Figure 1 below is a modified version of Khemraj (2013) voting pattern and resource allocations in Guyana. It describes the potential and actual avenues of corruption, the essential pressure groups within Guyana’s political economy and the underlying logic of political survival that confronts all regimes. The block arrows represent the voting pattern of the East Indian Masses (EIM) and African Guyanese Masses (AGM) while all other arrows are indicative of transfers from the state to interest groups, whether it be through legal or illegal (corrupt) means.
It is obvious that the East Indian Elites (EIE) undertake various redistributive schemes to all essential interest groups. The popular contention is that these kickbacks, transfers and side deals are highly skewed in favor of the EIM and the EIE themselves. Not all transfers illustrated are corruption however, some are tax reductions, increase in the income threshold, low interest mortgages and various pension and welfare packages that affect in various ways all interest groups in Guyana. The pervasive nature of corruption is obvious from the diagram and characteristic of undeveloped countries. The block arrow between the EIM and AGM illustrates the conflict and distrust that exists between the two groups and the popular opinion is that this tension is exacerbated by our political leadership.
The biggest fallacy of the development literature is that low corruption is an absolutely necessary prerequisite for material advancement. But the actual evidence dismisses this deception, see here https://caribansreason.wordpress.com/2013/12/24/hither-thou-shalt-come-but-no-further-a-reply-to-comments/. This misdiagnosis is precisely why anti-corruption strategies hardly work in the underdeveloped world. It fails to address the underlying problem of a dormant private sector and ignores the political necessity of many corruption networks which in itself is a compensation for the lack of a dynamic private sector.
Besides the standard anti-corruption strategies of constitutional reforms, empowering civil society is marketed as effective. This understanding of civil society is an aggregation of interests and pressure groups who have a collective stake in the health of the dominant private sector and possess the capacity to monitor and keep the state in check. The solidarity among interest and pressure groups are absent in poor states. They have little collective interests in the private sector since many are unemployed, thus, developing and cementing social networks is the most effective means of acquiring income and employment.
Essentially, civil society in the poor world is a group of competing interests and factions where only the most organized will determine which causes to champion. To effectively use civil society for the advancement of their country, we need to know whose interests are the dominant groups in civil society serving. Are these groups promoting development, or is the nature of their competition for redistribution itself part of the problem?
Figure 2 captures a civil society with a collective interest in the health of the private sector. The diagram describes an advanced capitalist society that is governed by the impulses of the private sector rather than political instinct. Interestingly, many forms of corruption disappear and new ones emerge. This dynamic private sector is no respecter of race or political allegiances as it absorbs various political elites, bureaucrats and Guyanese masses generally.
Remarkably, even the political sector is now subservient to the power of the modern private sector. Transfers are no longer done through illegal means or off the budget, as the tax base increases fiscal policy is set to satisfy competing interests within the margins established by the private sector. The private sector’s influence in politics becomes the new form of corruption, and the dominant one. Distributional conflicts still exist, the problem of race and ethnicity is now embedded within the new overarching problem of class conflict.
Meritocracy is essential to the health of a growing private sector, any other form of appointment is within direct conflict to their interest. Hence, we observe in rich capitalist states, a competent and meritocratic state apparatus, high levels of human capital and all the other accompanying elements of development. The sustenance and growth of the private sector is the regulating force of the society in figure 2 as opposed to the political sector in figure 1.
These advanced countries simply need to ensure the general health of the private sector since most of their political constituencies are employed there. This reality reduces the necessity for certain forms of political corruption. The latter is ever present in figure 1 because the majority employer is the political sector. As figure 2 illustrates, growth in the private sector is an effective solution to certain forms of corruption and the catalyst to modernization in all its variations.
A crucial part of this analysis is that the governing forces of society remain the same even with a different governing political elite. Consider figure 3. This is primarily the same as figure 1 but with the AGE controlling the resources of the state and appropriating at least a minimum number of swing voters that ensures electoral victory. The distributive pressures remain the same from all interest groups and may even intensify with the new government. The size of the tax base hasn’t changed and the need for off budget transfers is still ever present. The new ruling elites have to please their strong hold support base and the minimum swing voters that got them there.
However, transfers to the EIM are critical to ensure political stability and the political impulse to do this may even intensify. There are good reasons to believe that the AGE would hardly undertake any redistribution to the EIE. The most important question however, is what would be the nature of their relationship with the private sector that they inherit? Arrows of transfers are intentionally left out between the private sector and AGE in figure 3. But this hardly means that corruption of the sort that we now criticize would cease to exist. It is likely that the new ruling elites would effect policy to change the ethnic distribution of the private sector, but this too cannot be done without establishing and cementing new social networks of transfers, both of a legal and illegal nature.
The forms of corruption may change marginally and certain avenues of corruption may move underground to satisfy at least, the minimum swing voters. But this does not change the fact that the society is governed by the need to accumulate political capital through various redistributive schemes, whether legal or illegal. But not all corrupt regimes are created equal. There are great developmental differences between corrupt regimes and this is the contrast between developing countries and stagnant ones.
Any new government in Guyana would have a pressing mandate, but their ultimate priority would always be re-election and this has significant implications for the distribution patterns and the levels and forms of corruptions. The possibility exists that a new government could assume the ‘Mandela role’ and charter a new political culture and nurture a consensual private sector expansion agenda. Whether this is likely is an open question. Essentially, the developmental credentials of governments must remain an integral part of anti-corruption strategies. This is crucial since all governments are pressured by the underlying forces that govern underdeveloped countries. Thus, the logic of political survival dominates and sometimes even at the expense of private sector growth, the one essential for eliminating certain forms of corruption.
Khemraj, Tarron. (2013). Bi-Communalism and Economic Origins of Democracy: A Case Study. Institute of Development Studies, University of Guyana Special Series Working Paper # 4/12 to commemorate the 50th Anniversary (1963-2013) of the University of Guyana