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

 

The Good Governance of the Corona Crisis

The years since 1989, the previous threshold crossed by the contemporary world have seen unprecedented stress on good governance, with the adoption of international conventions and treaties, disclosures like Panama Papers and spectacular enforcement of the older American Foreign Corrupt Practice Act. But during this interval the world largely stagnated on the quality of governance. If anything, governance in top income countries declined slightly, and in less affluent countries stayed the same. Only a handful of countries registered significant progress- those good governance ‘achievers’ that I covered with an international team of researchers in several books and articles, and which are less than a dozen across continents.

It is very significant in these days’ debate to monitor the performance of these countries in the fight with the epidemic and to compare them with their income and regional counterparts, and why not, with older good governance achievers, like US, UK or Scandinavian countries. Of some, everybody heard in the past two weeks, even if not researching anticorruption: South Korea and Taiwan. These two democracies handled the Corona crisis brilliantly, acted swiftly on evidence to prevent the spread of the virus, learned from previous epidemics and summoned e-government, technology (apps to trace contacts) and the excellent relation between state and citizens, based on transparency and trust.

In Latin America, the good governance achievers have the lowest fatality rates. By Easter 2020, Chile with 1.1% and Costa Rica with 0.5% clearly stood out compared to Nicaragua’s 11.1%, Bolivia’s 8.2%, Mexico’s 6.6%, Honduras’ 6.3, the Dominican Republic 5.6%, Brazil’s  5.7% and Ecuador with 4.7%. Uruguay also did well. Africa was still at the very beginning, but already you could see that Tunisia, who is among the very recent countries which started on the good governance path (see map) has been handling the situation better than its neighbors.

It is more difficult to judge in Europe, the land of the oldest good governance achievers, but there it also seems that many countries which have improved their governance in the last thirty years- Estonia, Georgia, the Czech Republic, Portugal- handled the crisis better than ‘old achievers’- countries like France or UK.

This highlights a previously neglected issue- that the equilibrium representing good governance, the state-society balance that we capture in the Index for Public Integrity, needs to be sustained over time and should not be taken for granted. Indeed, the John Hopkins University-EUI who  estimated UK and US far better prepared than Germany or South Korea should revisit their criteria and allow a larger role for political leadership. Also, would it not be nice to include Taiwan in the 195 countries GHS index, as clearly its governance was superior to many and so some lessons could be learned from there? Poor leadership (as well as a good one) matters. It can enable or deter collective action needed in such times, and both these old good governance achievers showed that, leading to loss of lives. From the “old achievers”, Germany confirmed the most, with a low fatality rate (compared to the other West European countries) owing a lot to the same non-populist, solid social contract, where the state acts on evidence and broad consultation, the citizens trust it to do so and the public and private sector, as well as different branches of government cooperate well. Still, Germany did not react as swiftly as either Korea or Taiwan, who had more cases after China originally, but managed to curtail the spread from very early on. Or Iceland, the marginal European island which made a prime minister resign in half a day after it turned out his family’s money was invested offshore and tested all skiers returning in one flight from Ischgl, an Austrian virus hotspot.

The more a government is able to draw on trust and technology, the swifter and more effective the response. Taiwan merged its national health insurance data with customs and immigration databases to create real-time alerts to help identify vulnerable populations. Iceland made an app which created a log of where the user had been to enable contact-tracing – sharing it with authorities being done on a voluntary basis, unlike Korea where quarantined people have to use it. Countries which used e-government tools to lower red tape and electronic means of payment to increase tax collection and diminish the unaccountable money volume- like Estonia or Uruguay- found it easier to handle the crisis. They had been already reducing personal contacts and paperwork between government and its citizens.

Acting rapidly on the evidence to prevent corruption, with the help of both responsible and critical citizens is also the essence of successful anticorruption: what you do after the outbreak already matters less, because it cannot be so effective even in the best of circumstances, that few countries enjoy anyway (like great impartial prosecutors and effective courts). The countries which had managed to build control of corruption successfully in recent times were thus far more prepared for this crisis even than those advanced countries which had received it as a heritage from their ancestors. Good governance needs current practice, but also returns dividends, as we could see during this pandemic.

Costa Rica

With gradual progress on transparency, e-government, and administrative simplification, Costa Rica has been one of the world’s most successful new democracies in building controls against corruption. It is among very few countries in the world where freedom of the press has progressed in the past decade, which partly explains its well-documented corruption scandals, as its legal and normative structure is sufficient to deal with such scandals.

