In many countries public sector wages have fallen so low that a family cannot survive on a typical official's salary. Moreover, measures of success are often lacking in the public sector, so what officials earn is not linked with what they produce. It should be no surprise that under such conditions corruption flourishes. Fortunately, around the world experiments in both public and private sectors are emphasizing performance measurement and the overhauling of pay schemes. Fighting corruption is only one part of a broader effort of 'institutional adjustment', the systematic recasting of information and incentives in public and private institutions.
Institutional adjustment is the next big item on the development agenda.
The worry is that corrupt officials on top are monopolists unwilling to sacrifice their rents, and international and local business people are locked in a prisoners' dilemma in which the dominant strategy is to bribe. A corrupt equilibrium is reached, as a result of which rulers and top civil servants and some private companies gain, but society loses. The reflexive answer is 'nothing'. Yet such reforms have swept the world, as has the remarkable 'third wave' of democratic reforms. Some governments do, of course, resist establishing good governance.