Is there any state that is a shithole but doesn't suffer from endemic corruption?

[sweeteviljesus]

I was reading an article about how the Bill and Melinda Gates Foundation had awarded prizes for developing toilets to serve people in the third world who don't have access to good sanitation. I was also reading even sven's comments about the pervasive culture of corruption in Cameroon where you are forced to play the game. I don't know how pie-in-the-sky the winning entries were (the Caltech team's toilet was solar-powered and produced hydrogen and electricity), but given the enormous logistical problems that corruption creates, what are the chances that kids in some of these places will ever see the benefits? Are there any states that are simply poor and totally lack infrastructure but otherwise have good (or at least not corrupt) governance? If not, how well does the stuff that the Foundation promotes pervade these places?

Thanks,
Rob

[Koxinga]

nm, bad joke.

[MikeS]

Looking at Transparency International's Corruption Index (higher numbers are squeaky-cleaner), the one that jumps out at me is Bhutan. Its corruption score is 5.7, putting it in the same corruption neighborhood as Israel, Poland, and South Korea. However, its Human Development Index (an often-used proxy for standard of living) puts it in the same league as Kenya, Cambodia, and Pakistan.

Another one that jumps out in this way is Botswana, which has the distinction of being the least corrupt country in Africa (6.1). However, it has a correspondingly higher HDI than Bhutan.

[md2000]

I know when I worked for a large multinational, they made a distinction between (I forget the exact wording) "minor facilitating payments" made to minor officials, i.e. "tips" to border guards or traffic police who might otherwise harass you, permit departments who would hold up paperwork in expectation of a "tip"; versus large-scale payments to bypass or subvert business processes like bidding. The latter were forbidden, based on US law.

[MikeS]

Originally Posted by MikeS

Looking at Transparency International's Corruption Index (higher numbers are squeaky-cleaner), the one that jumps out at me is Bhutan. Its corruption score is 5.7, putting it in the same corruption neighborhood as Israel, Poland, and South Korea. However, its Human Development Index (an often-used proxy for standard of living) puts it in the same league as Kenya, Cambodia, and Pakistan.

Another one that jumps out in this way is Botswana, which has the distinction of being the least corrupt country in Africa (6.1). However, it has a correspondingly higher HDI than Bhutan.

So I was procrastinating and made a scatter plot of HDI vs. corruption index. There were four countries that jumped out of the data as having particularly good corruption indices given their relatively low standard of living: Botswana, Bhutan, Cape Verde (HDI = 0.57, Corruption Index = 5.5), and Rwanda (HDI = 0.43, CI = 5.0.)

My guess is that Rwanda is the best fit for "fairly poor but not that corrupt."

[lazybratsche]

I wonder if the "poor but not corrupt" examples might be due to lack of opportunity. E.g. in Shithole A, your poor government worker couldn't extract any payments from all of the poor goat herders even if they wanted to. But in Shithole B, there's mineral resources that foreign companies want to exploit, and NGOs that want to work in the country, so the poor government workers have a lot to gain from "minor facilitating payments".

[sweeteviljesus]

I remember even sven reporting on corruption in Cameroon a long time ago. If I am wrong on the details, feel free to correct me, but she made it sound like the corruption was predatory and destructive, basically killing the golden goose. Nobody wanted to get ahead or at least appear that he did because the second the cops or the taxman or whoever got wind of it, they would take nearly everything. The cops and the taxman meanwhile had to do this sort of thing because they had an entire extended family depending on them to earn money, many of which had invested in that person so that he had sufficient money to afford the bribes necessary to get the position. It sounded like people were trapped in a vicious cycle rather than being lazy or evil as they might be thought of in the West.

Given that, how are places like Botswana et al. benefiting from things like the Bill and Melinda Gates Foundation? Do they even need it? I would bet that such nations are comers (except for Bhutan which as far as I can tell spends a lot of time telling the world, "We don't need money to be happy")

Thanks,
Rob

[Blake]

Originally Posted by lazybratsche

I wonder if the "poor but not corrupt" examples might be due to lack of opportunity. E.g. in Shithole A, your poor government worker couldn't extract any payments from all of the poor goat herders even if they wanted to. But in Shithole B, there's mineral resources that foreign companies want to exploit, and NGOs that want to work in the country, so the poor government workers have a lot to gain from "minor facilitating payments".

