Political Parties, Business Groups, and Corruption in Developing Countries

By Vineeta Yadav | Go to book overview
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Robert Reich (2008), U.S. secretary of labor under Bill Clinton, argues that market forces have increasingly used money to achieve their goals politically, creating corruption. The result, he claims, is that “supercapitalism” has replaced “democratic capitalism,” leading to an imbalance in the political provision of private and social goods. In contrast, Edward Busek, the vice-chancellor of Austria and the Special Coordinator for the Stability Pact for Southeastern Europe (Financial Times, April 2,2008), argued that unless the business community organized and lobbied actively for its policy preferences, governments would not act to improve their policy design or implementation. “The business community must find ways to influence policy development,” he urged. The MPs in the Czech parliament agreed with him that lobbying was “an important part of a modern political system” and a desirable element of society that could be conducted in an ethical manner (Donath-Burson and Marstellar 2005). However, Vaclav Klaus in his premiership of the Czech Republic in 1997 echoed Reich’s fears when he stated that he wanted to “dissolve dangerous lobbying, rent-seeking, protectionist organizations, pressure groups and so on” (quoted in O’Mahoney 2003:, 190).

The intensity of this debate regarding the nature of the relationship between business lobbying and corruption in rich countries with considerable experience of markets and democratic politics, and in the context of established legal and judicial systems and free media underlines the deeper consequences of this relationship for the stability and prosperity of developing countries without these institutional advantages. These differences in opinions regarding the necessity of a close relationship between business and politics for social and economic progress, and, its potential costs to society, has a venerable intellectual history dating back to Tocqueville. The following conclusions reached by two recent studies on corruption and lobbyists summarize the reasons why policymakers, scholars, and citizens in contemporary democracies are still struggling with this dilemma:


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