JAPAN
14 April 2014
Corruption's many colors
Corruption, the abuse of entrusted power for private gain, has many colors, and most regrettably touches all of our countries, including Japan and the United States.
Corruption, the abuse of entrusted power for private gain, has many colors, and most regrettably touches all of our countries, including Japan and the United States.
Transparency International (TI), a non-governmental organization (NGO), does very important work in pursuit of its vision of a world in which government, politics, business, civil society and the daily lives of people are free of corruption.
One of TI's most important initiatives is its Corruption Perceptions Index. Based on expert opinion, the index measures the perceived levels of public sector corruption in countries worldwide.
This index covers some 177 countries. Broadly speaking, the advanced OECD countries have the best scores. Denmark, New Zealand, Singapore, Australia, Canada and some smaller European countries fill the top ten for the least corrupt countries. Japan is a bit further down the list at 18th place, just ahead of the 19th-placed United States.
Most Asian developing countries slide much further down the long list for corruption, with China being 80th, India and the Philippines both at 94th, and Indonesia 114th.
As important as this TI survey is, it only presents a partial perspective of the world corruption problem. To some extent, the more sophisticated OECD countries tend to have more sophisticated forms of corruption.
In Japan, for example, "the direct exchange of cash for favors from government officials ... is extremely rare", as the US State Department noted. At the same time, "some have described the situation in Japan as 'institutionalized corruption'", as the US State Department also noted.
"The web of close relationships between Japanese companies, politicians, government organizations, and universities has been said to foster an inwardly-cooperative business climate that is conducive to the awarding of contracts, positions, etc, within a tight circle of local players. This phenomenon manifests itself most frequently and most seriously in Japan through the rigging of bids on government public works projects."
The Japanese authorities have acknowledged the problem of bid-rigging and have taken steps to address it. But as the US State Department says, "questions remain as to whether the Act's disciplinary provisions are strong enough to ensure officials involved in illegal bid-rigging are held accountable". "Complicating efforts to combat bid rigging is the phenomenon known as amakudari whereby government officials retire into top positions in Japanese companies, frequently in industries that they once regulated."
As usual, the US is amazing in the way that it passes moralistic judgements on the behaviour of other countries. All too often, it is a case of "the pot calling the kettle black".
The United States government is now increasingly captured by corporate America, and practices its own system of crony capitalism. For example, there is the military–industrial–congressional complex which comprises the policy and monetary relationships which exist between members of Congress, the US administration, the national armed forces, and the military industrial base that supports them. This vast complex involves financial contributions to Congress members, and lobbying for defense contracts, for political approval for military spending, and to support the armed forces and its bureaucracy.
War has always been good for business. It is thus not surprising that the pro-business US Republican should love launching wars, and lobby against cuts in military spending.
Then there is the "Wall Street-Washington financial complex", the close alliance between Wall Street, the Federal Reserve, the Treasury Department, the West Wing of the White House and the economics departments of major universities. Wall Street lobbies for soft regulation and supervision. It finances US government elections. Its friends in government give it bailouts when it screws up. Many consultant economics professors write in the press and appear on television with their support for these policies. And all too often, people float between these different sectors, reinforcing the reality that it is just one big system.
In short, the US practices a vast system of crony capitalism, that undermines the integrity of its own democratic governance.
As President Obama has said himself, the struggle against corruption is “one of the great struggles of our time.” The costs of corruption are immeasurable – injustice, misallocation of resources, economic decay. Corruption affects a staggering number of livelihoods and lives and erodes the faith of citizens in their governments and in the rule of law.
The US Delegation to the OECD claims that "for years, the United States has led the fight against corruption" at the OECD. It is also leading the fight against tax havens when its own states of Delaware, Nevada and Wyoming are some of the worst examples.
The unfortunate reality is that as our countries develop and become more sophisticated, the forms and practices of corruption also become more sophisticated. And most regrettably, the US may be the most sophisticated country of all -- as highlighted by the seeming never-ending scandals that come out of Wall Street.
