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There is a common position in the Brazilian media and as a logical consequence in the Brazilian population that corruption is the main cause of Brazilian economics and social tragedy. Obviously, this idea is reproduced by international media.

Why is Latin America, with unique exception of Chile, – see Transparency International index - one of most corrupted parts of world? Because, corruption is closely related to the existence of a healthcare state, not to economic growth in the short run.

Although in the long run, probably, a sustainable economic growth is a necessary and sufficient condition for the existence of a healthcare state. However, in this case the relational cause and effect between health state and growth is more complicated. They must walk hand-in-hand, as one supporting the other. Therefore, each leg sustains the body while the other leg advances. It is somewhat of an upside horizontal bracing that supports the weight of two opposite vertical walls underneath the earth at the same time. If one falls, so does the other.

Corruption in most cases is not the cause of failed economic growth but rather a symptom of an illness.

Corruption can be the symptom of a process of destruction as well as of construction of new states.   – see the cases of China, India and Russia. In the case of Latin America it is a symptom of a process of the destruction of old states, States that could not build up nations, States that could not strengthen the incipient social capital, a “heritage” of the old colonies. States where, most of the time, the rule of law does not prevail anymore.

In a recent article a Brazilian professor of economics in Princeton (Folha de S. Paulo, 3-6-07, B2) makes a comparison between corruption in the USA in the 19^th Century and current corruption in Brazil. A good example of the confusion exposed above, during that period the US was on its way constructing a new state or at least in the improvement thereof while Latin America regressed.    

The most significant evidence on this new phenomenon of destruction of states is the current Latin American war. The media and people call it urban violence. However, if you look carefully you can see the existence of a new type of war: the homicides have a level similar to a war, no one knows who commits homicides, kidnappings are frequent and have become trivial in the way that ATMs have become trivial to banking so has the expressed kidnappings/hijacks have come to the crime industry, there are not enough prisons, criminals partially command prisons, etc. The state does not have complete control over the whole territory and the monopoly of force. In Rio de Janeiro, the local media talks about a parallel state.

There is more significant evidence: the massive emigration regardless of level of education, to the US, Japan, and Europe; generalized corruption in the police – usually there are different types of police corps; slums tat multiply at rapid rates and where the police do not enter; decomposition of the public health and the educational system; degradation of roads, ports, airports, lack of air traffic control etc.

A recent report (Folha de S. Paulo, 1-07-07, A22) shows that the main reason of the massive exodus of Brazilians to Portugal is violence, a natural consequence of the Brazilian war.

In the case of Brazil and probably in all of Latin America, corruption scandals have other important adjacent (correlated) features. It plays a role as a diversion of people not considering about the real causes of the symptoms. The real corruption is closely related to the state owned companies and gorgeous bureaucracy that rise at a sustainable growth rate to permit (allow) the entry of new members of nomenklatura – the new caste generated in Latin America.

Josino Moraes, a Brazilian engineer and economist, is author of (in Portuguese) The Industry of Labor Justice – The Culture of Extortion and The Destruction of Social Capital.