The war on corruption has been a longstanding progressive theme within the Atlantic system. The basic idea is that capital cannot be allocated effectively if the public sector is not based on taxation (preferably legitimised through democracy) but is 'done on the cheap' through supplemental bribery and 'deals'.

The Rise of the 'Big Men'

The theory is unarguable. Although a strong State will probably screw more out of the population than a weak corrupt state, bribery and corruption concentrates power on connections and clans and accumulates wealth around 'big men'. Personal freedom requires the rule of impersonal law.

These 'big men' are potentially dangerous to the West as independent sources for the funding of political enterprises, like jihadism, but the concept is not alien to the developed world.

Berlusconi is, in a sense, a 'big man' having accumulated not so much capital (though he is rich) as soft power through his media interests. The United States since the 1960s has developed 'pseudo-big people' in dynasties (Kennedy, Bush, Clinton) - political brands that attract power.

But the 'big men' that emerged in the developing world after the collapse of communism are of a different order. They filled a vacuum as the Cold War removed subsidies from overseas and as the triumph of the West demanded the mobilisation of resources by business to drive development.

'Big men' are not to be assumed to be corrupt or a 'bad thing'. On the contrary, unless you are a full-blooded socialist, given the lack of competencies in post-colonial states, mostly leaden and sclerotic, these players have become billionaires on the delivery of real benefits.

They are also realists. Whether oligarchs who emerged out of the heartland of communism, capable businessmen who exploited globalisation or networked managers of dynastic capital flows, anti-corruption measures and the rule of law are in their long term interest as well.

Many of these players are working in conditions close to those of early modern Europe. Without the rule of law, an oligarch (some say this has happened in Russia) can be brought down on the whim of the political class much as Louis XIV brought down Fouquet or Henry VIII executed Thomas Cromwell.

Fortunately, unlike early modern Europe, our 'modernising' big men, forcing grounds of development, are not embedded within the State but are always slightly outside it yet they still know that their access to decision-making will always require an 'understanding' of the political needs of those who rule.

The Internal Contradictions of Corruption Policy

All this raises an interesting problem for Western policy-makers because Western Governments are getting themselves into a dreadful pickle. Traditional corruption might be called organic - the understood method of doing business in pre-modern states and, up to a point, it works without particular malice.

It can even be efficient. Trust between persons ensures delivery of what is being promised in a way that many a modern Government would dearly love to see when they sign up to contracts on new defence or IT projects under the liberal system of open competition.

The story of modernisation is, in part, the story of how liberal reform has unravelled personal, feudal, kin and clan systems and replaced them with more impersonal systems of relations, designed for improved effectiveness but with full equality before the law. It is a system that the West wants to export.

The West's concerns are three-fold in this context: to stop its own corporate sector going native under competitive conditions; to stop pre-modern attitudes infecting post-modern society; and to ensure that modernising societies give access to its capital, products and services on equal terms.

The history of the last decade or more has been one of increasing pressure on corporations like BAE Systems to follow domestic liberal standards overseas and of introducing 'standards' into the rest of the world directly or through international bodies like the WTO.

These policies tend to be run by Treasury and Commerce Departments but derive their energy and impetus from a higher level, from the political and ideological commitment of the liberal consensus at the heart of most major parties within the West where business and community meet.

Alongside these are the rearguard actions within Europe to halt the introduction of pre-modern systems of clan-based corruption from 'village migration' at the grassroots (often merging at the boundary with organised crime) and infection from old Southern and Eastern European habits.

Late Capitalist Corruption

So far so clear. Modernisation requires the rule of law. The rule of law means that public services are personal and not impersonal and that political power is removed from kinship and clan to coalitions of interest built up through democratic politics.

To the West, democracy is second order. The rule of law is primary. But this leads us to a countervailing problem in foreign policy and international security. What happens under two new sets of condition?

1. The 'big man' has detached himself from dependence on a powerful political elite in a democracy or quasi-democracy and can finance his own political machine and ambitions.

2. Accumulations of capital are centred on many localised 'big men' (effectively warlords) and no progress can be made unless they can be defeated in war or accommodated.

Although the democratic 'big man' might be pro-Western and the warlords might be seduced into accomodation with the West, in failed or weakly democratic states these men are highly ambiguous figures in terms of Western values.

This is relevant to the situation that the West is finding so difficult to manage in Africa, the Middle East and West Asia - and potentially in parts of South East Asia and Latin America as well. After all, Thaksin represented the type of the 'big man' and such figures are powerful in Mexican politics.

Take Afghanistan. Western values are directed at creating a secular democracy but what has happened in practice is that the President has had to compromise with a culture based on warlordism where some of the key figures undoubtedly gain some of their wealth from the drugs trade.

