Corruption is as old as the world.  Some argue that corruption can even be a good thing.  Regular facilitation payments can make doing business easier and more safe and reliable.



But as Transparency International (TI) argues, corruption, the abuse of entrusted power for private gain, hurts everyone, especially poor people.  It can include bribery of public officials, kickbacks in public procurement or embezzlement of public funds.  But it can also be more than just slipping a few dollars to a government official.   


Here are a few examples from TI’s website: (i) 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; (ii) the unsuspecting sick person who buys useless counterfeit drugs, putting their health in grave danger; (iii) 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; or (iv) 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.  It is one of the most serious obstacles to reducing poverty.  It denies poor people the basic means of survival, forcing them to spend more of their income on bribes.  It undermines democracy and the rule of law, distorts national and international trade, jeopardises sound governance and ethics in the private sector.  Corruption threatens domestic and international security and the sustainability of natural resources.



Those with less power are particularly disadvantaged in corrupt systems, which typically reinforce gender discrimination.  Corruption compounds political exclusion: if votes can be bought, there is little incentive to change the system that sustains poverty.



There are many organizations active in the fight against corruption.  The OECD has its Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, and many other initiatives.



But perhaps the most influential is Transparency International.  It is a global network including more than 90 locally established national chapters and chapters-in-formation.   Being a global civil society organization, TI pulls no punches.  TI raises awareness and diminishes apathy and tolerance of corruption, and devises and implements practical actions to address it.



One of TI’s major initiatives to promote awareness about corruption, and therefore pressure for reform is its Corruption Perceptions Index, which indicates the degree of public sector corruption in 180 countries as perceived by business people and country analysts.  The top 10 “clean” countries are in order: Denmark, Sweden, New Zealand, Singapore, Finland, Switzerland, Iceland, Netherlands, Australia and Canada (the first three get a score of 9.3 out of 10).  Not surprising, and the countries are some of the world’s safest and most prosperous.  Other leading countries are less clean – the US and Japan are ranked only 18th, with a score of 7.3 out of 10, while France is 23rd with 6.9 out of 10.



Some of the dynamic economies of Asia rank fairly well – Hong Kong (12th), Taiwan (39th), Korea (40th), Macao (43rd) and Malaysia (47th).  The less advanced countries of Asia are further down the list – Thailand (80th), Indonesia (126th), Philippines (141st) and Timor-Leste (145th).  Overall, corruption and lack of transparency, particularly in political financing, are serious challenges for the Asia-Pacific region.  Of the region’s 32 countries and territories included in the Corruption Perceptions Index, 22 scored below 5, indicating a serious corruption problem in the public sector.



The BRICs fall within the two groups – China (72nd), Brazil (80th), India (85th) and Russia (147th).  The bottom ten countries, from the bottom up, are: Somalia, Myanmar, Iraq, Haiti, Afghanistan, Sudan, Chad, Guinea, Equatorial Guinea, Democratic Republic of Congo.  Corruption by powerful individuals, and the failure of leaders and institutions to control or prevent corruption, does not imply that a country or its people are most corrupt.  More specifically,  Somalians are not the world’s most corrupt people – on the contrary, the vast majority of Somalians are victims of corruption.



TI’s recent publication “Global Corruption Barometer 2009” presents the findings of a public opinion survey on corruption which complements the expert opinions on public sector corruption provided by TI’s Corruption Perceptions Index.  Political parties were perceived to be corrupt by 68 per cent of respondents, followed by the civil service (63 per cent0 and parliament (60 per cent).  The private sector and judiciary were also seen as corrupt by half of respondents.  Around 43 per cent of interviewees also believed that the media is affected by corruption.



Against the backdrop of the global financial crisis, the Barometer reveals greater public concern about the role of the private sector in corruption.  Among the countries and territories assessed, the private sector is perceived to be the most corrupt institution in Brunei Darussalam, Canada, Denmark, Hong Kong, Iceland, Luxembourg, Moldova, the Netherlands, Norway, Portugal, Singapore, Spain and Switzerland.



The Barometer asked about the extent to which citizens fell the private sector uses bribery to distort the policy-making process in their country, a phenomenon often referred to as state capture.  54 per cent of respondents believe bribery is commonly used by the private sector to shape policies and regulations, with upper-middle-income countries scoring highest at 65 per cent (in many emerging economies, growth and political transition mean that markets and regulation are in a state of flux).  By region, state capture is deemed to be most of a problem in the former Soviet Union (71 per cent), followed by North America (61 per cent), Latin America (58 per cent), Western Balkans and Turkey (57 per cent), EU (53 per cent), Middle East and North Africa ( (49 per cent0, Asia-Pacific (49 per cent) and Sub-Saharan Africa (41 per cent)    



Some other interesting points are the following.  Half respondents reported that they would be willing to pay more to buy from a corruption-free company.  Experience of petty bribery is reported to be growing in some parts of the world, with the police the most likely recipients of bribes.



Finally, governments are considered to be ineffective in the fight against corruption.  And ordinary people do not feel empowered to speak out about corruption.



So what to do?



Stemming corruption requires strong oversight through parliaments, law enforcement, independent media and a vibrant civil society.  Poorer countries are often plagued by corrupt judiciaries and ineffective parliamentary oversight. Wealthy countries, on the other hand, show evidence of insufficient regulation of the private sector, in terms of addressing overseas bribery by their countries, and weak oversight of financial institutions and transactions.



In addition, a more focused and coordinated approach by the global donor community to ensure development assistance is designed to strengthen institutions of governance and oversight in recipient countries, and that aid flows themselves are fortified against abuse and graft.



The weakening performance of some wealthy exporting countries, with notable European decliners in the 2008 CPI, casts a further critical light on government commitment to reign in the questionable methods of their companies in acquiring and managing overseas business, in addition to domestic concerns about issues such as the role of money in politics. The continuing emergence of foreign bribery scandals indicates a broader failure by the world’s wealthiest countries to live up to the promise of mutual accountability in the fight against corruption.



Regulation, though, is just half the battle. Real change can only come from an internalised commitment by businesses of all sizes, and in developing as well as developed countries, to real improvement in anti-corruption practices.



Across the globe, stronger institutions of oversight, firm legal frameworks and more vigilant regulation will ensure lower levels of corruption, allowing more meaningful participation for all people in their societies, stronger development outcomes and a better quality of life for marginalised communities







References:

Transparency International

www.transparency.org/

OECD’s anti-corruption work

www.oecd.org/corruption/overview