Wolfowitz, Corruption, and Parking Tickets

May 22, 2007
Posted by Jay Livingston

Paul Wolfowitz has finally agreed to resign from presidency of the World Bank. The controversy, at least on the surface, was about corruption. In some countries that received Bank money, some officials used their position to siphon off funds for personal gain rather than playing by the rules. Wolfie had gone to the World Bank as the guy who would sweep out corruption. Then it turned out that Wolfie himself had used his position to secure favors (a job with a high salary) for his girlfriend, Shaha Riza.

Wolfowitz and his supporters, mostly American neoconservatives — the folks who gave us the wonderful war in Iraq— argued that he had done no wrong and that he had played by the rules and cleared the package of goodies for his girlfriend with others at the Bank.

The whole affair raises questions about corruption as an individual and cultural characteristic. I seem to recall studies that contradicted the notion of a single trait that we might call “honesty.” Children who cheated on a test in one situation (in class) were not necessarily the ones who cheated in another (a take-home exam). Obviously the situation, the degree of opportunity it provided for cheating, made a big difference in the rate of dishonesty.

But although situational forces are important, some people may be more prone to dishonesty. The same goes for countries. Researchers, notably at the World Bank, have developed measures of corruption, and some countries consistently rank high (Nigeria, Uzbekistan, Paraguay), while others rank low (Denmark, Singapore).

In low-corruption countries, officials follow the rules even when it might be more convenient and more profitable to break them. In high-corruption countries, officials use the rules for private gain. Usually this takes the form of bribery. If you don’t bribe the right people, they may delay your project with interminable bureaucratic rules. Does this spill over into a general willingness to ignore inconvenient laws?

Ray Fisman at Columbia University realized that the UN in New York provided a ready-made natural experiment. Maybe Fisman had noticed all those cars with Diplomat plates parked in No Standing zones or next to fire hydrants, even though the city reserves special parking zones for them where we ordinary mortals may not park. Why shouldn’t they park illegally? They can get away with it. If Fisman or I parked there, we’d get a hefty ticket ($115). But diplomats have immunity, and they don’t have to pay for parking violations. Still, many diplomats obey the parking signs.

Fisman wondered if there might be a pattern among countries that freely flouted parking rules. So he got the city’s data on parking violations— even if the city couldn’t collect a fine, it still kept records— and sure enough, there was a strong correlation between a country’s score on the corruption index and the number of parking violations its diplomats had run up.

This copy of the graph is not very clear, and even in the original those three-letter country codes may be hard to read or decipher. You can get the full data set and original graph here.

The “culture of corruption” may explain parking violations. But what about Wolfowitz? It’s not hard to explain why a bureaucrat in Chad or Kazakhstan might use his office to secure a cushy job for his girlfriend. That’s just the way things are done. But the US does not have a culture of corruption.

Perhaps it’s more our belief in “US exceptionalism.” One facet of this belief is the idea that the US has a special place in the world and that it has been chosen by God to lead the world and improve the world. Because we are so important and because our intentions are so pure, we need not follow the usual rules and restraints that govern other countries when we try to accomplish our mission. As the World Bank investigation concluded, “Mr. Wolfowitz saw himself as the outsider to whom the established rules and standards did not apply.”

And besides, we have the power to force our will on other countries. Or as Mr. Wolfowitz so diplomatically put it, “If they fuck with me or Shaha, I have enough on them to fuck them too.”

In my mind’s eye, I can see Wolfowitz parking his car next to a No Standing sign and thinking “What I’m doing is so beneficial to the world that I must park in the most convenient spot, regardless of what the sign says.”

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