CORRUPTION Syndromes of Corruption

158 Syndromes of Corruption
and face little legal or political constraint. Such uncoordinated monopolies,
with no restraints upon the prices they exact, can choke off whole
streams of economic activity (Shleifer and Vishny, 1993); unpredictable
corruption is likewise especially harmful to economic development
(Campos, Lien, and Pradhan, 1999). Even where Official Mogul corruption
coexists with rapid growth, as in China, it is difficult to argue that it is
somehow beneficial for development: other effects can include inhibiting
the national integration of markets; weakening secondary economic
institutions, such as bond and equity markets, and the reality-testing
and international integration functions they perform in a developing
economy (Karmel, 1996); stunting the growth of civil society by choking
off its economic base and autonomy; and increased externalities such as
environmental damage and social disruption.
A lack of electoral opposition and legal accountability does not mean an
absence of challenges, however. In a setting of weak institutions and
significant social change top figures may face separatist movements,
communal contention, personal rivals, or other forms of unrest. Any
such insecurity encourages rapacious ‘‘hand over fist’’ corruption
(Scott, 1972); so too, ironically, might poorly institutionalized efforts at
democratization, as we shall see. The personal agendas of top leaders can
thus make an immense difference: some may perceive threats to their
rule, while others do not; some may tolerate or encourage corruption
while others impose working limits upon exploitation, or even fight it.
Not surprisingly, this group is marked by wide variation in corruption and
development situations.
Three cases
In this chapter I consider three cases – the People’s Republic of China,
Kenya under Daniel arap Moi, and Indonesia during and following the
Suharto years – located in this category by the statistical analysis in
chapter 3 and collectively illustrating the systemic corruption problems
outlined above. All have experienced significant corruption; all have seen
ambitious elites exploit economic opportunities while most citizens
remain poor – at times, desperately so. None would qualify as a wellinstitutionalized
democracy. All have relatively intrusive but ineffective
states – arguably, a hallmark of Official Mogul abuses – and weak
mechanisms of accountability. Consider the indicators presented in
Table 7.1.
China and Kenya broadly fit the Official Moguls profile of weak
institutions, expanding economic opportunities, and undemocratic
politics. Indonesia’s Polity ratings improved markedly following the fall