Economic Gangsters: Corruption, Violence, and the Poverty of Nations | 
 enlarge | Authors: Raymond Fisman, Edward Miguel
Publisher: Princeton University Press
Category: Book
List Price: $24.95
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Avg. Customer Rating:  5 reviews
Sales Rank: 13181
Media: Hardcover
Number Of Items: 1
Pages: 250
Shipping Weight (lbs): 0.9
Dimensions (in): 8.5 x 5.8 x 0.9
ISBN: 0691134545
Dewey Decimal Number: 364.1323
EAN: 9780691134543
ASIN: 0691134545
Publication Date: September 22, 2008
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Product Description
Meet the economic gangster. He's the United Nations diplomat who double-parks his Mercedes on New York City streets at rush hour because the cops can't touch him--he has diplomatic immunity. He's the Chinese smuggler who dodges tariffs by magically transforming frozen chickens into frozen turkeys. The dictator, the warlord, the unscrupulous bureaucrat who bilks the developing world of billions in aid. The calculating crook who views stealing and murder as just another part of his business strategy. And, in the wrong set of circumstances, he might just be you. In Economic Gangsters, Raymond Fisman and Edward Miguel take readers into the secretive, chaotic, and brutal worlds inhabited by these lawless and violent thugs. Join these two sleuthing economists as they follow the foreign aid money trail into the grasping hands of corrupt governments and shady underworld characters. Spend time with ingenious black marketeers as they game the international system. Follow the steep rise and fall of stock prices of companies with unseemly connections to Indonesia's former dictator. See for yourself what rainfall has to do with witch killings in Tanzania--and more. Fisman and Miguel use economics to get inside the heads of these "gangsters," and propose solutions that can make a difference to the world's poor--including cash infusions to defuse violence in times of drought, and steering the World Bank away from aid programs most susceptible to corruption. Take an entertaining walk on the dark side of global economic development with Economic Gangsters.
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| Customer Reviews:
 Interesting research but could use a more thorough treatment November 30, 2008
0 out of 1 found this review helpful
I enjoyed this book and I think the research is compelling. Aside from a chapter in the middle of the book that veers inexplicably into Bush-bashing, Economic Gangsters is well written and very accessible. It is clearly written to introduce their ideas to readers who may have little or no experience with economics and there is little math or mathematical theory involved. I managed to breeze through it in about a week of before-bed reading.
Interesting but not sparkling... November 18, 2008
2 out of 6 found this review helpful
[Originally published at my blog, [...]
I read this book recently. The authors (Ray Fisman and Ted Miguel) are development economists at big schools (Columbia and UC Berkeley; Ted's in the econ department, but I see him and his RAs all the time), and they've written this book to give laymen some insight into the research we (economists) do and how that research can be used to advance development around the world.
Ray and Ted have structured their book around academic papers that they and their colleagues have written, omitting the tedious math and econometrics and adding explanations, stories and context to the questions at hand.
Relative to an economic textbook, this book is much more accessible and intuitive; relative to other development books (Easterly's Elusive Quest for Growth, Scott's Seeing Like a State, and even Perkins' Confessions of an Economic Hitman), this book is, uh, boring and overly didactic.
Yeah, sorry.*
Perhaps I am a jaded reader -- I've read about 2/3rds of the papers behind the book, and I've been "doing" development economics for 5-15 years (depending on who you ask) -- but the book only grabbed my interest a few times, e.g., the mayor of Bogota who used mimes to shame those breaking traffic laws. Put differently, I can think of better ways to spend your time.**
For those of you interested in the contents, here's a preview, chapter by chapter:
1) Economic development is impeded by corruption.
2) You can measure a company's political importance by watching its stock price when the corrupt dictator (Suharto in Indonesia) gets sick.***
3) You can detect corruption in the discrepancy between figures of the exporting country and importing country (e.g., Hong Kong to China). Distorted tariff and trade rules encourage corruption.
4) Some cultures are more corrupt than others. Ray and Ted discuss their brilliant paper, which showed that diplomats to the UN in NYC obeyed parking laws in rough proportion to their corruption at home (and attitudes towards the US) -- despite having the same immunity from prosecution. (I'm guessing that this paper was their book proposal.)
5) No water, no peace -- conflict rises when water supplies fall.**** Global warming will make this worse. Ray and Ted overlook an important problem in this chapter. They claim that the Rich world will not do too bad with climate change, but they forgot the adverse impact of a sick environment on quality of life.
