Corruption, The American Way

So apparently an Ambassadorship costs $1.8 million per post in the US.

In virtually any other country, even where the situation with corruption is quite dismal, such arrangements would be seen as unquestionably corrupt. And yet the US scores an entirely respectable 73/100 in Transparency International’s Corruption Perceptions Index (CPI), leagues above say Italy which gets 42/100.

The reason I mention Italy is that I was once discussing the question of corruption in different countries with an Italian. He said that what in the US is known as “political lobbying” would be treated as a criminal activity in Italy, and indeed in most of the rest of Europe. Hence why in the Med countries you get far more cases of corruption in the form of cash in envelopes. In the US that’s against the law, but that’s not such a big deal, because the law – or rather the absence of it – allows for the same thing, just in indirect formats (expensive dinners, contributions, astronomic speaking fees, stock performances superior to those of corporate insiders, etc). But that kind of corruption is “deniable” and hence respectable, whereas the direct kind is crude and distasteful, a defining feature of disorganized Third World countries.

In Italy, regulations against corruption and weaselly dealings in general are stringent. Now because Italians tend to corruption in general, either by nature or nurture, this means that the high incidence of such endlessly knocks against their corruption ratings. In the US, however, the factual “legalization” of much of what passes for corruption in Europe allows it to remain relatively unscathed in such international assessments.

There are many other such examples. Saudi Arabia, for instance, is insanely corrupt if you think rulers siphoning off billions of dollars off the oil budget is fundamentally illegitimate (as is alleged but never evidenced for Russia’s “mafia state” and Putin’s Swiss bank accounts). But it’s all quite legal there, which is why – hard as it is to believe – Saudi Arabia scores higher than not only Russia, but even Italy in the CPI.

So the solution is simple. Just legalize your corruption, and move up to the top in both the World Bank’s Doing Business ratings and soon enough in the Corruption Perceptions Index. Don’t forget to be slavishly pro-American in your foreign policy. Investors will love you for it. Well, maybe not, at least once said investors get to know you a bit better, but at least you’ll get glowing reviews from the Wall Street Journal and Transparency International. That’s how you become a made country in Davos World.

GCB2013 Released

Here it is. Or just skip the graphics and download the data in Excel here.

I can’t say I care much about most of it. Of course most people everything think corruption is “increasing,” because they are a grumpy lot.

What does matter is the number of people who report paying a bribe in the past 12 months. It is as close to objective measurement as you can get in a sphere of life as indefinite and necessarily opaque as “corruption.”

Below is a quick table summarizing the results from the most notable countries (no comment where it’s pretty much “as expected”).

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Review of “The Otherness Of Self” by Xin Liu

“The Otherness of Self” by Xin Liu, published in 2002. Rating: 1/5.

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I don’t want to sound overly demanding, but really, unless a writer is the next Kant or Heidegger, he owes it to his readers to make his prose at least minimally engaging. With this book on too many occasions I was under the impression that I was reading something from the Postmodern Essay Generator. Here is a totally random quote I just pulled from [easyazon_link asin="0472068091" locale="US" new_window="default" tag="httpakarcom-20" add_to_cart="default" cloaking="default" localization="default" nofollow="default" popups="default"]THE OTHERNESS OF SELF[/easyazon_link]: “As Carr argues, a solution to the problem of experience is provided by the Husserlian idea of retention-protention as a horizon from which the experience of being experienced at the present moment stands out.

Come again, amigo? About 80% of this book is PoMo-babble, as verbose as it is apparently meaningless – one is under the distinct impression that Xin Liu is padding out a thesis paper with references to thinkers who are not really at all relevant to the putative object of his studies, the Beihai Star Group and South Chinese business culture. It is with this in mind that we come to the actual content, unearthing which expends no small time of energy and sanity.

In this book, the anthropologist Xin Liu argues that “the human experience itself is narrative in character… time is the life of narrative.” By extension, social life is centered around the perception of time as it relates to the past, present, and future, as well as to the sense of “before” and “after”. He analyzes China’s changing society through the prism of its changing conceptions of temporarily as described in three contemporaneous books representative of the time periods in which they were written, as well as his own observations of business life in Beihai.