Executive Director
Asian Century Institute
www.asiancenturyinstitute.com
Transparency International (TI), a non-governmental organization (NGO), does very important work in pursuit of its vision of a world in which government, politics, business, civil society and the daily lives of people are free of corruption.
One of TI's most important initiatives is its Corruption Perceptions Index. Based on expert opinion, the index measures the perceived levels of public sector corruption in countries worldwide.
This index covers some 177 countries. Broadly speaking, the advanced OECD countries have the best scores. Denmark, New Zealand, Singapore, Australia, Canada and some smaller European countries fill the top ten for the least corrupt countries. Japan is a bit further down the list at 18th place, just ahead of the 19th-placed United States.
Most Asian developing countries slide much further down the long list for corruption, with China being 80th, India and the Philippines both at 94th, and Indonesia 114th.
As important as this TI survey is, it only presents a partial perspective of the world corruption problem. To some extent, the more sophisticated OECD countries tend to have more sophisticated forms of corruption.
In Japan, for example, "the direct exchange of cash for favors from government officials ... is extremely rare", as the US State Department noted. At the same time, "some have described the situation in Japan as 'institutionalized corruption'", as the US State Department also noted.
"The web of close relationships between Japanese companies, politicians, government organizations, and universities has been said to foster an inwardly-cooperative business climate that is conducive to the awarding of contracts, positions, etc, within a tight circle of local players. This phenomenon manifests itself most frequently and most seriously in Japan through the rigging of bids on government public works projects."
The Japanese authorities have acknowledged the problem of bid-rigging and have taken steps to address it. But as the US State Department says, "questions remain as to whether the Act's disciplinary provisions are strong enough to ensure officials involved in illegal bid-rigging are held accountable". "Complicating efforts to combat bid rigging is the phenomenon known as amakudari whereby government officials retire into top positions in Japanese companies, frequently in industries that they once regulated."
As usual, the US is amazing in the way that it passes moralistic judgements on the behaviour of other countries. All too often, it is a case of "the pot calling the kettle black".
The United States government is now increasingly captured by corporate America, and practices its own system of crony capitalism. For example, there is the military–industrial–congressional complex which comprises the policy and monetary relationships which exist between members of Congress, the US administration, the national armed forces, and the military industrial base that supports them. This vast complex involves financial contributions to Congress members, and lobbying for defense contracts, for political approval for military spending, and to support the armed forces and its bureaucracy.
War has always been good for business. It is thus not surprising that the pro-business US Republican should love launching wars, and lobby against cuts in military spending.
Then there is the "Wall Street-Washington financial complex", the close alliance between Wall Street, the Federal Reserve, the Treasury Department, the West Wing of the White House and the economics departments of major universities. Wall Street lobbies for soft regulation and supervision. It finances US government elections. Its friends in government give it bailouts when it screws up. Many consultant economics professors write in the press and appear on television with their support for these policies. And all too often, people float between these different sectors, reinforcing the reality that it is just one big system.
In short, the US practices a vast system of crony capitalism, that undermines the integrity of its own democratic governance.
As President Obama has said himself, the struggle against corruption is “one of the great struggles of our time.” The costs of corruption are immeasurable – injustice, misallocation of resources, economic decay. Corruption affects a staggering number of livelihoods and lives and erodes the faith of citizens in their governments and in the rule of law.
The US Delegation to the OECD claims that "for years, the United States has led the fight against corruption" at the OECD. It is also leading the fight against tax havens when its own states of Delaware, Nevada and Wyoming are some of the worst examples.
The unfortunate reality is that as our countries develop and become more sophisticated, the forms and practices of corruption also become more sophisticated. And most regrettably, the US may be the most sophisticated country of all -- as highlighted by the seeming never-ending scandals that come out of Wall Street.
Author
John WestExecutive Director
Asian Century Institute
www.asiancenturyinstitute.com