What do corruption perception indexes tell us?

As it does every year, the release of the Corruption Perception Index (CPI) from Transparency International is making headlines. And rightly so. There is no better occasion for the political opposition and the critical media to rally against the government—that is, in countries blessed to enjoy a free press and a political opposition, which are fewer every year.

This shows us why the average of subjective rankings (gathered from various banks and agencies) known as CPI has been a media success and has endured so well over time since it was unexpectedly raised to fame by the friendly encounter between an intern in the early days of TI (Johann Graf Lambsdorff) and an Economist journalist. Of course, an average of subjective ratings is not more objective, but it does clearly indicate the reputation of a country. And reputation matters. CPI has managed so far great civic work in naming and shaming governments. And as anyone in the anti-corruption business knows, there is hardly a more effective instrument than naming and shaming.

This is not to say that CPI has not been misunderstood and misused daily. Most laypeople do not grasp the concept of a statistical aggregate and do not click on methodology entries. They compare the indicator across time, although the change in the number of countries and the statistical noise created by aggregation make this an imprecise if not altogether misleading affair.  When we read “South Africa’s ranking on the 2023 Transparency International Corruption Perceptions Index has fallen to 83 out of 180 countries, marking a decline of 11 spots compared with the previous year’s rankings” we do not know actually where precisely South Africa is compared to where it had been a year ago (since other countries may have changed, dropped out, etc.). Nor, certainly, do we know why. If anything, disaggregated indicators of causes associated with good control of corruption in the research profession show that South Africa has rather progressed on the whole, although its judicial independence may be under strain. But those who perceive it as backsliding also perceive something. And what are these perceptions based on? The CPI does not tell us.

These are the kinds of issues that the next generation of research – such as the Horizon Project BridgeGap, in which Transparency International is an essential member and of which I am the principal investigator – will hopefully clarify. Beyond naming and shaming, which have been and remain laudable actions, we need more actionable and specific indicators that allow us to measure results before and after anti-corruption policies are implemented. Indeed, we need tools that help us evaluate if and how regulation is leading to progress – or not.

How will corruption evolve in 2024?

REVIEWING THE PAST TO FORECAST THE FUTURE

Every year on December 9 the world celebrates International Anticorruption Day. This is the annual moment to review the state of global corruption, as well as the best opportunity to reflect on the poverty of our review tools. It has always been a challenge to measure corruption, but to measure corruption across time is the ultimate challenge. Another year of struggle against corruption is coming to a pass. Are we nearer to the target? Has any country graduated to good governance, in the ‘green’ area of the upper third of the global ranking? Has any country already in that area experienced some backsliding? Are some countries closer to reaping the benefits of many years of reforms or, on the contrary, does the world risk losing more countries to state capture?

As perception indicators are not optimal for assessing change from one year to another, ERCAS devised a methodology to both capture change – and lack of it- and explain it. A snapshot for 2023 can be found as the Index of Public Integrity (IPI), based on scientifically validated indicators, which proxy the causes (enablers and disablers) of corruption. Then, as indicators always have a certain time lag, the trend analysis is completed with an analysis of recent facts. All the data can be found on www.corruptionrisk.org. Except for the countries presented in the front table, all the others are forecast to be stationary. The six indicators used for the IPI 2023 are:

 

Administrative transparency De facto transparency of public contracts, business register, land cadaster and auditor general reports, as reported step by step and link by link in the T-index.
Online services The extent to which governments offer online services, as featured in the UN Survey. (Replaced Administrative burden based on the World Bank Doing Business)
Budget transparency The extent to which budget proposals and previous-year expenditures are and have been made public, using a fraction of the Open Budget Index survey.
Judicial independence The extent to which the judiciary is autonomous from private interest (including by government officials) as in the Global Competitiveness Report survey by the World Economic Forum
(Digital citizenship)
E-citizenship
Household broadband subscriptions and Facebook users per country measure the capacity of civil society
Freedom of the press Yearly indicator including economic and physical pressure on media

 

As Facebook users’ data, which is a component of the e-citizens, changes coverage across years, we use only Internet household connections to measure e-citizens for the forecast. As administrative transparency is a new indicator, with direct observations of every country’s online transparency, it is also not included in the forecast trends monitoring (just the IPI), but as an additional weight step. The step-by-step methodology can be read here.

Our IPI and forecast methodology thus provide three pictures:

1.   A snapshot- How the world is in the 2022-2023 IPI and why. Users can read the IPI by country and compare it against its region and income group on every component.

2.   A motion picture based on a time series- how countries changed over the past ten years and where they would likely be next year.

3.   A diagnosis – Open the forecast country page to see the individual trends, diagnosis and explicit legend to understand where the country is on corruption risk, what it could do to improve, and where it will be next year.

 

 

THE ANALYSIS

  • Every year, state capture is subverted by the silent but unstoppable rise of global digital citizenship, which signifies aggregate demand for good governance, understood as fair and equal treatment by a government for its subjects, with no privileged groups or citizens, enjoying a different status due to connections to the government — or bribes. Almost in every country of the world, the number of e-citizens is on the rise.
  • Corruption fights back, even against the most successful judicial crackdowns, with former successful countries losing battles against impunity in Latin America, Africa and the Balkans. Anti-privilege reforms promoting ethical universalism, and not high-profile trials, thus offer the most sustainable path to good governance, as success stories prove.
  • An unprecedented number of insurgencies, coups and wars are taking state capture to the next violent stage and threaten what have been incipient promising trends in  have also been under threat but give signs of resilience and recovery.
  • As Estonia moved up and the United States down, Estonia is now ahead of the United States as number 5 in the IPI ranking (1-10, with 10 best integrity in the IPI), after Denmark, Norway, Finland and New Zealand, which lead the top.
  • Digital trends (Internet and social media connected citizens, online services) are all steadily rising, while political indicators (judicial independence, freedom of the press) are doing badly in most of the world and worsening. The political trends cancel out the positive tech trends, and growing demand in the form of civil society combined with increased repression of the press and civil society is likely to lead to much instability wherever civil society reaches some critical mass – for instance, in the capital cities. The fall of captors in Sri Lanka may be followed by many others, but the success of the revolutionary path to good governance depends on the degree of institutionalization of political alternatives to follow. Not many political coalitions for good governance, unified by a single program on eliminating privilege and increasing transparency, exist around the world. If the good political society does not associate with a clear purposive movement, populists will remain what they have been for a while now – the chief political winners due to discontent with corruption.
  • Unless the United States solves its leadership integrity problems and is back convincingly as the needed global anticorruption coalition leader, global standards will sink even lower in 2024, and global anticorruption will become just another tool of a new cold war, with accusations of political instrumentalization and double standards flourishing. A phase of global moral anarchy with few successful transformations might follow as countries increasingly realign on grounds other than public integrity reputation.

 

More on www.corruptionrisk.org

Direct queries to professors Alina Mungiu-Pippidi and Michael Johnston at mungiu-pippidi@againstcorruption.eu

 

Berlin-Roma-Bucharest, December 2023

 

Evidence on Anti-Corruption: From Research to Policy-Making

In the past decades, efforts to fight corruption have increased across the globe. At a closer look not much evidence can be found to prove these strategies to be successful. We are still facing the same questions: Why is it so difficult to overcome corruption and what measures need to be taken to majorly improve the situation? Here at the European Research Centre for Anti-Corruption and State-Building (ERCAS) we try to answer these questions through research, looking for evidence on which anti-corruption strategies work and under what circumstances.

While our first aim is thus to produce badly-needed research, our second aim is to make sure it reaches those policymakers who design and implement anti-corruption policy around the world. We thus participate in many events to present our work. In the policy circles April and May is high season for conferences and workshops:

19-20 April, our Director Alina Mungiu-Pippidi and our senior researcher Ramin Dadasov took part in the 2016 OECD Integrity Forum. It brought together some of the most important policy makers in the anti-corruption industry. Alina presented her latest book, “The Quest for Good Governance: How Societies Develop Control of Corruption”, taking stock of 30 years of anti-corruption policy making and deriving lessons learned from those countries that managed to transition into a system of ethical universalism.

OECDRaminRamin presented the Index of Public Integrity (IPI), which was officially launched by ERCAS and ANTICORRP in May 2016. The index presents a new way of measuring public integrity systems and the ability of 105 countries to control corruption. It does so through six individual components which are all highly associated with the control of corruption, but are more objective and actionable than previous measurements. Ramin presented the IPI at panel on using integrity data for anti-corruption policy-making, showing how much work is still needed for solid, evidence-based policies.

On invitation of The Netherlands EU Presidency 2016, Ramin Dadasov also presented the IPI at a workshop on good governance, which took place in Brussels on 27 May 2016. The workshop targeted representatives from all EU member states. Ramin presented the IPI in the context of a report on “Public Integrity and Trust in Europe,” which ERCAS  launched with the Dutch Presidency earlier this year. The report argues that a lack of public integrity and institutional quality is a major explanation for the declining trust in public institutions in Europe.

On 28 April 2016 Brussels-based economic think tank Bruegel hosted an event titled “Fighting corruption: from headlines to real impact” featuring researchers Mihaly Fazekas and Alina Mungiu-Pippidi, as well as Transparency International (TI) representative Carl Dolan titled to talk about these questions. Together, the experts discussed the meaning behind different measurements of corruption and what conclusions they offer to support policy makers in their attempts to design better anti-corruption instruments.

OECDAlinaIn the discussion, Alina Mungiu-Pippidi also pointed out the need for better instruments to measure change. Indicators need to be modified in order to have more objective insights into corruption. According to Mihaly Fazekas, the trend towards open and big data helps researchers systematically collect and analyze previously undisclosed data. He highlighted Public procurement as a good proxy for uncovering corruption, as its data helps trace preferential treatment. The Horizon2020 DIGIWHIST project puts together data on companies who win many contracts with public funds. This data is then matched with connections between politics and business to identify companies with political ties and the conflict of interest (COI) is measured.

