Corruption in emerging countries seriously impacts the ability of such economies to occupy their increasingly relevant role in the international scene.
The topic is frequently in the news about the Brics, such as in these recent Financial Times posts about Brazil http://on.ft.com/nXG6NU, China http://blogs.ft.com/beyond-brics/?p=368651 and India http://on.ft.com/ohC5p7.
It has different historical reasons and is harder to deal with where there is lack of free press or less educated population. But the problem in emerging countries remains high also due to other relevant factors.
See, for instance, Brazil. The country is a stable democracy with a free press, government agencies and reasonable legislation. Even a Public Ministry, a sort of "Internal Affairs" for government actions. However, corruption among politicians and government agents is high and even worse in the top levels of Government.
Corruption tentacles reach different institutions, in all countries. It is frequent even in private, first world companies, often in their purchasing and sales departments - let's remember that this is a two way street, and the bribing party is also corrupt!
However, private companies have closer and more efficient controls and take actions that significantly restrict such practices (at least people are fired and will have a relevant financial loss with the unemployment). And, from an economic perspective with the consideration that, in the private sector, it is the companies' shareholders, not the tax payers, who pay such bill!
Oversimplifying, the reasons for public corruption in Brazil originate in the time the country was a Portuguese colony, when extracting as much wealth as possible from the colony was a common practice and the "king's friends" (future politicians?) felt like they had the right to take their share of profits from such activity.
Since then, to take personal advantage of their position and to charge a "price" for granting licenses or for intermediating transactions has become a practice for several public authorities in all government levels, as if they were still the kings' friends, the owners of the public institutions.
Such historical and widespread practice causes certain complacency and a relevant sense of mutual protection among government authorities. As several politicians are not good examples of ethics, they prefer to conceal the problem and not expose one another. Worse, a public perception that politics is a dirty system inhibits ethical people to get involved and incentives people with low standards to pursue such career!
I believe that the Brazilian problem lies mostly in a ridiculously ineffective criminal justice system and, consequently, in the society's lack of trust in it. Despite clear disclosure by the press of unethical actions, Brazil has no history of a serious punishment for corruption, specially when committed by politicians and public employees. Often these actors are able to remain in power or, worst case scenario, step down from their mandate for a few years, with no serious consequence to their freedom or to their financial means.
People perceive what is going on and see the lack of punishment. They end up getting used to an environment where "there is nothing to be done, nowhere to go for justice". What, in turn, creates a criminal snow ball in the system (by the way, the weakness of our justice system is also a major cause for violence, "justice with your own hands" and lack of security in Brazil).
Finally, such environment is aggravated by an issue that relates to all Bric economies: the scale of government economic intervention and its dominant participation in the economy. The State controls and therefore public employees manage several key banks and companies.
Government is involved in a larger that usual share of commercial and financial activity and is a major player in the total GDP, what multiply the opportunities for corruption. Add to that the issues discussed above and you have all elements to the spread out government corruption.
Less government presence and an effective punitive system would have a major positive impact in several economic and social development indicators of Brazil and possibly other Brics.
The topic is frequently in the news about the Brics, such as in these recent Financial Times posts about Brazil http://on.ft.com/nXG6NU, China http://blogs.ft.com/beyond-brics/?p=368651 and India http://on.ft.com/ohC5p7.
It has different historical reasons and is harder to deal with where there is lack of free press or less educated population. But the problem in emerging countries remains high also due to other relevant factors.
See, for instance, Brazil. The country is a stable democracy with a free press, government agencies and reasonable legislation. Even a Public Ministry, a sort of "Internal Affairs" for government actions. However, corruption among politicians and government agents is high and even worse in the top levels of Government.
Corruption tentacles reach different institutions, in all countries. It is frequent even in private, first world companies, often in their purchasing and sales departments - let's remember that this is a two way street, and the bribing party is also corrupt!
However, private companies have closer and more efficient controls and take actions that significantly restrict such practices (at least people are fired and will have a relevant financial loss with the unemployment). And, from an economic perspective with the consideration that, in the private sector, it is the companies' shareholders, not the tax payers, who pay such bill!
Oversimplifying, the reasons for public corruption in Brazil originate in the time the country was a Portuguese colony, when extracting as much wealth as possible from the colony was a common practice and the "king's friends" (future politicians?) felt like they had the right to take their share of profits from such activity.
Since then, to take personal advantage of their position and to charge a "price" for granting licenses or for intermediating transactions has become a practice for several public authorities in all government levels, as if they were still the kings' friends, the owners of the public institutions.
Such historical and widespread practice causes certain complacency and a relevant sense of mutual protection among government authorities. As several politicians are not good examples of ethics, they prefer to conceal the problem and not expose one another. Worse, a public perception that politics is a dirty system inhibits ethical people to get involved and incentives people with low standards to pursue such career!
I believe that the Brazilian problem lies mostly in a ridiculously ineffective criminal justice system and, consequently, in the society's lack of trust in it. Despite clear disclosure by the press of unethical actions, Brazil has no history of a serious punishment for corruption, specially when committed by politicians and public employees. Often these actors are able to remain in power or, worst case scenario, step down from their mandate for a few years, with no serious consequence to their freedom or to their financial means.
People perceive what is going on and see the lack of punishment. They end up getting used to an environment where "there is nothing to be done, nowhere to go for justice". What, in turn, creates a criminal snow ball in the system (by the way, the weakness of our justice system is also a major cause for violence, "justice with your own hands" and lack of security in Brazil).
Finally, such environment is aggravated by an issue that relates to all Bric economies: the scale of government economic intervention and its dominant participation in the economy. The State controls and therefore public employees manage several key banks and companies.
Government is involved in a larger that usual share of commercial and financial activity and is a major player in the total GDP, what multiply the opportunities for corruption. Add to that the issues discussed above and you have all elements to the spread out government corruption.
Less government presence and an effective punitive system would have a major positive impact in several economic and social development indicators of Brazil and possibly other Brics.
