Latin America’s Corruption Challenge

COPENHAGEN -- It is difficult to distinguish the consequences from the causes of the corruption that bedevils many Latin American and Caribbean nations. Corruption limits growth, but low growth itself encourages corruption and makes it difficult to improve government effectiveness. In any case, corruption alone is not the essential problem. Rather, it symbolizes and highlights underlying weaknesses in the operation of the state and its interactions with citizens and businesses.

Some institutions are so vital that they produce either a competent and fair state if they function well or a corrupt, unfair, and ineffective state if they operate poorly. Cleaning up two such institutions – the public sector and the judiciary – should be a priority for many governments in the region.

Surveys carried out in El Salvador, Nicaragua, Bolivia, and Paraguay in the last decade have shown that people exposed to corruption have less confidence in the political system and lower trust in other citizens. Nicaraguans were asked if the payment of bribes “facilitates getting things done in the bureaucracy.” Those who agreed that corruption worked had less respect for the political system’s legitimacy.

A well-functioning bureaucracy is also necessary because it contributes to economic growth. Few of this region’s most important challenges can be tackled successfully unless the state can administer complex public programs.