Corruption Redefined

C.S. Lewis once remarked that, in our modern age, the most evil acts are committed in ‘clean, carpeted, warmed and well-lighted offices, by quiet men with white collars and cut fingernails and smooth-shaven cheeks who do not need to raise their voices’. If the banality of evil is widely accepted by now, why is it that when we think corruption in the developing world, our minds go instantly to the image of the despot or the warlord? You could be forgiven for associating ‘corruption’ with Mobutu Sese Seko or Robert Mugabe, but to stop there would be to do a disservice to the billions who suffer each year from a more nefarious form of corruption.

To be sure, the 20^th century has provided many examples of corrupt dictators – think Uganda’s Idi Amin or Indonesia’s Suharto – and such corruption survives today, costing the developing world between $20 and $40 billion each year in theft falling under ‘illicit outflows’. These kinds of illegal financial outflows lead from the coffers of poor nations directly to the offshore bank accounts of their corrupt leaders. While this breed of corruption is well-documented, research by Global Financial Integrity (GFI) has found that it represents only 3% of all illicit outflows from the developing world.

The global south loses a mind-boggling $1.1 trillion each year in illicit outflows. This is a difficult number to get one’s head around. For context: the $1.1 trillion stolen from developing countries is eleven times the size of the global aid budget ($99.3 billion in 2013). It far outstrips the $858 billion of Foreign Direct Investment (FDI) developing countries received in 2013. 65% of this stolen fortune takes the form of illegal corporate tax evasion.

Why is it that this evil, committed in warmed and well lighted offices in the Global North, goes unheard of while we vilify the leaders of developing countries, often tarring them all with the same brush? The answer, I think, is twofold: It has to do both with the way in which we measure ‘corruption’ and the structures that enable it; as well as the role of ideology in shifting the blame to developing countries.

The generally accepted analysis of corruption in the developing is Transparency International’s ‘Corruption Perception Index’ (CPI). This defines corruption as ‘the misuse of public power for private benefits’, therefore focusing only on abuses of public office. So narrowly defined, it focuses on things like bribery and only captures within that 3% of illicit outflows above. Furthermore, as its name suggests, the CPI measures perceptions of public sector corruption by ‘experts and business people’. This is methodology is problematic as it both reinforces and generates stereotypes of corruption, and surveys those who have a vested interest in keeping their own theft – totaling two-thirds of global illicit outflows – hidden.

Accordingly, almost all African nations are labelled as corrupt/very corrupt by the CPI, while Western countries who benefit from tax evasion are “clean”. This distorts our perceptions of who is really hurting developing countries. For example: The UK is ranked “clean” despite the fact that, counting its overseas territories and crown dependencies, it’s far and away the most secretive financial jurisdiction in the world, according to the Tax Justice Network’s Financial Secrecy Index (FSI). The UK’s crown dependencies and overseas territories such as Guernsey and the Cayman Islands are notoriously secretive tax-havens, ranked 10^th and 3^rd by the FSI respectively.

Our narrow definition of corruption is reinforced by the ideology of thinkers such as Steven Pinker and development economist Paul Collier, who peddle in accusatory rhetoric which blames deficiencies in the ‘cultures’ of the third world. In ‘The Better Angels of our Nature’, Pinker decries the ‘poisoned chalice’ of global aid, worrying that it may prove irresistible for developing countries’ leaders not to enrich themselves at the expense of their compatriots. Pinker, among many other mainstream thinkers, champions ‘smart aid’ in the form of technocratic tweaking of the infrastructures and economies of the developing world, rather than addressing the structural inequalities in the global system. Such thinking has permeated through the highest levels of the world economy. The World Bank’s website highlights bribery first and foremost as the form of corruption plaguing the developing world. They too place the blame squarely on domestic factors: corruption ‘undermines the social contract’ of a developing country.

What is to be done if we are to rid the world of this enormous, complex and mostly hidden evil, which affects all levels of the global economy? Firstly, a more flexible and realistic definition of corruption of needed. Rather than the CPI’s restrictive focus on the public sector, corruption should be redefined so as to account for more than bribery and domestic patrimonial-like activity and encompass the rampant private sector corruption. That done, anthropologist and development expert Jason Hickel has written extensively on solutions ranging from commonsensical improvements, such as the prosecution of tax evaders, to seemingly radical solutions. One such compelling radical solution is the implementation of a global minimum corporation tax, which would disincentives illicit outflows altogether.

Radical or not, any solution may seem impossible in the face of seemingly insurmountable, largely unknown inequality on a global scale. It is tempting to despair when presented with such unabashed wrongdoing operating with apparent impunity.  In such case, it is worth remembering the words of revolutionary and anti-imperialist Frantz Fanon: “Each generation must, out of relative obscurity, discover its mission, fulfill it, or betray it.”

• Featured Photo: ‘Just Say No to Corruption’ by Lars Plougmann, November 2, 2005 via Flickr (CC BY-SA 2.0)