Corruption

parkingticket.jpg

If you were a diplomat, you wouldn't have to pay this.

rknickme
 

Professors Raymond Fisman and Edward Miguel, authors of Economic Gangsters: Corruption, Violence and the Poverty of Nations, have been studying corruption for many years now. Their book, which will be published in October, uses economics and econometrics to explain why organizations and countries succumb to bribery, extortion, favoritism and fraud.

In 2006, they published a working paper, entitled "Cultures of Corruption: Evidence From Diplomatic Parking Tickets." It got a lot of press.

Diplomats in New York, affiliated with the United Nations, have diplomatic immunity. From lots of things. Fisman and Miguel found that "there was essentially zero legal enforcement of diplomatic parking violations" in New York City. Basically, if a diplomat got a parking ticket from the NYPD, he didn't have to pay it. That said, some diplomats did.

Fisman and Miguel found an interesting correlation between the diplomats who did pay. And those who didn't: "...diplomats from high corruption countries (based on existing survey-based indices) have significantly more parking violations, and these differences persist over time." In simple terms, an ambassador from a corrupt country is less likely to pay a parking ticket than one from a less-corrupt country.

Last week, when Neal was on vacation, he read this piece, by Drake Bennett, published in The Boston Globe. It got him thinking about corruption. What causes it? Who causes it? And [how] can it be curbed?

We'll talk to Ray Fisman and Robert Klitgaard, an expert on corruption, currently the president of the Claremont Graduate University. And we want to hear from you. Have you ever taken a bribe? Or have you ever considered taking one? If you have, why? Did you think twice about it? Do you think that an organization or a city or a country can eliminate corruption?

1:57 PM ET | 08- 6-2008 | permalink

 

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The comments about corruption being cultural to some degree reminds me of when I traveled 25 years ago. Each country made it clear that banks were the only place to exchange money, yet I was constantly approached with the same story.."I'm planning on taking a trip to the US and want to save up some dollars." I resisted most of these overtures, especially in East Germany, lest I end up in detention somewhere. Yet, when in Cairo, I happened to go into the police station to ask where I could go to exchange money (because it was impossible to know what was where at that time, very chaotic), a uniformed gentleman asked me to follow him to his office. I was under the impression that he was the police chief or someone of relatively high rank. And then came the same story..."traveling to the US, need dollars..." He wanted me to give him the dollars for a higher exchange rate! This was a huge shock, but I came to learn that things do work differently in different places. I did exchange money with him - twice! I should have known better, but I was young and the lure of the additional money was too much (plus the fact that it was a scene out of a movie - smoky hallways, people wandering about without purpose, corrupt officials).

Sent by Irene | 3:26 PM ET | 08-06-2008

About a year ago, I was "guided" by a "friend" out of a moving car. In other words, I was thrown from a moving vehicle by someone that I no longer speak to. I broke my arm in a few places, but was okay considering how it could have turned out. Her family is wealthy, so she gave me $40,000 to keep it hush, hush. We made up a different story for the doctors, my family, and friends. To this day, no one knows the truth...well, of course, until now. Needless to say, we are not "friends" any longer.

Sent by Monika | 3:30 PM ET | 08-06-2008

Corruption is difficult to combat especially when it is exhibited from the highest levels of government, such as no-bid contracts for Haliburton awarded by an administration with ties to Haliburton at the highest levels. When does something cease being simple corruption and become war profiteering?

Sent by David Yohn | 3:31 PM ET | 08-06-2008

Surely this past eight years of national government there has been systemic corruption, or at least the appearance of that. External reviewers might be able to discern, investigate, and prosecute the corruption, but external viewers, if lawyers, seem to be part of the problems.

Can the guests discuss the US history and contemporary examples of corruption.


John

Sent by John Ford | 3:34 PM ET | 08-06-2008

I have a theory that barganing at the marketplace creates a climate that is just one step away from bribery or favoritism. For example, in cultures where purchases are done by bargaining, the merchant can sell to a relative or a friend at a discount, and overcharge a tourist. The merchant can either demand a favor, or expect a favor in return for giving favorable treatment. In the U.S., one just pays what is on the price tag ---no favoritism involved.

Sent by James | 3:37 PM ET | 08-06-2008

Sometime in elementary school the teachers in our grade set up a sort of student government, and with this an economic system in which our tender was known as 'Jackrabbit Dollars' or something cutesy like that. Students were posted in certain positions after volunteering or being voted in and then were paid a salary. The "working class" could earn "money" by accomplishing certain tasks; set amounts for certain grades, attendance levels, perks for doing little things extra.

The teachers intended that we use these "Jackrabbit Dollars" in exchange for things like getting to stand near the front of the line at lunchtime, or getting to spend an hour away from class in the library, and other things like that.

This all lasted only a couple of months.

It was only a matter of days before a few of us -- oddly, the GT kids -- realized that we could buy favors from those in positions of authority with "Jackrabbit Dollars." With that, we also learned that we could exchange real Dollars for fake dollars.

Eventually there was a rather advanced network of corruption and currency trading, even a black market where one could exchange 'Jackrabbit Dollars' off the books between students for unintended goods and services.

When teachers noticed that something was up they set up a series of reforms, and cut down on corruption and black market trades.

Though, what eventually brought down both the 'Jackrabbit Dollar' and the student government was a counterfeiting scheme run by a couple of members of the cabal I was in. When the teachers discovered that the market was becoming diluted and that some people just had too much money, they sought to root out the counterfeiters.

