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Economist Atif Mian thinks incompetence is a bigger problem than corruption

KARACHI: Renowned Pakistan-American economist Atif Mian stirred up a debate on Wednesday by putting up a Twitter poll about the challenges of corruption and incompetence being faced by  developing countries from the ruling elite.

“Which one is the biggest problem in developing countries,” he asked in his poll and gave two answers –  1) corruption of elite and 2) incompetence of elite.

Among those who took part in the poll, 60 percent voted for corruption as being the biggest problem in developing countries while 40 percent blamed the incompetence.

Later, reacting to the results hiself, Atif Mian put his weight behind the minority view.

“I will go with the minority view on this poll and argue that incompetence is the bigger constraint on development than corruption (of course ideally we want to avoid both),” he said and then cited the examples of China and Saudi Arabia.

“They (China and Saudi Arabia) are both centralized power structures with a lot of corruption at the top. But Chinese system differs in one important way: it encourages competition within the power structure and favors those who can deliver stronger productivity (think of local gov targets etc),” he wrote.

“In a sense the Chinese recognize that a growing pie offers a lot more to pick from, and enables centralized power to stay longer,” he said, adding that Saudi Arabi was unable to do anything similar, with the result that there is no dynamism, and one sees glaringly incompetent policies like “saudization”

He continued: “The eventual success of a system relies on one key Q: How effectively does it delegate power to the most competent? There is no doubt that corruption can come in the way of such delegation. But even a corrupt system can deliver if it finds a way to delegate to the competent.”

For the wonkish reader, see the Coase Theorem, he concluded.

 

Atif Mian

@AtifRMian

1/ I will go with the minority view on this poll and argue that incompetence is the bigger constraint on development than corruption (of course ideally we want to avoid both).

Let’s compare China and Saudi Arabia