Country: Estonia

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 Quality of Government and Public Administration

In 1999, Evans and Rauch showed a strong association between government effectiveness (quality of government)—particularly the presence of a Weberian-like bureaucracy, selected and promoted on merit alone and largely autonomous from private interests—and economic growth. In 1997 and the aftermath of the Washington Consensus controversial reforms the World Bank promoted this finding in its influential World Development Report 1997 as part of its broader paradigm on “institutional quality.” Twenty years of investment in state capacity followed, by means of foreign assistance supporting the quality of public administration as a prerequisite to development. However, most reviews found the results well under expectations. This is hardly surprising, seeing that Max Weber, credited as the first promoter of the importance of bureaucracy as both the end result and the tool of government rationalization in modern times, never took for granted the autonomy of the state apparatus from private interest. He clearly stated that the power using the apparatus is the one steering the bureaucracy itself. In fact, a review of empirical evidence shows that the quality of public administration is endogenous to the quality of government more broadly and therefore can hardly be a solution in problematic contexts. The autonomy of the state from private interest is one of the most difficult objectives to accomplish in the evolution of a state, and few states have managed in contemporary times to match the achievements of Denmark or Switzerland in the 19th century. Two countries, Estonia and Georgia, are exceptional in this regard, but their success argues for the primacy of politics rather than of administration.

Europe’s Burden: Promoting Good Governance Across Borders

The EU is many things: a civilization ideal to emulate, an anchor of geopolitical stabilization, a generous donor, and a history lesson on cooperation across nations. A fixer of national governance problems, however, it is not. In this book, Mungiu-Pippidi investigates the efficacy of the European Union’s promotion of good governance through its funding and conditionalities both within the EU proper and in the developing world. The evidence assembled shows that the idea of European power to transform the quality of governance is largely a myth. From Greece to Egypt and from Kosovo to Turkey, EU interventions in favour of good governance and anti-corruption policy have failed so far to trigger the domestic political dynamic needed to ensure sustainable change. Mungiu-Pippidi explores how we can better bridge the gap between the Europe of treaties and the reality of governance in Europe and beyond. This book will interest students and scholars of comparative politics, European politics, and development studies, particularly those examining governance and corruption.

Reviews for this publication

“A blistering and contrarian critique of EU anti-corruption efforts from one of the field’s leading authorities. Based on extensive quantitative data spanning both EU member states and a large number of the union’s external partners, the book’s findings have troubling implications for the future of EU good governance strategies – and deserve to be considered with the utmost seriousness.”

Richard Youngs – Carnegie Endowment for International Peace, Europe

Estonia

Estonia has been after 1991 the world’s most successful short transition to good governance and ripped the economic dividends of its reforms. Its administrative simplification, transparency, e-government and autonomy of a merit based bureaucracy and judiciary should be taken up as models by any country which seeks to progress on control of corruption. The only challenges to Estonia come from vulnerabilities of its geopolitical situation in a globalized economy, in particular to its banking sector. The country has continued to progress over the past ten years on all IPI components.

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

Process-tracing report on Estonia

In controlling corruption, Estonia is an obvious top-achiever in comparison with the rest of the post-socialist area countries. Some historical legacies apparently facilitated this state of affairs – Estonia was by and large the wealthiest republic of the Soviet Union with the most developed elements of autonomous civil society and considerable exposure to Western information. The strong anti-communist and nationalist mood of Estonians appear to be a key driving force behind the drastic replacement of the ruling elite, which culminated in the 1992 parliamentary elections. This report explores the replacement of the old Communist nomenclature, provides insights into some of the reforms undertaken and the roles of their proponents.The ruling groups changed again in 1995 but the governments of 1995-1999 were probably too short-lived, too weak and indeed not reactionary enough to reverse many of the positive effects of the reforms of the previous period. New legal guarantees of public access to information and broad access to online public services came after 1999 to serve as another layer of constraints on corruption. It can be surmised that a virtuous circle developed, perpetuated in the interplay between, on the one hand, pressures of public opinion requiring efficient and universalistic governance and, on the other hand, initiatives from government in response to public needs. Episodes of corrupt particularistic acts are still recurrent in Estonia but they do not outweigh the overall success.

