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Friday, July 31, 2009

Transparent banking

In The Nation July 13, economist Joseph Stiglitz notes that greater banking transparency could help fight corruption in the developing world.
Developing nations are often criticized for corruption, but secret bank accounts wherever they may be facilitate corruption, providing safe haven for stolen funds. Developing countries want this money returned and want access to information that will allow them to detect secret accounts.
Stiglitz is critical of recent congressional legislation for failing to go far enough to solve this problem.

Paul Collier makes a similar argument in The Bottom Billion and calls explicitly for new international norms -- such as budget transparency -- to make this kind of corruption far more difficult.

Collier also calls for transparency initiatives in natural resources.

The U.S. spent much of the 1990s arguing for a "strategy of openness" -- seeking open markets, especially. However, as Andrew Bacevich outlined, the Clinton administration sweepingly sought to remove "barriers to the movement of goods, capital, people, and ideas."

Perhaps the Obama administration can devote some attention to a slightly different form of openness. The President certainly seems to understand the critique offered by Stiglitz and Collier.

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