The importance of procurement data was also highlighted by Alina Mungiu-Pippidi in a presentation at the EBRD’s 2016 Annual Meeting, which took place 11-12 May in London. She presented how civil society actors can make procurement more transparent and uncover corruption risk in awarding public contracts. In doing so she highlighted important work done by the DIGIWHIST project and the Romanian Academic Society in Bucharest.

Government favouritism is still seen as “rule of the game” by many citizens in Europe and other parts of the world.  The need for more evidence-based policies is thus clear. New measurements and insights are a first step for these reforms. The ERCAS team is happy to frequently have the opportunity to present the research that we produce.

All pictures by OECD/Michael Dean, shared on flickr under CC – by-nc 2.0

ANTICORRP Launches New Index of Public Integrity

Berlin, 04 May 2016 – A new ranking lists the Scandinavian countries Norway, Denmark and Finland as the countries with the best public integrity systems in the world, followed by New Zealand, the Netherlands and the United Kingdom. The Index of Public Integrity (IPI) represents the first objective, actionable measurement of public integrity in the world. As such it assesses a society’s ability to control corruption. Myanmar, Chad and Venezuela receive the lowest scores in the index which covers 105 countries across the world. The IPI is published by the European Research Centre for Anti-Corruption and State-Building (ERCAS) at the Hertie School of Governance.

Why do we need a new index?

Currently the most cited corruption indices, such as Transparency International’s CPI and the Worldwide Governance Indicator on the Control of Corruption, are based on perceptions and expert assessments. They do a lot to raise awareness about the state of corruption in different countries. However, they do not help policy makers to understand how to better prevent corruption. The IPI is aimed to address this issue. Its six components are covering specific policy areas which enable governments to design policy reforms improving their integrity systems. It thus not only offers an evaluation of the state of corruption in different countries, but can also serve as the start of a roadmap for reform.

What is the IPI made of?

Based on years of empirical research and a solid theoretical framework, the IPI consists of six individual components. They are all significant factors in the control of corruption and represent the most vital policy areas in this field:

  • Judicial Independence represents an assessment of the independence of the judiciary from influences from the government, citizens or companies;
  • Administrative Burden is based on the time and number of procedures it takes to start up a business and the number and times it takes to pay taxes in a given society;
  • Trade Openness looks at the number of documents and time required to complete importing and exporting procedures in a given country;
  • Budget Transparency looks at the way a government publishes its executive budget proposal;
  • E-Citizenship measures the opportunities for citizens to take part in online discussion by taking into account internet access, the number of Facebook users and the number of broadband subscriptions;
  • Freedom of the Press looks at the legal and societal framework that the press operates in and if journalists are allowed to do their work without interference.

The components are chosen to be more objective and actionable than previous corruption indicators. Using data from different international organisations and non-governmental organisations, ERCAS aims at publishing new data every two years to make comparison possible over time and enable policy-makers to track changes.

What can the IPI be used for?

The IPI can serve as a starting point for policy-makers to identify reform areas to build a better framework to control corruption. To facilitate this, ERCAS developed www.integrity-index.org, an interactive online tool to help policy-makers and civil society leaders to use the IPI. The online tool enables users to compare countries to their peers in their region or income group in order to see the potential for improvement in specific policy areas. The website also includes indicative suggestions for reforms.

The IPI was supported and funded by the EU FP7 ANTICORRP project. European civil society groups, investigative journalists and civil servants involved in or concerned about transparency, accountability and the control of corruption are invited to contact the project for more information.

Download the Press Release here.

ERCAS Congratulates Martin Mendelski

ERCAS congratulates Dr. Martin Mendelski, a member of the EU FP7 ANTICORRP project and affiliate of ERCAS partner Romanian Academic Society (SAR): He was awarded the “THESEUS Award for Promising Research on European Integration” for his PhD thesis entitled “The Limits of the European Union’s Transformative Power: Pathologies of Europeanization and Rule of Law Reform in Central and Eastern Europe”.

Mendelski’s doctoral thesis argues that the EU’s impact on the rule of law depends on the social order in which countries (from Central and Eastern Europe) are located. The findings of the study show that EU-driven reforms tend to undermine the rule of law in closed-access and transitional social orders (e.g. Moldova, Romania, Western Balkans), by reinforcing legal pathologies (e.g. legal instability and incoherence, politicization). These detrimental effects of Europeanization tend to occur when empowered and unchecked reformers instrumentalize judicial and anti-corruption reforms (including newly created anti-corruption agencies, judicial structures and laws). In contrast, the “pathological power” of the EU is less harmful in open-access social orders (e.g. Poland, Estonia) where it is constrained by reform-resisting and independent horizontal accountability institutions (e.g. Constitutional Courts, Ombudsmen, judicial councils). To explain differences in the rule of law more systematically, an original causal theory of “virtuous and vicious reform cycles” is proposed. The main implication is that EU conditionality is not transformative but reinforcing, i.e. reformers tend to reproduce the respective social order in which they are embedded and thus cement the post-communist divergence in the rule of law. The thesis further makes several policy recommendations to remedy the pathological impact of donor-driven reforms.  Two papers resulting from his research can be found on the ANTICORRP website.

The THESEUS award is awarded for excellent work by junior researchers in the field of European integration. The rewarded works have been PhD theses or publications in major journals, which analyse on-going challenges for the European Union and its member states with regard to the institutions, policies or policymaking processes of the European Union or from a comparative perspective across the member states of the European Union, recommending potential institutional or policy solutions.

Alina Mungiu-Pippidi Launches “The Quest for Good Governance”

Alina Mungiu-Pippidi launched her book “The Quest for Good Governance: How Societies Develop Control of Corruption” at the Hertie School of Governance last week. She was joined by a distinguished panel of speakers to discuss her work: Gunnar Folke Schuppert (Berlin Social Science Centre (WZB)), Finn Heinrich (Transparency International) and Janine R. Wedel (George Mason University) gathered to discuss the book that Larry Diamond called a “brilliant integration of theory, history, case studies and quantitative evidence.” Anne Koch, Regional Director for Europe and Central Asia at Transparency International moderated the event.

Alina Mungiu-Pippidi presented the main findings of her book which is based on years of research and evaluations of the international community’s efforts to curb corruption globally. Mungiu-Pippidi explained how she approached the question of how to control corruption through a historical lens, by trying to understand how countries managed to break the vicious cycle of patrimonialism to reach a governance norm of ethical universalism. In doing so she looked at historical and contemporary achievers to understand how these processes worked in those contexts. Mungiu-Pippidi highlighted that many lessons are to be learned from countries that managed to establish a governance order based on ethical universalism.

To the panelists, who were generally impressed by Mungiu-Pippidi’s findings, some parts of the book raised questions. Gunnar Folke Schuppert asked about the relationship between the formal and informal institutions in countries on the path to good governance. He wondered: how do these informal instituions, the rules of the game, change when we try and tackle corruption? Mungiu-Pippidi explained that, naturally, informal institutions will always exist, which is why her approach looks at governance regimes, rather than just political regimes. These are much harder to change and take a more comprehensive approach. Janine R. Wedel highlighted that to her the strength of the book is that it looks not only at institutions and their reform, but also at how corruption operates in a specific environment and how we need contextual choices for anticorruption. She stressed Mungiu-Pippidi’s argument that corruption is not a deviation from a norm, but in itself defines a governance system with its formal and informal rules. In some ways “The Quest for Good Governance” evn caused some frustrations, as Finn Heinrich, Research Director at Transparency International, pointed out:

“Reading the book was really a roller-coaster. I’ve been with TI [Transparency International] for 7/8 years now and some of key frustrations where linked to the question of why countries are not showing significant progress. We need to have some success cases. The positive side of the roller-coaster was that reading your book I understood: it’s an equilibrium – it’s not about incremental progress, but much more deep seated. It’s about really fundamental changes and revolutions. That got me excited. The downslide of the roller-coaster was to realize that this is easy to implement. You can’t just come up with new institutions. Anti-corruption is about domestic political forces and long term change. I ended up also being a bit frustrated about the lack of easy fixes, yet, it made a lot of sense to me I really encourage you to read the book. It touches upon all the key issues of corruption: It looks at measurement, theory, at policy; it uses quantitative methods, but also process tracing tools. It’s really a tour de force on various things and, while you might not agree with all of its conclusions, it really is a textbook even though it’s not a textbook on corruption.”

The audience brought together many representatives of the Berlin based anti-corruption community. Representatives of NGOs and government institutions were joined by professors and university students, who engaged in a discussion of the questions raised by Mungiu-Pippidi’s book. One of the members of the audience was Hans-Dieter Klingemann who explained to us what he thought about the book:9781316286937i

“What I was impressed by was the historical depth and the combination of various methods, from court case analysis to survey data and econometrics. You really had the impression to get a comprehensive picture. What I was also impressed by was the refusal to give easy and simple answers. This is not a cookbook; it’s a book to think about very specific cases and come up with very specific solutions.”

This event was the third in a series of events in which Alina Mungiu-Pippidi promotes her book. Earlier this month she presented it at two occasions in London, at the School of Slavonic and East European Studies at University College London and at the Legatum Institute. Later this month and in March Mungiu-Pippidi will be travelling to the East Coast of the United States to present her book at Columbia University, the World Bank, the Woodrow Wilson International Center and the Harvard Kennedy School of Governance.

If you didn’t get a chance to read it yet, order The Quest for Good Governance:  How Societies Build Control of Corruption by Alina Mungiu-Pippidi, published by Cambridge University Press here.

