News – ERCAS

Preserving the integrity of corruption measurement

You may say it’s a joke, but it’s not. Why, in recent years, do we have such a congestion of corruption measurements, especially among international organizations? For many years, only the World Bank and Transparency International did that and led the field by similar, limited but transparent methods: aggregating all expert scores or organizing public opinion surveys of citizens or firms. Then victimization surveys proliferated—some, like the Mexican one, becoming established—asking people if they were coerced to bribe. In all this interval, we missed objective evidence, but all these perception indicators, which received tons of criticism—some justified, some not—had managed to map the world.

The academia was not idle in this interval. In the last fifteen years, organizations like ERCAS and the Government Transparency Institute, supported by EU and US research funding, produced another generation of objective indicators. These measurements are based on directly observable indicators such as spending, public procurement, digital transparency, and regulation—in the case of the Index for Public Integrity, a full model of enablers and disablers of corruption. These new indicators allow for analytical insights as well as actionability. In the T-index, improvements in government transparency can be observed in real-time, with crowd-sourcing ensuring that no fixing or gaming can take place. Unfortunately, the excellent Doing Business World Bank set of indicators met its untimely end due to undue influence from countries seeking to improve their reputation, such as Azerbaijan, Saudi Arabia, UAE, and China, to name the most notorious.

You would say that this is a positive trend, but of course when reputation by governance is concerned, it never really is. China, Russia, Azerbaijan, and Saudi Arabia have been the top funders of the internationally endorsed Anticorruption Academy in Vienna (IACA) which has struggled in the last years to create a new measurement of corruption. The ball and the Saudi funding have now passed to the UNDP, an organization with no experience in the field.

Yesterday I had to answer at IACC in Vilnius (in a panel with the World Bank, UNODC, and Transparency International) a question from the Saudi Arabia representative. Why am I an opponent of corruption measurements sponsored by their government? Why did I decline the repeated invitations from this country, and others, to join in any capacity and advise instead of criticizing and boycotting their effort?

*18 June, 2024, The International Anti-Corruption Conference, Vilnius*

The answer is very simple. Only an organization with no interest can do corruption rankings, and one that is academically fit and economically autonomous, not depending on the funds of patrimonial countries seeking to improve their non-improvable reputations, especially when it happens that their internal critics may be discretionarily arrested, kidnapped, or eventually killed. The world has enough academics, able to win transparently enough research funds—both ERCAS and GTI just won, with their partners, 6-million-euro research grants which do not depend on the favor of any government, just on anonymous academic reviewers.

Why don’t you leave academics do their rankings without funding them? Surely it would be more rewarding than the elusive quest of a measurement to make you look better? No need for gifts to get objective treatment from us! Looking better is really up to you. You do the reforms, and we shall provide the mirror. If they are the right reforms, and they have an impact, you will discover that your reputation will improve eventually.

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.

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