Corruption Landscape of the World
Corruption is more widespread in the world than it should be. It hurts the poor most severely. Many blame the increasing prevalence of corruption to globalization, other think increasing materialism is responsible for it. However, it is an issue that needs serious attention.
- Corruption is a Global Menace
- Corruption Measuring Tools
- The Corruption Perceptions Index (CPI)
- Global Corruption Barometer (GCB)
Corruption is a Global Menace
World Bank estimates that globally corrupt practices take away USD 1 – 1.6 trillion from the mainstream economy every year. Many people feel that decay of institutions upholding moral values is the prime cause of increasing corruption through out the world. Others blame increasing materialism throughout the world for it. The extreme materialistic philosophy of life posits that you are no more than a combination of random chemicals that came together by chance. So, enjoy while you are here. There is no good or evil, so do whatever you like. Naturally, such a valueless thinking can not distinguish between ethical and non-ethical living.
Corruption in the World: Why Should We Care About It?
Regardless of what is causing or fueling corruption, it is certainly a cause for concern and leading global organizations such the UN, World Bank, IMF, or Transparency International are worried about corruption. Transparency International is a non governmental global body that provides tools to analyze corruption and helps countries deal with it -- two of its tools will be the focus of this article.
Corruption Measuring Tools
This article will focus on two very popular corruption indicators designed by Transparency International – the Corruption Perception Index (CPI) and the Global Corruption Barometer (GCB). The CPI tells about public sector corruption and the GCB measures corruption as felt by the ordinary citizens. Therefore, taken together the two provide a good idea of effectiveness of a country’s anti-corruption laws and their implementation.
In a previous article, we talked about its Bribe Payers Index that measures companies’ propensity to bribe when they go to other countries for business. It revealed that firms from the newly emerging economies – Brazil, Russia, India, and China (BRIC) – are the worst in the world when it comes to indulging in corrupt practices abroad. The above image presents a summary of the performance of the BRIC countries: their performance is not very flattering.
The Corruption Perceptions Index (CPI)
The Corruption Perception Index is an aggregate indicator that combines different sources of information about corruption. Broadly speaking, it compiles responses to questions relating to bribery of public officials, kickbacks in public procurement, embezzlement of public funds, and questions that probe the strength and effectiveness of public sector anti-corruption efforts.
A concealed activity like corruption is difficult to measure, so perceptions are used to compile the CPI. If one tries focusing on scandals, investigations and trials, it would reflect more on factors such as freedom of the press or the efficiency of the judicial system and less on the prevalence of corruption. However, over time, perceptions have proved to provide reliable estimation of corruption.
Whether or not a country is included in the index depends solely upon the availability of information, which must come from at least three sources. It must also be emphasized that due to its methodology, the CPI is not suitable for trend analysis. The year to year change in the score can come from the change in the sources of information or changes in the methodology for improving the index.
The latest 2010 CPI data show that nearly 75% of the 178 ranked countries scored below five – on a scale from 0 (highly corrupt) to 10 (highly clean) – indicating that corruption is a serious global problem. Some of the countries that showed improvement over the 2009 data include Bhutan, Chile, Ecuador, Haiti, Jamaica, Kuwait and Qatar. However, deterioration during the same period was observed for the Czech Republic, Greece, Hungary, Italy, and the United States.
Two important points about the CPI score and countries’ ranking must be noted:
- If all countries show same change in performance the rankings will remain unchanged, and
- A country will slip in ranking even if the corruption or corruption perception does not change but if other countries show significant improvement and rank better than it.
The “most clean” top ranking countries are Denmark, New Zealand and Singapore – with a score of 9.3. The other end of the ranking is occupied by Somalia with a score of 1.1 and Myanmar and Afghanistan at 1.4 and Iraq at 1.5 – they are the most corrupt countries in the world in the light of CPI.
Global Corruption Barometer (GCB)
The Global Corruption Barometer (GCB) is common man’s friend. Rather than experts or business executives the GCB polls ordinary citizens. It, therefore, reflects common men’s perception of corruption. Thus, it complements the above index. Another unique feature of GCB is that the questions vary from year to year. If the recent 2010 GCB data is to be believed, global efforts to curb corruption are not working – in the opinion of ordinary people of the world.
Responding to the question: whether corruption had got better or worse in the last three years, 85% of Asians, 89% of Latin Americans, 76% of Africans, and (hold your breath!) 97% of Europeans say that corruption has either stayed the same or got worse. If their perception is right, countries appear to be moving backwards and that all debates on corruption at different world forums have failed to produce results at the ground. Consequently, corruption appears to have become integrated in the everyday life for much of the world.
On the question whether they had paid bribe in the past 12 months, the sub-Saharan Africa reported the greatest incidence of bribery – over 50%. The Middle East and North Africa were the next most corrupt regions with over one-third people indulging in bribery.
As seen by the ordinary citizens, the four worst bribe paying countries are Afghanistan, Cambodia, Cameroon, and India. They found themselves in the company of Iraq, Liberia, Nigeria, the Palestinian territories, Senegal, Sierre Leone and Uganda – in all these countries over 50% people handed out cash to officials. Additionally, nearly half the respondents said they paid to avoid problems, while a quarter said it was meant to speed up procedures. Besides, the police proved most corrupt.
Compare this with the best performers – 5 per cent in the European Union and North America and 11 per cent in the Asia-Pacific region. Thus, ordinary citizens in these regions are considerably insulated from corruption.
Both indicators reveal that corruption is a global phenomenon and is more widespread that people realize. South Asia and Africa are particularly afflicted by the virus of corruption. The emerging economies will have to pay serious attention to it, if they have to develop in an orderly fashion.
The Corruption Landscape of India
What Makes India Corrupt?