You want to reduce corruption? Give awards to foreign journalists

A few days ago, Eduardo blogged about the LAC version of the Copenhagen Consensus. I was there discussing the institutional reforms paper by Susan Rose-Ackerman. In my discussion (available here), I made the point that evaluating institutional quality was incredibly difficult and that coming up with a cost and benefit analysis of possible reforms was mission impossible.

Then, I came up with a crazy proposal aimed at providing incentive for reporting corruption in Latin America. The premise is that auditing and transparency can play an important role in reducing corruption and that effective auditing agencies require independent media. However, in several countries the government has subtle ways to influence the media and thus limit their monitoring role. Moreover, in several countries newspapers and TV channels are often perceived to be partisan. Reporting of corruption by an opposition newspaper is often dismissed as being motivated by a political agenda.

Reporting by prestigious international newspapers is often perceived to be more balanced and impartial and the news produced by the international newspaper can be disseminated within the country by local newspapers and bloggers. One problem is that the market does not supply enough of such reporting. The New York Times is more likely to publish a story about Paris Hilton than a story about corruption in some unknown Latin American country which does not even have a Hilton Hotel. As a consequence, able freelance investigative journalists will have more incentives to write stories about Paris Hilton than about corruption in Latin America.

My crazy proposal aims at addressing this situation. The IDB (I chose this institution because it was the sponsor of the event, but any other agency with deep pockets would do) could establish a list of ten or so prestigious international newspapers and magazines (of the caliber of the New York Times and The Financial Times, for instance) and pay a $20,000 premium (discussants at the conference suggested that the premium may need to be higher) to each journalist who manages to publish a major story about misgovernment (Ernesto Stein suggested to include good government) in Latin America in one of these journals. An important feature of this proposal is that the premium should be automatic. After the author publishes the article she can directly collect the money from the IDB, no questions asked. Otherwise, member countries that are offended by a given article could prevent the IDB from awarding the prize or accuse the IDB of being biased against a given country and/or government.[1]

Of course, this premium will provide incentives to write articles but not to publish them. However, if the prize increases the supply of good articles, it is likely that the newspapers in the list will publish some of them. Moreover, even if an article does not get published in a major journal, it is still likely to be published in some other journal and have some effect on reporting on corruption and bad government. The impact might be smaller, but the cost (from the point of view of the IDB) of this article will be zero. 

What would the costs and benefits of such policy be? Here, I went from crazy to completely mad and computed that the net benefits amount to 1.7 trillion PPP-adjusted dollars. Of course, I don’t believe in this number, but I still think that the idea of creating third-party quality control about news on institutional quality in developing countries is a good one.

You can read more here.

Acknowledgment: I think that I got the idea from something I read on Marginal Revolution. Probably this piece




[1] Member countries that think that they would not be treated fairly by the international press could opt out (either totally or partially) in advance (i.e., at the beginning of each year) but not after the article is published.

6 Responses to "You want to reduce corruption? Give awards to foreign journalists"

  1. Eduardo Cavallo   November 12, 2007 at 9:29 am

    Great post Ugo! The biggest limitation of this excercise was that the proposed solutions had to be accompanied by cost-benefit analyses, thus they were limited to interventions that have already been tested somewhere and for which there is some quantitative program evaluation. Your proposal is a good example of thinking outside the box and we need more of that in the region (by the way, Ugo’s proposal ended up beign the most voted of all the proposals in the area of public administration!!). I hope that we can organize a similar conference in the future where we explicitly ask for more creative proposals like yours! Ugo and Roberto Rigobon would certainly be invited!!!

  2. Vitoria Saddi   November 12, 2007 at 1:12 pm

    Ugo, It is a great idea indeed. On a state level, we have plenty of data (at least for Brazil) to start displaying corruption. It is very interesting!Vitoria

  3. Andrew Powell   November 12, 2007 at 4:10 pm

    Dear Ugo,
    Let me make an alternative suggestion. Lets invent a Pulitzer, we can call it the “Pannizar” prize for the best piece on “governance” issues in EM’s.  I think it should be open to all journalists from the South or the North and in any language, with an independent panel (the Pannizar Policy Committee) to ensure objectivity – I guess the original may have to be translated for the panel. How would this be funded? Well Ugo has more friends than virtually anyone I know, so a small donation by each one should provide for very attractive prize money!
    I would imagine the work being done by Transparency International and other NGO’s that work in this area would be a valuable input. It might also be worth reviewing the experience with corporate whistle-blowers and their protection, for lessons for EM’s.
    By the way, I suggest governance rather than corruption as it seems difficult to separate. Indeed the plethora of indicators of governance-quality are highly correlated. A table named “over-rated” in a recent paper on ratings and spreads (written with Juan Franciso Martinez and available as Table 3 in ) illustrates the point,
    Very best
    Andrew Powell
    (IDB Research Dept.)

  4. Fernando Paulsen   November 12, 2007 at 6:24 pm

    Interesting initiative. It reminds me a fantastic old western movie, Shane. The town was under the tirany of the local landowner; the town´s institutions( sheriff, judge) were either fearful or corrupt and unable to cope with the threat. Until from the mountains comes blue-eyed Shane in his white horse, does the required punching and killing, restoring order in town, and then leaves to a new challenge beyond the horizon.Transparency, corruption and bad government will not be part of the Latin American culture out of a monetary race between foreign journalists with connections to super newspapers from abroad. That may affect for a while the local elites, who are always very sensible to foreign media. The people get affected when those stories are published in the local newspapers and newscasts. A different approach might be to ask the IDB to heavily finance new media and networking projects all over Latin America, and stimulate the stories from within to be part of the flow. Put the incentive in the digitalization of the territory and let what Ray Kurzweil labels the exponentiality of growth works.

  5. ewulf   November 13, 2007 at 3:58 pm

    Although interesting idea for a partnership ,between independent media and all of those who try to improve Government accountability,in Latin America the best solution for decreasing corruption ,is to reduce the State involvement in the economy ,and to implement reforms to make it more efficient and focused on the best use of resources available ,which should be applied on specific social target.Therefore an alternative approach ,would be to write down articles about those success stories arising from Government reforms.

  6. Charles N. Steele   November 14, 2007 at 10:23 am

    Excellent idea! This is the kind of craziness we need.But why *not* establish a Pulitzer-like prize, open to anyone publishing suitable work in a suitable outlet (as defined by the prize parameters and judges). (Call it the Ugo?)Couple this with the proposed automatic payments, and the effects of each would be magnified, no?