Hard to reconcile that with Botswana, which has a huge mining industry, lots of foreign aid projects, lots of tourism and is a major diamond trading centre.

[Anomie]

Originally Posted by MikeS

So I was procrastinating and made a scatter plot of HDI vs. corruption index. There were four countries that jumped out of the data as having particularly good corruption indices given their relatively low standard of living: Botswana, Bhutan, Cape Verde (HDI = 0.57, Corruption Index = 5.5), and Rwanda (HDI = 0.43, CI = 5.0.)

My guess is that Rwanda is the best fit for "fairly poor but not that corrupt."

As an aside, what were the outliers for rich/corrupt?

[ralph124c]

How about a place like Greenland-small population, poor, but basically honest? All of a sudden (due to melting ice cap), huge areas are opening up-which might be full of stuff like petroleum, gold, rare earth metals, precious stones, etc. So all of a sudden, money starts flooding in-and Ivar the governor decides he'd rather live in the South of France-what prevents Ivar from becoming your basic 3rd-world corrupt official?

[toadspittle]

Originally Posted by ralph124c

How about a place like Greenland-small population, poor, but basically honest? All of a sudden (due to melting ice cap), huge areas are opening up-which might be full of stuff like petroleum, gold, rare earth metals, precious stones, etc. So all of a sudden, money starts flooding in-and Ivar the governor decides he'd rather live in the South of France-what prevents Ivar from becoming your basic 3rd-world corrupt official?

I think a longstanding culture of non-corruption. Same thing that prevents the mayor of some small town in North Dakota from becoming corrupt when the oil boom hits there.

That, plus the threat of reliable retribution. Ivar (and the mayor in N.Dak.) knows that someone will crack down on him promptly (the Danish government, other western governments, big NGOs, etc.; for N.Dak., various state and federal AGs). Tinpot Dictator No. 5987 in the third world similarly knows that the odds of anyone cracking down on him are slim to none, and the odds are improved for him so long as he has enough armed men on his side and puts enough valuable natural resources into enough foreign hands to make it not worth the trouble to remove him.

[Tom Tildrum]

Some of the more recently prosperous Asian nations likely would have fit the category of poor but not too corrupt before their economic rise, like Singapore, South Korea, Taiwan. Also perhaps Qatar and the UAE.

[ralph124c]

Then there is Haiti-small, poor, and always corrupt. The Haitian government can always be relied upon to steal whatever comes in-and stays in power by terrorizing the politicians. I remember the earthquake-something like $2 billion flowed in .... and nothing got fixed. It seems whoever is in charge, the money always gets stolen.

[FuzzyOgre]

Originally Posted by ralph124c

How about a place like Greenland-small population, poor, but basically honest? All of a sudden (due to melting ice cap), huge areas are opening up-which might be full of stuff like petroleum, gold, rare earth metals, precious stones, etc. So all of a sudden, money starts flooding in-and Ivar the governor decides he'd rather live in the South of France-what prevents Ivar from becoming your basic 3rd-world corrupt official?

Jante Law and Tall Poppy Syndrome I think.

http://en.wikipedia.org/wiki/Jante_Law

[MikeS]

Originally Posted by Anomie

As an aside, what were the outliers for rich/corrupt?

Unfortunately, I'm on vacation right now and don't have the graph with me. From what I remember, though, the data consisted of a general "fuzzy" trendline. The four countries I mentioned above were well off of the trendline on the poor/honest side, but there weren't any that were so far off the trendline on the rich/corrupt side. I seem to remember finding Italy, Libya, and Turkmenistan on the graph, but that's by no means a comprehensive list — and as I said above, there were plenty of countries that were just a bit more honest and/or poor nearby on the graph.

Another interesting point was that the "fuzzy trendline" was really not linear; there was a clear "bend" to it towards the rich/corrupt side. Maybe this is just an artifact of how the HDI and CI are measured, but maybe there's just a whole bunch of "outliers" skewing the trendline that way.

I'll try to remember to point my graph somewhere once I get home, but it'll be some time next week.

