Corruption and Transparency International (Redux)

Apropos of an earlier post and discussion in class today about correlation and causality, here is an excerpt from an interview with Transparency International’s Huguette Labelle, where she answers questions about the apparent correlation between corruption levels and GDP, and corruption levels and levels of violent conflict:

The countries with the best scores in the CPI seem to be some of the world’s richest countries – is higher GDP the key to less corruption?
I think the difference between the countries at the top and the bottom is not so much due to their relative wealth or poverty, but to the development of their institutions. The top scorers have effective public sectors, with open contracting procedures, strong disclosure rules and access to information.

Labelle is implying here that the correlation between corruption and GDP is not causal; it is spurious (we’ll talk about spurious causation next class).

Many of the countries with the worst scores in the CPI are victims of violent conflict (Somalia, Myanmar, Iraq, Sudan and Afghanistan). What is the relationship between failed states and corruption?
In a crisis situation, the institutions of government are weakened, so corruption can more easily take hold and spread. It is not just individuals, but also institutions, that are responsible for maintaining integrity in a country. Many countries at the bottom of the CPI are failed states that are at the intersection of poverty, conflict and corruption.

Transparency International Corruption Perceptions Index for 2007

Economists, political scientists and practitioners have long been aware of the deleterious effects of corruption. Transparency International, an international NGO, has been playing a lead role since its inception in 1993 in the fight to highlight the problem of corruption and in creating a forceful international anti-corruption movement. What is corruption?

Corruption is the abuse of entrusted power for private gain. It hurts everyone whose life, livelihood or happiness depends on the integrity of people in a position of authority.

What are some of the effects of corruption, but obvious and hidden?

Corruption hurts everyone, and it harms the poor the most. Sometimes its devastating impact is obvious:

* A father who must do without shoes because his meagre wages are used to pay a bribe to get his child into a supposedly free school.

* The unsuspecting sick person who buys useless counterfeit drugs, putting their health in grave danger.

* A small shop owner whose weekly bribe to the local inspector cuts severely into his modest earnings.

* The family trapped for generations in poverty because a corrupt and autocratic leadership has systematically siphoned off a nation’s riches.

Other times corruption’s impact is less visible:

* The prosperous multinational corporation that secured a contract by buying an unfair advantage in a competitive market through illegal kickbacks to corrupt government officials, at the expense of the honest companies who didn’t.

* Post-disaster donations provided by compassionate people, directly or through their governments, that never reach the victims, callously diverted instead into the bank accounts of criminals.

* The faulty buildings, built to lower safety standards because a bribe passed under the table in the construction process that collapse in an earthquake or hurricane.

Corruption has dire global consequences, trapping millions in poverty and misery and breeding social, economic and political unrest.

Corruption is both a cause of poverty, and a barrier to overcoming it. It is one of the most serious obstacles to reducing poverty.

Here is a chart comparing corruption levels around the world in 2007. The higher the cpi score, the higher the level of perceived corruption.


Transparency International Corruption Index

Here’s another excellent source of information from an NGO, Transparency International, that investigates, writes about, and collects data dealing with corruption. This NGO puts out an annual Transparency Index, listing countries around the world with respect to the level of corruption in each.

What is Transparency International?

Transparency International, the global civil society organisation leading the fight against corruption, brings people together in a powerful worldwide coalition to end the devastating impact of corruption on men, women and children around the world.
TI’s mission is to create change towards a world free of corruption.

Transparency International challenges the inevitability of corruption, and offers hope to its victims. Since its founding in 1993, TI has played a lead role in improving the lives of millions around the world by building momentum for the anti-corruption movement. TI raises awareness and diminishes apathy and tolerance of corruption, and devises and implements practical actions to address it.

Here is a link to the Corruption Perceptions Index (CPI), and Bribe Payers Index (BPI), among others. There is a wealth of information on this site related to corruption.