Edition: U.S. / Global

What Makes Nations Turn Corrupt?; Reformers Worry That Payoffs and Theft May Be Accepted as Normal

Published: August 28, 1999

As old as the forbidden fruit, and as hardy a perennial, corruption is back in.

Take Russia. When the Soviet Union first collapsed, the first worry in the West was of a Communist revanche. Then it was mass hunger. Then it was resistance to radical reform. Now, virtually to the exclusion of everything else, it is ''koruptsiya'' -- the image of last week's Communists, yesterday's reformers and over-dressed ''New Russians'' amassing billions through plunder and crony capitalism.

Westerners who so recently demanded ''shock therapy'' for the Russian economy now demand to know ''who lost Russia,'' as if it has moved beyond redemption.

The current reports about huge sums of Russian money flowing through the Bank of New York only reinforce the notion of a nation whose entire economy, Government and military have succumbed wholesale to gangsterism, greed, embezzlement, cronyism and bribery, all with a bewilderingly sophisticated manipulation of global monetary mechanisms. The fact that many other former Soviet republics and some Eastern European countries have fallen prey to the same plague has given rise to hand-wringing about the deep scars of Communism, or to musings about an innate proclivity for corruption in certain cultures.

The preoccupation with corruption is hardly limited to the former Communist countries, however. The financial turmoil in Indonesia and across Asia has focused new attention on corruption there. James D. Wolfensohn, the president of the World Bank, has made control of corruption in client nations a top priority.

Transparency International, an organization founded in 1993 by Mr. Wolfensohn's predecessor, Peter Eigen, has developed a ''Corruption Perception Index'' in which nations are ranked according to the perceptions of surveyed businessmen. Though essentially subjective, the listings -- with Denmark, Sweden and Canada currently rated as least corrupt and Russia, Colombia, Indonesia and Nigeria as most -- have fired debate on the causes and sources of the blight.

Yet if all this fuss gives the impression that corruption is the No. 1 problem of the former Communist and developing countries, not everyone agrees even on what ''corruption'' is, or how evil are its effects.

''Fears that the undoubted corruptions of the transition process have somehow embedded themselves deep within society and state are rampant throughout the former Soviet empire,'' wrote Marek Hessel and Ken Murphy in a report for Transparency International.

''Whether real or unreal, such widespread, sometimes even paranoid, anxieties raise important questions. Is corruption merely a waste product of economic liberalization, a transitory phenomenon that will recede as the transition winds down? Or is it something more sinister, a paralyzing threat to economic growth and Soviet progress at work?''

For example, much of the plunder of Russia, though obviously wrong and harmful, may be technically legal, not only because pertinent laws have not been written, but because it is done under the rubric of ''privatization.''

Some have argued that crime has played a central role in building states and fortunes. ''Behind every great fortune,'' Balzac once noted, ''is a crime.''

When the excesses of privatization were first noted in Russia, there was a widespread notion that the country was simply undergoing a mandatory phase of capital accumulation through ''robber barons.'' Alongside that was an argument that such cronyism is universal, only that in developed societies it is legalized through such channels as campaign giving.

There are economists who still argue that corruption on a certain level serves a beneficial purpose -- that it ''greases the wheels'' of bloated, underpaid and inefficient bureaucracies, allowing energetic and aggressive enterprises to break through. A senior official in Singapore is reported to have said some years ago that the only thing worse than an overregulated corrupt country was an overregulated noncorrupt country.

The argument is especially popular among some otherwise respectable multinational corporations that argue that they have no choice but to adapt to local culture when working in developing or former Communist countries. The same argument could be heard in defense of the generous ''gifts'' given members of the International Olympic Committee by officials in Salt Lake City in their successful bid for the Games. Such practices, in turn, have prompted some reformers to argue that the developed countries and their multinationals are the worst culprits in sustaining corruption.

Attempts to develop a unified theory of corruption, however, tend to founder on facts. If Communism is the culprit in the former Soviet Union and Eastern Europe, then how to explain that Estonia has far less corruption than neighboring Latvia? And anyone who reads about mob activities in the United States, or the cover-up by Government officials of dioxin in Belgian poultry feed, or the assassination of Presidential candidates in Mexico, knows that corruption is thoroughly universal.