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Corruption and Democracy (Part 4 of 5)

© Jason Gottlieb

(This article is Part Four of a five-part series on "The Clash of Capitalism and Democracy in East Asia." For an introduction to the series, please see Part One.)

Corruption, unfortunately, is everywhere, but corruption on the Japanese scale is truly outstanding. Last month, Yasuyuki Yoshizawa was arrested for accepting 4.3 million yen (about US$330,000) from various banks. The kicker is that Yoshizawa was a high-ranking official of the Bank of Japan, and thus responsible for overseeing the banks that were spending up to $750 a night entertaining him at high-class restaurants and golf clubs. In the wake of this latest scandal (and the scandals keep piling up in Japan), the governor of the Bank of Japan, Yasuo Matsushita, has resigned his post in shame.

The manifestations of corruption creep up in all aspects of government. There is big corruption in a big arena, like the Bank of Japan scandal, and there is small corruption in a small arena, like a police officer that accepts a bribe to forget about a traffic violation. Any type of corruption, though, no matter how big or small, is a blow to democracy. In a system that should be ruled by transparent and predictable processes of law, corruption creates favorites, loopholes, and connections-based advantages, and fosters an unpredictable and opaque rule of personality.

Corruption is part and parcel of a capitalist system, where money is good, and more money is better. Certainly, corruption is not endemic to capitalism, nor limited to it. Indonesia, a heavily bureaucratic nation, is among the most corrupt nations in the world, and the former Soviet Union was rife with corruption in the party bureaucracy. Part of corruption, after all, is human nature. Even faceless, soulless government bureaucrats want to live in a nice place, dress well, and feel important, and no governmental system has a shortage of them. But capitalism poses a special, structural problem vis-a-vis corruption. Although virtually all known and tried societal systems value money, capitalism does so more openly and more pointedly than any other. A system that specifically values money so highly creates a moral hazard for people in positions of power to accept money for favors.

Other than just the human drive for a nicer life, which obviously cannot be addressed in any useful way in a democracy without legislating away basic freedoms, there are several factors that contribute to corruption. First and foremost, a problem with government jobs, especially in developing nations, is low pay. From Albania to Indonesia to Mexico to Zimbabwe, low-level government officials, including police officers, are often paid very little, for the basic reason that their developing governments cannot afford very much. Second, corrupt officials in many nations have little chance of being caught. Especially in nations that are just beginning to have a professional civilian police force, hiring additional hands for an Internal Affairs Division seems like a pipe dream when their main police force is often understaffed, and quality officers are rare.