Poverty-Corruption Link Underlined in Latest Transparency International League Table

Naming and Shaming

The respected Corruption Perceptions Index (CPI) has been compiled annually since 1995. It uses a composite index to arrive at a global corruption league table. Each year the number of countries grows (to 163 this time) and the methodology and sources evolve, so precise inter-year comparisons are impossible. Multiple expert-opinion surveys are drawn upon to arrive at a consensus score, one of which is provided by Global Insight. It is important to note that this is very much a qualitative index—it measures perceptions instead of the volume of corrupt transactions. The latter are unfortunately impossible to measure accurately. There is a danger that perceptions can lag behind changes on the ground, or that they can be unduly swayed by high-profile scandals. Transparency International (TI) seeks to counter this with as broad a range of sources as possible.

The order in which countries appear is not that surprising—there is a very heavy concentration of poor countries towards the bottom of the scale. In nearly half of the 163 countries studied, corruption is described as rampant (below three on the scale). Almost three-quarters have major corruption problems (under five on the scale). The most corrupt country is this time found to be Haiti, followed closely by Guinea, Iraq and Myanmar. The most corrupt are not necessarily the most lawless and chaotic—authoritarian systems will often tolerate rampant nepotism and corruption. Africa unfortunately dominates much of the lower end of the scale, albeit joined by a number of Asian, Latin American and Eastern European states. Relatively large and developed economies that stand out in the lower end of the scale include Pakistan (142^nd), Venezuela (138^th), Indonesia (130^th) and Russia (121^st).

As noted above, corruption is particularly rampant in Africa. However, the picture is not all bad. Botswana, in 37th place, has once again emerged as the least corrupt country in the region, followed by Mauritius (42nd) South Africa and Tunisia (joint 51st), and Namibia (55th). At the other end of the scale, Guinea has now slumped to the bottom of the regional table by slipping to 160th out of the 163 countries on the overall index, ahead of Niger (138th), Angola, Congo, Kenya, Nigeria and Sierra Leone (joint 142nd), Côte d'Ivoire and Equatorial Guinea (joint 151st), the Democratic Republic of Congo and Sudan (joint 156th). Although the latest TI index has drawn a strong correlation between a country's position on the CPI index and its poverty level, it is interesting to note that most of the African countries at the bottom of the list are resource rich and corruption is seen as a leading contributor to their current poor level of development and rampant levels of poverty, rather than the other way around.

At the least corrupt end of the global scale are relatively small wealthy nations with highly evolved governance—Finland, Iceland and New Zealand. Although most wealthy states are perceived to have relatively low levels of corruption, major scandals continue to break regularly. These rarely compromise the country's economic prospects, but they show that no government can afford to be complacent. Wealthy countries are also part of the problem in poorer countries. Many of their firms regularly bribe in order to win and preserve contracts. TI assesses this side of the coin in its separate Bribe Payers Index (the latest edition launched on 4 October 2006).

Outlook and Implications

The role that corruption plays in trapping countries in poverty is well known. This tends to be a vicious cycle, but there are ways of intervening. There can be home-grown political pressure from aggrieved voters, sometimes stirred by TI's findings. Pro-active judges and prosecutors can lead campaigns of their own, aided by regulatory improvements. Then there are international initiatives to spread good governance and to tie aid to improvements. Finally, there are a growing number of legal tools to counter bribe-givers and takers. Recent legislation adopted by wealthy nations allows overseas corruption to be targeted. This has started to be used, but wrongdoing is often hard to prove and convictions are rare. TI hails the Organisation for Economic Co-operation and Development (OECD) Anti-Bribery Convention as a key tool, but it needs to be applied more widely. The authors call particularly on groups such as lawyers, accountants and bankers to act responsibly and refuse to play the role of facilitator. These professionals should instead be "the stalwarts of a successful fight against corruption." The authors call for the promotion and adoption of corruption-specific codes of conduct by professional associations, and effective legal sanctions.