Corruption Causes and Maintains Global Poverty

http://www.ncpa.org/sub/dpd/index.php?Article_ID=15091 

Fighting poverty is a popular cause these days.  But if do-gooders are serious about reducing global poverty, fighting corruption is one of the best places to start, says the Wall Street Journal.

Consider:

• Corruption keeps poor countries poor by squirreling away resources in the hands of elites, who spend the gains on, at best, inefficient public works and at worst, private ends.
• Corruption also drives away foreign investment and discourages local entrepreneurs from starting new businesses.

According to Transparency International’s annual Corruption Perceptions Index (which scores countries on a scale from zero to ten, with zero indicating high levels of perceived corruption and ten indicating low levels of perceived corruption):

• The world’s poorest countries — Burma or Bangladesh, etc. — languish at the bottom of the list, while the world’s richest countries get top marks.
• Some 40 percent of the countries that have “rampant” corruption are also desperately poor — a trend that’s endured since the poll’s inception in 1995.

That doesn’t mean that corrupt countries don’t attract investment, says the Journal.  China, which tied with India at a middling rank, pulled down $63 billion of foreign direct investment, despite widespread corruption in the Communist Party ranks.  But imagine how much money the mainland would receive if it made a more serious effort to bolster its legal system and enforce clean business practices — like Hong Kong does, which ranks number 14.

Source: Editorial, “Combating Corruption,” Wall Street Journal, October 2, 2007.

For text:

http://online.wsj.com/article/SB119127319577145465.html

For report:

http://www.transparency.org/news_room/in_focus/2007/cpi2007#pr 

For more on International Issues:

http://www.ncpa.org/sub/dpd/index.php?Article_Category=26