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# Are there any hard figures showing that corruption damages a country’s economy?
Corruption damages a country’s development in several ways. It reduces growth, it scares away foreign investment and it channels investment and loan and aid funds into "white elephant" projects of little or no benefit to the people but which carry with them high returns to the corrupt decision-makers.
According to research conducted by the World Bank, widespread corruption can cause the growth rate of a country to be 0.5 to 1.0 percentage points lower than that of a similar country with little corruption. Widespread corruption can also radically reduce inward investment. A study based on the TI Corruption Perceptions Index shows that a rise in corruption levels from that of Singapore (very low) to that of Mexico’s (very high) is equivalent to raising the marginal tax rate by over twenty percent. As a single percentage point increase in the marginal tax rate is calculated as reducing inward foreign investment by about five percent, in the instance given corruption has cost the country and continues to cost the country virtually all of the foreign direct investment it might otherwise have expected to receive."
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UPDATE 2:00 p.m.: Two years ago, as I wrote in a column versions of which were published in The Tennessean (here thanks to the Google cache)and the Memphis Commercial Appeal (not online), the Better Government Association ranked Tennessee's legislature 44th out of 50 states on the integrity scale, based on its analysis of the freedom of information laws, whistleblower protection laws, campaign finance laws, conflicts-of-interest laws and laws governing legislators accepting gifts, trips and honoraria in all 50 states. (You can see the BGA's Integrity Index here in a big PDF file.)
And four years ago, the Center for Public Integrity found that a third of Tennessee lawmakers sat on legislative committees that regulated their own professions or businesses, a third received income from a government agency other than the legislature (even though the legislature often subsidizes those institutions), and 15% of lawmakers had financial ties to businesses or groups that lobby state government. (The Center for Public Integrity issued a new version of that report in September 2004, which you can read here.
Of 126 state legislators in office in 2001 and disclosing their interests in 2002, in Tennessee, according to the CPI, 23.8 percent sat on a legislative committee with authority over a professional or business interest; 8.7 percent had financial ties to businesses or organizations that lobby state government; and 19 percent received income from a government agency other than the state legislature.
Newton is a good example. While he makes his living in the railcar industry, he sits on the House Transportation Committee.
The Center also annually publishes a database of state lawmakers' financial disclosures from the 47 states that require them. You can see Tennessee's here, but they tell you next to nothing.)
Only some of those problems were addressed by recent ethics legislation passed by the legislature and signed by Gov. Phil Bredesen (The governor provided zero leadership on the issue while ethics legislation was being debated).
And now we've come to this: indictments alleging corruption involving legislators from both sides of the aisle in a cash-for-legislation scandal and even allegations that one powerful senator threatened to kill a witness."
"U.S. Attorney Terry Harris said the investigation has been under way for two years after authorities got an anonymous complaint. The undercover operation was dubbed “Tennessee Waltz.”
“Public corruption is a high priority,” Harris said. “Our citizens have a right to know government is not for sale.”
"Canada's oil reserve stands at 176 billion barrels, second only to that of Saudi Arabia, and 50 percent more than Iraq. [1] Such an upgrade in ranking of resources is due to a reclassification of the status of Alberta's oil sands to the economically recoverable category. Today, Alberta produces more oil from oil sands than from conventional reserves. Although the cost of extracting oil from sand is higher, at about $12 per barrel compared to roughly $4 per barrel for conventional recovery in the Middle East, it is still a profitable operation when the world oil price hovers in the $45-55 range. Canada also enjoys the kind of political stability that the Middle East and many other oil producing regions lack. With current Alberta oil production at three million barrels a day, and half of that going to the U.S., there is still a surplus available after satisfying domestic needs. Billions of dollars worth of oil sands development projects, pipelines and related projects are in the process of being planned and implemented."
"SECRETARY OF STATE COLIN POWELL (who granted a posthumous award to Harry's children): "This proud tradition of service has deep roots in American history and in the Foreign Service. Later in today's ceremony, we'll be honoring the memory of Harry Bingham, IV, a US Vice Consul in Marseilles who risked his life and his career, put it on the line, to help over 2,500 Jews and others who were on Nazi death lists to leave France for America in 1940 and 1941. I am especially, especially honored and pleased to welcome here today in the audience two people who owe their lives to Harry Bingham's "visas of freedom," two people who got out because Harry was prepared to take that risk to career to do that which he knew was right. Would Mrs. Lillian Stuart Smith and Mr. Pierre Shostal please rise so we can recognize them. I think they're here. (Applause.) Where are they? We've lost them. They're somewhere. (Applause.) And a number of Harry Bingham's 11 children are also here today and will accept an award on behalf of their father in a moment." (Speech at ceremony honoring diplomats, State Department, June 27, 2002.) The Washington Post further reported that Powell praised this "special constructive dissent award that went posthumously to Hiram Bingham IV, who defied State Department policy during World War II by surreptitiously issuing...visas to Jews desperate to flee Nazism...Powell called Bingham a diplomat 'who risked his life and his career' to do the right thing. Thomas Pickering, a seven-time ambassador who received an award yesterday for contributions to U.S. diplomacy, also paid homage to Bingham's 'creative integrity.'" Washington Post 6/28/02."
"At least two important things are missing from the letter former immigration minister Judy Sgro says vindicates her in the messy Romanian stripper affair. One is a key paragraph naming long-time aide and confidante Ihor Wons for his part in granting a work permit to exotic dancer Alina Balaican; the other is a strong defence of ministerial accountability."
"From these figures, it's clear that large contracts were being bestowed upon advertising firms with virtually no accountability on the companies' part. This reflects badly on everyone -- the ad executives who were so cavalier with public funds, the bureaucrats under whose oversight all this should have fallen, and of course the politicians with whom the buck should ultimately have stopped, especially considering the Liberal ties to the firms in question."