In addition, there is probably no settlement without deals being struck with 'moderate' (meaning less ideological and so more 'business-like) Taliban forces that could embed their economic interests, including the drugs trade, in the polity without massive countervailing funding (bribery) from the West.

Essentially, Western soldiers are dying and gold being expended not to build a secular democracy but to build a 'good enough' pre-modern state. As so often, liberals have been deluded and the public is now understandably wary since any actual link with terror on the streets seems unproven.

Compromising Values

The West has made other compromises where the Western values being promoted in legislatures are at complete variance from what is happening on the ground - so that policymakers are merely grateful that their publics are generally uninterested in foreign policy.

While liberal activists stomp and get outraged at this abuse or that abuse, the general public tend to become interested only when money starts leaking heavily out of the system or men start to die in a theatre of war without adequate explanation.

Even in these cases, the public tends not to care so much in good economic times, perhaps treating the expenditure as a means of maintaining national identity as 'powerful'. In the case of military deaths, the public still prefers to slag off Government about equipment rather than its war aims.

Eventually, internal contradictions will appear and be seen to appear. Most 'big man' situations will be seen as tolerable, even desirable (as they may be), if they are far away and the political elite involved seems, over all, to be moving in a modern direction.

The manufactured colour revolutions, often designed to help pro-Western 'big men' to capture political power over more traditionalist, socialist or nationalist elites, will be treated as political theatre. Rhetoric can be crafted to be liberal and democratic so that they can become the 'good guys'.

But what happens when the West throws in its lot with 'big men' whose rhetoric is shallow and who are obviously being challenged by both liberal and illiberal but democratic oppositions. Are these men modernisers? Do they deserve our support? Are they perhaps undermining our core values?

Poor Palestine

This brings us remorselessly to Palestine where the West's total commitment to the two-state solution and to the Peace Process and its manipulation of the local political situation has led it into a trap of its own making. The intention was good - as it always was in Afghanistan and in Iraq.

The intention was to build a democratic secular liberal peace-loving Fatah that abandoned terrorism, provided a democratic alternative to illiberal Islamism and could come to an accomodation with an Israel that was a fact on the ground.

The plan went further. The West was never going to allow Israel to be wiped off the face of the planet so the Palestinians would have no choice but to accept their small divided state and the probability that their diaspora would remain a diaspora.

But, in return, the West, making free use of Arab funds, implicitly promised massive economic development and all the benefits of modernisation in return for a shift to the same Western values that Israel was supposed to hold. Basically, Palestine, back to the wall, was up for sale.

The emergence of Iran as disruptive player in the game and of Islamism as an ideology of martyrdom pushed the conservative Sunni Arab elites increasingly behind the Western programme of work.

With this pool of capital available, the real mission of Fatah was to extract the highest possible price for Palestine. The question has become - is Palestine its people or is Palestine the men who run Fatah? Sadly, it is becoming clearer that the answer is the latter.

With money for the Palestinian people and acceptance all round of 'no alternative', it should have been common sense for Fatah to reinvent itself as the wealth-bringing liberal nationalist party, standing up to Israel and the West without violence, and delivering real goodies where Hamas could not.

So much for common sense. Fatah has become a political disaster zone. Factionalised and degraded, it has looked weak against Israel and it has failed to move one jot from its pre-modern attitudes to clan-based business dealings. Liberal Palestine is often in despair - Hamas on one side, Fatah on the other.

Recent Deterioration

In recent weeks the situation has deteriorated further. Most readers will be aware of the Goldstone Report which has condemned Israel in the strongest terms for its actions in the Gaza War. One would assume that the Palestinian Authority would leap to endorse it - but not so.

The fact that Mahmoud Abbas, President and Fatah Leader, seemed to be collaborating with the Israelis and the Western powers to weaken the impact of the report is startling in itself but the real question on everyone's lips in the region was 'why?'.

There was, perhaps, a political calculation that might be legitimate - that there was no peaceful Palestinian State without its economic development funded by other Arabs and that required Israeli acceptance. Provocation of Tel Aviv was a mere indulgence of armchair activists.

Unfortunately, reports have suggested that Abbas miscalculated. You can push a people only so far. 'Modernisation' on future promises is fine but current humiliation can easily drive some men to consideration of the virtues of martyrdom.

The Hamas-linked Press Agency, Shihab, claimed that the PA's administration had backed down from an initial robust stance on the Report when Israelis (playing their customary hard ball) threatened to reveal just how complicit the PA was in the war on Gaza.

This should be no surprise on Hamas claims or the public credibility given to the report. Fatah and Hamas' mutual hatred is no secret. Mohammed Dahlan, an important figure on the West Bank, was a significant figure in the attempted armed suppression of Hamas in Gaza.

Other claims that conservative Arab allies also tried to get the PA to go easy on the Report also ring true. The three players here are Egypt, Saudi Arabia and the UAE and all three are close allies of the West against radical Islamism.

