08-Feb-2009

Corruption

From FT:
There was a steady erosion in business ethics and moral standards in commerce and trade. Regulatory capture and corruption, from petty corruption to grand corruption to state capture, became common place. Truth-telling and trust became increasingly scarce commodities in politics and in business life. The choice between telling the truth (the whole truth and nothing but the truth) and telling a deliberate lie or half-truth became a tactical option. Combined with increasing myopia, this meant that even reputational considerations no longer acted as a constraint on deliberate deception and the use of lies as a policy instrument.
Regulatory Capture is defined as:
... situations in which a government regulatory agency created to act in the public interest instead acts in favor of the commercial or special interests that dominate in the industry or sector it is charged with regulating.
State Capture is defined as:
State capture is the phenomenon in which outside interests (often the private sector, mafia networks, etc.) are able to bend state laws, policies and regulations to their (mainly financial) benefit through corrupt transactions with public officers and politicans. The notion of state capture deviates from traditional concepts of corruption, in which a bureaucrat might extort bribes from powerless individuals or companies or politicians themselves steal state assets (see kleptocracy). State capture is recognised as a most destructive and intractable corruption problem, above all in transition economies with incomplete or distorted processes of democratic consolidation and insecure property rights.
We're not talking about transition economics though. We're talking about the US & UK - submerging economies. So it is only to be expected that it would be called something else, rather than just 'corruption'.

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