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One idea I've read in the works of Ivan Illich (among others) is that the best thing we could do for developing countries that struggle with corruption is to le

One idea I've read in the works of Ivan Illich (among others) is that the best thing we could do for developing countries that struggle with corruption is to leave them the hell alone when it comes to financial matters (aside, perhaps, from canceling their World Bank debts, which often come from loans made to past corrupt governments and for which the people are unjustly held accountable) and let them sort their problems out. Injecting money, even with the best of intentions, tends to make things worse when there are already structural problems.

nradov 2y ago
How exactly could we even "leave them the hell alone"? Developing countries are integrated into the world economy and financial system. Other countries trade with them. If they want to issue sovereign debt then someone will buy it, if not the World Bank then the Chinese government or random private investors. The World Bank isn't perfect but they're at least somewhat helpful with improving governance standards and avoiding the most egregious forms of corruption.
- tomatocracy 2y ago
  I mean, yes and no. The World Bank (and other multilaterals) are supposed to provide or facilitate loans which the private sector would not otherwise advance (or provide them on concessionary terms which the private sector otherwise would not offer). Absent this form of lending, countries have a stronger financial incentive to improve their governance to the point where they can borrow on better terms on the open market. This is how bond markets operate in developed markets - hence why eg Italy pays more to borrow money than Germany (despite both being in the Eurozone). Most people would probably agree that the reduction in those basic financial pressures to reform is more than offset by the more formal governance requirements which are (sometimes) attached to the granting of multilateral loans (and the types of governance the private sector cares about don't necessarily always align with what the World Bank cares about). But it's not automatic, especially given "improving governance" isn't the main reason the multilaterals make loans in the first place.

nradov 2y ago

How exactly could we even "leave them the hell alone"? Developing countries are integrated into the world economy and financial system. Other countries trade with them. If they want to issue sovereign debt then someone will buy it, if not the World Bank then the Chinese government or random private investors. The World Bank isn't perfect but they're at least somewhat helpful with improving governance standards and avoiding the most egregious forms of corruption.

tomatocracy 2y ago
I mean, yes and no. The World Bank (and other multilaterals) are supposed to provide or facilitate loans which the private sector would not otherwise advance (or provide them on concessionary terms which the private sector otherwise would not offer). Absent this form of lending, countries have a stronger financial incentive to improve their governance to the point where they can borrow on better terms on the open market. This is how bond markets operate in developed markets - hence why eg Italy pays more to borrow money than Germany (despite both being in the Eurozone). Most people would probably agree that the reduction in those basic financial pressures to reform is more than offset by the more formal governance requirements which are (sometimes) attached to the granting of multilateral loans (and the types of governance the private sector cares about don't necessarily always align with what the World Bank cares about). But it's not automatic, especially given "improving governance" isn't the main reason the multilaterals make loans in the first place.