Sunday, July 01, 2007

UK updates and pollution-corruption resemblance

Most of this was written on a breakfast paper napkins as I was having my Scotch pancake tower with fresh berries, orange juice and a big mug of black coffee. Across the window was calmer sea tide (it had been rougher the past few days) in a cold summer breeze of Brighton.

Some updates for you from UK. Gordon Brown just assumed premiership, replacing Tony Blair. Smoking ban is effective nationwide as of 6am this morning. Glasgow airport was hit by a car bomb yesterday, suspects are caught and held, and the word ‘Al-Qaeda’ is again operative all over the media. As usual, TVs exaggerate things up -- while in London yesterday I heard no single word of terrorist attacks (well, except of course in airports). Rather, people talked about tennis. Wimbledon is packed but wet – many games are interrupted by rain and wind. Federer is relaxed, Mauresmo seems quite nervous. In the meantime, the two princes, William and Harry, are preparing a birthday party for the late mother. Yes, it would be tonight at Wembley Stadium and yes I would have to miss it – I’m flying back this evening. No, I’m not sad to miss Elton John or Duran Duran or David Beckham, but I hate to miss Joss Stone (the new soul beauty) and Fergie (the Duchess of Black Eyed Peas, not the Duchess of York, mind you).

Yet, I am still thinking of the discussion at the IDS, University of Sussex. We were talking about the many types of relationship between public authority and private capitalists in developing countries, both in national and in district levels. It is interesting that most if not all participants recognized that there are linkages, direct or indirect, between government officials and businessmen and that those linkages play role in affecting the flow of investment. Different speakers came up with different terms: public-private relationship, hand-in-hand relationship, collusion, trust, you name it. But I thought they were all referring to the same thing. And that same thing could lead to good or bad outcome. I am talking about corruption. It is true that some degree of closeness between public authority and private capitalists is needed to promote investment. But the critical question is how much. What if the ‘trust’ transforms into ‘collusion’? Of course this is a very difficult problem to solve, but I suggested other participants not to shy away from recognizing the danger of promoting any kind of interaction between public and private agents.

To make my case, I used an analogy with pollution. I think, the role of corruption in economy increasingly resembles that of pollution. Both are bad. But you can not completely eliminate them. The best you can do is to minimize them. Some participants looked horrified with this idea. But just as many people have accepted the notion of minimum level of pollution (as opposed to zero pollution – a darling term used by environmentalists), I expect that the same thing would happen to corruption, sooner or later. The growing literature on the optimal level of corruption is one indication of this trend.

OK, I miss home.


  1. Let's assume an economy without a government where I=S :)

  2. There is another resemblance: disease eradication programs. It's improbable for us to wipe out an organism that cause a particular disease. There are just too many things out there. Yet, experts are still using the term eradication reluctantly because it attracts money and supports from politicians.

  3. And it occured to me, Roby, even 'poverty eradication' is too ambitious, unrealistic notion. It should be 'poverty reduction', I guess. I talked with Mas Darno of Smeru once and even when we're developed, he said, the poverty rate is still 4 percent.

  4. maybe that's the reason for a certain obsession of donors on 'doubling' or 'halving'... consider the MDG targets:
    - halving extreme poverty by year xxx
    - halving illiteracy rate by year xxx
    - doubling the level of aid
    - doubling the school enrollment rate

    I thought only isotop/radio-active analysts who are keen on calculating half-life...