most corrupt politicians. The corruption-causes-poverty discourse is no doubt popular with elites and international financial institutions because it serves as a smokescreen for the structural causes of poverty, and stagnation and wrong policy choices of the more transparent technocrats.

(By Walden Bello,April 21,2010)

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