Targeted Tariff Preferences to Reduce Corruption in Developing States

By Franklin, Aaron | Georgetown Journal of International Law, Summer 2010 | Go to article overview

Targeted Tariff Preferences to Reduce Corruption in Developing States


Franklin, Aaron, Georgetown Journal of International Law


TABLE OF CONTENTS

  I. INTRODUCTION
 II. How CORRUPTION WORKS: CORRUPTION AS INSTITUTIONAL
     FAILURES
     A. Institutional Framework to Analyze Corruption in
        Developing States
     B. The Dominant View of Corruption: Corruption as
        Unbalanced Incentives and Lack of Political Will to Reform.
     C. Economic Growth is Critical to Institutional Reform
        1. The Need for Economic Growth to Pay for
           Institutional Reform
        2. Political Will for Institutional Reform is
           Insufficient Without Economic Growth
III. INTERNATIONAL TRADE AND CORRUPTION: THE POTENTIAL FOR
     TARGETED TARIFF PREFERENCES
 IV. TARGETED TARIFF PREFERENCES CAN REDUCE CORRUPTION
     A. Targeted Tariff Preferences Make Institutional Change
        Feasible by Spurring Economic Growth
     B. Targeted Tariff Preferences Build the Political Will to
        Successfully Reform Institutions in Developing States
        1. Tariff Preferences Can Provide Political
           Incentives Within Target States to Reform Failing
           Institutions
        2. The Locally Driven Change Caused by Targeted
           Tariff Preferences is Most Likely to Successfully
           Reform Failing Institutions
    C. Counterarguments
        1. The TTP Program Rewards Bad Behavior and
           Punishes Success
        2. Corrupt Elites Would Capture Any Benefits the
           TTP Program Can Provide
        3. The Most Corrupt States Would Be Unable to
           Take Advantage of Targeted Tariff Preferences
 V. THE ENABLING CLAUSE AUTHORIZES TARGETED TARIFF
    PREFERENCES ADDRESSING CORRUPTION
    A. Targeted Tariff Preferences Respond Positively to
       Corruption
       1. To "Respond Positively" Should Be Understood
          by Comparison to the GSP Program
       2. The Nexus Between Targeted Tariff Preferences
          and Reducing Corruption is Similar to the GSP
          Program's Nexus to Industrialization
    B. Targeted Tariff Preferences Would Be Non-Discriminatory
       1. Reducing Corruption is a Widely-Recognized
          "Development" Need
       2. The World Bank's "Control of Corruption"
          Indicator is an Objective Method of
          Distinguishing Among States
    C. Targeted Tariff Preferences to Reduce Corruption Would Be
       Generalized Because They Would Remain Generally
       Applicable
    D. Targeted Tariff Preferences Would Be Non-Reciprocal
       Because They Would Not Require Market Access
       Concessions
    E. Targeted Tariff Preferences Would Not Impose an
       Unjustifiable Burden on Other Member States
    F. The Enabling Clause Does Not Authorize Reward-Based
       Tariff Preferences
VI. CONCLUSION

I. INTRODUCTION

This paper focuses on the nexus between public corruption in developing countries and international trade regulation. (1) First, this paper argues that targeted tariff preferences could help to provide the economic strength and political will necessary to reduce corruption in developing states. Second, it argues that international trade regulations would uniquely authorize such preferences.

Corruption is linked to myriad global problems. Some argue that corruption endangers world peace by "[facilitating] the possible proliferation of weapons of mass destruction, [assisting] the spread of terror and terroristic practices, and [strengthening] the malefactors who traffic illicitly in humans, guns, and drugs, and who launder money." (2) Many argue that corruption also hinders economic growth. (3) They argue that corruption "foster[s] rentier capitalism ... imped[es] economic diversification ... [and] slow[s] structural reform." (4) Corruption ruins the investment climate, which costs Russia alone $10 billion per year, (5) by effectively taxing investment, decreasing the quality of infrastructure, and diverting human capital. (6) In addition, corruption drives up transaction costs, which prevents development of an efficient market. …

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