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Why fighting corruption helps the poor

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Fighting corruption is no longer just a moral issue. It has become a major tool in the fight against world poverty.

Once seen as the cost of doing business in much of the globe - sometimes even regarded as useful in greasing the way for development projects - bribery increasingly is viewed as a major stumbling block to progress.

And increasingly, governments and business groups around the world are beginning to do something about it.

"There has been a sea change in the past seven or eight years in awareness of the issue," says Daniel Kaufmann, the World Bank's top official on the corruption issue.

Three factors have been pushing the planet in this direction: the spread of democracy to many developing countries and former communist nations, recent research proving the terrible damage corruption does to the economies of poor nations, and the rapid spread of this knowledge across borders through the Internet.

The most sweeping move came two weeks ago when the General Assembly of the United Nations approved - unanimously - the Convention Against Corruption. Justice ministers and some heads of state from about 130 nations plan to gather in Merida, Mexico, from Dec. 9 to 11 to sign the new treaty.

"Corruption is an insidious plague that has a wide range of corrosive effects on societies," UN Secretary General Kofi Annan told the General Assembly. "It undermines democracy and the rule of law, leads to violations of human rights, distorts markets, erodes the quality of life, and allows organized crime, terrorism and other threats to human security to flourish."

As Mr. Annan noted, this evil phenomenon is found in all countries, rich and poor. The United States, despite its wealth, democracy, and elaborate system of justice, has been experiencing a troubling bout of financial fraud.

Corruption, though, hits poor countries especially hard by diverting money away from development.

New research finds that, over a generation, if a poor country with a high level of corruption manages to reduce corruption to a median level, it will enjoy a 400 percent improvement in its per capita income, according to Mr. Kaufmann. That translates into a jump from, say, $4,000 a year for every many, woman, and child to a relatively prosperous $16,000. By contrast, people subject to a truly corrupt government often see a reduction in their living standards.


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