Corruption, Governance and Security: Challenges for the Rich Countries and the World
AbstractTraditionally, national governance and corruption challenges have been seen as: i) particularly daunting in the poorer countries, with the richer world viewed as exemplary; ii) anchored within a legalistic framework and focused on formal institutions, iii) a challenge within public sectors, and, iv) divorced from global governance or security issues - seen as separate fields. Through an empirical approach based on the analysis of the 2004 survey of enterprises by the World Economic Forum, we challenge these notions and portray a more complex reality. We suggest that the undue emphasis on narrow legalism has obscured more subtle yet costly manifestations of misgovernance, which afflict rich countries as well. Emphasis is also given to measurement and analysis of misgovernance when the rules of the game have been captured by the elite through undue influence. We construct a new set of ethics indices, encompassing forms of (legal) corruption not subject to measurement in conventional (illegal) corruption indicators. It is found that manifestations of legal corruption may be more prevalent than illegal forms, such as outright bribery, and particularly so in richer countries. Further, we find that governance constraints, and corruption in particular, is a key determinant of a country's global competitiveness. These findings challenge traditional notions of what constitutes the country's 'investment climate', and who shapes it. It is also found that illegal forms of corruption continue to be prevalent in the interaction between transnationals of the rich world and the public sectors in many emerging countries. Finally, we suggest an empirical link between governance and security issues.
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Bibliographic InfoPaper provided by EconWPA in its series Public Economics with number 0411009.
Length: 20 pages
Date of creation: 18 Nov 2004
Date of revision:
Note: Type of Document - pdf; pages: 20
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Corruption; governance; security; development; ethics; indicators;
Other versions of this item:
- Kaufmann, Daniel, 2004. "Corruption, Governance and Security: Challenges for the Rich Countries and the World," MPRA Paper 8207, University Library of Munich, Germany.
- C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General
- C3 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables
- C42 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Survey Methods
- C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
- E00 - Macroeconomics and Monetary Economics - - General - - - General
- H00 - Public Economics - - General - - - General
- H4 - Public Economics - - Publicly Provided Goods
- K0 - Law and Economics - - General
- K2 - Law and Economics - - Regulation and Business Law
- K4 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior
- K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
- M21 - Business Administration and Business Economics; Marketing; Accounting - - Business Economics - - - Business Economics
- O10 - Economic Development, Technological Change, and Growth - - Economic Development - - - General
- O16 - Economic Development, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
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