6) When people are starving, they look for ways to reduce the demand for food. One way to do this is by finding and killing "witches". One way to stop the massacre of old women and children accused of witchcraft is to provide insurance against such risks, i.e., drought relief.
7) Countries can recover from war pretty quickly, but it's harder to recover from civil war or when ex-militants are left in unemployed groups. Vietnam succeeded; Iraq is failing.
8) Randomized trials (one village gets a new program, another "control" village is left alone) are a good way to evaluate anti-poverty programs.*****
Bottom Line: Anyone REALLY interested in development economics (but who is not an economist) should read this book. Everyone else should keep reading and debating at economics blogs :)
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* And who am I, a lowly postdoc without a book to his name, to question the output of two superstar professors? Just me, folks...
** Listen to this great podcast [...], in which Richard Epstein discusses inequality and happiness.
*** Read this paper [...] to really understand how a developing country moves from the "Natural State" to the "Open Access Order."
**** Check out the updated Environment and Security Water Conflict Chronology" [...] from Peter Gleick's Pacific Institute for Studies in Development, Environment and Security (yes, that's the full name). It's pretty exhaustive, but it's also pretty inclusive (it includes incidents when one person is attacked, "perhaps" over water...)
***** I'm still amazed that a PhD student (Ben Olken) was given [...] to study corruption in Indonesian road building. Holy Cow! That's enough to fund 200 "normal" PhD research projects!
 Political Economy of Conflict Goes Mainstream November 14, 2008
2 out of 2 found this review helpful
A few years back, economists Ray Fisman (Columbia University) and Edward Miguel (University of California, Berkeley) caught the attention of the global media and the United Nations with their study of diplomats' unpaid parking tickets. At the time, diplomatic immunity allowed representatives to the international body to park in violation of city traffic codes, racking up fines. Fisman and Miguel looked at the list of traffic violations for UN plates over several years. They found that diplomats from some nations such as Canada and Ireland behaved themselves, parking lawfully and paying any tickets, while others such as Kuwait and Chad exploited their power, sometimes in ostentatious ways. Why? The ticket behavior, the economists suggested, is a proxy indicator for the intersection of culture and corruption.
Now, in their recently published book, Economic Gangsters: Corruption, Violence, and the Poverty of Nations, Fisman and Miguel extend their corruption lens to the problems of conflict and development. They look for economic causes of conflict such as water scarcity or food crises to help explain everything from civil wars to witch trials. They ask whether more money or better governance is the key to economic growth for Africa, concluding that--although corruption and economic abuse is a key challenge to development--it won't really be possible to answer the big questions of the field until there is better quality, more scientific evaluation of the results of aid projects.
Economic Gangsters is a pleasurable and fast read, written for a popular audience who may or may not know the context of the work. For development specialists familiar with the writings of Jeffrey Sachs, William Easterly, and Paul Collier, the broad contents of the book will be familiar. As other reviewers pointed out, there is also a certain sense in which discussions of warlords and blood diamonds brush up against diplomats' parking tickets or randomized sampling without connections between the topics ever being delineated. On the whole, however, Fisman and Miguel's presentation feels fresh and dynamic. Even seasoned development practitioners are likely finish with a few new ideas inspired by the book's creative approach to cross-pollinating approaches and examples.
The book is available in print and in Amazon's Kindle e-reader format. The digital version suffers from occasional print type errors (for instance, writing budget as bud-get), but the charts and tables thankfully appear crisp and clear on the Kindle screen. I read in Kindle format and would be pleased to do so again.
Economic Gangsters deserves to be widely read. The authors' tone is friendly and simple, approachable even. This is important, given the complexity and high stakes of the issues at hand. Indeed, the economics of conflict and corruption need to be more widely understood if donor countries' policy making is going to be improved. Yet, one finishes reading this book on the topics of war, poverty, suffering, crime, and interventionist failure feeling not overwhelmed, but rather empowered--equipped with intellectual tools for making the world better, little by little.
witty, clever, upbeat, all while tackling some of international development's most difficult issues November 2, 2008
4 out of 4 found this review helpful
Eight years ago, as I crossed the Uganda-Kenya border, I was sequestered in a shack, interrogated, threatened with prison, and ultimately required to pay a bribe by border guards. After that harrowing experience, I returned to my hotel and recounted the story to the first friendly face I saw: my sympathetic colleague Ted Miguel. Ted and his colleague Ray spent the succeeding years studying violence and corruption in poor countries; and this sweet book is the latest fruit of those labors.
