draining development.pdf - Khazar University

380 Draining Development?unemployment or homicide or any form of harm to relatives—can besufficient to induce compliance. The PEP may bypass domestic controlsanyway, for example, when Marcos instructed the Philippine CentralBank to generate large disbursements from its account at the New YorkFederal Reserve, rather than using the bank’s Manila office (Briones2007). Analytically satisfactory estimates are affected by the definitionalproblems that bedevil white-collar crime studies generally: acquittingformer President Chiluba in August 2009, the Zambian court appearedto accept the defense that Zambian law did not lay down any upper limiton the gifts the president could accept. 9 The Zambian authorities did notproceed with an appeal against this ruling, but this would mean thatwhat to some might look like kleptocracy does not constitute criminalcorruption. Unless one is imposing an objective standard of corruptionthat disregards the legal requirements of the mental element to provecrime, one presumably should drop such sums from the total in estimates.Such considerations do not appear to be incorporated in the corruptionestimates embodied in the governance indicators developed byKaufmann (2005) or others. To focus only on criminal corruption orlaundering cases that have passed through the final stages of appealwould be too strict a test. On the other hand, to allow anyone to imposetheir own judgment of whether any given conduct was corrupt wouldlikely generate many different estimates without any clear way of adjudicatingamong them. This is not an appropriate place to rehearse corruptiondefinitions, but depending on whether or not the private sphere isincluded in the victim category, corruption might be the use of illegalmeans for private gain at public expense or the misuse of public trust orauthority in private enterprises or nonprofit organizations.Sums transferred might be referred to as funds rather than bribes toexpress the possibility that large tranches of profit might arise (1) fromtransfers for fictitious or partly fictitious goods and services (that is, falseaccounting) or (2) from undervalue privatizations (including land sales)to nominees of the officials or to apparently independent third parties aspart of patron-client relationships. Noncash payments could take manyforms, including (1) electronic funds, which are less anonymous thancash because, excepting some prepaid cards for which there is no seriousknow-your-customer effort, they leave audit trails; (2) jewels, real estate,vehicles, and so on regulated under the European Union’s third anti–