You don’t fight corruption by “fighting corruption”

I confess that until Martin Tisne turned me on to this Development Drums podcast, I’d known Mushtaq Khan only as the reverently cited sage that kept cropping up again and again in the footnotes of every book and paper I’ve read these last few months.

What a blindspot to have! Mushtaq Khan in full flow is a thing of beauty: the development equivalent to Karim Benzema chasing a winning goal.

An heterodox anglo-bangladeshi development studies professor at London’s School of Oriental and African Studies, Khan has long advocated for the type of nuanced, realpolitik-view of corruption’s role in development that Doug North’s writing initially turned me on to. In this 2009 recording, the legendary Owen Barder moderates as Khan debates the impact of corruption on development with eminent Chilean economist Daniel Kaufmann.

It’s no disrespect to Kaufmann to say Khan absolutely overshadows him, though, with a dexterity of argument and clarity of vision that’s just spellbinding. “The question,” Khan wants to ask, “is why do some poor country elites make their money by growing their economies and others make their money by ruining the economies?”

He’s terrifyingly funny as he pours scorn on the pathetic little mansions Mobutu built himself in Congo (pictured), next to the proper, big-time corruption of the Chinese elite. “It’s just a completely different scale,” he says.

Any gloss I could give his enormously elegant, entertaining rants would sell them short. Just go and listen to it. 


6 thoughts on “You don’t fight corruption by “fighting corruption””

  1. Mr. Kaufmann also makes some good points actually (be careful with intuiitive judgement due to eloquence of speaking, with such a huge difference in language fluency).

    I think Mr. Khan is right in the sense that massive social transitions result in “illegal” rent seeking, and that when the tansition to Capitalism is complete, much of that rent seeking is legalized in some form.

    However, and I think this is were the ultimate disagreement between the two comes from, is Capitalism really the goal these countries should aim for?
    Yes, Mr. Khan has a point that too high goals can be damaging, but wrong goals can also be damaging, maybe even more so.

    To some extend it’s the age old debate about means justifing the end, to which liberal-socialists have always argued that the means determine the end. So yes, you can go the way Mr. Khan is proposing (and use the “means”), but the end result is probably not really what one would wish for (although it might be better that the status quo).

    1. “be careful with intuiitive judgement due to eloquence of speaking, with such a huge difference in language fluency”

      This is a very good point. I love the English language and hearing someone wield it with the terrifying precision and dexterity M. Khan deploys can be…intoxicating. (And when the terrifyingly dextrous speaker happens to mirror your own position, well…the confirmation bias is rampant.)

      I love for instance his turn on phrase on the “Transition to Capitalism” – a hugely provocative, pointed idea that just lets all the air out of the sanitized talk about markets.

  2. I meant “ends justifing the means” in my previous comment obviously.

    Anyways, this has actually clarified some of the thoughts about LAO and OAO for me, as talked about before.

    It seems to me that Capitalism is the ultimate form of a Limited Access Order, with the power and rent-seeking fully transferred to the meta-level of capital (and thus legalized).

    What North et al. call a Open Access Order is actually not Capitalism (they don’t use the word, but imply it), but a historical anomaly within the western world that was most noticable roughtly in the second half of the 20th century, as Piketty has so eloquently pointed out in his popular book “Capital in the 21st century”. Basically it was the only time in history where labor earned its fair share in economic growth instead of being exploited by the capital (as it is happening again now).

    1. Here we disagree. What’s missing here is the idea of competition as a disciplining mechanism. In capitalism, the thing that ultimately limits rent accumulation is competition, and its mainstreaming in the legal system.

  3. Yes that is the idea I guess, however the defining characteristic of Capitalism is the accumulation of wealth (ultimatly a rent seeking strategy) and not competition.
    It just happens that in the western world, in a period of resource abundance (“oil age”) a system that is both capitalistic and having a OAO like competition mechanism has developed.
    However right now it seems like the Capitalism part is winning over the OAO part with oligopolies becoming the most common economic structure in most of the western world.

    IMHO I can imagine a system that is non-capitalistic and still based on competition, i.e. a true OAO. Maybe it would make sense to also differentiate between different states of OAO, with Capitalism as the equivalent to the primitive or basic LAO.

  4. The world has always been capitalistic. The idea that it is a modern development just doesn’t stand up. Since the invention of, say metal refining and manufacturing, about 6000 years ago, there have been workers and bosses or owners. The only real issues are returns to labour and capital. Is the latter fair and the former fair. When the former is fair, i.e. fair wages, then there is not much of a problem. When it is not adequate then there are problems, hence the rise of unions to negotiate a fairer return to labour. When the return to capital is too high then this can mean the return to labour is lower than is fair. Hence you get contention.
    However it is not about the essence of capitalism just the administration of capitalism. Socialism or other forms of Marxism are essentially about the commune and do not create wealth because of the disincentive effect to initiative. It essentially controls what the individual does for the benefit of the whole and the result is little benefit. It reduces output. And sooner or latter, usually sooner, some pigs become more equal than others.
    A concession that can be made, with the reference from Orwell, is that many Socialists, are neo-Orwellian without the proper analysis of history. This means, they mean well for the poor, would in no sense want to be the pigs that are more equal than others, but just don’t understand the history of socialism enough, that it results in some pigs are more equal than others, i.e., rent seeking in an LAO controlled by politicians. Big pigs with their noses in the trough while the smaller pigs go around hungry.

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