In the 1990's, my brother traveled in Georgia with a friend. They were cruising around with an old van, looking for archaeological sites and other cultural heritage. Every 10 kilometers they were stopped by police who politely asked for baksheesh. My brother’s friend hated corruption, and, more significantly, had severe difficulties controlling his temper. After this pathetic annoyance was constantly going on for days, he became angry and shouted at the policemen: “Your country is the most rotten place on earth. I will never come back to Georgia and I will tell everybody how miserable it is here!”
The policemen didn’t expect this kind of reaction. They looked at each other and exchanged some words in Georgian. Then their face expressions turned sad… and – guess what? – they humbly returned the baksheesh. Moreover, they went to their police car, took a bottle of wine from somewhere in the back, and handed it over to my brother and his friend.
This experience was exemplary for Georgia in the 1990's. The country was permeated by corruption, but people were essentially decent and uneasy about their own conduct.
Values enter a complex relation with incentives. It is indeed possible for decent people to be corrupt – if the incentives to be corrupt are so strong that they override any intrinsic motivation to be decent. Yet it is almost impossible for a decent person to be happily corrupt. A bad conscience, and a deep-seated desire to end the corrupt state of affairs, plagues everyone who submits to incentives instead of living up to their values.
This is the decisive reason why, after the Rose Revolution, the Georgians have so successfully eradicated corruption. In fact, everybody was suffering from the situation before 2003. Removing corruption was not seen as something which negatively interfered with peoples’ lives, but as a relief from a straining and unbearable situation.
And this is the difference between Georgia and Greece. I doubt that until recently, Greeks were psychologically suffering from the corruption in their society. I am not even sure that they recognized corruption as a problem at all.
When Mobuto Sese Seko came to power in the Congo, everybody expected him to give the less important positions in the government to other members of his Ngbandi tribe, and the most important positions to the members of his closer family. Not being nepotistic would have been considered inappropriate by the people. Why should somebody who has acquired the foremost position in the government not share some of the benefit with his family and his tribe? Wouldn’t it be selfish and unfamilial to give the riches of the state, which can be exploited by those who run the government, to members of other tribes, to members of other families?
Likewise, the Greeks expected somebody who luckily obtained the job of a, say, tax officer, to extract maximum benefit for himself from this juicy position. And a Greek physician would of course take extra money from patients in exchange for priority treatment – wasn’t it just fair that he economically exploited his right to decide on priority treatment? In the end, he had to attend university before and bribe other people there for becoming a doctor.
The shock which recently hit the Greek economy showed the Greeks that their baksheesh economy is not sustainable. If this triggered off a process of reflection – and I am doubtful whether this happened – a real change of values might result, letting people wholeheartedly condemn corruption. Georgia shows that an attitude of integrity is a precondition for successful corruption fighting. If the Greeks get the lesson, I wouldn’t be surprised if in 10 years they can boast with successes in corruption fighting similar to Georgia.
Now let us answer Yasya’s question. Cheops’ pyramid was built within 20 years. The Nile, on the other hand, did not appear within decades, but needed millennia to come into being. And the Cheops’ pyramid is manmade, while the Nile is the outcome of geological processes. Are values like rivers or pyramids?
They are like pyramids, because they can be established within relatively short time, and because they are manmade. This is the reasons why economics must take into account values – if they were completely exogenous, it would indeed be sufficient to only talk about material incentives.