Cutting the corruption tax

by Paul Romer

VOX
August 11, 2010

For many, corruption and political cronyism are seen as an inevitable part of Greek politics. This column argues that the same could have been said in the 1970s about Hong Kong, now a beacon of low corruption. Hong Kong managed this turnaround by appointing a non-elected governor accountable to the UK government. Greece could achieve the same by calling on the EU and start counting the benefits.

Many of us take it for granted that government officials will obey the law. In the US, news that the police department in New Orleans committed and covered up crimes like rape and murder reminds us that this needn’t be the case. It also reminds us that living with the lawlessness of a weak state might be better than living under a strong state that officials can abuse.

Many nations live with a weak government because people fear that a strong government will abuse its power. This fear is particularly acute in a country like Greece, where people can still remember the time in the late 1960s when military officers seized control of the state and brutally suppressed dissent.

Unfortunately, the current economic crisis in Greece is too serious for its weak state to manage. In New Orleans, the mayor and community leaders asked the federal Department of Justice to intervene and reform the city’s dysfunctional police department (Robertson 2010). Like the city government in New Orleans, Greece needs to reach out for help.

An achingly slow recovery from the financial crisis could threaten the foundations of Greek society. To avoid this, the people of Greece should reach out to the EU – not for more loans or for budget supervision but for assurance that new efforts to root out corruption and civil service inefficiency will be politically neutral. By working with the EU, Greece can quickly build the kind of strong, honest, and efficient state that can lead the country out of the crisis.

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