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Markets in everything: African dictator edition
Hmm...I had just been thinking about related ideas:
Sudanese billionaire Mo Ibrahim (of Celtel fame) has created a $5 million dollar cash prize for Africa's most effective head of state.
Each year the winning leader will, at the end of his term, get $5m (£2.7m) over 10 years and $200,000 (£107,000) each year for life thereafter. "We need to remove corruption and improve governance," Mr Ibrahim said.
...The Mo Ibrahim Prize for Achievement in African Leadership will be launched in London on Thursday... It will be available only to a president who democratically transfers power to his successor. Harvard University will do the measuring to see just how well the president has served his or her people during their term in office.
Here is more, and thanks to Pablo for the pointer. The prize sounds too small, relative to the lure of corruption, but I see no reason not to try this idea.
Posted by Tyler Cowen on October 26, 2006 at 08:15 AM in Political Science | Permalink
Comments
For many politicians, this could be too small a prize, but it still raises the price of being a corrupt politician, and apparently, raises it a lot. I have to believe that there are a lot of people at the margin of honesty and corruption where a $5m prize can make a difference. My main question is how the winner is decided upon. How do you think it should be decided ideally? More corruption could enter via a kind of nepotism if another politician or group of politicans decide that question.
Posted by: Jason Voorhees at Oct 26, 2006 9:06:02 AM
"Harvard University will do the measuring "
Isn't this the place where a cabal has recently overthrown their President?
Posted by: Anom at Oct 26, 2006 11:10:51 AM
I think an important issue to throw into the ring is when the actual $5mm is awarded. Is it days/months after a democratic election? What's the time frame? It seems that unless you explicitly state that there must be some time in between when power is handed off and when the money is given there would be an incentive to 1. hand off power peacefully; 2. get $5mm soon after and then 3. decide, hmm, that the whole power thing wasn't such a great thing to give away and now maybe it should be taken back, by force if necessary.
Posted by: Alex Ambroz at Oct 26, 2006 1:08:04 PM
"We need to remove corruption and improve governance," Mr Ibrahim said. ["]Then the continent would not need any aid["]
This to me is the most important idea here, although I bet the mainstream media will spin it as a pro-democracy initiative instead of an anti-corruption tool. I also suspect they will miss the point that a country that is running itself properly doesn't need aid, and that a country which is getting its aid money stolen by kleptocrats can't be helped by aid money.
Posted by: happyjuggler0 at Oct 26, 2006 1:12:52 PM
It sounds like a good idea and the prize is sufficient for a head of state not to corrupt himself. The problem is the people who support this leader. They also get a lot of money from corruption. If the head of state fights these kind of problems, he could end up losing support and the chair - and maybe even the head.
Posted by: träsel at Oct 26, 2006 1:14:19 PM
Trasel, above, writes charmingly and recognizes the difficulty of a lone anti-corruption operative in a corruption- dominated milieu. But many 3rd world leaders make $5million per month, per week, or even per day.
It is enough, though, to publicize the goal and may get lots of leaders and potential leaders to embrace a new vision. I remember when Mickey Mantle got his first $100,000 contract and suddenly many parents were more supportive of kids who played baseball instead of the violin.
Posted by: Dave Meleney at Oct 26, 2006 4:00:56 PM
Is this really a market?
Posted by: Mike Huben at Oct 26, 2006 6:35:07 PM
I would say the real incentive needs to be guaranteed asylum for dictators who voluntarily step down.
Look at Pinochet. He was a dictator, who held an election, handed over power peacefully, and then, years later, was arrested and charged with his earlier crimes. Despite being promised immunity.
Likewise Ferdinand Marcos.
Yes they were guilty. But what incentive does this give other dictators? They get a big message: Do not trust any promise of immunity.
And yet, can a democracy promise immunity? Can a democracy promise that a future government won't change it's mind? Perhaps we should do a deal with China or someone to set up a retirement resort on some China sea island where ex-dictators are safe from western extradition?
Posted by: Patrick at Oct 26, 2006 7:12:27 PM
Putting on my amateur sociology hat, I would say that aside from the $5 million there may be an incentive if the prize has significant prestige and honor associated with it. Winning the prize would get the leader of perhaps a lesser known country international press coverage and invitations to events and junkets in London and New York where praise is heaped upon him. Ultimately, this incentive depends on African dictators caring about what foreigners think of them which may or may not be realistic. For Kim Jong Il, for instance, it is almost certainly irrelevant.
I hope Andrei Schleifer is not going to be on the panel deciding who the winner is...
Posted by: Ricardo at Oct 26, 2006 7:13:59 PM
That Ibrahim guy still owes me $40 million for helping him extract his fortune from his murderous thieving cousins :(
Posted by: BillWallace at Oct 26, 2006 7:52:06 PM
i think this is a great idea idea. go ahead and pay they politicans to do good, they what is the need to go bad?
Also like he said it would at least drive the price of corruption up. that alone would make people less likely
to attempt to corupt an offical.
Posted by: blake at Oct 26, 2006 9:47:44 PM
i think this is a great idea idea. go ahead and pay they politicans to do good, they what is the need to go bad?
Also like he said it would at least drive the price of corruption up. that alone would make people less likely
to attempt to corupt an offical.
Posted by: blake at Oct 26, 2006 9:48:17 PM
"The prize sounds too small, relative to the lure of corruption"
Ah, but the winner need only steal less than his peers, as opposed to not at all. It may be worth $5m to some leaders to do so and thus may reduce corruption for some.
-Kevin
Posted by: Kevin Postlewaite at Oct 27, 2006 4:37:36 PM
The only problem I see with this is that if a corrupt official can earn more by being corrupt than they could through the prize then it wouldn't be much of an incentive to be a good leader. The only way I could see this being effective is for a leader who will benefit more from the 5 million dollars than from the benefits of being a corrupt leader. Besides since the prize does go to the most effective head of state, what happens if an official is totally corrupt but does more for his country than any other leader in Africa?
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