What can economics tell us about corruption and violence around the world? More, perhaps, than you'd expect. Ray and Ted use surprise changes in a dictator's health to measure the value of political connections in Indonesia, rainfall to capture the effect of recessions on violence in Africa, and tricks in the trade data to reveal smuggling. (That's not to mention the parking tickets - Chapter Four.) They present their clever research in surprisingly clear English, and they draw on the related research of other economists as well. They really know how to tell a story: I was captivated by the opening recounting of Kenyan author Ngugi's woes and delighted by the creative policy making of Antanas Mockus, mayor of Bogota.
It's hard not to compare popular economics books today to Freakonomics: Gangsters has the advantages of Ted and Ray's witty, pleasant voice, more of a thematic focus, and none of the self-adulation that took away some Freakonomics' shine.
Despite the focus on corruption and violence, ultimately the book is presenting a miscellany of work that is related but isn't (and perhaps cannot be) circumscribed into a larger theory. Occasionally I found myself wishing a central theory like you find in Malcolm Gladwell's books. But then again, those theories usually aren't convincing for exactly the reason that Ted and Ray don't have one: they are careful and big, broad theories are not. I really enjoyed the clear policy recommendation of Rapid Conflict Prevention Support in Chapter 6, and I look forward to more clear recommendations in the next book. Again, Ted and Ray are careful and tend not to recommend policies that don't have clear evidence to stand on. Not all scholars are comfortable laying out strong recommendations on limited evidence; two books by scholars who are more comfortable are The Bottom Billion and The End of Poverty. (As I recall, that's also the self-definition given by an economic hit man!) The main policy recommendation, ultimately, is more evidence-based policy making, particularly randomized trials of development programs (but with a healthy view of the realistic scope for these kinds of trials).
This book won't just show you that economists can be clever (although it will show you that): It shows that economics, cleverly applied, can illuminate some of the most intractable development problems of our time. I strongly recommend it. And if you don't trust me, Publishers Weekly said that in this "surprisingly spry" read, "fascinating insights abound" [1]. Take it from both of us and learn something.
[1] Publishers Weekly, 6 October 2008.
Incentives matter--to gangsters too October 6, 2008
7 out of 7 found this review helpful
As Raymond Fisman and Edward Miguel explain at the beginning of their book, there are two main currents of thinking among those who opine on the wisdom of foreign aid: the "poverty trap" view, which holds that aid must be injected to end a vicious cycle in which inability to save leads to disaster in lean years, and the view that more such aid is simply sending good money after bad, straight into the hands of corrupt officials to be funneled away or otherwise wasted. Fisman and Miguel aim to look at corruption and violence in developing countries to determine how prevalent such evils are, how they are caused, and how they can be prevented--and, therefore, what the best way, non-ideologically-speaking, of raising up poor nations might be.
The funny thing about corruption is that it tends to exist out of sight--at least, out of sight of official statistics and public measurements. No one reports the bribes he takes on his income tax returns. So Fisman and Miguel have to come up with creative means of measuring corruption of various types, and this is the most fun part of their book. Economic Gangsters is completely accessible to the general reader, with virtually no economic jargon or concepts more difficult than "incentives matter," but it perfectly captures the exciting, puzzle-solving nature of this kind of academic research.
Fisman and Miguel's biggest, and most important, suggestion is the basic one that foreign aid and other solutions to developing-nation poverty be studied and implemented in an evidence-based manner. Without experimental data it's very difficult to determine whether a particular program is actually effective or not (or cost-effective or not). Randomized trials, like those carried out for developing medicines, are rare in the field of poverty reduction. But sometimes they are carried out. For example, local democratic control of public works projects is often touted as an antidote to corruption and skimming of funds. But in Indonesia a test was conducted to compare road building under local control, the thread of a federal audit, and no corruption prevention. Local control did little better than the control group, while those projects that were audited involved significantly less stolen money.
The authors adhere to their intention to remain non-ideological, and their interest is clearly in going where the evidence leads them. Unfortunately, large-scale economic experiments are often impossible and unethical, so some things can never be tested. But those interested in solutions that actually work should use what information they can. Economic Gangsters provides some of that information, and an interesting look at how to find it. It also tells some great stories about the incentives economic gangsters respond to, the strange circumstances that sometimes create these incentives, and how governments and other groups can play with them to aim for better outcomes.
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