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I don't buy the corruption thesis for explaining lack of development. New York in the late 1900's was unbelievably corrupt, yet it had one of the fastest growi

I don't buy the corruption thesis for explaining lack of development. New York in the late 1900's was unbelievably corrupt, yet it had one of the fastest growing economies in the history of the world. Read this book if you want to read how corrupt it was: http://books.google.com/books/pdf/Satan_s_Invisible_World_Displayed.pdf?id=hQdJAAAAIAAJ&output=pdf&sig=ACfU3U1GUJ9IZP3WMC7qDFpenq9Djp7cbQ http://books.google.com/books/pdf/Satan_s_Invisible_World_Di... The same applies for modern China. It is very corrupt. Greasing palms and making connections is mandatory. Property rights are still quite shaky. Yet it is growing at a stunning rate. Bribery is not a huge obstacle to a determined entrepreneur. You just pay it like any other tax.

paddy_m 18y ago
you say that as if taxes aren't huge impediments.
- bokonist 18y ago
  Yes, but taxes are not unique to African countries, which is what the article is trying to explain. All developed countries have taxes too.
huherto 18y ago
"New York in the late 1900's was unbelievably corrupt, yet ..." New York in the 1900's may have been as corrupt as Cameroon today, also the development of New York at that time may be comparable as the development of Cameroon now days.
- bokonist 18y ago
  also the development of New York at that time may be comparable as the development of Cameroon now days. No way. I would much, much prefer to live in New York city circa 1900 than Cameroon today. Read the section of "The Land of the dollar" on New York. http://books.google.com/books?hl=en&id=vsxEAAAAIAAJ&dq=the+land+of+the+dollar&printsec=frontcover&source=web&ots=Y7FMCy2MAC&sig=sjPutQwnGgm0NThBm1q8TW4CEg8&sa=X&oi=book_result&resnum=1&ct=result http://books.google.com/books?hl=en&id=vsxEAAAAIAAJ&... And it's not the level of development that's the issue, it's the rate of growth. 1900's New York was getting much richer every year. The African countries are almost all either stagnant or actually getting poorer.
jbert 18y ago
> Bribery is not a huge obstacle to a determined entrepreneur. You just pay it like any other tax. But it's not just bribery. It's about being in or out of favour. It's about irrationality and lack of transparency. If you know that the current telecoms company has the brother-in-law of the president on the board, do you think that paying some bribes will be sufficient to allow you to enter the market? How about if you don't know whether that's the case, but you do know there's a reasonable chance that your startup business will be blocked for a "non business" reason like that? All of these factors act to reduce the likelihood of return on investment and increase risk. I imagine also that bribes also fluctuate a lot with regard to frequency and amount. That makes them hard to plan for.
pg 18y ago
Bribery is not a huge obstacle to a determined entrepreneur. You just pay it like any other tax. What makes it different (and much more damaging) is its unpredictability.
dusklight 18y ago
I think its a question of math. If income - overall costs > 0 then there is growth. So if the cost imposed by corruption is small enough that the entrepreneur can still profit, well he's going to keep going.

paddy_m 18y ago

you say that as if taxes aren't huge impediments.

bokonist 18y ago
Yes, but taxes are not unique to African countries, which is what the article is trying to explain. All developed countries have taxes too.

huherto 18y ago

"New York in the late 1900's was unbelievably corrupt, yet ..." New York in the 1900's may have been as corrupt as Cameroon today, also the development of New York at that time may be comparable as the development of Cameroon now days.

bokonist 18y ago
also the development of New York at that time may be comparable as the development of Cameroon now days. No way. I would much, much prefer to live in New York city circa 1900 than Cameroon today. Read the section of "The Land of the dollar" on New York. http://books.google.com/books?hl=en&id=vsxEAAAAIAAJ&dq=the+land+of+the+dollar&printsec=frontcover&source=web&ots=Y7FMCy2MAC&sig=sjPutQwnGgm0NThBm1q8TW4CEg8&sa=X&oi=book_result&resnum=1&ct=result http://books.google.com/books?hl=en&id=vsxEAAAAIAAJ&... And it's not the level of development that's the issue, it's the rate of growth. 1900's New York was getting much richer every year. The African countries are almost all either stagnant or actually getting poorer.

jbert 18y ago

> Bribery is not a huge obstacle to a determined entrepreneur. You just pay it like any other tax. But it's not just bribery. It's about being in or out of favour. It's about irrationality and lack of transparency. If you know that the current telecoms company has the brother-in-law of the president on the board, do you think that paying some bribes will be sufficient to allow you to enter the market? How about if you don't know whether that's the case, but you do know there's a reasonable chance that your startup business will be blocked for a "non business" reason like that? All of these factors act to reduce the likelihood of return on investment and increase risk. I imagine also that bribes also fluctuate a lot with regard to frequency and amount. That makes them hard to plan for.

pg 18y ago

Bribery is not a huge obstacle to a determined entrepreneur. You just pay it like any other tax. What makes it different (and much more damaging) is its unpredictability.

dusklight 18y ago

I think its a question of math. If income - overall costs > 0 then there is growth. So if the cost imposed by corruption is small enough that the entrepreneur can still profit, well he's going to keep going.