Corruption Challenge Thailand
Transcript of Corruption Challenge Thailand
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DEVELOPMENT ECONOMICS AND
Prof. Robert Klitgaard
DEVELOPMENT ECONOMICS AND THE CORRUPTION CHALLENGE
Keynote Address
4th National Conference on Collective Action against Corruption
Bangkok, 8 October 2013
WHAT IS “CORRUPTION”?
• The word is related to “spoiling”The word is related to spoiling
• Historically, a judge’s selling a decision
• More generally, corruption is the misuse of office for private gain
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KINDS OF COSTS
• Economic costs Economic costs
• Social costs (inequity and injustice)
• Political costs (undermines democracy, solidarity, and human rights)
INVESTMENT AND GROWTH
• Countries with poor governance have
L i t t th thi l• Less investment, other things equal
• Less benefit from each dollar of investment.
• Who loses the most? The poor.
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WHAT IS SPECIAL ABOUT CORRUPTION?
• Duty vs. money: A service should be allocated by merit or eligibility or y y y g yneed, not according to bribes.
• An economic crime
• Calculation, not passion
• Supply and demand
• The institutions designed to control corruption can themselves be corruptedp
• When corruption is systemic
WHERE DOES THAILAND STAND?
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SOURCES
• Corruption Perceptions Index 2012
Gl b l C ti B t 2013• Global Corruption Barometer 2013
• Legatum Prosperity Index 2012
• Global Competitiveness Report 2013-14
• Structural equation modeling
CORRUPTION PERCEPTIONS INDEX 2012
• Transparency International’s combination of many surveys
• Thailand ranks of 176 countries
• Worse than Burkina Faso, El Salvador, Malawi
• Malaysia ranks 54, Indonesia 118, Singapore 5
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GLOBAL CORRUPTION BAROMETER
Thais rated 12 institutions in terms of corruption on a 1 to 5 scale:
1 ti 5 t l t1 = no corruption, 5 = extremely corrupt
• Military does best 1.8
• Political parties 4.0
• Police 4.0
• Courts 3.7
LEGATUM PROSPERITY INDEX 2012
“Most people would agree that prosperity is not just about money but also about the quality of life. The Index defines prosperity as both also about the quality of life. The Index defines prosperity as both wealth and wellbeing, and finds that the most prosperous nations in the world are not necessarily those that have only a high GDP, but are those that also have happy, healthy, and free citizens.”
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EIGHT DIMENSIONS
The Index benchmarks 142 countries around the world in eight categories: 1. Economy;
2. Education;
3. Health;
4. Entrepreneurship & Opportunity;
5. Governance;
6. Personal Freedom;
7 Safety & Security; and 7. Safety & Security; and
8. Social Capital.
THAILAND
• Ranks of 142 countries
• Malaysia 45
• Singapore 19
• Indonesia 63
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THAILAND
• Are business and government corrupt?Are business and government corrupt?
Thailand , world average
GLOBAL COMPETITIVENESS REPORT 2013-2014
• World Economic Forum surveys >13,000 respondents in 148 countriescountries
• Data on 111 variables related to business competitiveness
• Comparisons across countries
• Closely watched by international investors and financial institutions
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GLOBAL COMPETITIVENESS INDEX
• Thailand’s overall rank in 2013-14
• Malaysia 24
• Indonesia 38
• Singapore 2
GLOBAL COMPETITIVENESS INDEX
In some dimensions,Thailand is quite competitive
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GLOBAL COMPETITIVENESS INDEX
• Strength of investor protection 13 (of 148 countries)
• Better than Japan, Norway, France
GLOBAL COMPETITIVENESS INDEX
• Gross national savings 24
• Better than Australia, Netherlands, USA
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GLOBAL COMPETITIVENESS INDEX
• Business impact of rules on FDI 21
• Better than Germany, Belgium, New Zealand
GLOBAL COMPETITIVENESS INDEX
• Degree of customer orientation 15
• Better than Canada, United Kingdom, Finland
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GLOBAL COMPETITIVENESS INDEX
• Hiring and firing practices 31
• Better than Ireland, Israel, New Zealand
GLOBAL COMPETITIVENESS INDEX
• Availability of financial services 26
• Better than Japan, Denmark, France
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• USA • Belgium
BRAVO THAILAND! BETTER THAN
• France
• Germany
• Australia
• Japan
• Sweden
• Denmark
• Ireland
• U K • Japan • U.K.
