Corruption: Inhibitor of Development

Paul Collier on the "bottom billion"

http://www.ted.com/talks/paul_collier_shares_4_ways_to_help_the_bottom_billion.html>

http://users.ox.ac.uk/~econpco/   Paul Collier  Biography

1. What is the fundamental challenge for the bottom billion?

2. When was the last time the rich world got interested in developing another region?

3. What did the United States do to assist Europe?  What were the total reversals?

4.  What is one idea to strengthen governance?

5. What is the opportunity example that Paul Collier presents?  What is the challenge between the flow of resources from the commodity boom versus development aid?

6. With Collier's projections what is the difference that he projects between the short run and the long run?

7. Why is there a resource curse?

8. Why do democracies seem to create greater instability compared to autocracy?  What is doing the damage with democracy?

9. What is Collier's proposal for improving checks and balances in weak democracies?

10. What is a verified auctions?

11. Why does Collier claim that nothing has been done yet?

Brief Notes on the Nigeria Article: 

• Two Irish businessmen, Michael Quinn and Brendan Cahill, convinced Nigeria to sign a $500 million contract to build a gas processing facility.

• The contract was riddled with corruption: Quinn and Cahill paid bribes to Grace Taiga, a legal director at the Ministry of Petroleum Resources, to get the contract approved.

• Even though P&ID hadn't built anything yet, they won a $6.6 billion arbitration award against Nigeria when the country reneged on the deal.

• Nigeria challenged the arbitration award in court, arguing that the contract was obtained through fraud. They also discovered that P&ID had received confidential legal documents during the arbitration process, possibly through more bribes.

• A judge in London eventually ruled in favor of Nigeria, overturning the arbitration award.

• The judge also criticized the arbitration system itself, saying that it allows for secrecy and can be manipulated by greedy actors.

• Grace Taiga, the Nigerian official who was bribed, died in prison while awaiting trial.

• The hedge fund that financed P&ID's defense is now suing Brendan Cahill and the litigation funding company over their losses.

This is a complex story about corruption, international arbitration, and the human costs of financial fraud.