Magazine article Newsweek

Pulling Hands out of the Till

Magazine article Newsweek

Pulling Hands out of the Till

Article excerpt

Byline: Stefan Theil

The best countries keep public and private sector graft in check.

For every success in fighting corruption, there's a fresh backslide. Although the U.S. and Europe have made spectacular gains in cracking down on corporate bribery, the financial crisis and its $20 trillion in bailouts and stimulus spending created a rash of opportunities to shift public resources to private pockets. It didn't help that the programs concentrated on some of the most fraud-ridden sectors, such as banking, real estate, energy, and infrastructure. China alone has arrested more than 3,000 officials for graft related to its $586 billion stimulus.

What's clear, however, is that some countries do much better than others in rooting out corruption. Their lessons, according to corruption experts at Transparency International, the Basel Institute on Governance, and the Brookings Institution:

Get government out of the shadows. Corruption thrives not just on plainly illegal bribes, but even more on legal practices such as political donations, lobbying, and the revolving doors that reward lawmakers and regulators with juicy jobs in industry. Sweden, a star performer in the corruption rankings, has cleaned up government by opening virtually all government records to the public. It's no coincidence that economists consider Sweden the world's textbook example for how to resolve a banking crisis resolutely and at minimal cost to taxpayers.

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