Levels of Public Integrity Show Multi-speed Europe

By Ramin Dadasov

The Dutch Presidency of the European Union released on Thursday, January 21 at the European Commission in Brussels a new ranking of public integrity for the 28 EU Member States. The ranking represents the first objective measurement of public integrity in the EU. It is part of a report on trust and integrity commissioned to a group of research institutes associated in the EU FP7 ANTICORRP project lead by Professor Alina Mungiu-Pippidi at the Hertie School of Governance in Berlin.

The ranking is based on six closely associated indicators, which on one hand correlate sufficiently to be aggregated into one index, and on another are strongly associated with existing corruption indicators. These commonly used indicators, for instance Transparency International’s Corruption Perception Index, are based on expert perceptions. The new Index of Public Integrity (IPI) is more objective. It is drawing on six transparent indicators: administrative simplicity (time to register a business and pay tax), trade openness, auditing capacity, judicial capacity, e-services offered by government and e-services used by the population. This transparent structure allows for the index to be compared across time (from one year to another), something that should not be done with perception based indicators. It also makes the indicator sensitive to policy reforms, another shortcoming of perception based indices that are notoriously lagging behind reality. For instance, Greece was only ranked as very corrupt in rankings after the euro crisis became public, whereas corruption is seen as a major cause for it. The ranking lists Scandinavian countries and the Netherlands firmly on top, with Bulgaria, Romania and Croatia competing for the bottom of the ranking. The index is offered for 2012 and 2014, the latest available data. It shows positive trends for Romania (which moved ahead of Bulgaria after being last until 2012) and especially Greece, which registered the largest progress in recent years together with Latvia and Lithuania (see Figure 1).

IPI_Ranking

The report argues that economic performance alone does not explain the sometimes dramatic decline in trust in government. Europeans in many member states perceive a serious drop in the quality of governance, and the failure of current policies to redress it. Only in a minority of countries in present-day Europe we encounter a clear majority believing that success in either the public or private sector is due to merit. More than half of Europeans believe that the only way to succeed in business in their country is through political connections. Less than a quarter of Europeans agree that their government’s efforts in tackling corruption are effective. The countries where citizens perceive higher integrity and better governance are those that managed to preserve high levels of trust in government despite the economic crisis.

In pointing at these factors contributing to the growing loss of trust in national and European institutions throughout EU-28 the report takes major steps in helping to understand this crisis. It formulates lessons learned from this review if evidence and hopes to inform the policy debate on how to address the apparent lack of public integrity in Europe.

Digital Whistleblowing. Blessing or Curse?

Whistleblowing Panel

What does whistleblowing look like in the digital age? What are its benefits and pitfalls? On 17 November 2015 the Hertie School of Governance and the Council of Europe hosted a discussion on these questions. The event was a satellite event to the World Forum for Democracy, taking place at the Council of Europe 18 – 21 November and focusing on finding the right balance between freedom and control in democratic societies. The Hertie School brought together a set of panellists from a variation of countries and fields to present their very own experiences of working with whistleblowing. The panel was moderated by Anne Koch, regional director for Europe and Central Asia at Transparency International.

The different panellists showcased various experiences of working in the context of whistleblowing: Marius Dragomir, a journalist and senior manager for the independent journalism programme of the Open Society Foundations in London, Maksymilian Czuperski, working the Atlantic Council which recently supported the collection of evidence for the presence of Russian troops in Eastern Ukraine by crowdsourcing information from citizens. It also featured Simona Levi, the founder of Xnet, a Spanish online journalism platform specialized on engaging citizen. Xnet actively calls upon citizens to become whistleblowers and leak undisclosed information in order to uncover corrupt behaviour.

The final two panellists were Mara Mendes, project manager for Open Knowledge Germany and Alina Mungiu-Pippidi, professor of democratization at the Hertie School. They presented DIGIWHIST, a new EU Horizon 2020 project. The project aims at increasing transparency and efficiency of public spending. It will do this through the systematic collection, structuring, analysis, and broad dissemination of information on public procurement through online platforms. Alina Mungiu-Pippidi highlighted the centrality of procurement data in fighting corruption. Linked to information on aggregate asset and income declarations data, she hopes that this data will help detect potential conflicts of interest and identify systemic vulnerabilities. In this way DIGIWHIST is supposed to specifically support journalists in creating transparency within the procurement sector.

What is a whistleblower?

One reoccurring theme at the discussion was the actual definition of a whistleblower. Anne Koch opened the panel by describing it as “any person that wants to report wrong doing to someone who can do something against the problem.” This stood somehow in contrast to the experience of Xnet’s Simona Levi, who, for instance, collected emails from whistleblowers at big Spanish banks and reported on wrongdoings in these contexts. The panel agreed though that a whistleblower does not necessarily have to be someone working for the government or a private enterprise and release information from the inside. For Alina Mungiu-Pippidi it was “a person who is aware of a situation the rest of the world is not and brings it to public attention.” It can also be a group of people collectively gathering information that the wider public is unaware off, or analyse data collectively in order to highlight important information.

Who has the right to decide?

The debate also looked at the pitfalls of whistleblowing and discussed the questions of what safeguards are needed to prevent harm to innocent individuals through whistleblowing. In many countries protection of whistleblowers is still deficient and there are no laws specifically protecting whistleblowers from prosecution. Often those willing to share information are unaware of technical tools which can be used to protect their identity. The participants highlighted tools such as GlobaLeaks, which provides anonymous channels for whistleblowers. Journalists in particular carry a twofold responsibility. On the one hand they need to protect their sources and those who entrust them with information, also by teaching them secure ways to share information. Journalists, however, are also responsible for the information they publish. When Anne Koch asked the panel who has the right to decide what publications are in the public interest, the panel generally agreed: journalists can decide, but they have to be aware of their special responsibility. They will, however, always be better placed to decide than civil servants who might incriminate themselves by publishing data.

In the end, the best kind of whistleblowing might be done collectively. Communities of people can uncover corrupt behaviour of local officials and document what is happening around them. Also, individual whistleblowers depend on those around them. As Alina Mungiu-Pippidi pointed out: “In the end, laws cannot protect whistleblowers, but public opinion can.” A similar conclusion was also taken at a panel on safe whistleblowing at the World Forum for Democracy in Strasbourg, which representatives of ERCAS also attended. One conclusion to be taken from both discussions is that whistleblowing should not remain an exception, but it should become the norm for citizens to report wrongdoings that they witness.

Curbing Corruption: Ideas that Work

ccreportThe Legatum Institute launched a new collection of successful anti-corruption case studies. The series titled “Curbing Corruption: Ideas that Work” is published jointly by the Legatum Institute and Democracy Lab. It presents a wide range of case studies illustrating what does and what doesn’t work in the field of anti-corruption. The study wants to stimulate a discussion on corruption “that draws on implemented policies, lived experience and specific details,” according to Christian Caryl, Managing Editor of Democracy Lab and Senior Fellow at the Legatum Institute. By doing so it wants to avoid the pitfall of generalising anti-corruption policies, which often only work in specific contexts and addresses a particular form of corruption.

The eleven case studies take the reader into different corners of the world and into a large spectrum of anti-corruption success stories. Christopher Eglund and Johan Engvall, for example, are looking at the reforms of the education system in Georgia after the 2003 ‘Rose Revolution’. They describe the ‘big bang’ approach of sweeping reforms introduce by Alexander Lomaia, the new minister of education and science. They turned the Georgian education system around into one that values academic performance and integrity. In another case study Richard E. Messick looks at the FBI agents that uncovered a web of corruption in Chicago’s court system. He describes how they used fake trials and informants to tackle deeply ingrained court corruption. Anna Petherick analyses the case of Brazil where authorities tried to reign in on corruption on the municipality level with ‘audit SWAT teams’ performing surprise audits of municipalities. A lottery decides which municipalities are going to be audited; this way all mayors know the next audit could be in their constituencies.

These are just three out of the eleven case studies presented by the Democracy Lab and the Legatum Institute. They illustrate the broad range of cases covered in the Curbing Corruption series. The reports were launched in September with a panel discussion titled “Fixing the Fight Against Corruption”, held at the Legatum Institute in London. The panelists stressed that there is now easy fix for corruption and that solutions always have to be adapted to local environments. The case studies give plenty of food for thought in this context. Naturally the evidence they convey remains anecdotal. Yet, they spark a debate about potential policy solutions. In the end, this is exactly why they were commissioned.

The Quest for Good Governance: How Societies Develop Control of Corruption

9781316286937i

“This is one of the most important books ever written on the most universal governance challenge of our time – how to control corruption.” These are the words of Larry Diamond, the director of the Center on Democracy, Development and the Rule of Law* from Stanford University about Prof. Alina Mungiu-Pippidi‘s new book The Quest for Good Governance How Societies Develop Control of Corruption, available from September 2015 from Cambridge University Press.

Mr Diamond stated: “In this brilliant integration of theory, history, case studies and quantitative evidence, Alina Mungiu-Pippidi shows how countries move from the natural state of corruption, clientelism and particularistic governance to the impersonal norms of fairness, integrity and transparency that make for good governance. This is an indispensable work for any scholar, student or policy-maker who wants to understand how societies mobilize and states reform to control corruption.” This is not a book on corruption as crime, as this except shows:

 

Tarek al-Tayeb Mohamed Bouazizi was a 27-year-old Tunisian street vendor who set himself on fire on December 17, 2010, in protest of the confiscation of his wares following an accusation by officials that he was trading illegally and evading taxes. That street vendor’s action started the fires of the Tunisian Revolution and then the wider Arab Spring, and he was instantly cast as a hero by the global anticorruption community. After all, then-President Zine El Abidine Ben was a typical corrupt leader with a wife who had built herself an unauthorized villa at the Carthage UNESCO heritage site. But he could also have argued that since people like Bouazizi had never paid taxes, there were insufficient public resources to offer them much in the way of education or health care. In other words, beyond the paradigm of predator and victim – two parts with ideally cast actors in this particular circumstance – what seems to be the problem in the Tunisian situation is the absence of an agreed social contract between these actors-only such a contract would give development a chance.

