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Economic Gangsters: Corruption, Violence, and the Poverty of Nations

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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 develop 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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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 develop 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.

30 review for Economic Gangsters: Corruption, Violence, and the Poverty of Nations

  1. 5 out of 5

    Hardik Lohani

    What are Economic Gangsters? They are the maladies that cripple economies and doom people into miseries. This book has very easy approach in explaining the root causes of poverty and destitute in parts of world like East Asia in 80s and Sahel-Sub Saharan Africa (for very long time). Corruption; is it cultural thing ingrained in human minds of certain people or is it ever changing approach which disappears in accordance with overall improvement in human life standards like rising standard of educ What are Economic Gangsters? They are the maladies that cripple economies and doom people into miseries. This book has very easy approach in explaining the root causes of poverty and destitute in parts of world like East Asia in 80s and Sahel-Sub Saharan Africa (for very long time). Corruption; is it cultural thing ingrained in human minds of certain people or is it ever changing approach which disappears in accordance with overall improvement in human life standards like rising standard of education? There are many theories which are craftily presented to show how various factors contribute to poverty. Some ideas like dry weather being a catalyst factor to increase likelihood of civil strife in arid deserts of Africa where nothing grows and people turn to violence. Other cultural malpractices like witch hunting in Tanzania and Indian Northern states (Bihar, UP) are really not cultural but more aligned with economic mindset. So, there are other ideas in line with these and are very interesting. Overall book is an easy read, useful to understand why poor remain poor for very long time. Poverty-violence- more poverty-more violence: circle of doom!

  2. 5 out of 5

    Nils

    Written by a protege of Jeff Sachs, this book adopts a quasi-travelogue "you are there" approach to reporting on the economic underpinnings and implications of the various seemingly noneconomic challenges facing the poor in the Global South. It's not really a book about development, so much as it us a book about global poverty, and it's basic thesis is right there in the title: the central source of the miseries of the world's poor (from civil wars to climate change to witchcraft persecutions) i Written by a protege of Jeff Sachs, this book adopts a quasi-travelogue "you are there" approach to reporting on the economic underpinnings and implications of the various seemingly noneconomic challenges facing the poor in the Global South. It's not really a book about development, so much as it us a book about global poverty, and it's basic thesis is right there in the title: the central source of the miseries of the world's poor (from civil wars to climate change to witchcraft persecutions) is economic thuggery. It's a crypto-Marxist hermeneutic of suspicion — at bottom, the world's evils are caused by base economic motives — repackaged as a set of micro-policy prescriptions rooted in a disconcertingly cheerful and sometimes almost sententious neoliberal nostrums (e.g. no need for serious reordering of global power, authority or institutions!). Not that the ultimate conclusions lack any merit, but the writing and analytic level appears designed for earnest and bright high school juniors.

  3. 5 out of 5

    Vince

    I might be a little unkind in my rating as I went into the book with high expectations, an internation freakonomics, and the book falls short. Some of the data is mis interperted. For example the writers go on how when Indonesia's ruler was sick certain stocks went down. They assumed that this meant that these companies were involved with corruption to a greater level than others. That could be true or it could be that the markets just assume new leadership might make changes that would impact d I might be a little unkind in my rating as I went into the book with high expectations, an internation freakonomics, and the book falls short. Some of the data is mis interperted. For example the writers go on how when Indonesia's ruler was sick certain stocks went down. They assumed that this meant that these companies were involved with corruption to a greater level than others. That could be true or it could be that the markets just assume new leadership might make changes that would impact different companies in different ways. For example a John McCain victory in this country would certainlly have been a boon to the military industrial complex. that doesn't mean that McCain or Boeing are corrupt just different allocation of resources.

  4. 4 out of 5

    Ra

    This book is about ten years old, so most of the research done has been concluded and/or superseded. However I am happy that I read it at this juncture in time after moving to Kenya, because it has many historical references about this country. The book makes a good case for the thesis that development is possible wherever governance is generally good and free of corruption. It cites many examples about the effect of corruption in Asia and Africa and gives examples of places where development and This book is about ten years old, so most of the research done has been concluded and/or superseded. However I am happy that I read it at this juncture in time after moving to Kenya, because it has many historical references about this country. The book makes a good case for the thesis that development is possible wherever governance is generally good and free of corruption. It cites many examples about the effect of corruption in Asia and Africa and gives examples of places where development and change worked despite the scourges of poverty and war (Vietnam and Botswana). There are also many examples of failure, like Iraq. The authors also give some evidence that economic hardships may be one of the underlying reasons behind civil wars, witch killings and even genocide. I found the history, the stories and the economic experiments fascinating. This book, however would be more useful as reading material, as it often cites numbers and statistics that I would like to see and ponder black and white. These are hard to grasp fully when listened to.

