From what I have seen in my travels, having low corruption is probably more important than for example being a democracy for the general wellbeing of average people. I am growing to believe this may in fact be the single largest factor determining how much opportunity and prosperity a country has.
Yeah, but how would you define corruption? Does it include lobbying, regulatory capture, the revolving door, inviting Federal justices on all-expenses-paid vacations where the catch is that they must oblige to listen to your lectures on political economics...?
You go to the nicest places in a country, some fancy rooftop in the posh neighborhood of the capital city for example, a place where a round of drinks costs more than the average wages for the people living there, you talk to the people there, in a normal country you'll discover there are a lot of smart and ambitious people who have well paid, high skill jobs requiring a lot of education and training. In a corrupt country you'll find the same smart and ambitious people but now their jobs will be things that don't appear to pay that well and not require too much like being responsible for issuing building permits or something. On your way home the police stop you and hassle you until you pay a "fine" to be paid on the spot in cash. Maybe you pay it (and be sure to get a receipt so the next cop knows you've already paid), maybe you haggle for an hour or two until they get bored and move on.
This will prevent the country from developing their most valuable industries, these countries will suffer massive brain drain both to other countries and also internally as their best and brightest end up competing for jobs that could be performed by low level staff.
Type 2 Corruption: American Style
The government allocates 3 billion dollars for an infrastructure development project. This is already twice what the project should cost compared to similar projects in other countries, but the labor unions still find ways to bloat the project more, adding all sorts of rules and stipulation that empower their members to do things like play games with overtime where people alternate weeks to be "unavailable" and introduce delays that everyone gets paid for. Various groups trigger environmental reviews and refuse to compromise unless the project is expanded to include things they want. To the surprise of no one, the final cost of the project is more than twice what was originally allocated and completed 10 years behind schedule. In addition some key features needed to be cut, leaving the final product a shadow of what was originally envisioned. When election day comes, the unions push hard for their benefactors. The city is effectively completely controlled by a single party and with less to differentiate candidates in the eyes of the average voter, this support has a decisive effect. Everything is debt financed and the burden is kicked down the road for the next generation to figure out.
This is definitely a huge drag on the economy and quality of life, but by itself does not fundamentally derail the direction of economic activity like the first kind does.
I'd rather the second kind if I had to choose, but both are horrible. In the US it seems that people can only see corruption in the opposite party that they are in, which is very much by design in my opinion. Most of the issues that animate political discussions in the US are in fact intentionally selected to draw attention away from these issues.
