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.
But in the decade ahead, the crucial problem will not be inducing governments to do something about corruption but rather helping them to decide what should be done and how. Because of democratic reform, new leaders dedicated to fighting corruption and improving public administration are attaining power as never before. Election campaigns from Nicaragua to Pakistan feature corruption as a major issue. And not just in developing countries, as public outcries about electoral campaigns in Italy and Spain, and negative publicity about campaign contributions in the United States, suggest. Many new leaders would like to improve customs and tax departments, clean up campaign financing and elections, reduce bribery and intimidation in legal systems and the police, and in general, create systems of information and incentives in the public sector that foster efficiency and reduce corruption.