Добрый день Мохаммад! Вам необходимо обратится к научным работам по экономике коррупции. Имеется достаточное количество научных исследований по данной проблематике в России.

Very difficult challenge to answer so explicitly. To the best of my knowledge, one can not have neoliberal economic policies and a corruption free society go together.

Thank you, Siba.

Thank you, Pavel. Unfortunately, I am sorry that I did not have an opportunity to learn your so sweet language. Can you translate it in English for me!

Уважаемый Мохаммад! Направляю в Ваш адрес автореферат докторской диссертации российского экономиста Юхачева на русском языке.

Mohammad, it appears that you have really seen what is currently happening in Nigeria. Why? The previous government looted billions of dollars, using a sensationally-coined 'transformation agenda' to perpetrate their collective looting. However, it has been very difficult for the new government to salvage the situation because the corruption was collectively perpetrated. The underpinning question is now: how can we remediate the collective behaviour of corruption, and sanitize the economy through anti-corruption practices and policies that work best for each country? One-size-approach of anti-corruption best practices and policies being championed by the World Bank, UNDP and other international financial institutions will not work for all developing countries because of the historical trajectories and contextual realities of each country, and because the devil lies in the details. In my own view, I think developing countries firstly need strong institutions to deal with this terrible cancer (corruption) before we can look at additional measures and actions to take.

Уважаемый коллега, Гбенга, прав. Действительно, коррупцию как средство решения экономических вопросов необходимо экономическими средствами. Поэтому одновременно с разработкой экономической стратегии Правительства необходима разработка Стратегии противодействия коррупции.

Mohammad, it happens in Brazil too.

The problem is worst when great part of population have low education.

I believe that you need a benevolent dictator. But this is a very controversial hypothesis.

You might like to have a look at this publication:  "Tackling Corruption, Transforming Lives" which focuses on some of the key challenges in Asia and the Pacific, but some of the issues are also more widely applicable.  It looks at key areas which affect people's lives the most - petty corruption of the daily kind where the sums may be small but the affected number of people are huge; the corruption of grand contracts; and the corruption of collusion which may be technically legal bit results in the capture of the state itself.

http://hdr.undp.org/en/content/tackling-corruption-transforming-lives

http://hdr.undp.org/sites/default/files/rhdr_full_report_tackling_corruption_transforming_lives.pdf

Just look very carefully the organization of the production system. The key is to produce more, generate mass and rapid employment and generate more foreign exchange earnings, As simple like this.

The new created employment will bring income to families, foreign exchange earnings will allow you to maintain the value of your currency and pay for your imports. Investment will be developed.

If you spread the new income, inequality will decrease at a more rapid pace. The expectation is that increased welfare will reduce corruption. 

For me there should be a complete re-orientation of the populace, family values needs to be encouraged, societal ethics and norms strengthened. Then, the anti-corruption agencies, institution and the government as a whole needs to brace up to the challenges of corruption

So called developed economies like that of the USA have legalized corruption.  The  housing bubble that led to the Great Recession and the wars based on the false premise of  the  at the  least greatly facilitated  911 attack are both due to corruption but it has a veneer that too many Americans refuse to see through.   I am American and my country is not what she used to be.

I am currently finishing up a special edition of Journal of Developing Societies on this issue.  We challenge the existing approaches to corruption reform such as those by the World Bank.  As our colleague points out for the case of Nigeria, merely making formal reforms consistently comes up short in corruption reduction efforts.  When I examine well-functioning public sectors such as Singapore and to some extent, Hong Kong, what comes across to me is that the rule of law is based on informal and more deeply-seated cultural factors as much as incentives.  This goes back to the dominance of economists who push the world view that we are all atomistic individuals, responding to incentives structures, something that the Downsian political scientists have picked up.  In my book, Three Perspectives on Human Irrationality, I suggest a different way to understand human behaviour.  Going to back Paul Gentle's comment, the social pact in the West is under severe duress.  While the principle of the rule of law has not been challenged, the bending of the law for special interests and the general malaise and growing inequality have started to break down the social legitimacy of the economic system, reinforcing my point that focus on individual incentives provides a very incomplete picture of what makes an economy function well.

Well, i also have the example of Hong Kong (where i live for a long time) in mind. Instead of talking about so-called "cultural values", it may be more rewarding to analyse the historical experience. In fact, Hong Kong was one of the most corrupted place in the 1970s, but it managed to curb it. The creation of the ICAC (independent Corruption against Corruption) has been an important milestone in this direction -- the important word being "independent", of course. The ICAC did not hesitate to prosecute top level civil servants (e.g. the former chief secretary, Raphael Hui, and, most likely, the former Chief Executive, Donald Tsang). Another issue has been to raise salaries in order to make corruption less easy to achieve. The rule of law and the separation of powers differentiate Hong Kong from the Mainland. However, the example of China shows that it is still possible for some countries to experience high economic growth with a high level of corruption -- provided the money is still reinvested locally and does not flow overseas.

