Want to Make a Clean Break?(political corruption, and President Barack Obama's appointment of Timothy Geithner as treasury secretary)

Ignoring Geithner's lapse may seem a small price to pay. But cutting corners is dangerous.

In the days leading up to Barack Obama's inauguration, it really has felt like the dawn of a new era in the United States. While the latest scandals--both political (Rod Blagojevich) and financial (Bernard Madoff)--continue to reverberate, the country seems eager to break with a recent past characterized by corruption and self-interest. Politics, of course, involves compromise--and by sticking with Timothy Geithner as treasury secretary, Obama has signaled his willingness to overlook an earlier lapse in judgment by his nominee in order to get the most competent person for the job. Ignoring $34,000 in missing tax payments may seem a small price to pay for rescuing the financial system. But the country needs a cultural overhaul, and to bring it about Obama must set the right tone and example from the start.

That's because corruption tends to be an all-or-nothing affair. If you look at corruption levels around the world, you'll notice that relatively few countries are halfway corrupt. One is generally part of a bribe-paying culture or one isn't. To understand why, imagine the difficulty of paying bribes in an otherwise law-abiding nation. Odds are it won't be long before you try to shake down the wrong person and find yourself in prison or a social outcast. Where corruption is the norm, the logic flips--you may well get in trouble if you refuse to play along. Moreover, a culture of corruption can throw one's own moral compass off course. "Everyone is doing it" has served as an effective rationalization for everything from accounting sleight-of-hand to options backdating. When everyone else is cheating the system, it's all too easy to go along.

This kind of social "tipping" is called an equilibrium phenomenon: communities that are otherwise similar can end up with very different outcomes (either corrupt or uncorrupt) just by tipping in one direction or the other. Once the tipping starts, it feeds off its own momentum.

Changing an equilibrium of corruption--or of anything else--is extremely difficult because it's so costly to be the odd person out. As a result, everyone has to make the switch all at once. Imagine what would happen if a country tried to switch from driving on the right to driving on the left through gradual change. Mismatched expectations about the rules of the road would quickly lead to chaos, fender benders and even a reversion to the old "equilibrium" by the few early left-siders.

What all this means is that change requires a clean and visible break with the past, not incremental efforts. Most people, even those living under the most corrupt of regimes, would like to switch to the corruption-free equilibrium. But given their circumstances, they go along with whatever those around them are doing. Convince them ...