Organized Crime, Political Corruption, and Development

I’m speaking in private capacity, not on behalf of my government.

Many developing countries harbor criminal organizations that have ties to developed countries. The Dutch police liaison officer for West Africa told me that he not only saw there many Colombian drug criminals but also a lot of members from the Dutch underworld.

In his study The World of Crime, Breaking the Silence on Problems of Security. Justice, and Development across the World, 2008, the Dutch scholar and former UNODC director Jan van Dijk concludes there is a strong link between organized crime and "grand" or political corruption and poverty on the one hand, and low urbanization, poor development of law and limited judicial autonomy on the other. Political corruption is an essential characteristic of organized crime. The two go hand in hand, organized crime tries to buy political influence and to provide space for or eliminate blockages to their illegal practices. This relates to bribery of police, judges, politicians etc, and infiltration of these offices of government by organized crime (state capture). Examples are found in West Africa but also Eastern Europe and Latin America. In his book Van Dijk develops non-subjective indicators of the presence of organized crime in countries on the basis of an organized crime index. This enables those countries that have little or no reliable crime rates to obtain a relatively accurate estimate of the size of the organized crime in their country. The relationship between various indices of good governance and the presence of Mafia crime is remarkably strong. This link shows that good governance, particularly well-functioning police and justice sectors, and a high level of organized crime are each others antagonists. If the first is strong, the other will be weak. Malfunctioning law enforcement provides a suitable breeding ground for organized crime. Where the mafia is firmly rooted, police and the justice system become weakened by bribery and intimidation.

There are strong indications that prosperity depends on good governance: "There are no countries that have experienced sustained economic growth, where organized crime and corruption are rampant. Where the mafia rules, places are doomed to remain poor. Revenue from oil or diamonds or external subsidies leak away to accounts abroad and do not lead to investments in national economy. Sustainable growth requires a functioning rule of law." Singapore provides a good example. 50 years ago this country was very poor and in the grip of the Chinese mafia. The government decided on a rigorous anti-corruption policy through which the economy could grow strongly and the country is now one of the wealthiest in the world. 90% of the 60 least corrupt countries according to Transparency International are stable democracies, while all 30 most corrupt countries are (de facto) dictatorships.

We should perceive the prevalence of organized crime and political corruption as an important indicator of the presence or absence of the rule law and thus as a determining factor in whether development aid can or should be given. Where no rule of law exists poverty eradication is purposeless. Van Dijk concludes on the basis of many studies: "Without a functioning justice system, both the government and civil society are defenseless against rampant crime and corruption and development is likely to stagnate." He therefore advocates the establishing of well-equipped anti-mafia/corruption units to stop undermining of the legal system from the inside. I’d like therefore to strongly argue that development funds be spent on peace-building (stability) and strengthening the rule of law. Ministries of Justice and Police, but also possibly of Defense, should play an active role in international law reform and training. Strengthening the rule of law, however, makes no sense if political will is lacking in the target country, for example because the rulers are not prepared to share power. In such cases, cooperation should be focused on individuals and segments who do have the will to change. A constitutional state that is sufficiently capable to ward off political corruption and organized crime is a sine qua non for the development of a country and for the improvement of the living conditions of the poorest. Therefore, development in my opinion must concentrate on the rule of law rather than on the position of the poorest.

Organized crime and political corruption also hamper sustainable development. The vast majority of investors merely want to focus on those countries which are safe and where their money is safe, where competition is fair and no major barriers (red tape) exist, where contracts can be effected, where the law applies and everyone is equal before the law and where they can be confident that the court will rule honestly in business conflicts. They do not want to settle in a country where the government is 'bought' by a group, let alone a by criminal group. What is true for investors from outside, is of course equally true for domestic (potential) entrepreneurs: where there is little or no chance of success, where they risk being extorted and threatened or beaten when refusing to cooperate, maimed or even killed, they will take less or no risk. It is unlikely that development aid can contribute directly and lasting to the economic situation of the poorest in such countries. Their position will probably be improved, however, if the overall economy is boosted and this requires as a first condition an established rule of law, more specific: preventing and combating of organized crime and political corruption as an explicit and integral part of the development strategy. Examples of countries where this was (relatively) successfully put into practice are not only Singapore, but also Chile, Mauritius, Botswana, Taiwan and Hong Kong. These countries developed themselves by the establishing the rule of law, adopting a strong anti-corruption policy and creating an open market. That was only possible through the strong political will of their leaders. Foreign policy should therefore begin to focus on fostering genuine political will in those in power. There are many tools, ranging from seduction to a certain degree of political coercion. See for example the EU assistance to the then candidate member states of Central and Eastern Europe. Cape Verde is also a good example. Its government, with the assistance of UNODC and the EU, combated corruption and organized drug trafficking, while in the mean time improving the living standards of the population. In regimes that actually are part of the problem this approach will achieve very little. The usual forms of development aid under these conditions can hardly be successful. The Oxford economist Paul Collier has tried to find solutions to these dilemmas in building democratic states. The poorest countries ("the bottom billion") are too small (too little cohesion to take collective action) so as to provide for themselves all the key public goods: security and accountability. When they cooperate, they can take advantage of each other's infrastructure such as ports and railways, energy, drinking water. Such cooperation is, however, not in favor of those in power because they will be held accountable for their actions and especially for their use of public funds. Therefore, they should get a push from the outside: the international community should provide for accountability, at least temporarily. Also the excuse of victimhood and "colonial interference" should go: those in power have too much sovereignty, not too little. The push includes the promise of effective, if necessary military protection against coups (security) in exchange for the use of international standards for democratic elections and, I should add: fixed maximum terms to be president. The second step is close monitoring by donors that development funds be spent on the purpose they were given for, and not leak away through corruption and patronage. This is possible by separating policy from implementation: ministries should not themselves execute, but leave this to civil society. Also, the money must be provided by a separate agency. The third step is that donor countries stipulate as a condition for assistance that military expenditure is not increased.

I think Collier offers proposals that may help overcome difficult dilemmas. But there is one more factor that is important here. The War on Drugs, the worldwide criminalization and prosecution by all means of drug trafficking and (in some cases) consumption drugs, is in my opinion an aggravating factor. The high demand for drugs in many countries, with high revenues for dealers, and the economic need for farmers in some countries to grow coca or poppy, keep the system going. Increasing sanctions and law enforcement will boost, not curb, crime and corruption. The costs of bribing are relatively low in many countries. The negative effects of this system in terms of human lives, social costs (in some countries entire generations cannot contribute in building up their country because they finished up in the justice system), undermining the rule of law and destruction of the environment are mostly felt in developing countries. It is a vicious circle away from the rule of law, especially in fragile countries. Our efforts should therefore aim to identify (joint) effective strategies to develop and promote the rule of law and to achieve effective containment of notoriously rotten places. Combating organized crime and political corruption should be an integral part of that.

Thank you.