There is perhaps no greater problem that handicaps the flourishing of developing nations than that of corruption. Though corruption is associated with the original sin that marks the heart of every person, corruption is also a social scourge that debilitates the daily economic and legal transactions upon which all of us ultimately depend for our material survival. For many people, corruption is invisible, as it is often limited to specific sectors of the economy. For others, it is an omnipresent feature of their existence. In all cases, however, corruption is ultimately derived from the personal choices of individuals to violate the law that, as Saint Paul reminds us, is written on our hearts.
We must recognize that all societies, no matter how sound their moral and institutional cultures, are in some way marked by corrupt activities. The question is, what does the term corruption mean? By corruption, we do not necessarily mean crime per se. Tax evasion, for example, is a crime, but it is not corruption. However, bribing a tax-auditor is corruption because there is a voluntary transaction between the evader and the auditor with the intention of defrauding a third party (the government). Failure to stop at a red traffic light or to comply with the speed limit is a crime, but it is not corruption. Bribing a policeman to avoid the ticket is corruption.
Tragically, corruption is pervasive in developing nations. It is found often on the part of public officials who delay the issuance or processing of public documents unless a monetary inducement is offered. It is found in the typical mismanagement and appropriation of national budgets toward the personal gain of political leaders. And it is found in ordinary individual transactions in the form of fraud, price gouging, and organized crime.
Osvaldo Schenone is a native of Argentina with a PhD in economics from the University of Chicago. He is a member of the National Academy of Economic Science of Argentina and of the Panel of Fiscal Experts of the International Monetary Fund. He has also served as a professor of economics at the University of San Andres, Argentina, and at the Center for Macro-economic Studies in Argentina. He has been visiting professor of economics at the Catholic University of Chile, the University of California at Los Angeles, and as a lecturer at the Economic Development Institute of the World Bank. He has authored papers published in The American Economic Review, Public Finance|Finances Publiques, The American Economist, and in other scientific journals of Europe, United States, and Latin America.
Samuel Gregg is director of research at the Acton Institute. He has written and spoken extensively on questions of political economy, economic history, ethics in finance, and natural law theory. He has an MA in political philosophy from the University of Melbourne, and a PhD in moral philosophy and political economy from the University of Oxford, where he worked under the supervision of professor John Finnis.