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May 24, 2007



First Rodrik makes this claim:

"A development strategy that focused on anti-corruption in China would not have produced anything like the growth rate that this country has experienced since 1978, nor would it have resulted in 400 million plus fewer people in extreme poverty."

Then he offers this statement by Bert Hofman which seems to challenge the above claim:

"Sure enough, an anti-corruption strategy is not a development strategy, but not having the first may derail the latter. China is actually a case where rather stern action against corruption kept rent seeking in check...."

Hofman is saying that you can't have development without going after corruption, yet development strategies and anti-corruption strategies are two separate but complimentary strategies. Also that the World Bank didn't have to worry about corruption in China, because China was doing a good job keeping it in check. That takes most of the wind out of Rodrik's statement about anti-corruption strategies and the growth rates in China.

Rodrik seems to be asking "How much corruption should be tolerated to get maximum development?"

Since rents cause inefficiencies, wouldn't the logical conclusion be that allowing less rents would have produced an even faster growth rate in China, along with greater equality, bringing even more people out of poverty.

But this isn't about "the more" but "the most" efficient way to promote development.

Rodrik is saying that the World Bank shouldn't concentrate on anti-corruption strategies where corruption isn't the problem to development.

That statement seems obvious, but it begs the question. To make that statement Rodrik would have to show that corruption isn't causing the economic problems he sees as a greater barrier to development. For instance, if people in China save to much and spend to little because they don't trust their government, then, to some extent, both are corruption problems as much as development problems.

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