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Antisocial Punishment: Why China Will Defeat Corruption, But Russia And The Arabs Won’t

One of the books I’ve been reading lately is Steven Pinker’s massive door-stopper The Better Angels of Our Nature. Incidentally, I found it a very interesting read with tons of cool factoids, although it could have done with a third of its text and a tiny fraction of its liberal sanctimonious. But that’s for the forthcoming review; in this post, I will focus instead on a reference I found there to a very fascinating and revealing paper about Antisocial Punishment Across Cultures (Herrmann et al.) – and by extension, its implications for social cohesion.

Power summary: The shrinks got a bunch of university students, divided them into teams of four, and got them to play a “public goods game.” They were given 20 tokens at the start of each of ten rounds, and they were told they could invest any number of them into a pot, with a return of 0.4 tokens to each player – regardless of whether or not he participates – to each token invested in the pot. So if everyone was to contribute all 20 of their tokens, each player would walk away with 32 tokens; on the other hand, if only two players were to contribute all their tokens while the other two got a free ride, the altruists would walk away with only 16 tokens, whereas the free riders would get their 16 tokens plus their original 20 which they had kept back.


In this version of the game, there were no interesting patterns; across all cultures, contributions plummeted as free riders enjoying impunity undermined the morale of productive contributors. However, that’s not how the game works in real societies, which actively punish many forms of free riding: Tax evasion, benefit fraud, dodging fares on public transport, etc. The game was then modified to include a punishment option, in which any player could choose to spend one token to remove three tokens from any other player of his choosing. The results changed drastically.

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Corruption Realities Index 2010

The most famous corruption indicator is Transparency International’s Corruption Perceptions Index. Its only problem is that the perceptions of their self-appointed experts have nothing to do with reality!

As I explained in previous posts on this blog, it suffers from numerous flaws. Part of it has to do with its questionable methodology: using changing mixes of different surveys to gauge a fluid, opaque-by-definition social phenomenon. Another is its reliance on its appeal to authority, the theory being that “experts” in business and think-tanks know more about corruption relative to anyone else. Countries with more regulations are systematically prejudged, as are those facing hostile media environments such as Russia or Venezuela. Above all, the CPI doesn’t pass the face validity test – in other words, many of its results are frankly ludicrous. Is it truly plausible that Russia (2.1) is as corrupt as failed states like Zimbabwe (2.4) or D.R. Congo (2.0), or that Italy (3.9) is more corrupt than Saudi Arabia (4.7) which is a feudalistic monarchy!?

This suggests that we urgently need another, more objective index. Thus I present the Corruption Realities Index (CRI)!

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Introducing the Karlin Corruption Index (KCI)

Following on the ground-breaking and globally acknowledged Karlin Freedom Index (which is of course by far the most objective, accurate, comprehensive and plain awesome democracy measuring tool available to political scientists today), I’m now revealing the Karlin Corruption Index (KCI) which rates transparency based on my own readings, personal impressions and bigoted prejudices. As with the “democracy indices” (Freedom House et al.), the current corruption indices – the most prominent of which is Transparency International’s Corruption Perceptions Index (CPI) - just don’t do all that of a great job. Let me explain why.

First, let’s have a look at the very language of corruption. Contrary to what one might expect, almost all linguistic terms for bribery are either neutral or even positive and are related to some of (1) “gift”, (2) small “tip” or tip, or (3) “greasing” i.e. a way of making things flow smoother, (4) “understanding”. I suspect the reason is that corruption, as long as it’s systematized, cannot unravel a state by itself, and in some cases even creates positive effects. Arguing to absurdity, a “gift economy” society of the type seen in hunter-gathering societies, kibbutzim or hippie coops would probably be given a 0/10 for transparency by the CPI’s methodology. But does that really mean anything?

Similar critiques can, in part, be extended to states. In highly regulated countries, giving kickbacks may be the optimal way of running businesses, employing people and generating growth (e.g. Russia, Italy). In highly stratified societies, increasing public spending to improve social mobility – even if part of that spending is siphoned off and contributes to more corruption – may be the socially just decision (e.g. Venezuela). In economically backwards nations, purposefully turning a blind eye to copyrights and IP violations may lead to faster development (e.g. 19th C Germany, China)*.

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