I think that many politicians as well as scholars often neglect a simple issue, that not only the size/prevalence of corruption matters, but also the nature of corruption, how it is organized. One prominent example is the so-called East-Asia paradox. While corruption is a real obstacle for economic development in many developing countries, it may play a positive role in such countries like China and South Korea. Why? Corruption is these countries is more centralized, in the sense that bureaucrats coordinate their rent seeking behavior. Companies know in advance to whom and how much to pay. This diminishes costs and uncertainty induced by corruption and allows it really to "grease the wheels" of economy, avoiding excessive regulation, etc. Of course, cultural issues may be important as well. In many African countries,  corruption is a social norm: public officials help their relatives or friends using public office, and this is socially approved. In Western countries it is both illegal and socially disapproved. Singapore, Hong Kong, and now Georgia are really amazing success stories, and I think scholars should study these cases very carefully in order to understand how to replicate this experience and fight corruption in many other countries. For now, it seems to me that it is impossible to combat corruption without the real impulses from top politicians, plus general readiness and support of reforms from mass population.

There is little scope for corruption in private firms that are subject to market disciplines. When an employee act corruptly the owners of the business have a strong incentive to end the corruption in order to protect their wealth.

This discipline does not apply when politicians and government officials can offer favours that are paid for by taxpayers and consumers.

The obvious answer is to restrict as far as possible the economic activities that politicians and public servants are able to influence. If politicians and public servants have little influence, there is little incentive to bribe them.

The corruption is in regard to the way that money is being paid out for services rendered. A new system should be emplaced where instead of money, national bonds or shares are paid instead of money. The rights to these shall be confirmed at the bank where they might be cashed only with the personal and independently provided signature of an official in the treasury department. This single person, who has been checked for his status of security, must have his banking services at home and abroad regularly available and should not be permitted to hold unauthorized or new accounts.

Dr. Augustin- Jean makes a good point about the ICAC, which has a similar counterpart in Singapore.  But it begs the q. of why anti-corruption agencies set up around the world are generally ineffective and corrupt (eg Nigeria, Paraguay).  That's what makes me think there is something deeper about the paradigm change that occurs in the shift away from corruption than just setting up an enforcement agency.  As I noted, I make this argument in a lot more detail in the coming article, but one of the other differentiating things about Sing/HK is their transparency.  Their officials, esp. in Sing, get paid outrageous amts., but the AC agency also has the ability to examine their bank accounts.  Making this one change, to create transparency around personal income and wealth, would be a crucial step fwd.

Along with our colleagues I would suggest the creation of an independent Entity on all activities related to the public sector (where the corruption lies). This independent entity should only refer and be accountable to the parliament of the country. Not to the government/minister. And should have members well paid. International experts could also help in the running of this entity.

Corruption is irrational behaviour from the perspective of economic theory and illegal action in the frame of state & politics, whereas it is a moral issue against honesty & equality in the societal perspective.

Corruption caused by low level of income & poverty can be minimized by economic measures. But high level & high voltage corruption is based on greed of profit, never ending demand for luxuries and hunger of accumulation of wealth which cannot be minimized by economic measures. Therefore, collective/organized pressure from the people, constitutional & independent authority against corruption, efficient & honest auditing authority, strict legislation & effective enforcement etc. administrative & political measures may work as remedies in the real sense. However, corruption & economic development can go parallel, corruption may also increase with higher economic growth. Hence  corruption is not the only factor to hinder economic development & not alone responsible to disturb the functioning of economy.

The long term answer to corruption is to rearrange the macro-economy so that nobody is in fear of either having too little or of being forced to share too much. This can be done by the provision of equal opportunity for all, by abandoning all forms of taxation and changing the way that the national income is created to a form where the unjust advantage that land ownership confers is being taken as a national revenue. When the effect of opportunity sharing through land value revenue collection (so that any monopoly due to unequal opportunities is eliminated and when this becomes obvious, corruption will cease.

Dear mohammed,

may I recommend the World Bank Development report of this year:

http://www.worldbank.org/en/publication/wdr2015

It deals with the dynamics of behavior and economics, and it includes a lot of relevant literature references for your question. It also includes a specific chapter on the issue when corruption is the accepted social norm and people indeed behave socially in a context where corruption is the norm - so in line with their social incentives.

Good luck.

Thanks Linda

Your suggestion is really creative. I have gone through WDR 2015 twice. Will read once more.