[Nametag]

Dammit! I had a long and insightful post discussing this, and accidentally killed it. So I'll sum up:

1) For the congested left half of this graph, calculating the HDI/CPI ratio is illuminating.
2) The highest ratios (richest/most corrupt) belong to Turkmenistan (0.428), Uzbekistan (0.394), Venezuela (0.389), and Libya (0.377).
3) The highest ratios among nations with HDI over 0.85 are Greece (0.254, between Guyana and Haiti) and Italy (0.224, between Tonga and Yemen).
4) Ten of the eleven members of the CIS (former Soviet republics) are in the top 20 with the highest ratios (Moldova is in a class with Italy).
5) The lowest ratios are found in prosperous, well-run democracies and poor African countries that are relatively non-corrupt.
6) Aside from Japan, Singapore, China, and India, most Asian countries have very high ratios, as do most South American countries. Middle Eastern and Central European countries trend lower, but still high.
7) The only African countries with CPI over 5 are Botswana (6.078), Cape Verde (5.525), Mauritius (5.067), and arguably Bahrain (5.110).

It might be interesting to correlate this data with the Failed States Index, but not today.

[njtt]

Originally Posted by Anomie

As an aside, what were the outliers for rich/corrupt?

I don't have a graph, like MikeS, but, just from eyeballing the corruption map, I would say Venezuela and Italy are the obvious outliers.

I note, however, that it is a map of "corruption perceptions", so apparently they do not have any objective measure of corruption; I suppose they have just surveyed people (who?) about how corrupt they think various places are.

[iamthewalrus(:3=]

Originally Posted by Anomie

As an aside, what were the outliers for rich/corrupt?

A few years ago, Greece probably would have been on that list. They were quite rich on paper as a result of the Euro and the fact that the government falsified the tax books for many years, and there are some pretty cushy social benefits that are substantially funded by fraud.

The tax collectors are corrupt on a massive scale, which is one of the fundamental problems they have. See Michael Lewis's Beware of Greeks Bearing Bonds.

Now, of course, since all that's come out, their standard of living has dropped quite a bit.

[MikeS]

I'm back from vacation; here's a link to the graph. I hand-labelled the points that looked most outlier-y to me, but it's really just my opinion. There's probably a better way to quantify which points are outliers.

Originally Posted by njtt

I note, however, that it is a map of "corruption perceptions", so apparently they do not have any objective measure of corruption; I suppose they have just surveyed people (who?) about how corrupt they think various places are.

Apparently they use about seventeen different surveys of business leaders and experts in international affairs. There's a link to a ZIP file containing their raw data, descriptions of their sources, and their methodology available in a link in Question #5 in their FAQ.

[lazybratsche]

Originally Posted by Blake

Hard to reconcile that with Botswana, which has a huge mining industry, lots of foreign aid projects, lots of tourism and is a major diamond trading centre.

Good point. Ignorance fought (and hypothesis nullified)!

[yabob]

Originally Posted by MikeS

I'm back from vacation; here's a link to the graph. I hand-labelled the points that looked most outlier-y to me, but it's really just my opinion. There's probably a better way to quantify which points are outliers.

Apparently they use about seventeen different surveys of business leaders and experts in international affairs. There's a link to a ZIP file containing their raw data, descriptions of their sources, and their methodology available in a link in Question #5 in their FAQ.

Looking at that data, have you plotted it on a log scale? However those indices are constructed, the data appears to fit an exponential. Plot log(corruption) vs. HDI and see if it looks linear. It would probably make the outliers on the left side of the chart really stand out.

It could fit a power function, too, though biased. plot log(corruption - about 1.5) vs log(HDI).

It looks to me that as HDI increases, variance in corruption, either above or below the norm gets significantly less.

[MikeS]

I just gave it a shot, but I didn't find it terribly illuminating. The data seems to be equally well fit by both a power law with an offset (the exponent is about 10.1, offset of about 2.55) and an exponential (growth constant of about 8.2, offset of about 2.39.) Of course, this is largely explained by the fact that the ratio of maximum value to minimum value is only about 5 in both cases, which I don't think is really enough to distinguish between a power law vs. an exponential.

I've also added a link to the raw data in the linked blog post above, if anyone else wants to play with it.