Sunday, December 06, 2009

corruption puzzle

i was listening to the planet money podcast about organized crime in japan. what's remarkable is how openly and semi-officially these organizations operate there. which i guess i kind of knew. except this is also japan, a country that has a squeaky-clean reputation when it comes to corruption. indeed, japan scores pretty high, higher than the u.s., in the 2009 CPI index.1 the CPI is only a measure of how corrupt the country is perceived to be. it's harder to measure actual corruption.

but how did japan get to maintain it's clean image when criminal syndicates weren't even outlawed until 1993 and since then have continued to serve in a semi-official capacity in the japanese economic system? the podcast recounts how the yamaguchi-gumi fleeced lehman brothers out of $350 million, and yet the organization works so much in the open that there are signs outside its headquarters in kobe. it took only a quick search to find the organization's headquarters, clearly marked, on google earth.

you'd think such open criminal activity, with little government reaction, would severely damage the country's image, especially when it preys off of foreign investors. and yet, lehman brothers is now gone, yamaguchi-gumi is still around and has never been penalized for stealing money from them, and japan gets rated one of the least corrupt countries in the world.

1-yes, i know that's got RAS syndrome. so what?