DATE=5/4/99
TYPE=BACKGROUND REPORT
NUMBER=5-43309
TITLE=CORRUPTION / FREE MARKETS
BYLINE=MICHAEL BOWMAN
DATELINE=ATLANTA
CONTENT=
VOICED AT:
INTRO: PARTICIPANTS AT AN ANTI-CORRUPTION CONFERENCE IN ATLANTA
(GEORGIA) SAY FREE MARKET ECONOMIC REFORMS CAN HELP DETER BRIBERY
AND INCREASE TRANSPARENCY IN BUSINESS DEALINGS IN THE AMERICAS.
FOUR CURRENT AND EIGHT FORMER HEADS OF STATE FROM THROUGHOUT THE
HEMISPHERE ARE AMONG NUMEROUS OFFICIALS ATTENDING THE THREE-DAY
CONFERENCE, WHICH BEGAN MONDAY. THE EVENT IS HOSTED BY THE
CARTER CENTER - A PUBLIC POLICY ORGANIZATION HEADED BY FORMER
(U-S) PRESIDENT JIMMY CARTER. V-O-A'S MICHAEL BOWMAN REPORTS.
TEXT: CONFERENCE PARTICIPANTS ARE ADVANCING NUMEROUS IDEAS FOR
CRACKING DOWN ON CORRUPTION, WHICH FORMER PRESIDENT CARTER SAYS -
IN SOME NATIONS - ROBS PEOPLE OF MORE THAN HALF THEIR PURCHASING
POWER. THE IDEAS RANGE FROM ENACTING PUNITIVE LEGAL MEASURES TO
INCREASING PUBLIC ACCESS TO INFORMATION ABOUT GOVERNMENT
OPERATIONS.
ONE CONCEPT FOCUSES ON THE POTENTIAL FOR FREE MARKET ECONOMICS TO
REDUCE THE IMPETUS - AND THE OPPORTUNITY - FOR ACTS OF
CORRUPTION. ROBERT KLITGAARD, DEAN OF THE RAND GRADUATE SCHOOL,
EXPLAINS:
// KLITGAARD ACT //
COMPETITION IS LESS VULNERABLE TO CORRUPTION THAN
MONOPOLY. CLEAR RULES OF THE GAME ARE LESS VULNERABLE
THAN ARE SYSTEMS WHERE OFFICIAL DISCRETION IS PARAMOUNT.
// END ACT //
MR. KLITGAARD'S OBSERVATIONS ARE ECHOED BY THE HEAD OF THE WORLD
BANK'S ECONOMIC DEVELOPMENT INSTITUTE, DANIEL KAUFMANN. MR.
KAUFMANN SAYS CORRUPTION AND BLOATED BUREAUCRACIES GO
HAND-IN-HAND.
// KAUFMANN ACT //
BRIBERY, BASICALLY, FUELS RED TAPE, FUELS BUREAUCRATIC
OBSTACLES AND THE INCENTIVE FOR BUREAUCRATS TO HAVE MORE
DISCRETION AND TO IMPOSE MORE REGULATION.
// END ACT //
THE COSTS OF CORRUPTION ARE DIFFICULT TO QUANTIFY, SINCE - BY
DEFINITION - CORRUPTION IS AN ILLICIT AND SURREPTITIOUS ACTIVITY.
NEVERTHELESS, STUDIES CONDUCTED BY THE WORLD BANK REVEAL THAT, IN
CERTAIN COUNTRIES, THE PRACTICE IS SO COSTLY THAT FOREIGN
CORPORATIONS OPERATING IN THEM WOULD GLADLY PAY AN ADDITIONAL
20-PERCENT IN LOCAL TAXES IF CORRUPTION WERE ELIMINATED.
THE IDEA THAT THE FREE MARKET SERVE AS A BARRIER TO CORRUPTION
ALSO HAS THE BLESSING OF THE PRESIDENT OF THE INTER-AMERICAN
DEVELOPMENT BANK, ENRIQUE IGLESIAS. MR. IGLESIAS SAYS NATIONS
THAT WANT TO COMBAT CORRUPTION SHOULD LIMIT THE SIZE AND POWER OF
THEIR GOVERNMENTS.
// IGLESIAS ACT //
IN GENERAL, MAKING GOVERNMENT SMALLER, MORE EFFICIENT,
LESS BURDENED BY REGULATORY SYSTEMS IS AN INSTRUMENT TO
REDUCE SHARPLY THE OPPORTUNITIES OF CORRUPT PRACTICES.
// END ACT //
BUT MR. IGLESIAS SAYS THE FREE MARKET BY ITSELF CANNOT ERADICATE
BRIBERY AND CORRUPTION. HE DOES NOT ADVOCATE ANARCHISTIC AND
UNFETTERED CAPITALISM, BUT RATHER A SYSTEM IN WHICH DEREGULATION
IS COUPLED WITH HEIGHTENED RESPECT FOR MORALITY AND ETHICAL
BEHAVIOR.
// IGLESIAS ACT //
THERE IS A KIND OF DISEASE OF ETHICS IN OUR SOCIETIES IN
THE MODERN WORLD - VERY MUCH LINKED TO INDIVIDUALISM AND
MATERIALISM. I THINK THAT WHEN WE SPEAK ABOUT
LIBERALISM, WE SHOULD NOT FORGET THAT (EARLY ECONOMIST)
ADAM SMITH, BEFORE TEACHING LIBERAL ECONOMICS, WAS A
PROFESSOR OF ETHICS.
// END ACT //
ECUADOR'S PRESIDENT, JAMIL MAHUAD, SAYS HE BELIEVES ONE OF THE
ROOT CAUSES OF CORRUPTION IS MAN'S DESIRE FOR MATERIAL GAIN - A
DESIRE HE SAYS IS FUELED BY POPULAR CULTURE.
// MAHUAD ACT //
WHAT HAPPENS WHEN SOMEBODY IS WATCHING TELEVISION, AND
ALL THE T-V ADVERTISEMENTS ARE SAYING THE MOST IMPORTANT
THING IN LIFE IS MONEY? WITH MONEY, YOU CAN DO
ANYTHING. YOU CAN BUY CLOTHES, YOU CAN TRAVEL, YOU CAN
HAVE THE BEST CAR. IF ALL THE VALUES THAT WE ARE
SELLING ARE JUST CONSUMERISM, WHAT IS THE INCENTIVE TO
BE HONEST?
// END ACT //
MANY PARTICIPANTS AT THE ANTI-CORRUPTION CONFERENCE SAY - FOR A
SOLUTION TO BE VIABLE - IT MUST INVOLVE MANY SECTORS OF SOCIETY,
INCLUDING THE GOVERNMENT, THE BUSINESS COMMUNITY, CONSUMERS AND
THE NEWS MEDIA. FINAL RECOMMENDATIONS ARE TO BE UNVEILED AT THE
CONCLUSION OF THE GATHERING WEDNESDAY. (SIGNED)
NEB/MCB/WFR
04-May-99 6:44 PM EDT (2244 UTC)
NNNN
Source: Voice of America
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