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Nationalism and corruption – Econlib

by Index Investing News
September 17, 2023
in Economy
Reading Time: 3 mins read
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The Economist has an excellent piece on the link between nationalism and corruption:

Tunisia reflects a global trend: more leaders are using nationalism as a tool to amass power—and to abuse it (see chart 1). Whereas nationalism was once a means to dismantle deplorable colonial empires, it is increasingly becoming a device to remove legitimate constraints on government power. Leaders who chafe at checks and balances need a pretext to scrap them. They cannot admit that they want to muzzle the press and purge the courts because they find it irksome to follow the rules and would prefer to rule with unfettered authority. So they accuse journalists and judges of being traitors, or agents of foreign powers.

After declining during the neoliberal era, nationalism has been increasing since 2012:

They discuss a University of Gothenburg Study that found a link between rising nationalism and rising levels of corruption:

We combined our measure of how nationalist governments are with data on perceptions of public-sector corruption from Transparency International (ti) for the years 2012 to 2021. Using a statistical model, we found that where governments rely on nationalist rhetoric to stay in power, experts think the public sector is much more corrupt (see chart 2). Moreover, comparing countries with themselves over time, going back to 2012, we find that more nationalist rhetoric has been associated with more corruption, and less nationalism with less corruption. Both these findings remain true after controlling for average incomes, and changes in them, and worldwide trends in nationalism and corruption.

Nationalism also reduces the quality of governance, and makes a country more violent:

A paper co-written by Abhijit Banerjee, a Nobel prize-winning economist, found that when voters pick candidates by ethnicity instead of, say, probity or competence, they end up with less honest, less competent representatives.

Andreas Wimmer of Columbia University crunched data from nearly 500 civil wars and found that when political parties are ethnically based, civil war is nearly twice as likely. And instability is perhaps 30 times as likely if the country in question is neither a dictatorship (which can crush unrest before it escalates) nor a full democracy (where disputes are typically resolved peacefully). In short, when a leader invokes blood and soil, expect things to get bloody, or soiled. 

There is only one point on which I disagree:

Nationalism can be positive or negative. The positive sort—love of one’s country—can be a force for good. 

I’d call love of one’s country “patriotism”, not nationalism:

1.   A patriot believes free trade makes their country richer.  A nationalist fears dependence on foreigners.

2.  A patriot believes immigration makes their country stronger.  A nationalist fears immigrants will change the culture.

3.  A patriot supports equal rights for women and gays.  A nationalist views women’s rights and gay rights as a suspicious foreign idea.

4.  A patriot wants to teach children a true version of their country’s history.  A nationalist wants schools to conceal their country’s crimes.

5.  A patriot views all citizens as being of equal worth.  A nationalist sees minority groups as being less than equal citizens.

6.  A patriot wishes to work peacefully with other nations.  A nationalist is suspicious of international agreements to promote peace and trade. 

In the future, I believe 2012 will come to be seen as the year when the world started a long period of political decline—much like 1913 in the previous century.  A period of rising statism in economics and rising nationalism in politics.  I fear that we are still in the early stages of this new era.



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