regulation

Siemens just settled on a major international corruption case.  It turns out that over the past decade Siemens and some of its subsidiaries made at least 4,283 payments either to public officials or “agents” to secure or retain contracts.  The estimated amount of the payments made in more than ten countries surpassed $1.4 billion.  During the current case, the criminal damages from Siemens were calculated to amount for up to $2.7 billion.  Now fines totaling $1.6 billion have been charged; Siemens cooperation with the authorities is cited as reason for the somewhat reduced fine...

The financial crisis has been spreading slowly but steadily from the US to Europe, and now to Asia.  It is neither clear when the markets will finally recover nor when the world can begin to get back to business as usual.  Last week in sunny Barbados, a tinge of pessimism pervaded many of the discussions taking place at CAPAM 2008 – the annual Commonwealth Association of Public Administration and Management conference, attended by career civil servants, public management professionals, and a smattering of politicians, private sector and civil society organizations.   The pessimism was about the potential effects of the crisis on the Commonwealth countries, but more broadly to the impact of the crisis on the role of the state and civil servants, and the implications on governance. 

With the plausible nationalization of private entities and a greater post-crisis emphasis on oversight and regulation, there is a temptation to declare victory over the “down-sizing government” faction. Many at the conference did not resist the temptation to do so.  Last week, even ex-Federal Reserve Chairman, Alan Greenspan admitted that he had been mistaken about the market’s ability to regulate itself.

With a greater role of the state, both the private sector and the public sector will need to assume different roles in the new and emerging governance structure.  Some predictions about what is to come: