Routing Out Corruption

A virus infects the international system. It's called corruption. Ask visitors about their experiences in China, Indonesia, Mexico, Nigeria, Pakistan, Russia, or any number of other countries. Business representatives are likely to complain about the pressures to include members of prominent families in new ventures. Other travelers will talk of demands from civil servants for side payments for official services.

At the highest levels, the temptation to use position for gain is irresistible. At lower levels, underpaid employees see no other way to exist. But the practices of both are less tolerated as regimes face the scrutiny of modern media. And rumors of corruption can undermine regimes. A widespread belief in excessive and corrupt gains was a factor in the collapse of governments in two countries important to the United States: Iran and the Philippines.

Corruption is not easy to define, prove, or eradicate. Blatant extortion under threat obviously fits the definition. The issue becomes less clear in societies where the expectation of gifts for favors are part of the culture. Practices acceptable in one society may be considered corrupt in another.

Efforts to detect illegal or other questionable practices encounter common problems. Political leaders deny charges - even when ostentatious displays exceed their known income. Some in power may be more candid, especially in developing countries. Rulers may insist that family participation in ventures is essential for development.

Current political, social, and technical circumstances aggravate the problem. The institutional vacuum following the breakup of the Soviet Union has provided new opportunities for powerful criminal elements. Some Asian and South American leaders, often under personal threat, have facilitated and frequently benefitted from the drug trade's enormous profits. Clandestine traffic in arms into areas of conflict provide opportunities for illicit gains. Advances in transportation and computer technology have made it more feasible to hide the existence of such profits.

The US government has long been aware of the dangers posed by such corruption. The Corrupt Practices Act, passed in 1977, was designed to shield US firms from pressures created by extra-legal demands. Although some businesses have welcomed the law, others insist it has placed US companies at a disadvantage in global competition for exports and contracts. US allies such as France, Germany, and Japan have seemed less eager to limit the freedom of action of their firms.

US diplomats have from time to time been asked to raise the issue with officials in countries where Washington has significant interests. Such approaches have tried to signal the risks to friendly governments of rumors of officials' corruption. The task has been difficult. Foreign officials will insist such matters are internal. Those being accused will protest innocence. Even when rulers may be tempted to bring about reforms and rein in excesses, the pressure by family members and cronies who have benefitted and who may fear the results of honest revelations will oppose such reforms. Many, with wealth safely stashed in foreign bank accounts, are prepared to wait out events, assuming escape will be possible if political tides turn.

The problem of corruption involves economics as well as ethics. The US is not immune from examples in its own society of how protection rackets increase the cost of products and services. Abroad, monopolies created by favors granted through bank loans, licenses, tax avoidance, and equity participation stifle competition and raise prices, often in poor countries.

In its worldwide mission on behalf of freedom, the US has linked democracy and the free-market system. Perhaps the time has come to emphasize that the system works best when laws and practices make it free, not only of excessive government interference, but also of the virus of corruption that infects far too many governments.

*David D. Newsom, former undersecretary of state, is Cumming Memorial Professor of International Affairs at the University of Virginia.

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