Corruption is widely acknowledged to distort markets, undermine the rule of law, damage government legitimacy, and hurt economic development. The global anticorruption movement has gained ground since the mid-1990s, but its key agents -- developed and developing countries, international organizations, and MNCs -- must do more to prevent and punish misbehavior systematically.
BEN W. HEINEMAN, JR., is a Senior Fellow
at the Belfer Center for Science and International Affairs at Harvard's Kennedy School
of Government and former Senior Vice President for Law and Public Affairs of General
Electric. FRITZ HEIMANN, a Co-founder of Transparency International, was
Chair of Transparency International-USA from 1993 to 2005.
A WAYS TO GO
Since the mid-1990s, the issue of corruption has gained a prominent place on the global agenda. International organizations, including the Organization for Economic Cooperation and Development (OECD) and the UN, have adopted conventions requiring that their members enact laws prohibiting bribery and extortion. International financial agencies, notably the World Bank, have announced programs aimed at ensuring fair and open contracting for their projects and stopping misappropriation by government officials. Most nations have enacted some type of anticorruption law. International business groups have promulgated model codes of behavior, and multinational corporations (MNCs) now claim to be implementing antibribery programs. The leading nongovernmental organization (NGO) in this area, Transparency International, has conducted analysis and advocacy through chapters in over 90 nations. The international media report instances of corruption in high places virtually every day (often at great risk).
Underlying these changes in rules, rhetoric, and awareness is the growing recognition that bribery and extortion have demonstrably deleterious consequences. Gone is the day when some pundits seriously argued that corruption was an efficient corrective for overregulated economies or that it should be tolerated as an inevitable byproduct of intractable forces. The true impact of corruption is now widely acknowledged: corruption distorts markets and competition, breeds cynicism among citizens, undermines the rule of law, damages government legitimacy, and corrodes the integrity of the private sector. It is also a major barrier to international development -- systemic misappropriation by kleptocratic governments harms the poor.
This is a premium article
You must be a Foreign Affairs subscriber to continue reading. If you are already a print subscriber, click here to activate your online access.
Log In
Buy PDF
Buy a premium PDF reprint of this article.Related
Economic journalist Martin Wolf adds sharp insights to the trade-liberalization debate and scores a major victory against critics of globalization.
Virtually last among the world's major industrial nations-but by no means least-the United States has now agreed to offer some form of tariff preferences to imports from developing countries. President Nixon's Latin American policy address last October, followed by his statement on November 10, signaled what amounts to a major shift in U.S. policy by calling for a broad system of generalized preferences, with the proviso that if this cannot be achieved, the United States may extend regional preferences to Latin America alone.
America's economy is in its eighth year of sustained growth, transcending the German and Japanese "miracles." This is no fluke. America's unique brand of entrepreneurial capitalism is based on a series of advantages that explain the stunning success of the 1990s and provide the basis for extending this winning streak. These strengths include deft managers, technological innovation, and a culture that values rugged individualism -- all fueled by finance capital that can nimbly meet the needs of a globalized, rapidly changing economy. Furthermore, the era of the deficit is over. Pessimists who warn of inflation should be ignored; American business leaders understand that today's low level of inflation is self-perpetuating. America's prosperity is structural, not transient, and its lead over Europe and Asia will only widen with time. America had the twentieth century. It will also have the twenty-first.
