Transparency International released its annual Corruption Perception Index today (we also covered the 2004 Index). Iceland just edged out last year's least-corrupt nation, Finland, with a transparency score of 9.7 out of 10; Finland and New Zealand tied at #2, with Denmark and Singapore rounding out the top five. The UK remained at #11, Canada dropped from #12 in 2004 to #14, and the US remained at #17, just ahead of France and just behind Germany. As was found last year, the majority of nations remained hampered by serious corruption, with more than two-thirds of the countries scoring less than 5 on the 10 point scale:

“Corruption is a major cause of poverty as well as a barrier to overcoming it,” said Transparency International Chairman Peter Eigen. “The two scourges feed off each other, locking their populations in a cycle of misery. Corruption must be vigorously addressed if aid is to make a real difference in freeing people from poverty.”

Despite progress on many fronts, including the imminent entry into force of the United Nations Convention against Corruption, seventy countries - nearly half of those included in the Index - scored less than 3 on the CPI, indicating a severe corruption problem. Among the countries included in the Index, corruption is perceived as most rampant in Chad, Bangladesh, Turkmenistan, Myanmar and Haiti – also among the poorest countries in the world.

Poverty doesn't in and of itself mean corruption; many of the most-improved nations this year come from the poorer regions of the world. And as the drop in Canada's rating suggests, however, wealth does not mean immunity to increasing corruption. As Transparency International puts it, risk factors such as government secrecy, inappropriate influence of elite groups and distorted political finance apply to both wealthy and poorer countries.

The CPI focuses on corruption in the public sector, defined as the abuse of public office for private gain. Transparency International lists the following steps as demonstrably useful methods of reducing corruption:

By lower-income countries

Increase resources and political will for anti-corruption efforts.

Enable greater public access to information about budgets, revenue and expenditure.

By higher-income countries

Combine increased aid with support for recipient-led reforms.

Reduce tied aid, which limits local opportunities and ownership of aid programmes.

By all countries

Promote strong coordination among governments, the private sector and civil society to increase efficiency and sustainability in anti-corruption and good governance efforts.

Ratify, implement and monitor existing anti-corruption conventions in all countries to establish international norms. These include, the UN Convention against Corruption, the OECD Anti-bribery Convention, and the regional conventions of the African Union and the Organization of American States.

Corruption harms both economic growth and a government's legitimacy as a means of helping communities to solve problems; fighting corruption is arguably as important as fighting disease or oppression in global efforts to meet the Millennium Development Goals. The best tools we have to do so are transparency and accountability -- and we need a lot more of both.

This provides a nice reminder to those who speak loudly of America's steep plunge into corruption since 2000. Obviously the vector points in that direction, lending credence to the warnings, but a little perspective shows that panic is unnecessary.

Calm action would serve better, not to mention providing a useful model for others.

Posted by: Kim on October 20, 2005 5:07 PM

Even though I don't agree with the hypothesis, Patrick Chabal and Jean-Pascal Daloz' little (in)famous book "Africa Works. The political instrumentalisation of disorder" shows that the notion of "corruption" in itself is way too eurocentric, and that those who fight it have no clue about the real economies of some of the most corrupt countries. As we know by now, the informal economy makes up something around 20% of the world economy, with countries like Congo having such an economy producing over 60% of their real GDP's. Their blunt statement: "it works", shocked the development, international finance and NGO world.

Chabal and Daloz brilliantly show how what we perceive to be "corruption" is often the continuation of very ancient traditions of redistribution, based on personal patrimonial alliances and clan networks. Many of those most corrupt countries do not operate on the logic of the abstract State, let alone on that of "public finance" serving the "common good" - these are all very strange typical european concepts.

Of course, when the people of Transparency International, the World Bank, or the EU look at these countries, they do so from a perspective of how western economies function. They don't have a clue about the real parametres and about what's really going on below the radar.

So we first need *real* studies, anthropological studies of those most corrupt economies. Just using our own categories and dumping those analytical frameworks on other traditions is a bit too simplistic.

There's a tradition of studying informal economics (thinking of the McGaffey's who basically invented the topic with their "The Real Economy of Zaire", decades ago). We need to invest more in this tradition. Else, we just keep stating the obvious over and over again.

Posted by: Lorenzo on October 21, 2005 4:06 AM

Our politicians are simply better trained at hiding thier deeds;/

Posted by: wintermane on October 21, 2005 4:25 PM

Lorenzo, your comments are interesting. I wonder what an evaluation of governments would look like if it were produced by some of the countries called most corrupt. What parameters would they consider most important, and why?

Posted by: Kim on October 21, 2005 5:10 PM