Balkan Freakonomics

By: Radoš Lazarević

Freakonomics, the best-selling book by a Harvard-educated economist Steven D. Levitt and his journalist friend Stephen J. Dubner, was my read over the boring Christmas break.

At the same time I was thinking about the situation in our beloved Balkans and Kosovo 2.0’s  series on corruption, it made me try to apply some of their major ideas to the current situation in the region.
In one of their stories the authors try to explain the mechanisms behind crime in Chicago, especially in poor urban neighborhoods. By coincidence they discovered financial records of one of Chicago’s crack-dealing gangs.  They came to the shocking conclusion that the gang members, especially the ones with lower ranks (teenagers selling crack at street corners),  earn amazingly small amounts of cash while running a risk of being killed greater than if one was  on  death row. So what is the incentive that makes them do it?
The main reason  is “the same reason that a pretty Wisconsin farm girl moves to Hollywood or that a high-school quarterback wakes up at 5 a.m. to lift weights”. They are all in a highly competitive market, where those who become rich and famous are few, but the supposed reputation and fame that goes with it (e.g. becoming a gang boss) is unparalleled to any other career paths these kids may have a chance of taking.
Where is the similarity, you might ask? Well, this logic on the one hand, and my experience on corruption in the Balkans on the other made it obvious: the link is exactly that fame and the social status it brings along.
The specific Balkan macho mentality has a lot to do with corruption. When you pay to pass an exam, to skip the queue in the municipality, to get a driver’s license or a building permit done, doesn’t it also bring you a kind of satisfaction: the realization that you are the one who fooled the system, that the rules can be bent for you, that somehow you are above those other common folk. Doesn’t it make you a cool dude, conspiratorially winking and smiling while you tell your story to friends?
People who decide to climb this  hierarchy are motivated by huge profits, and  the fame that goes along with being at  the top of this food chain, untouchable by the system, getting VIP tables in the best clubs, a cool car, etc. It is this mental image of “success” that makes people in the entry-level positions of corruption tick: an average municipality officer giving your private company a job for the government, or a doctor receiving a bribe so a certain someone skips a couple of places on the operation list, or a professor allowing the sons and daughters of you-know-whos to pass exams, etc.
The strategy  on how to fight this is in the same book. It’s in the story about how a young journalist, Stetson Kennedy, exploiting an economic concept known as “information asymmetry” brought the infamous Ku Klux Klan to its knees. He and his friend infiltrated the organization and learned about the Klan’s secret handshakes, passwords, cruel practices, meeting places etc. Soon enough, they began giving out this information to the public through a radio show and then through several books. As a consequence, the Klan membership, as well as their intimidation and lynching actions began to drastically decline.
This greatly inspires me, especially given today’s power of the internet. The strategy of ordinary citizens in fighting corruption should be exactly this – exposing its mechanisms to the public, removing this veil of mystery and secrecy around  it, making people realize that in essence this lifestyle is miserable and very dangerous, both from the ethical and the economical point of view. The probability of slander is high of course, but so was the probability of Wikipedia having the wrong information and it turned out just fine.
This is precisely the proposal of one of the earlier posts on Kosovo 2.0, and there are similar initiatives in Serbia as well. Levitt and Dubner comment on this kind of power by quoting US Supreme Court Justice Lous D. Brandeis: “Sunlight is said to be the best of disinfectants.”

The article was originally written in English and Serbian.
Illustration: Jared Nickerson

Kosovo EU Mission Dismisses Charges Against Ex-Central Banker

Dec. 15 (Bloomberg) — The European Union mission in Kosovo dismissed charges of corruption and abuse of office against former central bank Governor Hashim Rexhepi, who was arrested in July last year.

“Even though the former governor undertook some inappropriate action, his conduct was not linked to the exertion of any official power or authority,” the EU Rule of Law Mission in the capital Pristina said in an e-mailed statement today. Rexhepi was arrested in July 2010 and released from prison on bail in November.

Rexhepi was appointed to a five-year term in March 2008 and was replaced by his deputy Gani Gerguri after the arrest.

Kosovo, where 90 percent of the population is ethnic Albanian, wants to strengthen the rule of law more than three years after declaring independence from Serbia. The Balkan country led by Prime Minister Hashim Thaci wants to exert authority in the Serb-dominated north as it seeks to mend ties with its former ruler.

–With assistance from Bekim Greicevci in Pristina. Editors: Louis Meixler, Digby Lidstone.

To contact the reporter on this story: Boris Cerni in Ljubljana, Slovenia, at

To contact the editor responsible for this James M. Gomez at