Alina Mungiu-Pippidi takes up the challenge from where renowned authors Daron Acemoglu and James Robinson had left it in “Why Nations Fail”. If the difference in economic performance is accounted for by governance, what explains why so few countries engage on the path of open and inclusive government versus one limiting access and spoiling its subjects? She argues that corruption starts historically being the norm before being the exception, and that in over eighty electoral democracies of the present spoiling of public resources by ruling elites has become the rule of the game and the number one collective action problem.

Mungiu-Pippidi, the Democracy Chair at the Hertie School of Governance in Berlin, who also developed aggressive anticorruption methodologies based on naming and shaming for MP candidates as well as integrity rankings of public universities in her native Romania travels in this book from 12th century Siena to present day Estonia or Uruguay to deconstruct and learn from virtuous circles: the evolution of politics from a game of public spoiling to the maximization of social welfare. She is also merciless towards current anticorruption industry, which she sees as far too complacent and too concerned to generate work for itself rather than attack the problem and places her bets instead on the new media and civil society. Countries with more Facebook subscribers or Internet household connections have superior collective action capacity against predatory elites, she finds. Her research draws on the largest social science grant awarded by EU within its research framework projects, the 10 million ANTICOORP (anticorrp.eu). Professor Mungiu-Pippidi is also the main author of a report on how to redress integrity in the European Union for the forthcoming Dutch EU presidency (to be released January 2016).

The Quest for Good Governance, Press Release

*as stated on the backcover

Virtuous Circles Conference: Lessons Learned

DSC_0045 editedThe final roundtable of the conference “Understanding Governance Virtuous Circles: Who Succeeds and Why” (July 8-12, 2015) organized by the Hertie School’s European Research Centre for Anti-Corruption and State-Building, ERCAS in the framework of EU FP7 ANTICORRP project, extracted the lessons learned from three days of discussions of the biggest contemporary achievers in governance reform (Estonia, Chile, Costa Rica, Uruguay, Georgia, Taiwan, Botswana, South Korea) as well as of some of the greatest challenges (Russia, Ukraine, South Africa). The questions asked focused on the causes of institutional change. Why these countries (Botswana and Georgia only partly) managed, and others, which received a lot of assistance and support from the international anticorruption community, did not? In a sweeping comparative attempt of the success cases, Alina Mungiu-Pippidi, who is editing with co-author Michael Johnston a book on these cases, summed up seven provisional conclusions:

  • All success cases have some story of massive institutional correction which set a virtuous circle in motion, for instance the land reform in post-war Taiwan and Korea which created a large number of landowners able to educate their children, and so a sudden rise in the middle class, or the revolutions in Estonia and Georgia which identified old rules of the game and their defenders with an ‘old regime’ on which popular consensus existed that it must at all cost be removed;
  • While democratization helped all these success stories, the virtuous circle unfolds over a larger interval of time, with authoritarianism playing a part (for instance in pulling out clientelism, or developing an effective bureaucracy), but more often than not a full virtuous sequence playing out (democrats who return after an authoritarian regime as in Uruguay have learned their lessons and change their old ways);
  • None of the successful examples is a federal state, meaning that strong unitary central government and a certain unity of purpose matters;
  • Non-discretionary government, which seems the key to success, can be achieved by both left and right, by Uruguay, on the one hand, Estonia and Chile on the other, what matters is that social allocation is based on ethical universalism (everyone treated equally and impartially) and not the ideology of that government;
  • Human agency matters greatly, even if the motivation of these central individuals is very different. Taiwan is improved by a succession of justice ministers who each deliver a piece of the final construction until they lose political support, in a counter-factual Taiwan with no virtuous circle we would find ministers with long tenure and no reforms, so the will of these individuals to achieve something made a difference;
  • Everywhere we find a mix of groups who seek their own interest and some altruist who push for a governance change, in these cases an alliance of them is empowered over those who defend the status-quo;
  • The success in all these cases has come out of a large mix of reforms which built open competition and a fair state, only occasionally combined with some crackdown on dissenters, it is far more difficult to curb corruption after it happens, so these are state-building successes.

A lot, however, is contingency. As Philip Keefer from Inter-American Development Bank put it: “There’s often a lot of accident involved. It could be that you just need to be lucky.” And the institutional revolutions are not normative revolutions necessarily, as Larry Diamond from Stanford University put it: “Changes won’t be led by normative propositions. Ethical changes happen when you change behavior and institutions. The ethical transformation will come later.”

DSC_0042Finally, in the words of Michael Johnston from Colgate University: “There’s been a healthy discussion of distinction between what sustains versus what gets you there and how you sustain it over time. But it’s really incredible about how much we still don’t know. But what is clear is that we can’t force a model or checklist. There are virtuous circles, but there’s no one way right for different countries.”

Understanding Governance Virtuous Circles: Estonian Miracle

The conference “Understanding Governance Virtuous Circles: Who Succeeds and Why” (July 8-12, 2015, organized by the Hertie School of Governance (HSoG) and the European Research Centre for Anti-Corruption and State-Building, ERCAS) got off to an intriguing start here at the European Academy Berlin. The aim of the event – with the biggest names in the international anti-corruption discourse in attendance – is to identify patterns that have led to national success stories (“virtuous circles”) in fighting corruption. In a nutshell, this is the task of the project EU FP7 ANTICORRP (Anticorruption Policies Revisited: Global Trends and European Responses to the Challenge of Corruption), which is a large-scale research project funded by the European Commission and led by ERCAS.

ANTICORRP has identified seven success stories in good governance that have led to low levels of corruption in those countries. One of these is Estonia, the small Baltic country that liberated itself from the Soviet Union in 1989-90. Can it be copied? Or lessons learned from it? Was Estonia’s model an accident of history – or something that can be applied elsewhere? To what extent does human agency play a critical role? What makes these reforms sustainable?

In a video presentation of a wide-ranging interview with Alina Mungiu-Pippidi of the HSoG, Estonia’s former prime minister Mart Laar, who led the country’s transition out of communism in the early 1990s, outlined the elements that were critical to getting the Estonian Wirtschaftswunder off the ground and sustainable with anti-corruption elements embedded.

Briefly, Laar’s government: 1) made fewer, simpler laws; 2) liberalized (deregulated) everything; 3) introduced open (merit-based) public service; 4) started anticorruption fight at beginning of transition; 5) had laws ready to go (came into office with them in hand); 6) first government came from the anti-communist resistance, highly motivated and unified in purpose; 7) controlled the instruments of the main processes (safeguarding banks from mafias, for instance); 8) sought out local advice that proved better than Western (U.S. American) advice.

In the discussion that followed, the panelists chimed in with the following:

“It’s essential to look at what has worked in the real world but there are no cook book recipes” for beating corruption. Michael Johnston, Colgate University

“One-man shows come and go but collective action is always necessary in fighting corruption.” Philip Keefer, Inter-American Development Bank

“Free and fair elections, biometric registration, and a serious electoral commission made an important difference in Nigeria” [where a peaceful transfer of power happened this year]. “Perhaps a virtuous circle is unfolding with the new leader there, as could be the case in Mongolia, too, where the corrupt former president was convicted and sent to prison. But it’s still too early to tell for sure.” Larry Diamond, Stanford University

By Paul Hockenos

website

Understanding governance virtuous circles: who succeeded and why

Why do some societies manage to control extraction of public resources in favour of particular interests, so that it only manifests itself occasionally, as an exception (corruption), while others societies do not and remain systemically corrupt? Is the superior performance of the first group of countries a result of what they do, or of who they are?

ERCAS is hosting a conference at the European Academy in Grunewald, Berlin from 8-12 July 2015 that will address these questions. The conference, ‘Understanding Governance Virtuous Circles. Who succeeded and why’ is part of the EU FP7 research project ANTICORRP: Anticorruption Policies Revisited: Global Trends and European Responses to the Challenge of Corruption. Our researchers have identified seven countries (Uruguay, Estonia, Chile, Costa Rica, Taiwan, South Korea and Georgia) as the most successful in achieving control of corruption in the past 25 years. We would like to address why and how these countries have been successful and what lessons can be learned from them.

Spaces are extremely limited, but the conference will be live tweeted and a conference report will be published by Cambridge University Press.

 

Speakers:

  • Dr. Mart Laar (ex-prime Minister, Estonia) (by video)
  • Prof. Robert Klitgaard (Claremont Graduate University)
  • Prof. Larry Diamond (Stanford University)
  • Mr. Philip Keefer (World Bank)
  • Prof. Michael Johnston (Colgate University)
  • Prof. Adam Graycar (Australian National University)
  • Prof. Eric Uslaner (University of Maryland)
  • Prof. Ryan Saylor (University of Tulsa)
  • Dr. Mark Plattner (Journal of Democracy)
  • Dr. Natalia Matukhno (Centre for the Study of Public Policy/School of Government and Public Policy)
  • Dr. Martin Mendelski (University of Trier)
  • Dr. Mark Pyman (TI Defense and Security UK)
  • Dr. Daniel Buquet (Universidad de la República de Uruguay)
  • Prof. Bruce Wilson (University of Central Florida Costa Rica)
  • Prof. Patricio Navia (Universidad Diego Portales/New York University)
  • Prof. Paul Felipe Lagunes (Columbia University)
  • Dr. Valts Kalnins (Centre for Public Policy PROVIDUS)
  • Dr. Alexander Kupatadze (University College London)
  • Dr. Marianne Camerer (University of Cape Town)
  • Dr. Halyna Kokhan (UNDP Ukraine)
  • Dr. Anastassia Obydenkova (Harvard University)
  • Prof. Christian Göbel (University of Vienna)
  • Dr. Yong-sung You (The Australian National University)
  • Dr. Mihaly Fazekas (Corvinius University of Budapest)
Agenda Virtuous Circle Conference – Current as of 05 July 2015.

