Murphy's Law: Follow The Money To Find The Next War


January 22, 2014: In 2012 about 1.4 percent of the $72 trillion global GDP was lost to corruption, crime and tax evasion. For those from more affluent countries that 1.4 percent might not be very noticeable, but most people live in nations where there is not much money to go around and there these losses are very much felt. In these less-wealthy nations the corruption is often so pervasive that the thieves can flaunt their ill-gotten wealth openly without fear of prosecution. This is often the result of police and courts who can be easily bribed. All this misbehavior is a major cause of rebellions and civil wars, although these usually end with one collection of crooks being replaced by another.

We know so much more about this misbehavior because over the last three decades computers and networks have become more common and with that has come more information and easier access to a lot of it. Early on in this new “information age” it was possible (with some effort) to get enough data to tell that something bad was going on. For example, in the 1970s some researchers, using international banking statistics on money being moved between countries, they were able to detect why foreign aid to many poor countries was not having much impact. The data showed that nearly as much money was being illegally moved out of the receiving countries as was going in as aid.

People on the ground could supply more details of these blatant foreign aid rip-offs. This led to growing criticism of foreign aid, despite the fact that government officials who supervised this aid knew that the main purpose of the aid was to bribe the local officials to be more cooperative to the needs of the donor countries. In the countries getting this aid/bribes there was growing realization that the problem was not the aid but the fact that local officials stole most of it. The problem was a local one that only the locals could solve. Some countries have done so, and have generally prospered because of it. But many nations are still struggling with the curse of corruption.

In places like Afghanistan, one of the major recipients of foreign aid in the last decade, donors have gone to extraordinary lengths to get the aid to the people, and not into the secret foreign bank accounts of their leaders. The local officials consider the anti-corruption measures of the donor nations a challenge and are often to get around these pesky rules. In short, if you want to know where the next war will break out just follow the money, especially the cash that is not going where it is supposed.





Help Keep Us From Drying Up

We need your help! Our subscription base has slowly been dwindling.

Each month we count on your contributions. You can support us in the following ways:

  1. Make sure you spread the word about us. Two ways to do that are to like us on Facebook and follow us on Twitter.
  2. Subscribe to our daily newsletter. We’ll send the news to your email box, and you don’t have to come to the site unless you want to read columns or see photos.
  3. You can contribute to the health of StrategyPage.
Subscribe   Contribute   Close