To our credit, no one talked. No one. With no one to punish, the dollar and government was abolished.

Sent by Joe | 3:38 PM ET | 08-06-2008

To answer the question, "who did he hurt?" posed to the contractor who took the $40k bribe----himself! My brother did business like this (repaired cars for cash on the weekends while working in his muffler shop during the week). He obviously lulled himself into believing this was ok, and actually clever to "beat the system"------when my father died, my brother was quite comfortable taking the lion's share of the assets, after allowing my father to believe his assets weren't worth much. My sister is living at the poverty level and would greatly benefit by receiving her share of what was clearly stated to be hers in my father's will.
This has ruined our family relationships--and I can only wonder about the status of my brother's soul.

Sent by Deborah Jett | 3:39 PM ET | 08-06-2008

Regarding your comments about Kenya. I would like to add that the corrupt culture:- and it is a culture, did not start with the first African leaders but went as far back as during the colonial era.I am sure that your guest can attest to the fact that one of the reasons corruption is so hard to combat, especially in Africa is because it also entails overhauling constitutions,which were created for the sole purpose of enriching the minority (white settlers) at the expense of the majority (indegenous kenyans.

Sent by Christine | 3:40 PM ET | 08-06-2008

Talking about corruption! I lived in Puerto Rico for some years. Every government that came into power claimed that it would clean-up the corruption of the previous administration but all they did is add their own layer to what was there already. As one person said, "better the crook you know will steal a little than one you don't know who could steal everything".

The San Juan AIDS Foundation was a prime example. The US government sent $3 million for direct services to people with HIV AIDS. Not one penny went to the people but all of the money was skimmed by the directors of the foundation. 15 people were convicted.

There was also the case of the police. The DEA did a sting that, in one year, sent over 60 police officers to jail for drug trafficing, often moving the drugs in their police cars while on duty. One officer told DEA officers how to murder someone and take their body to a certain place where sharks would eat it. SHE was convicted also.

All this on US taxpayer dollars!

Sent by Steve Cannon | 3:42 PM ET | 08-06-2008

I was visiting Ukraine a few years ago and had a conversation with a few people on why there is so much crime and corruption there, considering their laws are very similar to the laws of US. The response I received was something I will never forget. Their answer was "yes we have laws and we all know about them. However, we live by understandings, not laws. It is understood that if you do not pay the cops, the mob, city government, and whoever else comes into the shop, you will not have a business. It is understood that our salaries are too low for anyone to survive one. It is understood that we have to steal from our places of employment if we want to survive. We do not live in a country of laws; we live in a country of understandings." It was an eye opener.

Sent by Artem | 3:42 PM ET | 08-06-2008

I'm a teacher, and I have been offered bribes but never took one. I'm not really sure how serious they were. I have succumbed to a form of extortion wherin some kid made class so difficult so consistently over such a long period of time that I went out of my way to individualize instruction so that I would not have to deal with them any more than necessary. My question: Isn't the cap and trade approach to environmental protection compliance a pragmatic governmental acceptance and even bureaucratic assimilation of corruption? As a teacher, I would like to apply a cap and trade policy to ensure attendance/truancy compliance. Students with extra sick days could sell them to those who go over. This could also apply to grades. As middle man in this mutually beneficial exchange, I would of course be in a position to profit. Entrepreneurism, or corruption?

Sent by robrt shaun kilburn | 3:57 PM ET | 08-06-2008

As I listened to this discussion on the radio many years of my life came back strolling in my head. I have lived in it and visit it often, plus it is on the march also in the US. One aspect no one touched is how war, any war, breeds corruption in societies.
But the part that touched me most was a comparison made by the host btn Kenya and Tanzania where the latter was seen in a positive light. This picture was true then but it is a 25 year old image. Today - Tanzania is, according to most of us regular visitors, just as corrupt and probably more corrupt than Kenya. Recently a Tanzanian minister explained off a million dollars found in one of his foreign accounts as "being harrased for this 'small change' in that account". That for part of the money he is believed to have received as kickback in a state purchase deal! He subsequently resigned his cabinet position but remains in parliament and there is no sign any legal action will be initiated.

Sent by Tim Martina | 11:11 PM ET | 08-06-2008

...of course academic cheating on exams etc is a form of corruption...because the grades become the payment and make the difference between future pay scale and research money! Thank you.

Sent by Phoenix Mourning-Star | 5:38 AM ET | 08-07-2008

When I was in college I was a designated driver for some girls on a "bar crawl." I hadn't had a drop of alcohol all night. The state troopers were waiting for us to pull out of the bar, though. I had Ohio plates and was in school in Michigan. Unfortunately I had forgotten to transfer the plates to the new car I was driving. So, although I was obeying all traffic laws they were able to pull me over for that, and they took my license and went back to their car. They made me get out of the car by use of a megaphone, but they didn't give me any sobriety tests. They had me walk over to their window so that no one else could here. Then they told me that they had to take away my license because I was from out of state unless I could give them $100 right then. Obviously, being a college student, I didn't have that kind of money on me. So, they kept my license and followed me home. I went to the court house the next day to pay the fine and get my license back and found out that the fee was only $65 dollars. When I asked the clerk why I was told by the troopers that it would be $100 she simply said "oh well...they don't know." I'm annoyed by it mostly because I was doing the right thing by being a DD and although it is my fault for forgetting to transfer over the plates, they could have at least not tried to take extra money from me.

Sent by Lauren | 11:46 AM ET | 08-07-2008

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