A few weeks ago I spotted on Twitter that LSE wanted more book reviewers. Within an hour I was signed up, and a few days later my first book appeared. Economic Gangsters by American professors Raymond Fisman and Edward Miguel:

Here is my first LSE review of it, just up:

So startling is the scale of dishonest manipulation of the world’s money that governments play down the problem for fear of exposing their own impotence and incompetence (see the staggering losses suffered by European taxpayers by VAT carousel fraud and illicit dealings in carbon credits).

Any intelligent politician or policy-maker should read this book. Not to get grainy insights into economic gangsterism, but to ponder Fisman and Miguel’s brisk introduction to the twin agonies of modern policy-making: measurement and causation.

We know in general terms that corruption and stupidity aplenty are out there. But what particular bad behaviour is leading to which particularly bad outcomes? Which good behaviour or cleverly targeted incentives might lead to better outcomes?

Read the review especially for the fascinating answer to this next question.

The World Bank tried to measure anti-corruption techniques in (again) Indonesia, by giving some money to several hundred villages to build a short road. The core of the roads duly built would be tested afterwards. The better the materials spent on the road, the less the money stolen via corruption. Clever (enough).

The villages were in three groups to test three very different psychological and policy approaches:

  • no anti-corruption message – see what happens
  • transparency: local villager empowered to monitor and ask questions via public meetings
  • threats: central audit teams appearing to check the work

In which group was there the least evidence of corruption?

One weakness of the book is its folksy and somewhat breathless style. Thus you can be confident that a film called Snakes on a Plane is going to be largely about snakes! On a plane!

Well this book is about gangsters! Not ordinary gangsters – economic gangsters!

On the other hand, it’s clear and readable. And in its drilling down into the sheer difficulty of most ways of measuring policy success, it hits a lot of very plump and self-important targets (such as the international ‘development’ elite) right on the nose.

Last but not least, it reminds us of the authors’ famous study where they measured the propensity of different countries’ UN diplomats to incur parking tickets in New York and ran the numbers past different international corruption indices. Gripping.

So, read the review. And buy the book.