 

Conference papers:

 

Helpful documents:

 

 

Democracy in Decline

What is the state of global democracy? According to renowned democracy expert Professor Larry Diamond who spoke last week at Berlin’s Hertie School of Governance , democracy around the world continues to decline largely because of a lack of good governance.

During the event, chaired by ERCAS Director Alina Mungiu-Pippidi, Professor Diamond presented evidence that between 2005 and 2014, Freedom House scores (assessments of political rights and civil liberties, both of which are reported every year by the organisation) consistently declined. While 5 new democracies (Fiji, Kosovo, Madagascar, Maldives, Solomon Islands) were added to the global tally, the overall trend is shifting away from democracy.

Diamond highlighted the breakdown of democracy in Russia, Nigeria, Venezuela, Philippines, Pakistan, Bangladesh, Thailand and Kenya. In Africa, 25 nations declined in their Freedom House scores, 11 improved, and democracy overall on the continent eroded. He argued that the situation in Venezuela is continuing to deteriorate, and pointed to the incipient populist authoritarian leadership in Bolivia and Ecuador as further cause for alarm.

Shifting focus to the Middle East, Diamond looked at what he dubbed an “Arab Freeze”, arguing that the hope of the Arab Spring has in fact failed to deliver democratic gains, with the exception of Tunisia where democracy is slowly taking hold.

Why have so many democracies broken down? Diamond argues that in all instances there is a weak rule of law coupled with executive abuse of power. Many fragile or failed democracies are also quite complicated countries; they are quite ethnically or religiously or linguistically diverse.  If, as Diamond pointed out, effective institutions are not developed and if broad and inclusive political coalitions are not developed, the results (for example in Ukraine) can be disastrous. Poor economic performance can also have a detrimental effect on democracy, but Diamond argues that government performance and perception of legitimacy by citizens is sometimes as or more important than mere economic success.

With many established democracies mired in legislative deadlock, and authoritarian countries gaining global influence, there seems to be little hope of inspiring new democracies. The rise of China for example as a global economic power could have negative impacts on leaders of non-democratic states who could argue that authoritarianism has produced good economic results. On a slightly more upbeat note, Diamond did point out that there is a real possibility (even in China) of economic success leading to more citizen demands for democracy. When these happen in countries that are already high-functioning, there is a a hope for democracy taking hold.

Aam Aadmi Party Victory in Delhi: the comeback of Indian anti-corruption politics?

By Lucía Ixtacuy

The Aam Aadmi (Common Man) Party (AAP) first gained international attention when it managed to achieve the second-largest majority in the Delhi Assembly after the 2013 elections. Grabbing 28 out of the 70 seats was considered an unprecedented and even “historic” political debut in India.

However, only 49 days after being sworn in as chief minister, the party leader, Arvind Kejriwal, resigned. Claiming that opposition parties in the national parliament were stalling an important bill (Jan Lokpal Bill (drafted by prominent civil society activists including Kejriwal himself) which would, among other things, appoint an independent body to investigate and prosecute corruption cases.

Kejriwal’s decision to step down was severely criticized by both analysts and AAP supporters alike. Perhaps partially as a consequence of his departure, the Party did not win any seats during the parliamentary elections of 2014. Such defeat brought deep concerns about the longevity of the AAP as a political organization.

Last week however, the AAP got 67 out of the 70 seats in the Delhi State Assembly elections. Not only are the results historic; the election also registered a record polling, with 67.08% turnout.

delhi_election_results
Source: Elections Data NDTV

Such a striking result makes it particularly interesting to have a closer look at the AAP, especially with regard to two facts. First, that the party blossomed as a result of the consolidation of the citizen anti-corruption movement, strong enough to influence the design and scope of a draft anti-corruption bill through a nationwide mobilization in 2011. Second, that once a part of the movement decided to constitute a political party, it was formed around anti-corruption as the main agenda.

The emergence and success of an anti-corruption movement, the impressive levels of voter turnout and the regained support for the APP, say much about Indian people being fed up with high levels of corruption.

Corruption in India

High-levels of corruption affect every citizen in India, from bribes that must be paid in order to access public services (i.e., identity cards, passports, and building permits) to an undermined rule of law and cases of fraudulent election processes. Corruption is present even in rural areas, as villagers are forced to pay bribes for accessing social programs. According to the Center for Media Studies, there is not much difference in the extent of corruption that households below the poverty line experience in urban and rural areas.

India has had broad anti-corruption legislation in place since colonial times, but corruption still prevails (i.e. Prevention of Corruption Act (1947), the Benami Transactions Prevention Act (1988), and Prevention of Money Laundering Act (2002). In addition, a set of anti-corruption institutions have been in operation since the early ninety-sixties (i.e. the Anticorruption Bureau (1961), the Central Bureau of Investigation (1963), the Central Vigilance Commission (1964) and the Directorate of Enforcement and the Financial Intelligence Unit (2004).

Unfortunately, legislation and institutions cannot control corruption per se. Engaged citizens demanding (and using) such instruments are also needed in order to have some results. Fortunately in India, parallel to the creation of an institutional and legal framework, social movements explicitly demanding transparency appeared already around 1975, leading to the declaration of the right to information as a fundamental constitutional right (1982), the adoption of the Right to Information Act (2005) and its operationalization (2010).

Supply and demand sides of accountability

The combination of supply and demand sides of accountability may be behind the success story of the India against Corruption Movement and the subsequent, electoral victories of the AAP; where the supply side consists of the mechanisms needed to hold government officials to account, and the demand side entails a dynamic civil society that is socially and politically active (World Bank 2009; Malena & McNeil 2010).

Last year, I was part of a team of master’s degree candidates that explored the role of both sides of accountability on control of corruption. As a case study, we analyzed the specific context in which the India Against Corruption Movement emerged, and the elements contributing its intensification and the subsequent formation of the AAP.

Changing the incentive structure of corruption

One of the main observations to emerge from our fieldwork, and which is relevant given the recent victory of the AAP, is that the anti-corruption movement and the Party rhetoric might have brought about changes in the incentive structure of corruption. This given that the logic behind corrupt behaviors follows a cost-benefit analysis, and individuals assess their opportunities, their cost, and the risks of getting caught.

First of all, the AAP has been highly successful in making corruption one of the most salient political issues. This has shifted the incentives for corrupt behaviors, since being corrupt has become increasingly more costly in electoral terms. An anti-corruption stance has become the prerogative in Indian politics. No politician can expect to get strong support from their electorate base if they do not address the issue of corruption. Hence, a society that is actively condemning the existence of corruption is also willing to give harsher punishments.

In addition, citizens were actively engaging in the collection of evidence for corrupt behavior. Arvind Kejriwal has asked followers and supporters of the movement on repeated occasions to be alert and record any situation they might find compromising. Social media has been the main platform to share these experiences and evidence. Organizations supporting the movement, such as, I Paid a Bribe, encourage citizens to share their experiences with corruption through Twitter and to accuse public servants involved in such acts. Consequently, there are new pressures on bureaucratic officials, who now have to think twice before they engage in corrupt acts. The risk of being caught has exponentially increased, and so have the costs.

Finally, the introduction of the Right to Information Act (RTI) has forced public officials into carrying out more transparent procedures of implementation of policies. Given that anybody can ask for information on the process at any time, RTI has changed the structure of incentives in terms of how public information is dealt with.

Whether the AAP is to last is yet to be seen. However, many of the individuals we interviewed for our field work agreed that even if the anti-corruption movement or the AAP are short-lived, they will remain relevant as long as they bring about certain changes, ideals or better yet, the development of a new governance structure.

As a final remark, it is interesting to note that, in terms of control of corruption, India’s rank in the Corruption Perception Index (CPI) moved up to 85 (score: 3.8) in 2014 compared to that of 95 (score: 3.1) in 2011- when the anti-corruption movement emerged. Transparency International India 2014 CPI Report notes that such score possibly captured the anti-corruption mandate on which the government was elected and reflects the possibility of some new reforms in this area, including the passing of pending anti-corruption bills.

Lucia Ixtacuy recently graduated from the MPP programme at the Hertie School of Governance. She, Julián Prieto and Mónica Wills authored the ERCAS working paper: Anti-Corruption Revolutions: When Civil Society Steps In based on their master’s thesis. A summary of their research and findings is available here.

References:

McNeil, M., & Malena, C. (2010). : Demanding Good Governance: Lessons from Social Accountability Initiatives in Africa. . Washington DC: World Bank Publications, Ch 1.

ERCAS Awarded Second Major EU Research Project

whistle
Photo credit: Steven Depolo, Flickr

The tell-tale signs of public spending gone wrong are easy to spot: An airport that is many years behind schedule and billions of Euro over budget, or a highway leading to nowhere. In many cases, corruption is at the core of the problem. For too long, it has been hard to identify such core problems and it has been even harder for civil society to play a role in preventing corrupt practices in public sector spending. A project is about to help change this: Together with five other European partners, the European Research Centre for Anti-Corruption and State-Building (ERCAS) at the Hertie School of Governance has just won a new EU-funded research project, DIGIWHIST, aimed at empowering society to combat public sector corruption.

The project is “The Digital Whistleblower:  Fiscal Transparency, Risk Assessment and Impact of Good Governance Policies Assessed” (DIGIWHIST), funded with three million Euro by the EU’s Horizon 2020 programme, will run for three years (March 2015 – February 2018). It is the second major EU Research Project awarded to ERCAS, led by Alina Mungiu-Pippidi, Professor of Democracy Studies at the Hertie School.