  5. 5 out of 5

    Curt Buchmeier

    Pretty good read, found my mind wandering after about 5 pages or thereabouts so it took me awhile to get thru this one. Tough subject; trying to scientifically measure corruption in various parts of the world. I commend the authors for a noble effort. Economists are not known for page-turners. When I heard about the premise on goodreads, I had to give it a shot & glad I did. I would recommend to others interested in social justice. Beyond documenting various forms of corruption & out &am Pretty good read, found my mind wandering after about 5 pages or thereabouts so it took me awhile to get thru this one. Tough subject; trying to scientifically measure corruption in various parts of the world. I commend the authors for a noble effort. Economists are not known for page-turners. When I heard about the premise on goodreads, I had to give it a shot & glad I did. I would recommend to others interested in social justice. Beyond documenting various forms of corruption & out & out stealing by the well-connected, this book actually gives possible solutions. However, the 'solutions' are as unlikely as taking money out of the election process in the US. While a bit dry for my taste, still, it had it's moments & was actually funny in an outlandish kind of way in several places.

  6. 5 out of 5

    Jay

    "Research has so far been more successful in figureing out how wars start than understanding how to make peace hold."

  7. 4 out of 5

    Ami Iida

    This book is useful to think about the economic incentives.

  8. 4 out of 5

    M

    Coming from Kenya and reading this nine years after it was written, there's still a direct variation between economic growth and the 'Economic Gangsters', both are on the rise. Otherwise, it was a good read and insightful.

  9. 5 out of 5

    Federico Romero

    It's a good attempt of providing information about corruption and poverty. It throws interesting information and data.

  10. 5 out of 5

    Dylan Groves

    negative value relative to reading each of the academic papers the book is about.

  11. 4 out of 5

    Nicole

    "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 "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.[return][return]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.[return][return]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.[return][return]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.[return](More at http://lifeinbooks.wordpress.com/2008... )"

  12. 4 out of 5

    Ed

    The most intriguing aspect of this well written book by two academic development economists is their discussion of the methods and materials they and other economists used in studying such issues as all pervasive corruption in Indonesia during the Suharto regime in Indonesia; how large scale smuggling from Hong Kong to Mainland China (entire container loads of goods falsely identified as holding similar but less taxed items) is done and why Botswana is the one of the few countries in sub-Sahara The most intriguing aspect of this well written book by two academic development economists is their discussion of the methods and materials they and other economists used in studying such issues as all pervasive corruption in Indonesia during the Suharto regime in Indonesia; how large scale smuggling from Hong Kong to Mainland China (entire container loads of goods falsely identified as holding similar but less taxed items) is done and why Botswana is the one of the few countries in sub-Sahara Africa to successfully deal with periodic drought, keeping it from impoverishing the rural population and freeing them from the "povery trap" that characterizes so much of the rest of Africa. Their conclusions aren't anything new and some of them are wrongheaded. For example the authors have a very different view of the result of corruption in Indonesia than does Ha-Joon Chang the author of "Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism", also on my list. Due most likely to a difference in approach, Fishman and Miguel look at it as an example of crony capitalism, showing how connections to Suharto were the most important factor in how the stock market valued on of the companies tied to him and his family. Chang's view is equally pragmatic but less moralizing. He compares the economic progress of Indonesia, one of the most populous and crowded countries on earth but one with significant natural resouces, especially oil, with Zaire, now the Democratic Republic of the Congo, which has untold mineral wealth. Suharto and his family controlled important and lucrative contracts for emerging technologies, like wireless phones and cable TV, as well as licenses to drill for oil. But they kept the resulting profits within the country, essentially re-investing their corruption fueled profits back into the local economy. In Zaire, kleptocrat-in-chief Mobuto not only demanded huge payoffs for the right to do business in his country but then sent billions to overseas bank accounts, robbing his nation and his subjects of any return for their work and investment. The authors are too easy on the activities of the World Bank--on of them was a staff economist there for several years, painting the supranational body as one committed to the best for its client nations in the developing world, a specious agrument at best but it is a worthwhile starting place for those interested in how development economics works, why it often fails and some of the pitfalls that are faced in implementing what should be beneficial programs.

