Wednesday, April 21, 2004

UN's Oil-for-kickbacks

The UN's Oil-for-kickbacks scandal has finally reached a major news outlet--ABC. Among those benefiting from Saddam/UN's corruption include French diplomats and government officials, much of the Russian government/mafia/oil companies, Samir Vincent and Shakir Alkhalaji from the US, Labour MP George Galloway from the UK, and many others.

The fiddle at the heart of Oil-For-Kickbacks is that one can centrally plan and control asset allocation, that one can keep money from being diverted from good/approved causes to bad/unapproved causes. The corruption is devastating for an organization whose only credibility comes from "legitimacy", but also unsurprising in any large bureaucracy focused on central planning. I'm not sure who originally said this, but it remains true today: centralized decision making is really decentralized decision making with bad incentives.


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