April 07, 2005

Governments in Corrupt Under-Developed Countries

Pelle Braendgaard at EconoTrix has, as usually, interesting articles about Danish and Third World economics and politics. His recent article Foreign hightech funds to flow into developing world rulers coffers tells about a European Digital Tax initiative to help "to provide hi-tech tools for poor nations". Pelle argues that this initiative is useless because:

  • The money will end up in the coffers of corrupt rulers
  • The poor economy in Third World counties is the fault of the local governments and dictators

It is a bit too simplistic to say that the economic problems (e.g. due to telecom monopolies, insane tax laws) are the fault of the government. For instance, (my native) Serbia relatively recently managed to transition from a light dictatorship (under Milosevic) to a free market economy. However, as soon the Prime Minister Djindjic managed to mount a successful campaign against crime, he was assassinated.

So, the government officials cannot change things for the better, even if they wanted to and knew how to. There is too much pressure from local millionaires businessmen who either bribe or intimidate officials.

Just blaming the local government does not make us any closer to the goal. I think that the answer is financing grassroots movements and providing technology and training to promote free speech. That is way cheaper and more effective (examples Easter Europe) than economic sanctions (e.g. Iraq, Cuba) or military invasion (e.g. Iraq, Afghanistan, Chechnya).

Posted by laza at 08:34 PM | TrackBack