BOOK REVIEW

International Handbook on the Economics of Corruption.Edited by Susan Rose-AckermanEdward Elgar Publishing, Cheltenham, U.K. 2006,ISBN 1-84542-242-2, 615 pages , £150.00 (Hardcover)

Gerald E. Caiden

Published online: 6 June 2007# Springer Science + Business Media B.V. 2007

Corruption is receiving increasing attention in government circles, especially criminaljustice agencies, as it takes on novel forms in this modern information technology era inwhich victims are rarely aware of how they have been cheated and perpetrators caneliminate their tracks. Money laundering of the proceeds of corrupt practices is on such alarge scale that the economies of many poor countries are handicapped while rich countriesbenefit. This aspect, along with many others, is dealt with in this collection of 19 essayscontributed by international specialists on the economics of corruption brought together byone of the foremost experts on the subject whose pioneer research (Rose-Ackerman 1978)remains a landmark. This handbook is not for the unsophisticated nor is it for theeconomist’s economist as it ranges wider than just economic analysis, econometrics,fundamentalist hardline rent-seekers, and classical economists who embrace socialDarwinism and confuse the selfish genes of contemporary sociobiologists with selfishand greedy economic behavior. It takes a much more rounded institutional approach ofapplied social science with a more humanitarian, moral, and Keynesian centralist position,demonstrating how the phenomenon of corruption really exists in practice.

When Susan Rose-Ackerman first embarked on research into the economic aspects ofcorruption, she was hard put to find anything at all as the literature was sparse and relied onmuch the same sources. The subject was virtually taboo. Clearly, corruption existed andwhen one came across it, it was distasteful, annoying, and offensive, as it remains, but whatcould one do about it? One had little option but to go along with it or refuse to comply,thereby suffering the consequences of seeing others less scrupulous take advantage of theiropportunities. That in some countries corruption was a way of life was unfortunate probablybecause they did not know any better or suffered from scarcity (of almost everything) orhad self-serving rulers who exploited their authority. In any event, it was hardly a subjectfor serious scientific study. What would one look for? How would one go aboutinvestigating it? Where would one begin, given that it was a somewhat hidden and furtiveactivity? Might there not be dire consequences to oneself if one uncovered too much,

Asian Criminology (2007) 2:81–83DOI 10.1007/s11417-007-9029-9

G. E. Caiden (*)University of Southern California, Los Angeles, CA, USAe-mail: caiden@sppd.usc.edu

revealed what those in authority did not want known, and exposed the powerfully corruptwho could exact vengeance upon whistleblowers?

But the spirit of inquiry could not be denied. The presence of an underground economy,the existence of organized crime, and the evidence of gross profiteering could hardly beignored. Surely, these could be investigated, and any meaningful findings would attract anaudience somewhere. This has indeed proven to be the case. An intrepid band ofresearchers refused to be discouraged and, with much patience and tenacity, have lookedinto common forms of corruption, official misconduct, unethical business, and misuse ofscarce resources. These pioneers came at these topics from many different perspectives—philosophical, ethical, political, social, cultural, religious, and of course economical becausescarcity was a major characteristic of corruption however defined. After all, people whoneeded something badly enough were willing to pay any price (not necessarily in monetaryterms) asked and people who had it in their power to supply could exact a special price tosatisfy the former. This economic slant could be employed to discover why internationalaffairs were distorted, why some countries fared better than others, why some societies hadhigher standards of integrity than others, where the rule of law meant very little, and howauthority could be abused, misused, and evil.

This handbook demonstrates how this economic approach has paid off. Professor SusanRose-Ackerman has carefully selected her contributors and has done an excellent job ofarranging them from the macro global perspective of the extent of corruption amongcountries (Part I) to micro case studies (Part V) of specific public service deliverydistortions in public works management in Italy, tax administration in Uganda, customsreform in the Philippines, and pharmaceutical selection in Bulgaria, and, in between, Part II:Corruption and Institutional Structure dealing with bribery, political constraints indemocracies, decentralization and accountability, bureaucratization, and the particularproblems of developing countries; Part III: Corruption in the Transition From Socialism,dealing with anti-corruption programmes and the legacy of central planning in China andRussia; and Part IV: Surveys and Experiments, covering integrity, regulatory capitalism,international business, and laboratory experiments on corruption. Moreover, ProfessorRose-Ackerman has penned a gem of an Introduction and Overview that places the wholesubject in context, referring to the circumstances in which corruption occurs, howcorruption is differently regarded, how different facets of corruption require differenttreatment, and what makes for more effective anti-corruption campaigns. Readers couldwell just read her contribution.

However, in her summaries of the contributions, she glosses over some unfortunateblemishes in this economic approach. First, the contributors to Part I are so busy measuring,based on the questionable observation that only when one can measure something can oneimprove it (p. 52), that they stop far short of even suggesting possible effective containmentstrategies. They rely too much on unrepresentative, biased opinion surveys based almostexclusively on Western cultural values, and their imperfect scientific analysis is dolled up tobe definitive whereas it consists of merely "guesstimates" about different forms ofcorruption that may be found in any particular country. In short, this is pseudoscience at itsbest (or worst).

Second, the contributors to Part II take much of their information at face value. Theyseem to believe that formal descriptions of how things are supposed to work are actuallyfollowed in practice. But when it comes to corruption, the informal workings of institutionsare far more important clues as to why corruption occurs and is protected and thereforepersists despite the best efforts to combat it. Nothing at all is said of corrupt practicesoutside government and the public sector, as if these did not exist or had no bearing on why

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corruption occurs in public organizations although they are clearly linked and point toserious lapses in integrity in social behaviour, an aspect that is totally ignored by thecontributors.

Third, the contributors to Part III are not dealing with socialism at all but withtotalitarian communist regimes that may share some common features in their governancebut when closely studied have much less in common and cannot be branded together. InWestern terms, all of them have had, by definition, corrupt and corrupted political systems.The extent that they have since been able to democratize differs widely between a Finlandand a Vietnam or a Ukraine and an Albania, and their ability to tackle corruption goes backto the failure of communism despite its authoritarianism and so-called re-education, toovercome previous pre-existing corruption, let alone deal with the inner corruption of thecommunist party elite.

Fourth, both Parts IV and V, while well written and insightful, constitute a hodge-podgeof essays that rarely mesh together, as if, in their over-specialization, they were dealing withquite separate phenomena. It resembles different blind folks touching different parts of anelephant without seeing the whole elephant. Corruption, like the elephant, is a very strangecreature indeed, and the contributors, like the blind folk, describe only what they want todescribe and leave it at that, whereas the phenomenon of corruption is so much morecomplex, complicated, and taxing than the simplistic Friedmanism that has regainedcommand of so much contemporary economic theory. At least, none of the contributorshave fallen into this particular trap.

References

Rose-Ackerman, S. (1978) Corruption: A study in political economy. New York: Academic Press.

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