• USA $49,922 • Belgium $43,686
BRAVO THAILAND! BETTER THAN
• France
• Germany
• Australia
• Japan
• Sweden
• Denmark
• Ireland
• U K • Japan • U.K.
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• USA $49,922 • Belgium $43,686
BRAVO THAILAND! BETTER THAN
• France 41,141
• Germany 41,513
• Australia 67,723
• Japan 46 736
• Sweden 55,158
• Denmark 56,202
• Ireland 45,888
• U K 38 589• Japan 46,736 • U.K. 38,589
WHAT IS THAILAND’S GDP PER CAPITA?
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WHAT IS THAILAND’S GDP PER CAPITA?
$5678
WHAT IS THAILAND’S GDP PER CAPITA?
$5678
Median of countries above:About $46,000
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• USA $49,922 • Belgium $43,686
BRAVO THAILAND! BETTER THAN
• France 41,141
• Germany 41,513
• Australia 67,723
• Japan 46 736
• Sweden 55,158
• Denmark 56,202
• Ireland 45,888
• U K 38 589• Japan 46,736 • U.K. 38,589
• Thailand 5,678
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GLOBAL COMPETITIVENESS INDEX
• Diversion of public funds 101
• Worse than Gabon, Nepal, Nicaragua
GLOBAL COMPETITIVENESS INDEX
• Public trust in politicians 127
• Worse than Nigeria, Pakistan, Mongolia
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GLOBAL COMPETITIVENESS INDEX
• Favoritism in decisions by gov. officials 93
• Worse than Timor-Leste, Malawi, Cambodia
GLOBAL COMPETITIVENESS INDEX
• Wastefulness of public spending 107
• Worse than Libya, Bangladesh, Senegal
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GLOBAL COMPETITIVENESS INDEX
• Transparency of gov policymaking 93
• Worse than Ecuador, Uganda, Mozambique
GLOBAL COMPETITIVENESS INDEX
• Reliability of police services 109
• Worse than Liberia, Nepal, Zambia
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• Bangladesh • Nepal
OH NO THAILAND! WORSE THAN
• Bolivia
• Burkina Faso
• Côte d’Ivoire
• Malawi
• Nicaragua
• Nigeria
• Pakistan
• Senegal
• Mozambique • Zambia
• Bangladesh $818 • Nepal $626
OH NO THAILAND! WORSE THAN
• Bolivia
• Burkina Faso
• Côte d’Ivoire
• Malawi
• Nicaragua
• Nigeria
• Pakistan
• Senegal
• Mozambique • Zambia
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• Bangladesh $818 • Nepal $626
OH NO THAILAND! WORSE THAN
• Bolivia 2532
• Burkina Faso 603
• Côte d’Ivoire 1054
• Malawi 253
• Nicaragua 1757
• Nigeria 1631
• Pakistan 1296
• Senegal 1057
• Mozambique 650 • Zambia 756
GLOBAL COMPETITIVENESS INDEX
“What are the most problematic factors for doing business in Thailand?”in Thailand?
1. Corruption
2. Government instability
3. Policy instability
4 I ffi i t t b4. Inefficient government bureaucracy
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STRUCTURAL EQUATION MODELING
• Dreher et al. (2007) estimate how much corruption affects a country’s GDPaffects a country s GDP
• Estimates for 100 countries in 1997
STRUCTURAL EQUATION MODELING
Because of corruption, Thailand lost
of GDP
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CONCLUSIONS
• Thailand has many competitive advantages
• The Thai people• The Thai people
• Macroeconomics
• Geography
• Some legal frameworks
• Among the foremost barriers to Thailand’s economic progress is
YOUR QUESTIONS AND COMMENTS?