The New York Times and Squishy Theories of Corruption

Two articles from the December 23 New York Times merit a bit of unpacking. The articles — one on Ghana’s upcoming elections, the other on the rise of Islamic movements in Jordan — tout two widely-held but rarely proven theories of corruption: that corruption inhibits growth, and that corruption is a motivator for radical, Islamic terrorism.

The nut graf of the Ghana piece, by Lydia Polgreen, argues:

Ghana has long been a favorite of foreign donors and Western governments in a region often known for brutal civil wars, corruption and tyranny. With its growing economy and squeaky-clean image, Ghana is a frequently cited success story.

Yet roiling just below the surface are tensions over how the country has been governed, who is benefiting from economic growth and whether corruption is on the rise. Some people here worry that the country’s image as a bastion of peace and democracy is merely a sign of the low expectations outsiders have for Africa.

Later in the piece, we read:

“This has been a period of increasing corruption and a broadening gap between rich and poor,” said James Gbeho, a senior opposition official who has served in many top government posts over the years. “For most people, progress has been an illusion.”

The Ghana argument raises important core issues for those of us working on anti-corruption efforts. The convention wisdom is that corruption is bad for growth, an argument the Polgreen piece makes (to be fair, the piece emphasizes the inequality argument just as much as corruption’s effect on overall GDP).

But can we prove that? Much of the original academic work that sought to link corruption to growth was based on very squishy data — notably, imprecise business firm surveys, the Corruptions Perceptions Index, and later, the World Bank Institute’s Worldwide Governance Indicators. But as later critiques have shown, those data are often inappropriate for use in cross-country analysis or to track change over time. Indeed, Global Integrity’s own data have never shown a clear link between anti-corruption performance and economic growth. So what we’re left with is a conventional wisdom without a whole lot of empirical evidence to back it up. And as Polgreen writes:

Ghana won its independence the same year as Malaysia, another former British colony. But 50 years later, Ghana remains among the poorest nations of the world, while Malaysia is far ahead of it in many measures of development, including per capita income, life expectancy, literacy and school enrollment. This African giant, it seemed, had feet of clay.

Does anyone want to argue that it was Southeast Asia’s clean record on corruption that spurred growth in the Asian Tigers while Africa lagged behind? This is a major gap in the field that needs to be filled.

The Jordan article, by Michael Slackman, is another in a long series of pieces to note the seemingly common-sense linkages between corruption and Islamic terrorism. Unemployed youths turn to radical Islam as their only outlet for venting frustration against their corrupt governments, and we end up with new generations of Al Qaeda, right? Seems to make sense. As Slackman writes:

As a high school student, Mr. Fawaz, 20, had dreamed of earning a scholarship to study abroad. But that was impossible, he said, because he did not have a “wasta,” or connection. In Jordan, connections are seen as essential for advancement and the wasta system is routinely cited by young people as their primary grievance with their country.

So Mr. Fawaz decided to rebel. He adopted the serene, disciplined demeanor of an Islamic activist. In his sophomore year he was accepted into the student group affiliated with the Muslim Brotherhood, Jordan’s largest, most influential religious, social and political movement, one that would ultimately like to see the state governed by Islamic law, or Shariah. Now he works to recruit other students to the cause.

And later in the article:

Indeed, as Islamist movements have swelled, governments across the Middle East have chosen both to contain and to embrace them. Many governments have aggressively moved to roll back the few democratic practices that had started to take root in their societies, and to prevent Islamists from winning power through the voting booth. That risks driving the leaders and the followers of Islamic organizations toward extremism.

To be honest, all of this makes sense to me from an anecdotal point of view…except we have very little data to back it up as a defensible theory. I have yet to see (and would welcome references from anyone who has!) a solid study linking corruption to terrorism. If you think the data problem is serious for corruption metrics, the terrorism data may be even worse — the “one man’s terrorist is another man’s freedom fighter” problem looms large. Most available terrorism data are by definition incomplete and rely on the “coding” of events covered in open source news media (here’s one example). That data is the best we’ve got, but is it good enough to link corruption to terrorism? I’m not entirely convinced.

For more on anti-corruption efforts in Ghana and Jordan, stayed tuned for the upcoming Global Integrity Report: 2008, which will feature fresh data from each country.

Until then, see the previous Global Integrity Report: Ghana and Global Integrity Report: Jordan.

— Nathaniel Heller