The WSJ reports on an interesting study, which finds that:
After examining all of the oil-related Foreign Corrupt Practices Act cases from 1997 to 2013, Paasha Mahdavi, an assistant professor at Georgetown University’s McCourt School of Public Policy, found that a total of 337 violations had been found in 35 out of a sample of 59 oil-rich nations. Besides vast oil wealth, what these countries have in common are national oil companies that are in charge of producing as well as awarding contracts and licenses. “Bribes to high government officials are more likely when contract awarding authority is vested in opaque institutions” that are less subject to scrutiny and oversight, said Mr. Mahdavi, in a colloquium at Oxford University last week. Explaining corruption is no easy matter, as it is “such an inherently complex phenomena,” he said, but the study showed that where the state oil company isn’t involved in handing out contracts there is less bribery.
This finding seems broadly consistent with what we know about state capitalism:
State capitalism often reinforces corruption because it increases the size and range of prizes for the victors. The ruling cliques have not only the government apparatus but also huge corporate resources at their disposal.
The biblical maxim that the love of money is the root of all evil is doubtless correct, yet adding state capitalism almost certainly makes the problem worse.