The security networks that operate against Iran and militant Islam extend from the UAE to Washington pass through Cairo and Ramallah and it is an open secret that Egypt actively gives Israel intelligence to help the latter hit arms movements into Gaza.

This is no longer an Arab-Israeli conflict but a conflict between various forms of radical Islamist democracy (note that word 'democracy') and the Western democracies and their highly illiberal and undemocratic allies.

Are These The Right Allies?

When your primary allies are Egypt, Saudi Arabia and the UAE as well as Israel and all are co-operating against the same enemies, then it becomes logical for Fatah to join the club. The problem is that Fatah appears to have sold its allegiance extremely cheaply as far as the wider population is concerned.

What is going on here? According to Shihab, unnamed PA officials urged Israel to continue its operations in Gaza when the rest of the world was begging it to stop. There are claims that Abbas himself pressed for a continuation of the war when the Israelis were wobbling.

Furthermore Shihab claims that the Secretary General of the PA actively called for Israel to bring ground forces into operation against the Jabalya and Shati refugee camps - a bloodbath would have ensued.

Whether true or not, the claims sound plausible to many observers, indicating the depth of esteem to which Fatah may have sunk in its desperation to crush Hamas. Its entire psychology would seem to be centred on one cause - the crushing of a domestic enemy, if necessary at the expense of its own people.

Some caution is in order because Hamas are adroit propagandists. Even then, this might just be a case of exuberant fanaticism, if it were not for one other factor - money is apparently flowing into Fatah's world but where it is actually going, through whom and to whom remains vague?

The UAE, for example, seems to have ended its generous support for Gaza and mounted some kind of purge against the wrong sort of Palestinian. Oddly, the PA tries to deny what others clearly evidence is happening. The only conclusion is that the UAE is being persuaded or strong-armed to divert funds ...

Rumours of corruption are also widespread. Ramzy Baroud (whose opinion we do not endorse but who is representative of much local anger) put the situation thus in Middle East Online on 15 October:-

... the post-Oslo culture has espoused a class of contractors. These are businessmen who are either high-ranking officials in the PA and the Fatah party, or both, or closely affiliated with them. Much of the billions of dollars of international aid that poured into Palestine following the signing of Oslo found its way into private bank accounts. Wealth generated more wealth and “export and import” companies sprung up like poison ivy amidst the poor dwelling of refugees throughout the occupied territories. The class of businessmen, still posing as revolutionaries, encroached over every aspect of Palestinian society, used it, controlled it, and eventually suffocated it. It espoused untold corruption, and, naturally, found an ally in Israel, whose reign in the occupied territories never ceased.

The PA became submissive not out of fear of Israeli wrath per se, but out of fear that such wrath would disrupt business, the flow of aid thus contracts. And since corruption is not confined by geographical borders, PA officials abroad took Palestinian shame to international levels. Millions marched in the US, in Europe, in Asia, South America and the rest of the world, chanting for Gaza and its victims, while some PA ambassadors failed to even turn out to participate. When some of these diplomats made it to public forums, it was for the very purpose of brazenly attacking fellow Palestinians in Hamas, not to garner international solidarity with their own people.

It should be added here that caution (not just for legal reasons) is necessary in accepting specific claims of corruption. Accusations are flung around easily in the fever of the moment but Baroud's general assessment, shorn of the political anger, is correct. Politics has been displaced by 'biz-ness'

Questions Raised For The West

The West Bank needs the sort of development that business offers. 'Big men' may be as functionally useful here as elsewhere - but questions need to be raised about whether the political leadership of the PA at this time should have any connection with economic interests.

As we write, the West's dream is looking very frail as we get closer to the 2010 Palestinian Elections.

There is an anarcho-communitarian sub-state under siege from Arabs and Israelis alike and on the edge of social collapse. There is another failed state that is run on the basis of informal understandings between a foreign-backed clique and what amounts to an occupying power in all but name.

The West has rejected direct dialogue with Hamas although efforts are under way to end its isolation and even to calm the vicious mutual hatreds between Hamas and Fatah but it persists in allowing Fatah on the West Bank to operate little differently, perhaps worse, from the days of Arafat.

Someone is eventually going to unravel any complicated business dealings between leading Fatah figures and their Gulf patrons, a strange 'big man' alliance of aspiring liberal democrats and dynasts, and ask whether money is still going off balance sheet and into places other than the PA.

Is it time for the Western powers to stop pussy-footing around their own imperialism? Perhaps leave Palestinians to slug it out without backing the dodgy ones or go in there and deliver serious economic development through a system that is thoroughly modernised and operates under the rule of law.

The question is important for Israel too. Either it is going to have a shady emirate in all but name on its own borders or it is going to have a legitimate small state to deal with. Standards good enough for the settlement of the small Balkan states should be good enough for Palestine.