Transitions to Good Governance: Creating Virtuous Circles of Anti-corruption

Why have so few countries managed to leave systematic corruption behind, while in many others modernization is still a mere façade? How do we escape the trap of corruption, to reach a governance system based on ethical universalism? In this unique book, Alina Mungiu-Pippidi and Michael Johnston lead a team of eminent researchers on an illuminating path towards deconstructing the few virtuous circles in contemporary governance. The book combines a solid theoretical framework with quantitative evidence and case studies from around the world. While extracting lessons to be learned from the success cases covered, Transitions to Good Governance avoids being prescriptive and successfully contributes to the understanding of virtuous circles in contemporary good governance.

Offering a balanced but always grounded perspective, this collection combines analytic narratives of existing virtuous circles and how they were established, with an analysis of the global evidence. In doing so the authors explain why governance is so resistant to change, and describe the lessons to be remembered for international anti-corruption efforts. Exploring the primacy of politics over economic development, and in order to understand how vicious circles can be broken, the expert contributions trace the progress of countries that have successfully transitioned. Unprecedentedly, this book goes beyond the tests of different variables to showcase human agency on every continent, and reveals why some nations make the best and others the worst of the same development legacies.

This comprehensive examination of virtuous circles of governance will appeal to all scholars with an interest in transitions, democratization, anti-corruption and good governance. Policy-makers and practitioners in the fields of international development, good governance and democracy support will find it an invaluable resource.

Reviews for this publication

“Vicious cycles, where corruption breeds corruption, present special challenges. Nevertheless, some success stories exist. The case studies in this edited volume highlight reforms that created virtuous cycles, where honesty breeds honesty. Nevertheless, the authors caution that reforms may be fragile and incomplete if policies do not shift expectations and behavior sufficiently enough toward a new, less-corrupt status quo.”

Susan Rose-Ackerman, Yale University

How Does Political Finance Regulation Influence Control of Corruption? Improving Governance in Latin America

In this paper, we address the question of how political finance regulation affects control of corruption in Latin America from a quantitative perspective. We present a Political Finance Regulation Index with panel data from 180 countries over 20 years (1996-2015). This index was developed using the IDEA Political Finance Database, and once created, was applied to assess the relationship between political finance regulation and control of corruption.

In order to do this, we use the equilibrium model of control of corruption developed by Mungiu-Pippidi (2015). We also included judicial independence and public investment, considered as a constraint and an opportunity to corrupt, respectively. Lastly, we use control variables for level of development.

Results show that, in Latin America, increases in political finance regulation are related with a deterioration of control of corruption. This relationship is statistically significant in the panel estimations. Inversely, the negative relationship between regulation and control of corruption becomes positive in countries with high levels of judicial independence. In a similar way, increases in opportunities to corrupt, represented by levels of public investment, have a significant and negative effect in control of corruption.

Process-tracing report on Costa Rica

This paper track Costa Rica’s long transition from a particularistic to a universal ethical society using a process tracing mythology. It argues that the origins of Costa Rica’s success began in the early 20th century followed by three subsequent tipping points that resulted in limiting opportunities for corruption. Each of these tipping points enhanced corruption-free governance through the devolution of political power across the branches of government, the decoupling of the executive branch’s control over state accountability agencies, the creation of new agencies whose actions expanded the anticorruption capacity of state agencies, and the remove of legal impediments on the media to investigate and publish stories about corrupt officials. It details the central role of the media in the most recent period as a public watchdog investigating and reporting on many cases of apparent corruption by public officials. It also identifies many recent cases where the media (traditional and internet-based) initiated investigations into corruption before the state’s official anti-corruption agencies investigated and prosecuted them. The analysis draws on primary research and interviews with former and current public officials, magistrates, historians, and investigators.

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:

 

 

Background paper on Costa Rica

In spite of the economic and social policy successes of Latin America’s longest surviving democracy, corruption has become a major problem shaking Costa Ricans’ confidence in appointed and elected public officials. In response to the apparent rise in corruption since the start of the new millennium, governments have introduced new laws and created new agencies to combat corruption at all levels of society, with an emphasis on combating particularism by elected and appointed public officials. This report evaluates the apparent increase in corruption, the efforts to limit, expose, and prosecute corrupt acts, and the factors that have facilitated the rise in corrupt actions on the part of state officials and private citizens. In short, acts of corruption that may have previously gone unnoticed (at least unproven) are now exposed by a more aggressive media and prosecuted by new and/or stronger state anti-corruption agencies and laws in response to multiple major political corruption scandals of the early 2000s. State prosecutors show no deference in their investigations of corruption and/or illicit enrichment by public officials and private figures, no matter how powerful. The only limitation is the level of resources available to these agencies. The contemporary increase in the scope of corruption is not in the quotidian actions of low-level officials directly affecting the lives of ordinary citizens, but in influence trading and manipulation of formal processes. A separate, more recent and growing corruption problem comes from international drug cartels that have amplified their activities and money laundering in Costa Rica that some fear might outstrip the state’s capacity to keep corruption under control.