The real cost of corruption

Discussions about graft and corruption in Greece typically revolve around the size of the «gifts» surreptitiously handed to a section of state officials and political cadres. Unfortunately, the cost of corruption to the national economy is not limited to the money that is secretly passed from the private to the public sector in the form of bribes. Sure, a sum of around 400 million euros is spent each year to make sure that state contracts end up in the hands of specific businessmen. However, this is only the visible cost of corruption. The invisible damage is far greater. In an economy where decisions are made according to the gifts made by private individuals (or, in some cases, demanded by state functionaries), state contracts are not awarded according to the criteria of project effectiveness or the country’s needs. We know that many infrastructure projects have in the past been assigned on the basis of personal gain without paying any heed to the country’s actual concerns. As a result, Greece has come to own aircraft produced by rival makers, army tanks we are not quite sure how to use, and rocket missiles we do not know how to deploy. Calls for transparency are not just about curbing some people’s illicit profit-making but about finally taking care of the country’s infrastructure problems. The lack of transparency in the assignment of public projects creates artificial needs that tend to absorb huge chunks of the state budget. This is where the conservative administration of Prime Minister Costas Karamanlis must concentrate its efforts. The government must double-check the objectives of all expenditures and make sure that state checks go where they are needed and not into the pockets of some cunning few.