The Splintering of Postcommunist Europe

There are two radically different versions of the postcommunist narrative. One tells the triumphal tale of the only world region in which the reforms recommended by the “Washington consensus” worked. The other and more realistic account speaks of a historic window of opportunity that lasted for only a quarter-century, during which efforts by the West and patriotic elites of Central and Eastern Europe managed to drag the region into Europe proper, leaving Europe and Russia pitted against each other along the old “civilizational” border between them. This essay argues that while Institutional choices matter in the postcommunist world, geopolitical and civilizational boundaries still set the horizons of political possibility.

Background paper on Estonia

As in all transition countries, corruption has been and remains a concern for Estonia. Still the country is an obvious top-achiever in comparison with the rest of the post-communist area. On the other hand, the last decade has been stable with the level of corruption almost unchanged and representing a certain plateau in development. The Estonian governance regime operates mostly in line with the principle of ethical universalism. Reportedly all key elements of the state are subject to quite high formal standards of transparency. Correct functioning of the public procurement system is the rule, and violations, although common, are more of an exception. Estonia appears to have a high level of equity of access to its education and healthcare systems.The search for causes of Estonia’s success often focuses on cultural factors. The high general level of interpersonal trust in the Estonian society is an unusual cultural feature of a post-soviet society. Plus the civil society and free media represent high normative constraints for corruption and particularism. It has been argued that in the beginning of 1990’s, Estonia experienced the most radical replacement of the political elite compared with Latvia and Lithuania where the old “nomenklatura” networks managed to perpetuate to a much larger extent. The new Estonian elite was willing and ready for thorough reforms of the judiciary and public administration.

The Anticorruption Report. Volume 1: Controlling Corruption in Europe

The first volume of the Anticorruption Report series provides a comprehensive analysis of causes and consequences of corruption in three European regions, presenting corruption risks for several European countries and concrete policy recommendations on how to effectively address those risks.

Print and e-book version of the report can be purchased here.

The Long Transition to Good Governance: the Case of Estonia. Looking at the changes in the governance regime and anti-corruption policy

This paper deals with the post-communist positive outlier Estonia, which made according to international comparisons perhaps the most spectacular progress in the world, from a totalitarian regime to a quality democracy in less than twenty years. The country has seen improvement in all four dimensions of control of corruption described in the equilibrium model of Alina Mungiu-Pippidi (2011) since the restoration of its independence in 1991. The changes in the different dimensions happened almost simultaneously. During the first government of Mart Laar (1992-1995), policies that reduced material resources and strengthened legal constraints were implemented. Estonia pioneered important liberal reforms, for instance the adoption of a flat tax which then became very trendy in Eastern Europe and a very advanced e-government inspired from the neighbouring Finland. It also had the most radical policy towards Soviet time judiciary, replacing most of it and restarting practically all over with new magistrates. Normative constraints are also high, with a public opinion intolerant of particularism, an active civil society and a free press. The paper tries to explain why Estonian elites succeeded in promoting good governance and anti-corruption measures more than most other Central and Eastern European countries. In addition, author is looking for integrative understanding how to improve the control of political and administrative corruption mechanisms via the better regulation measures (e.g. impact assessment, participation, simplification) and support of political motivation.