The central objective of DIGIWHIST is to improve trust in governments and efficiency of public spending by empowering civil society, investigative journalists, and civil servants with the information and tools they need to increase transparency in public spending and thus accountability of public officials in Europe.

Specifically, the project will create several interactive products:

  • national procurement portals and mobile apps allow users to: 1) making the database and documentation downloadable, 2) providing easy-to-useanalytic tools, and 3) making it possible for users to contribute to data and 4) allowing for anonymous whistleblower reports and freedom of information requests;
  • a European Transparency Legislation Observatory similar to the national procurement portals which allows users to access, and understand, existing legal frameworks related to public procurement;
  • an easy-to-use risk assessment software for public authorities, based on the indicators developed by DIGIWHIST, to assess corruption risks.

Returning to the airport example, an investigative journalist seeking to understand more about the airport project could visit the DIGIWHIST platform and look up the public body overseeing the construction or the construction firms involved, etc. The information on the platform would include whether the public body has complied with public procurement laws, or whether tendering behaviour has posed any corruption risks. This journalist could then file a report with the appropriate government agency to get more information on the project or even file a whistleblowing report if warranted.

“Our research has proven that only the combination of engaged civic actors plus legislative instruments work in fighting corruption,” said Professor Mungiu-Pippidi. “For example, Freedom of Information Acts (FOIAs) are more effective when civil society is empowered to use them and hold governments accountable for corrupt actions.”

The consortium, led by the University of Cambridge, includes ERCAS (Hertie School of Governance), Corruption Research Centre Budapest, Hungary; Datlab, Prague, Czech Republic; Open Knowledge Foundation Deutschland, Berlin, Germany; and Transcrime (Università Cattolica del Sacro Cuore) organised crime research centre, Milan, Italy. DIGIWHIST builds extensively on the partners’ prior innovative work in this area, particularly EU FP7 ANTICORRP.

European civil society groups, investigative journalists and civil servants involved in or concerned about transparency in public spending are invited to contact the project for more information. Contact: Kerry Schorr, ERCAS Communications Officer, schorr@hertie-school.org, +49 (0)30-25-92-19-337.

Trust-Keeping: What Ails the European Trust Compact?

According to the 2013 Global Corruption Barometer, two out of three from the 114,000 respondents in 107 countries consider that favoritism is the rule not the exception in public service (with only a quarter having resorted to bribes in the year previous to survey) and over 50 percent believe their governments is captured by vested interests and that corruption has increased, not decreased in the last year.

Photo credit: Amio Cajander, FlickrThe European Research Centre for Anti-Corruption and State-Building (ERCAS) has been contracted by the government of the Netherlands (Ministry of Interior and Kingdom Relations) to do a synthesis of policy relevant findings in the area of trust and governance in the EU.

According to Ms. Terry Lamboo, advisor at the Ministry of the Interior and Kingdom Relations: “The Ministry supports practices that advance evidence based integrity policies and transparency. It aims to do so within the Netherlands, but also as part of the international dialogue on integrity and anti-corruption policies for the public administration. The Ministry willingly participates in discussion and exchange of experiences between countries.” The results of the project can also assist in the preparation of the Dutch Ministry of the Interior and Kingdom Relations for assuming presidency of EUPAN  in 2016.

ERCAS director Professor Alina Mungiu-Pippidi, PhD, and Post-Doctoral Researcher Dr. David Jancsics will direct the research which will be conducted in collaboration with the Corruption Research Center Budapest, Hungary; The School of Communication and Media (SKAMBA), Slovakia; and the Center for the Study of Democracy, Bulgaria. The report on the Integrity and Trust in the EU will be delivered to the Dutch government in May 2015.

“My team and I are delighted to have been awarded this project, said Mungiu-Pippidi. Time and again research on corruption is simply behind the policy curve. With this project we have also been awarded a great opportunity to assist the Dutch government in understanding the relationship between good governance and public trust.”

In examining the relationship between trust and governance, researchers consider not just public perception of corruption, which has come to include an increased understanding of what the public understands as corruption as well as their perception of the government’s ability to control it. Often, the results of public surveys on corruption contradict official records of corruption. According to recently published ANTICORRP research, instead of giving an assessment of how well corruption, as defined by criminal codes, is controlled, respondents are often giving an assessment of their own society’s general capacity to enforce a “level playing field” for all citizens where the “rules of the game” and “who gets what” are transparent and perceived to be fair.

Project objectives:

  1. To propose a comprehensive governance theory highlighting the social compact binding integrity, trust, and government performance, applied to the EU as well as the rest of the world.
  2. To explain trust in EU at the level of member states and the level of the Union (European Union, Parliament and Commission) via a path model featuring government performance and integrity. The time framework is from 2008 to 2014.
  3. To offer a set of tools (indicators and policy options) to monitor, assess and correct governance problems in real time, with a focus on the public sector.

In addition to their work with the EU FP7 ANTICORRP project in assessing the effectiveness of anti-corruption policy ERCAS researchers were previously commissioned to do a study for NORAD (Norwegian Agency for Development Cooperation), “Contextual Choices in Fighting Corruption.”

Science to activism. The Anticorruption Frontline

budrich2_square KopieCan social science impact policy in real time and offer relevant options for major problems that our societies face today? This is the challenge taken up by the policy pillar of the EU FP7 project ANTICORRP which deals with good governance and anticorruption policies. ANTICORRP is a five-year project based across 20 European universities and research institutes. The head of the policy pillar, Alina Mungiu-Pippidi, a professor at Hertie School of Governance and director of the European Centre for Anti-Corruption and State-Building in Berlin has organized work so that once a year, relevant new data, analyses and solutions are published in the form of a policy digest published by Barbara Budrich and widely distributed both in electronic and print format. The series was initiated last year with the first volume, ‘Controlling Corruption in Europe’ and has continued with the second volume, ‘The Anticorruption Frontline’ which was released this fall at the OECD Anticorruption Network Meeting (Eastern Europe and Central Asia Plenary) on 10 October 2014.

“I frequently hear the complaint that social science projects are de facto decoupled from policy and that the findings miss the window of opportunity to inform policy,” Mungiu-Pippidi says. “There are good reasons for this, primarily because the academic publishing cycle is slow and the focus is different from policy. If you study corruption, however, you have to be relevant for policy when your problem becomes salient. Which, in the case of corruption, is now.”

The core argument of ANTICORRP, a title which translates as ‘anti-body’, is that control of corruption is an equilibrium between opportunities and constraints for corrupt behaviour. To improve on it, good instruments are needed to trace change across time and understand if a policy intervention works or not. Each volume of the series thus has a special section dedicated to indicators as researchers struggle to move away from perception-based indicators such as the Corruption Perception Index to concrete ones which allow comparisons across time. The use of such indicators seriously shakes common knowledge: in the current volume of the report, researchers show that the widely used perception indicators overrate Qatar and Rwanda (two excellent reports are dedicated to each), that EU funds increase corruption risk in Hungary and Czech Republic (Hungarian researcher Mihaly Fazekas also published his innovative indicators measuring risk in public procurement in the first volume) and that Bulgaria failed in its anticorruption efforts despite serious push from the EU. What control of corruption consists of is documented in every volume with new evidence – this time, across three different datasets. Hertie School researchers are currently working to develop an interactive website instrument, which would allow countries to calculate their own corruption risk: to see where their vulnerabilities are and thus get tailored recommendations. “Our work shows that silver bullets do not exist” Mungiu-Pippidi says “but it also shows that the balance can be tipped to one side or another by smart policies. We developed a reliable statistical model which is based only on human agency factors. If there is a will, we show the way to develop the needed anti-bodies, but the prescription is different for every context. As doctors say, there are no two patients alike, so we combine good individual diagnosis with a limited set of tested instruments in various combinations.”

ANTICORRP researchers are doing policy work for the Council of Europe, OECD, European Court of Auditors and DG Home, among others. Hertie School was recently commissioned to do a synthesis of policy relevant findings in the EU for the Dutch government to assist in their preparation for assuming presidency of the European Council in 2016.

Selected chapters from the report are available on the ANTICORRP project website, together with more academic publications and deliverables of the project. Printed copies can be ordered here.

When Will the Next Walls Fall?

Alina Mungiu-Pippidi on Breaking the Walls of Corruption

November 9, 2014 marked the 25th anniversary of the fall of the Berlin Wall, the beginning of the end of the division between East and West and the start of a major transformation in Europe. This same day, the Falling Walls Foundation held their annual conference on breakthroughs in society and science in Berlin, “Which are the next walls to fall?” This is the 5th Falling Walls conference, which is always held to coincide with the fall of the Berlin wall.

ERCAS director, Professor Alina Mungiu-Pippidi gave a talk on breaking down walls of corruption at the Falling Walls Conference in front of a wide audience of thought leaders in international science, policy, media and distinguished researchers. Professor Mungiu-Pippidi was amongst a distinguished group of internationally renowned scientists invited to present their work from a variety of fields including art, architecture, medicine, technology, psychiatry and physics.

alina_fallingwalls1
Photo Credit: Falling Walls Foundation

Mungiu-Pippidi’s talk “Bringing Down the Wall of Corruption” was a lesson on institutional change in countries, which as she notes are the majority in the world, where corruption is the norm and not the exception. She emphasized the dampening effect corruption has on innovation and the extent to which poor control of corruption leads to higher levels of brain drain, as talented individuals leave their home countries for work or study in less corruption places. Good control of corruption, on the other hand, leads to higher levels of press freedom and in EU countries in particular, higher levels of public trust in Brussels.

Mungiu-Pippidi summarized current work in the ANTICORRP project which is basically analyzing how successful countries managed to evolve from a system with particularistic distribution of resources toward one with more universalistic distribution. She also brought to bear on the significance of having more accurate measurements of corruption, noting that some indicators deliver misleading results.

