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What is an economic model to deter corruption
I wanted to ask a question that probably concerns many Chinese these days:

Is there an economic model that could deter financial corruption and is it possible to develop an economic theory independent of the political system?

Thank you in advance for your insights!
Regarding corruption and the politicians:

At least in my (admittedly limited) experience, most corruption occurs independently of the economic system. It occurs because petty officials lack integrity. Political positions mean power; power can demand money.I suppose there are two diametrically opposed ways to combat the corrupting of political officials. Both ways are intended to reduce the temptation for politicians to seek side money. After all, if petty officials are not paid well enough, corruption will come as they seek to feed their families. Or, even if salaries are adequate, criminal activity may be more lucrative than honesty (as in Mexico, on whose borders I have lived for years). 

(1) To prevent such corruption, some societies (all aristocratic systems, the Roman Repulic, and increasing the United States on the national level) limit political participation to men of such wealth and influence that money should not be a temptation. This system may be instituionalized (aristocracy) or de facto (United States). This system fails because such men have too much power, and because the inherent inequality of such a society breeds anger and despair among the masses. Couple the ruler's power with greed. and the aristocrats have the means to corrupt the system for their own benefit. 

(2) Alternatively, a country may pay politicians handsomely (including funding candidates campaigns). Why? Theoretically, this should level the playing field, allowing cash-strapped but honest candidates to enter the political arena. This is on some level tried in the United States: public funds go to presidential campaigns, and politicians are compensated and pensioned quite nicely. This system works to some level (the U.S. has its share of polical scoundrels, but their problems tend to stem from ineptitude and incompetence, unlike some other countries whose problems are more overtly criminal). However, the powerful (see solution #1), will still have undue influence, and can bend rules and make loopholes for their own benefit (as happens in in U.S. national elections).

These are just some unorganized thoughts reflecting my fear that no system exists that can eliminate political corruption because humans are inherently corrupt. I'd like to hear some better suggestions.
Stemming from Russia and spending several weaks a year there I am keenly aware of how damaging and disgusting corruption actually is.

As I see it Russia and China are similar in one aspect – they are both relatively new to capitalism. The social foundations of both countries are wavering beneath the weight of this new experience.

Living in Germany I also have a nice counter perspective. I am sure there are also bribes and corruption here but this is hardly comparable to what goes on in Russia or china. Just to give you an example: in Russia bribing police men is part of ever day life – some jokingly started calling those bribes tips. In Germany bribing the police is almost impossible for a normal citizen – some mafia bosses might be able to do that but that’s on entirely different scale.

Now what are the underlying reasons for those differences?  - culture, history and experience. Germany has always been a very orderly nation – the population seems to be in love with regulations, forms and bureaucracy in general. What is more Christian morals run very deep and there is also a very strong focus on morals in elementary, middle and even high school.

Being more of a Russian person in terms of ethics I was once really bewildered by the following incident:  there were two toilets – the one belonging to an outdoor pub reserved for its customers and another (which you had to pay for) for normal passer buys. They were only about two meters apart and there was nobody guarding the free option and people still decided to pay. This would have never ever worked in Russia.

What am I trying to say? In my opinion societies are like children they have to mature and must be educated or they will never learn. In certain aspects Russia and China haven’t grown up yet. Given time and the proper government they will get there. I do not condone of tsar Putin but his monopoly on power actually gives him the ability to enforce change … it is not the best option I know …

In response to Juri Pavlov
Juri, what you described so resonated in my own experiences. Like you, I also reflected a lot on why such big differences of  moral standards between China and the west. What China and Russia had in common in the past was the shared communist ideology, and communism destroyed all the religious and traditional practices in our society. Not sure about Russia, in China, while I was growing up, even a little kid could shout out loud Karl Marx's statement:"Religion is the opium of the people"!  The revolution over threw all the traditional values too, Confucianism, Daoism, Buddhism, ... all!  There isn't a single moral compass left after all values were discarded. To be sure, I'm not a religious person, however, I believe only if there was a single religion spared in China, the public moral won't deteriorate so low. People, especially those without yet opportunity for a reasonable education (many of such people are today's high ranking officials), do need a moral compass to guide the conduct. Sadly, they don't have one, not now. And they don't have one to pass on to their next generation either. This is the worst damage that the Cultural Revolution has done to us. 
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Latest Post: April 12, 2012 at 7:08 PM
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