The Long Transition to Good Governance: the Case of Estonia. Looking at the changes in the governance regime and anti-corruption policy

This paper deals with the post-communist positive outlier Estonia, which made according to international comparisons perhaps the most spectacular progress in the world, from a totalitarian regime to a quality democracy in less than twenty years. The country has seen improvement in all four dimensions of control of corruption described in the equilibrium model of Alina Mungiu-Pippidi (2011) since the restoration of its independence in 1991. The changes in the different dimensions happened almost simultaneously. During the first government of Mart Laar (1992-1995), policies that reduced material resources and strengthened legal constraints were implemented. Estonia pioneered important liberal reforms, for instance the adoption of a flat tax which then became very trendy in Eastern Europe and a very advanced e-government inspired from the neighbouring Finland. It also had the most radical policy towards Soviet time judiciary, replacing most of it and restarting practically all over with new magistrates. Normative constraints are also high, with a public opinion intolerant of particularism, an active civil society and a free press. The paper tries to explain why Estonian elites succeeded in promoting good governance and anti-corruption measures more than most other Central and Eastern European countries. In addition, author is looking for integrative understanding how to improve the control of political and administrative corruption mechanisms via the better regulation measures (e.g. impact assessment, participation, simplification) and support of political motivation.

Control of Corruption: the Road to Effective Improvement. Lessons from Six Progress Cases

In the last two decades, the emergence of an international good governance agenda has fostered the implementation of anti-corruption efforts in several countries. Nevertheless, recent assessments of those efforts reveal that the vast majority of initiatives have not produced concrete positive results. Only a few countries have made considerable progress in reducing corruption, and there is still limited knowledge about what has determined their positive experiences. This paper attempts to contribute to this discussion by engaging in a comparative analysis of six countries that have improved in terms of control of corruption. These countries are: Uruguay, Estonia, Botswana, Taiwan, South Korea and Ghana. The framework for analysis is based on a model of corruption as a function of power discretion, material resources and legal and normative constraints (Mungiu-Pippidi, 2010). Additionally, particular attention is paid to the role of political agents as drivers of change, with a focus on political leaders, civil society, media and enforcement institutions.

Anti-Corruption Programmes, Studies and Projects in Estonia 1997-2009: an Overview

This Working Paper on Estonia is made for the international research project “Civil society as anticorruption actor. What makes it work?” initiated by Romanian Academic Society. The general sample is including all Estonian anti-corruption programmes, audits and projects from 1998 to 2009. Both international donors’ reports and local projects were analysed.

The analysis of the local anti-corruption projects shows that usually there is available the information on planned outputs, outcomes and impacts of the projects, in many cases we can find also the achieved outputs and outcomes, but in most cases there is no concrete public information available on real impacts and sustainability factors of the anti-corruption projects.

Anti-Corruption Programmes, Studies and Projects in Estonia 1997-2009: an Overview

This Estonian report is made for the international research project “Civil society as anticorruption actor. What makes it work?” initiated by Romanian Academic Society. The general sample is including all Estonian anti-corruption programmes, audits and projects from 1998 to 2009. Both international donors’ reports and local projects were analysed.

The analysis of the local anti-corruption projects shows that usually there is available the information on planned outputs, outcomes and impacts of the projects, in many cases we can find also the achieved outputs and outcomes, but in most cases there is no concrete public information available on real impacts and sustainability factors of the anti-corruption projects.

With Business Ethics Against Corruption

The goal of the project was to raise entrepreneurship sector awareness about business ethics and to help to develop business ethics regulations by economic branches.

The project started in 1st January 2009 and sought to explain both to the entrepreneurship sector and to the wider public how important business ethic are in longer perspective.

During project examples of Nordic countries were brought. Nordic countries examples will be obtaining with help of Estonian Chamber of Commerce and Industry branches and TI-Finland, Latvia, Lithuania, also Ministry of Justice of Estonia.

Organized crime, corruption and the movement of people across borders in the new enlarged EU: A case study of Estonia, Finland and the UK

This project investigated the problem of corruption by organized crime in relation to border controls and immigration using as a case study the Estonian and Russian border; particular attention was given to the issues concerning the ‘Development Plan of Border Guards’ and the planned cooperation in relation to Organized Crime and Combating Corruption.

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