She argued for the need to move beyond perception-based indicators and highlighted the pioneering work of ANTICORRP researchers in developing new, data-based indicators to measure the corruption risk in public procurement tender processes.

Also on Professor Mungiu-Pippidi’s panel were: Jürgen Mlynek (Helmholtz Association), Zahava Solomon (Tel Aviv University), Karl Deisseroth (Stanford University) and Christof Koch (Allen Institute for Brain Science).

The opening panel of the conference was with Chancellor Angela Merkel, Sebastian Turner (Falling Walls Foundation), Michael Eissenhauer (Staatliche Museen zu Berlin) and David Chipperfield (David Chipperfield Architects) who hinted at the global reach and interdisciplinary depth of the talks to follow.

A talk of Professor Mungiu-Pippidi’s talk is available below and at the Falling Walls Foundation website:

Alina Mungiu-Pippidi – Breaking the Wall of Corruption @Falling Walls 2014 from Falling Walls on Vimeo.

Waging Battle on The Anticorruption Frontline

ruslanThe demand for good governance is on the rise everywhere, from Kiev to Sao Paulo, Paris to New Delhi. But has any measurable progress been made recently? Do we know which countries are succeeding and why? Do anticorruption experts and policy makers understand public concerns about corruption?

The Anticorruption Frontline, the second volume of the FP7 ANTICORRP project policy report launched last week at the Hertie School of Governance in Berlin, finds less than encouraging answers to these questions: Despite increased effort to fight corruption worldwide, there remains little progress on the ground. Even in countries which have shown improvement, the use of public office for private gain remains an issue. Public opinion surveys tracking concerns about corruption are frequently misunderstood – by those being surveyed as well as those proposing anticorruption policy solutions.

New research by Prof. Alina Mungiu-Pippidi of the Hertie School of Governance shows that decreased confidence in the EU, especially in Western and Southern Europe, is linked closely to citizens’ perceptions of their national government’s ability to control corruption. This confidence has been eroded in the wake of the euro crisis, most markedly in countries with the worst growth performance. Central and Eastern Europe, however, remains the last bastion of trust in EU institutions, which is perceived largely as a counterweight to untrustworthy national institutions.

Two European case studies from The Anticorruption Frontline illustrate that EU funding regulations and anti-corruption legislation alone are no panacea for the rampant favoritism inherent in extant particularistic systems. Despite an improved Bulgarian anticorruption rating according to most accepted measures, findings from the Center for the Study of Democracy on Bulgarian governance show that the avoidance of market competition in areas such as public procurement remains the rule rather than the exception. In another chapter, Mihaly Fazekas’ unique data mining method on the awarding of EU structural funding uncovers systemic corruption in Czech, Slovak, and Hungarian public contracting methods.

Such preferential treatment – and its inherent abuse of power – is one of the most insidious forms of corruption facing the world today.  Further case studies from The Anticorruption Frontline include deeper analysis of Qatar and Rwanda, two countries singled out for their improvements on anticorruption measures, yet both of which still exhibit favoritism in public procurement, as well as a look into the corrupt bed of Ukraine‘s gas market, exposed in the wake of 2014’s uprising. As every case in the book makes clear, traditional measures of corruption often fail to measure the existence and subsequent impact of such exploitation of public trust for private gain.

The Anticorruption Frontline argues that further EU regulation is not the solution. As a multidimensional phenomenon, fighting corruption requires tailored policy approaches as well as sustained support in areas such as improving transparency and strengthening civil society. The answer instead may lie in a transition from EU co-financing of large public projects – where the risk of corruption is higher – to a more universal and non-discretionary allocation of EU funding, such as an Europe-wide unemployment benefit scheme.

The Anticorruption Frontline is available for purchase via Barbara Budrich Publishers.

The Invisible and the Immeasurable: Towards Alternative Indicators of Corruption

How suitable are current measures of corruption in terms of forming anti-corruption policies? From 26-27 June, anti-corruption researchers including many from the ANTICORRP project came together for a colloquium convened by Alena Ledenva (UCL) and Nicolas Sauger (Sciences Po) to hash out the usefulness of old indicators and the promise of new ones.

The colloquium convened a cross-sector group of participants, including: academics (Monika Bauhr, Quality of Government Institute; Thomas Cantens, Centre Norbert Elias; Paul Heywood, University of Nottingham; Danica Prelec, MIT; Richard Rose, University of Strathclyde; Allan Sikk and Roxana Bratu, both from University College London), practitioners from the business and banking sectors (Ksenia Craig, Tina Fordham) civil society activists (Joy Saunders, Integrity Action, Elena Panfilova Transparency International Russia). Governance specialist Francesca Recanatini from the World Bank joined the debates in a one-hour video conference.

As participants discussed, the definition of corruption is currently too generic, and many argued for more nuanced definitions while taking into account the scale of the corruption problem. Future more sophisticated definitions would potentially rely on three key dimensions of corruption: need vs. greed, proactive vs. reactive, petty – administrative vs. political corruption.

One unintended consequence of what sociologist Saskia Sassen refers to as the ‘informalisation’ of global economy is that the existing indicators of performance and change are becoming less effective. Also, what researchers refer to as the ‘contemporary global corruption paradigm’, with governance indicators and multiple indices have not only been unable to solve the problem, that is actually reducing corruption, but they have also flattened the corruption landscape, treating corruption problems the same even if their national and cultural contexts are different.

Colloquium discussants suggested shifting from aggregate, perception-based measures and instead focusing on three key elements: costs of corruption, informal networks and questionable practices and the unintended consequences of anti-corruption policies. The alternative measurements could rely on innovative tools such as cartography, mapping or network analysis. Digital media was identified as important tool that could help researchers understand and reveal new forms of corruption through crowd sourcing and self-reporting. Corruption measurement tools could also be improved through triangulation of opinion-based approaches with standardized corporate and market measures (e.g. S&P ratings, CDS spreads, political risk premia).

Such shifts in the measurement of corruption suggest a move from ‘corruption’ to ‘integrity’ that facilitates policy actions focused on building fairer societies. In this context, rewarding integrity, promoting good behaviour become key policy interventions based on bottom-up local interventions.

A key research question for the ANTICORRP project involves assessment of current indicators and exploration of new ones. In February of this year project researchers Mihály Fazekas and István János Tóth won the U4 Proxy Challenge for development of new indicators of corruption in public procurement processes. They have since presented their work to the World Bank.

Recently published ANTICORRP research also backs up the need for more nuanced definitions of corruption. The first ANTICORRP milestone report revealed a disconnect between what corruption perception survey respondents identify as corruption and statistics, ie, respondents in countries with low reported incidents of bribery report perceiving high-levels of corruption. Researchers have uncovered that these perceptions in fact relate to favouritism that is the lack of a level-playing field necessitating that one have connections to accomplish bureaucratic tasks or to get ahead.

Top Berlin Airport Official Accused of Bribery

Barely six months into his contract as Head of Technology for the Berlin Brandenburg Airport (Flughafen Berlin Brandenburg GmbH (FBB)), Jochen Grossmann has been accused of demanding a half a million Euro bribe from a prospective contractor. This is only the latest in a long list of problems for the airport which is now estimated to be as much as €6 billion over budget and at least five years behind schedule (the FBB has actually declined to set a new opening date). Harmut Mehdorn, FBB CEO, has admitted that even more irregularities in the awarding of contracts could be found.

The notion that there might be more corruption in such a large-scale infrastructure project would come as no surprise to anti-corruption researchers. Indeed, recent research by the FP 7 ANTICORRP project showed that big infrastructural projects are prone to high levels of corruption. The concluding chapter of The Anticorruption Report Volume 1, Controlling Corruption in Europe stated: “Spending on new infrastructure projects, for example, allows the channelling of government resources to favourite companies either directly or through local or regional governments producing unnecessary outputs with high costs.”

While the corruption allegations are nothing new for a large infrastructure project, they are interesting in Germany which is usually held up as an example of good governance. The second chapter of the same ANTICORRP book placed Germany in a group of countries with relatively low risk of corruption, where control of corruption has largely been achieved and occasional incidences of corruption are handled successfully. Thus far, the case of the airport appears to be one where such incidences are being addressed quickly and publicly.

The FBB signed an Integrity Pact with Transparency Germany in 2005 and engaged local public procurement expert Professor Peter Oettel (Oettel is honorary professor at the Technical University Berlin and was former Head of the Department of Structural Policy for the city where he was responsible for overseeing public procurement) to work with TI in monitoring contract awarding for the airport. According to the FBB, this was the first time a German company took such a step, however, according to Transparency Germany; it took nearly a decade to convince the company to sign the pact.

The FBB also has an ombudswoman, an anti-corruption officer and an anti-corruption task force. The FBB reported the suspected corruption to public prosecutor in Neuruppin who then conducted a search of the office of two accused associates as well as the private premises of the chief suspect. The public prosecutor has described the situation as a “classic model of corruption in business dealings.” The task force is comprised of: legal experts, examiners from the FBB, outside legal experts, anti-corruption experts and a representative from Transparency International (TI) who will now review all the contracts awarded by Mr. Grossmann.

The bribery allegation against Mr. Grossmann, which emerged near the two-year anniversary of the cancelling of the open date, is the second publicised incident of corruption involving the airport in a little over a year. Last April, three men were charged with corruption after bribes were paid by firms wanting to secure airport contracts.

Corruption in public procurement will continue to be a key research focus for the ANTICORRP project, with the result of research on the impact of EU funds on control of corruption due later this year. A study released late last year by ANTICORRP researchers  Mihály Fazekas and István János Tóth compared public procurement processes involving EU funds and national funds in Hungary, Slovakia and Czech Republic and found that up to 1/3 of EU funds are touched by corruption.

