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
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. …