According to conventional wisdom, corruption causes poverty. That is to say, when a nation is corrupt, its people are impoverished. The Philippines during the Marcos administration is often cited as a perfect case in point.<\/p>\n
A serious look at the successful economic development of such countries as Korea, Taiwan and Japan, however, might tend to discredit (or at least cast some serious doubt upon) this conventional view of poverty and corruption. Japan, Korea and Taiwan have all been known to be significantly corrupt regimes over the past 50 years. Yet, despite their fairly widespread corruption, no pundit can legitimately deny the fact that these Asian nations have achieved remarkable economic success since the end of World War II.<\/p>\n
In the case of Japan, remember that for the past 50 years, the Japanese government has been ruled by one political party, the Liberal Democratic Party. And here bear in mind
\nthat one party control tends to concentrate great power into that political party; and, as Lord Acton once proclaimed, “absolute power tends to corrupt absolutely.”<\/p>\n
Besides, with all of its cultural emphasis on status and relationships, the Japanese government is bound to be a corrupt regime anyway–even to this day. Japanese bribery scandals are well-documented. Yet, even with the economic recession and recent years of stagnation, no one can legitimately claim that the Japanese people are poor. On the contrary, they still have the second largest economy in the world.<\/p>\n
Much like Japan, South Korea was also ruled by one party since 1953: by the Korean military. For decades since the end of the Korean War, Korean generals essentially ruled South Korea under martial law. One South Korean president was even jailed and convicted on graft charges. South Korea certainly ranks high in government corruption, yet it is not exactly one of the world\u2019s poorest nations.<\/p>\n
Like the Republic of South Korea, Taiwan was also established under corrupt military command. It was established by General Chang Kai-Shek and his nationalist KMT party, which fled the Chinese mainland in 1949. One of the reasons the nationalist Chinese lost the mainland was because of its rampant corruption. Yet, here again, despite the corruption, Taiwan is still a rich country.<\/p>\n
Every country in the world suffers from government corruption to one degree or another. Even the United States of America suffers from government corruption. Rich countries and poor countries alike have to contend with corruption.<\/p>\n
What then should we conclude about corruption? Well, we obviously have to agree that it does not necessarily lead to poverty. It depends on the type and magnitude of the corruption.
\nI think, too, that each country might have a kind of natural rate of corruption (as in a “natural” rate of unemployment)–a corruption threshold beyond which mass poverty results.
\nCorruption should be studied very carefully within a solid economics framework. Economists should develop corruption indexes and study their effects, if any, upon the economy (or economies). Until then, let us reserve judgment on corruption (at least from an economics point of view; it should be morally condemned, of course).<\/p>\n","protected":false},"excerpt":{"rendered":"
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