Why Eastern Europeans did not vote

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“I vote, you vote, he/ she votes, we vote, you vote, they vote? , #they rob us!” (Photo from: Uniti Salvam)

By Alina Mungiu-Pippidi

The night before the European elections I dragged myself – despite not being in top form – to plead for one hour by myself in a TV talk show that my Romanian countrymen should vote the next day. A boycott had been called by a group of Facebook activists under the catchy slogan: “Always voting for the lesser evil amounts in the end to choosing an evil.” As turnout in the previous elections for European parliament in Romania (when I declined being a candidate for the President’s party unless his daughter, a model, stepped down) had been 27%, I was worried that the boycott call would be answered massively in all urban areas. In poor rural areas subsistence farmers are ferried to vote by political entrepreneurs. Leaving Romania, a country of 18 million voters, to be represented by its poorest and most disempowered voters seemed to me an extraordinary forfeit of our efforts prior to 2007 to make the country join EU.

Voters have good reasons to be upset with politicians. They always do. Romania’s successive governments were unable to spend more than 25% of its EU development funds. Had the EU not introduced a rule allowing engaged money to be spent even after the end of the budgetary cycle (but not indefinitely), the opportunity costs would have been at about 18 billion Euro presently and they will probably stabilize at half of this. Romanian MEP Mr. Severin, filmed on tape taking money to pass legislation, was the only MEP who did not resign after the scandal. And at the current rate of growth, the trade with the rest of the Community might get some balance after 2019- until then Romania is a net importer. An op-ed of mine called “Futility of Joining the EU” got 50,000 likes on Facebook in a few hours last November. People do not blame the EU, but they blame their leaders, and for good reason, for wasting a historic opportunity.

But why boycott the vote? How would this help? I was still arguing, my eyes on the clock as the Champions League Final was approaching when I knew everyone would switch the channel, that this will be the strongest Parliament still on record. That issues everybody is concerned with, from Ukraine to fracking (hydraulic fracturing) are far more likely to be decided in Brussels than Bucharest. That the elections for European parliament might not always be, if people like Nigel Farage or Marine Le Pen win (they did). At the gas station on the way back home people then asked me how would they even know who in Brussels favors fracking and who is against. They had no idea. In one month of domestic political bickering otherwise known as an ‘electoral campaign’ nobody had told them anything and since they work all day long, they don’t have time to search on the Internet.

All over ‘new’ Europe voters, even in capitals, do not know what these elections were about. This is why only 17% of Slovaks came out to vote (Romanians actually outdid themselves with over 30% turning out this time). People have absolutely no idea:

  • What is decided in their capitals and what in Brussels;
  • What is the position of the European parties on major issues;
  • How their national parties position themselves on issues compared to their EU party family.

In my experience as a pollster, I frequently used a question called “subjective competence” where I asked people: Do you know enough on voters and candidates to make an informed choice? This question is the best predictor of turnout. People do not come out to vote in EU elections in the East because they don’t know the issues and the candidates and they are aware of their ignorance. Their leaders and media failed in informing them during their national disputes and scattered efforts such as mine were too disparate to matter.

According to the Eurobarometer, Eastern Europeans, unlike their Western counterparts, continue to trust EU institutions more than they trust their national politicians. But as national politicians are the ones claiming votes on behalf of the EU, confusion and skepticism reign supreme. And this is how the continent’s perhaps last untapped reserve of Euro-enthusiasts fall out of Europe’s politics.

Local Elections Closely Monitored by Montenegrin Civil Society

montenegro_electionsOn 25 May, Montenegrins will vote in local elections in a number of cities including the capital, Podgorica. Analysts are framing the election as a “test” for the ruling Democratic Party of Socialists (DPS). In the run-up to the elections, Montenegrin civil society has been monitoring and reporting a number of irregularities. In the middle of March, the organisation MANS (The Network for the Affirmation of the NGO Sector, an ERCAS network organization) filed criminal charges against several members of the party for alleged abuses of electoral law.

Following local elections in Berane in March, MANS reported that long lists of residents received “so-called one-time financial assistance” from the local boards of the DPS (Democratic Party of Socialists).” The party is also accused by MANS of padding electoral rolls with “eligible voters” who in fact live abroad or are even deceased. Parties who wish to participate in the May elections had until the end of April to file their electoral rolls.

Montenegro held presidential elections in 2013 which were marred by allegations of fraud. Both incumbent candidate Filip Vujanovic (DPS) and challenger Miodrag Lekic (Democratic Front) claimed victory with the latter demanding a full vote recount. Vujanovic, who was seeking his second presidential term, was declared the victor by the Montenegrin Electoral Commission. The Organization for Security and Cooperation in Europe said that “from a technical standpoint the election was administered in an efficient manner and fundamental rights were mostly respected.”

According to an IPSOS poll in February 2014, 47% of Montenegrins do not think that elections in the country are free and fair. 48% of those who do trust in the elections are registered with one of the ruling parties.  In order to try and improve voter trust in the electoral process, Center for Democratic Transitions (CDT, also an ERCAS network organization) drafted a code of conduct which all political parties have now signed. The agreement consists of four parts, the first declaring the right of all participants to disseminate their political views, the second declaring that parties will not engage in voter intimidation or padding of electoral rolls, the third stating that parties will advocate nonviolence and the fourth stating that parties will commit to not abusing power.

Milica Kovacevic, editor of the CDT portal, observed: “The upcoming elections are definitely more than just local elections. 30% of the Montenegrin population lives in Podgorica, and many believe that a change of power at the local level may lead to a change in the national government. These elections are test for all political parties, because it is like a mid-term test of their strength. The results of that test might decide whether extraordinary parliamentary elections are needed.”

In addition to their work in engaging political parties to improve voter trust, CDT is also helping to hold candidates accountable. In their Journal of Promises, (part 1 here, part 2 here, part 3 here) CDT researchers have compiled campaign promises made by candidates which will be evaluated after the candidate has been elected.

Montenegro applied to join the EU in 2008 and started negotiations in 2012. Progress reports have been positive, but the country has been called upon to ensure media freedom, women’s rights, corruption and organized crime.

Lessons from Sochi: getting civil society into the games

by: Niklas Kossow

“The mission of the IOC is to promote Olympism throughout the world and to lead theOlympic Movement. The IOC’s role is: to encourage and support a responsible concern for environmental issues…to promote a positive legacy from the Olympic Games to the host cities and host countries”– Olympic Charter, Rules 2.13 and 2.14

Once upon a time, Akhmed Bilalov was a successful businessman and deputy head of the Russian Olympic committee. His brother, Magomed was not only commissioned with the construction of the Krasnaya Polyana skiing resort, but also received 100% funding for the project from Russian state-owned banks. Business was booming for the Bilalov brothers, until President Vladimir Putin visited the resort in February 2013, criticising the quality of the construction work. In the next months, both brothers were charged with misuse of Olympic construction funds and fled the country. This is but one of countless tales of corruption from the Sochi Games, which will be remembered largely for incredibly high costs, disregard for human rights and the environment. Unfortunately, civil society voices were largely shut out of the planning process for Sochi. If they had been involved, would coverage of the games have been different?

Anti-corruption research has shown a positive link between an active civil society and levels of corruption, especially in Eastern Europe and Central Asia. Civil society actors are independent and represent citizens who want to have their voice heard. As independent actors, they can help prevent graft in providing oversight that is independent from private interests and state interference.

Before Sochi even won the bid to host the games, environmental activists urged the International Olympic Committee to reject the bid based on the environmental damage it would cause the Western Caucasus, a UNESCO World Heritage Site, but their pleas were ignored. Just before the start of the games, Transparency International Russia published a report, “Olympic Sized Corruption”, explaining in detail where funds were misused. Russian activists have exposed corruption as the main reason for the bloated cost of the Olympic Games, despite the increasingly oppressive responses of Vladimir Putin’s regime. The games were originally budgeted at $12billion, but the final cost was closer to $50billion. The amount lost to embezzlement has been estimated at anywhere from $18billion$30billion of the total expense.

Given their claims to support environmentally sustainable games, the behavior of the IOC with regards to the Sochi Olympics is disappointing. If they are serious about future games reflecting the true nature of the Olympic charter, then civil society involvement and independent oversight has to be one of the conditions for awarding the games. The Sydney 2000 games proved to be a successful example of how increased transparency and civil society involvement can make a difference. Environmental groups were involved in the planning process and took part in making the Sydney Olympics the first “green games”.[i]

The Sochi Olympics is definitely not the first, nor is it likely to be the last example of corruption, environmental degradation and human rights violations during the planning of a mega event. The run-up to the Rio 2014 World Cup and 2016 Olympic games have already seen major street protests and now a workers’ strike, respectively.  The IOC recently announced that it intends to review its host-city selection process, and has promised to take a more active role in Rio 2016 preparations, but they have yet to acknowledge the value of increased civil society involvement. It is not just the IOC who looks the other way when selecting a host city. FIFA selected Qatar to host the 2022 World Cup to despite reports of numerous human rights violations against migrant construction workers.[ii] By insisting on the inclusion of citizen voices in the planning of Olympics, the IOC would get closer to honouring the terms of their own charter as well as provide a good example for other international sports organizations.

Niklas Kossow is a Master’s of Public Policy candidate at the Hertie School of Governance. 


[i] Kearins, K. and Pavlovich, K. 2002. Corporate Social Responsibility and Environmental Management 9, 157–169

[ii] For more information on this, see: ERCAS Working paper No. 40, “Corruption in Qatar? The Link between the Governance Regime and Anti-Corruption Indicators” by Lina Khatib, and an Amnesty International spotlight on migrant worker abuse: “The Dark Side of Migration.”