Sleaze may not harm growth, but it is still an economic evil

Last week, Wen Qiang made international headlines for the first and last time in his life, when the former Chongqing police and justice bureau chief was put to death for corruption.

Wen is the most senior official to have fallen victim to Chongqing's anti-corruption drive. Yet, despite all the publicity, there is a widespread feeling that Wen's execution was something of an aberration. The suspicion is that the Chongqing crackdown is being driven by the vaunting ambition of local party boss Bo Xilai, rather than by any genuine desire to stamp out corruption.

Indeed, there is a growing belief in Asia that official sleaze is not as damaging as it has been portrayed by Western-dominated institutions like the World Bank, which in 2005 declared corruption to be one of the main obstacles to economic development in poor countries. On the contrary, argue some academics, a little bribery could even be good for growth.

Famously, the late US political scientist Samuel Huntington suggested that corruption could grease the wheels of a bureaucratic economy by helping entrepreneurs circumvent obstructive red tape.

More recently, Cambridge University economist Ha-Joon Chang, whose advocacy of protectionism for developing countries is much admired in Beijing, has argued that the World Bank's focus on corruption is misplaced and that there is no obvious link between sleaze and poverty.

This isn't as batty as it sounds. Corruption is endemic in Italy, but Italians are among the wealthiest people around. With a gross domestic product of more than US$35,000 per head, they are 30 per cent richer than New Zealanders, the most clean-handed nation in the world, according to Transparency International's Corruption Perceptions Index.

What's more, widespread corruption certainly hasn't prevented the mainland's economy from growing at an average 10 per cent a year for the last three decades.