Tuesday, December 23, 2008

The prices of corruption 

From a talk given by Daniel Kaufmann on his departure from the World Bank last week. This bribe fee table is from 1996; I was a USAID advisor to the National Bank of Ukraine when Dani was head of the World Bank office in the country at that time, and was the first of the researchers into corruption to come from that institution. We met a few times; I do not know him well, but his work was important to many of us working in the country. If you didn't pay the inspector, you were closed. If you needed to import or export anything to the country, you had to register. Each of these required a fee to be paid.

Two things: 1. For those of you that heard me talk about my book on Ed's show earlier today, this type of table is exactly the kind of data we look for, which is to seek things at the micro level. While I appreciate the work of Transparency International, their data is not a substitute for what Kaufmann and his researchers tried to accomplish at the Bank. For most of the important research, the micro-level data appears to be better.

2. Kaufmann quotes the governor of the National Bank of Ukraine, who spoke at a gathering for Kaufmann's departure (which I believe I attended):
But I want to acknowledge the most important thing that you did is that you made sure that neither the World Bank nor the IMF, for the first two years, gave us a cent in loans, because we basically were not ready. The cadre that was in power would never have reformed, and this would have perpetuated non-reforms.
The speaker of course is now-President Viktor Yushchenko. I wonder if the Bush Administration entertained this thought before agreeing to the auto bailout?

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Friday, April 20, 2007

Have you followed the Wolfowitz story? 

Someone asked me this earlier this week. I'm grading senior theses so the answer was "vaguely for now, will more later." Still going that way, but today's lead opinion in the Wall Street Journal might push it a little forward. I know no more than you do about the conflict-of-interest story and will wait to comment until I know more. But there's this paragraph screaming for commentary:
Finally, there is no question that many resent the tradition by which the nominee of the President of the U.S. becomes the president of the Bank. The resentment has been exacerbated by the staff's political preferences (roughly the same as that of most college faculty). Good philosophical arguments can be made for a more open presidential selection process. However, the same arguments can be made with respect to many other multilateral institutions such as the IMF; the African, Asian, European and Latin American multilateral development banks; and, last but not least, the U.N. The unproductive free-for-all that would be unleashed if all such understandings were abandoned would not be a pretty picture, nor, in my opinion, an improvement.
The first part -- that the average political preference of the World Bank's staff is equivalent to that of college faculty -- isn't altogether true. It's definitely left-of-center, no doubt, but most of these people are economists who happen to work in development. That group, by and large, is towards the left of the profession but still anchored by a deep respect for markets. You don't find that in the Department of the 3.7 GPA.

The second is quite reasonable. There has always been a tacit understanding of how posts in various multilateral agencies are divided between the G-7 or G-10 or G-whatever. If the EU would like to trade us the World Bank for the IMF, that's one thing. But the current push is just an attack on the US, which provides a large part of the funds for these organizations and therefore has paid for its position at the table. You might want to ask the Wolfowitz detractors if they would be willing to replace US funding of the multilaterals in return for the right to pick the WB president.

There's a running commentary on this blog, which appears not to favorable to Wolfowitz.