  13. 5 out of 5

    Elizabeth

    Economic Gangsters by Raymond Fisman and Raymond Miguel (pp. 240) Billed as another thought provoking, popular science offering following the best seller, Freakeconomics, Fisman and Miguel fall far short of the mark. The promo that got me was an interview with the charismatic authors who discussed how mimes were used in Columbia to curb traffic violations. This is by far the most novel detail based on their central premise – and turned out to be like movie previews delivering the (only) funny lin Economic Gangsters by Raymond Fisman and Raymond Miguel (pp. 240) Billed as another thought provoking, popular science offering following the best seller, Freakeconomics, Fisman and Miguel fall far short of the mark. The promo that got me was an interview with the charismatic authors who discussed how mimes were used in Columbia to curb traffic violations. This is by far the most novel detail based on their central premise – and turned out to be like movie previews delivering the (only) funny line of the comedy. There is a lot of interesting content. But you have to dig more than Gladwell or Levitt. Fisman and Miguel present a lot of tables and data that could be footnoted. The narrative and the ideas should have be concise and memorable, but their writing style makes it too easy to drift before they can fully realize their point. They are clearly academics and not storytellers. It’s difficult to tackling some of the very macro issues they cover. But other authors have covered gangs, prostitution and crime and succeeded in making it compelling. The economics for many topics isn’t going to be as conclusive, but the authors often present it like it is – and then give the typical economist disclaimer. Their discussion of parking scofflaws in New York-based international diplomats as a measure of political corruption is novel and worth reading. When the authors are actually able to frame complex problems in accessible and manageable chunks, the book works and can be thought provoking. The big questions that Fisman and Miguel tackle: poverty, wars in Africa, the impact of international aid, both positive and negative are often presented as a history and less real economics. With some more effort and looking beyond the scope of their personal research world, they may have mined better content by taking a similar approach as the book, Super Crunchers. Fisman and Miguel barely ripple the surface of opportunity in the subject matter they explore. If you had to read this as part of a college econ class, you’d be thankful for it’s readability. If you’re reading it based on its book jacket, marketing tour, or comparison with other successful popular science authors, you’ll be disappointed by its academicky style and lack of storytelling ease. The issues presented by the authors are very important and deserve a bigger voice in the public consciousness. Unfortunately, Economic Gangsters is a few dry bites in what could have been and needs to be a memorable multi-course meal.

  14. 5 out of 5

    Michelle

    An extremely well-written book with thorough citations and topics that don't need to be sensationalized (and are not) in order to be interesting. I was really impressed with how the authors reworked their papers for a general audience, with explanations that are understandable to non-economists, and good refreshers for the rest. Misters Raymond Fisman and Edward Miguel tackle the issues of corruption and poverty in ingenious ways. They look for correlations between stock market prices and politic An extremely well-written book with thorough citations and topics that don't need to be sensationalized (and are not) in order to be interesting. I was really impressed with how the authors reworked their papers for a general audience, with explanations that are understandable to non-economists, and good refreshers for the rest. Misters Raymond Fisman and Edward Miguel tackle the issues of corruption and poverty in ingenious ways. They look for correlations between stock market prices and political shocks (changes of who's in charge) to gauge the likelihood that certain companies are given preferential treatment by the government (in Indonesia). They use UN diplomatic immunity to analyze the roles that nature and nurture play in following the rules, and give several theories to explain their findings. They examine different methods of economic recovery for war-torn nations with the use of some creative proxies. And that's just a flat summary of a few chapters. Throughout the book, they also include neat (and concise) tid-bits and anecdotes to make sure everyone's on the same page. I strongly recommend this book to anyone remotely interested in the driving forces behind corruption, violence, or poverty.

  15. 4 out of 5

    Arbraxan

    Economic Gangsters, written by Raymond Fisman and Edward Miguel, is a highly readable account of how violence and corruption keep poor countries poor. The book reads like a tour through many hallmarks of state-of-the-art research in development economics and conflict studies. Therein, Fisman and Miguel show how statistical techniques can be used to analyse a variety of criminal behaviors. These behaviors include but are not limited to the corrupt relationships between politicians and businessmen Economic Gangsters, written by Raymond Fisman and Edward Miguel, is a highly readable account of how violence and corruption keep poor countries poor. The book reads like a tour through many hallmarks of state-of-the-art research in development economics and conflict studies. Therein, Fisman and Miguel show how statistical techniques can be used to analyse a variety of criminal behaviors. These behaviors include but are not limited to the corrupt relationships between politicians and businessmen, smuggling, the import of cultural norms and values for the prevalence of corruption, the influence of resource constraints on war, homicide, and the convalescence of countries from war. Although the book lacks a unifying theory of corruption or violent behavior, except maybe "criminals follow economic incentives", I found it to be fine and interesting reading. The book ends with a set of bibliographical footnotes and an index, which is helpful for anybody interested in further following the many stories mentioned in the book.

