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.

Ecuador

Ecuador lacks the autonomy of bureaucracy and judiciary from political rulers which would allow control of corruption, so its modest reforms on fiscal transparency only had a limited impact. While no major development can occur outside a massive political change for which a critical mass does not seem yet to be there, more administrative simplification and progress on e-government may help the gradual universalization of access to public resources.

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.