Thursday, November 17, 2016

Will Trump transform the nature of corruption in America and amplify its influence?

We are used to corruption in which the rich buy political favor. What we need to learn to fear is corruption in which political favor becomes the primary driver of economic success.

Many American administrations have featured acts of venal corruption, and Trump’s will likely feature more than most. The larger risk, however, is that Trump’s lack of grounding in ideological principles or party networks will create a systemically corrupt government. Such governments, Wallis writes, “are rent creating, not rent seeking, governments” that operate by “limiting access to markets and resources in order to create rents that bind the interests of the ruling coalition together.”

This is how Vladimir Putin governs Russia, and how the Mubarak/Sisi regime rules Egypt. To be a successful businessman in a systemically corrupt regime and to be a close supporter of the regime are one and the same thing.

Those who support the regime will receive favorable treatment from regulators, and those who oppose it will not. Because businesses do business with each other, the network becomes self-reinforcing. Regime-friendly banks receive a light regulatory touch while their rivals are crushed. In exchange, they offer friendly lending terms to regime-friendly businesses while choking capital to rivals. Such a system, once in place, is extremely difficult to dislodge precisely because, unlike a fascist or communist regime, it is glued together by no ideology beyond basic human greed, insecurity, and love of family.
The death of civil society:
The risk is not that Trump becomes a dictator, but that civil society simply withers and dies. We all like to think we would stand up and do the right thing under difficult circumstances. But to be honest with ourselves, we are all susceptible to the push and pull of fear and greed — especially those of us with spouses and families to think of. A suborned regulatory state could easily quiet mass media criticism, defund opposition activity, and enrich politically friendly actors.

No comments:

Post a Comment