  16. 4 out of 5

    Margaret Sankey

    From two development economists, popularizations of their papers measuring, bribes by following the share prices of companies owned by children of dictators through the health crises of the dictators, correlating UN parking tickets with the international index of corruption, suggesting small tariff changes that close loopholes like the chicken-turkey Chinese scam, mapping the disastrous effects of shrinking Lake Chad, examining Tanzania's anti-witch-hunting programs (giving old women enough in p From two development economists, popularizations of their papers measuring, bribes by following the share prices of companies owned by children of dictators through the health crises of the dictators, correlating UN parking tickets with the international index of corruption, suggesting small tariff changes that close loopholes like the chicken-turkey Chinese scam, mapping the disastrous effects of shrinking Lake Chad, examining Tanzania's anti-witch-hunting programs (giving old women enough in pensions to make them valuable enough not to kill), the bad news that in Indonesian road-building, threats from outside audit are far more successful than the direct democracy local town meetings controlling the money and a critique of Jeffrey Sachs' Millennium Villages for not keeping quantifiable records of success.

  17. 4 out of 5

    Max

    This book had a couple of interesting enough sections. The theme, I would say, is a bit "Freakonomics for Development." I like the concept a lot, obviously. The execution leaves a bit to be desired. While I like development and statistical analysis, the book never really manages to be that interesting. Still, it had a few interesting parts; I particularly enjoyed the chapter about how rainfall patterns in Africa may be causing violence and civil war. Also, the prose was clear and easy-to-read. A This book had a couple of interesting enough sections. The theme, I would say, is a bit "Freakonomics for Development." I like the concept a lot, obviously. The execution leaves a bit to be desired. While I like development and statistical analysis, the book never really manages to be that interesting. Still, it had a few interesting parts; I particularly enjoyed the chapter about how rainfall patterns in Africa may be causing violence and civil war. Also, the prose was clear and easy-to-read. All in all, this book was enjoyable at parts, but I don't think I would recommend it.

  18. 5 out of 5

    Bruno

    Corruption, violence, crime plague many developing (and even developed, actually) economies, but some seem better able to deal with those problems and escape the poverty trap. This book takes a look at some of the more recent theories explaining the issues as well as the effectiveness of the solutions, and does so in a very entertaining, "freakonomics"-way. It's also rather brief and to the , so I strongly recommended it to whoever is interested in the development of nations, and why some remain p Corruption, violence, crime plague many developing (and even developed, actually) economies, but some seem better able to deal with those problems and escape the poverty trap. This book takes a look at some of the more recent theories explaining the issues as well as the effectiveness of the solutions, and does so in a very entertaining, "freakonomics"-way. It's also rather brief and to the , so I strongly recommended it to whoever is interested in the development of nations, and why some remain poor while others achieve good progress and well-being for their people.

  19. 5 out of 5

    Douglas

    1CTake all you can and give nothing back 1D has been a prevailing motto throughout history. Fisman and Miguel enter the daunting task of explaining and understanding the age old problem of greed and corruption within society. A thought provoking look at the global problem; yet, the problems still remains. How do you treat an illness when the cause is still unknown? Does poverty breed corruption, greed, and violence or vice versa?

  20. 4 out of 5

    Rohan

    Although I do commend Authors for making a noble effort in trying to measure corruption, I do not think that this is one of the best books on the subject. For a short book, I particularly did not like the amount of time they spent on pointing out relationship between foreign diplomats number of parking tickets and their countries corruption perceptions index (CPI). A decent one time read.

  21. 4 out of 5

    Kimberly White

    Very interesting study on the causes of poverty. Not the best written and there were things that should have been included that weren't, but I learned a lot. E.g., did you know African nations are more likely to to have a civil war the year after a drought?

  22. 4 out of 5

    Russ

    I learned...when it fails to rain civil wars in Africa get worse. Old women in Africa are more likely to be accused of witchcraft when the crops fail. Chinese smugglers call chickens "turkeys" so they can pay less tariff charges. And many other little known useful facts.

  23. 5 out of 5

    Mark

    "A look at the complex interplay between culture, corruption, support, and economics. I had hoped this book was going to provide more answers than it did... but I think it would help people develop a more nuanced understanding of how these forces interact."

  24. 4 out of 5

    Andrew Sebastian

    File Under: Structural, Cultural, and Fiscal Imbalances

  25. 4 out of 5

    Franklin Parker

    Details the culture of corruption that exists in many areas of the world

  26. 5 out of 5

    Tricia

    thought it was great for people interested in corruption.

  27. 4 out of 5

    Lindsey

    I enjoyed this while I was reading it, but now (a few months later) I'd be hardpressed to recall any of it. For whatever that's worth. I guess it didn't totally capture me.

  28. 5 out of 5

    Nelly

    Another excellent book by Edward Miguel. I do still like his RCPS programs. Believe it has a lot of potential if well applied.

  29. 5 out of 5

    J

    Heavy focus on Africa, which is not an area I'm particulary interested in. Chapter on tariff evasion in China was excellent.

  30. 4 out of 5

    Manoj

    A bit detailed and dull, but nevertheless a good book.

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