Honesty and payback - The Undercover Economist

Tim Harford, a columnist for the Financial Times, has written a book called The Undercover Economist: Exposing Why the Rich Are Rich, the Poor Are Poor—and Why You Can Never Buy a Decent Used Car! (it must have a big cover). Reason have published an article in which he seeks to explain why Cameroon is so poor. It is very good, especially as he gives some concrete examples.

The conclusion is, unsurprisingly, that corruption is key. If there is no trust in the system, effectively the only system is that of power. People will do what benefits themselves; therefore, things will work only if honesty pays. So simple. I selected quotes from the article, but they extended so far that you would injure your index finger from the scrolling. So just one.

The rot starts with government, but it afflicts the entire society. There’s no point investing in a business because the government will not protect you against thieves. (So you might as well become a thief yourself.) There’s no point in paying your phone bill because no court can make you pay. (So there’s no point being a phone company.) There’s no point setting up an import business because the customs officers will be the ones to benefit. (So the customs office is underfunded and looks even harder for bribes.) There’s no point getting an education because jobs are not handed out on merit. (And in any case, you can’t borrow money for school fees because the bank can’t collect on the loan.)