Tag Archives: Corruption

Favors?

In the FAZ, Patrick Bernau und Manfred Schäfers report that the German Federal Ministry for Economic Affairs invited five research institutes to produce economic forecasts although the call for bids had stated that the Ministry would contract with at most four institutions. Legal experts agree that this procedure is illegal.

The report suggests that the institution that just made it (DIW) is led by Marcel Fratzscher who is politically close to the Minister.

America’s World-Wide Justice System

The Economist critically reports about the US legal system’s international reach. The article identifies several reasons for the activity of American prosecutors:

  • The US feels entitled to run down anybody who directly or indirectly uses services of the US banking system “or plans an illegal scheme on its soil.”
  • Persons may also be charged on the basis of violations of the “Racketeer Influenced and Corrupt Organisations Act” or the “Travel Act.” The latter stipulates that it is illegal to use “any facility in interstate commerce to carry out an illegal activity.”
  • Plea-bargaining is common, in contrast to Europe. This helps to build cases bottom up.
  • While European justice systems emphasize “comity”—not interfering with other countries’ legal affairs unless war crimes are concerned—this is not the case in the US.

In another article, The Economist reports about the US Treasury’s

powers to act against those who facilitate financial crime, anywhere in the world, by labelling them a “primary money-laundering concern”

based on section 311 of America’s “Patriot Act” of 2001. The report suggests that the section is used as a political instrument and that double standards apply. Moreover,

[i]t is an administrative procedure, not a judicial one. Only the Treasury knows how much evidence it has, and how reliable it is.

Cash-On-Delivery Development Aid

The Economist reports about cash-on-delivery schemes in development aid. Payments are made only after jointly agreed objectives have been met. The means to achieve those goals are left for the recipient country to choose—management by objectives.

True, potentially corrupt or negligent country officials can be monitored less tightly than with other schemes. But evidence discussed in the article suggests that such monitoring might not be very fruitful anyway. Moreover, sufficiently well specified objectives should in principle help to curb moral hazard and thus, reap the benefits of subsidiarity.

Postscript on Belgrade

The (once?) famous b92 station and Christen Farmer‘s b92 blog “Grumpy in Belgrade” (also published as a book). Nicola Tesla museum and airport. Corruption measures compiled by Transparency International. Euro Money country risk assessment. Saint Sava’s Temple, “Belgrade’s Sagrada Família.” Property market and country assessment by Global Property Guide.