Corruption, Anti-Corruption and Governance

D. Hough

• Publisher: Palgrave Macmillan
• Year: 2015
• ISBN:
  9781137268716
• Topic: Politica e relazioni internazionali
• Subtopic: Politica asiatica

By exploring the anti-corruption strategies in six countries, this book is the first detailed, cross-national analysis on techniques to address corruption. It highlights the importance of understanding that quality of governance is critical to tackling corruption and that only when this link is truly appreciated can inroads into corruption be made.

1

The Rise and Rise of the Global Anti-Corruption Movement

Corruption has been around since time immemorial, but systematic attempts to try and counteract it have not. On the contrary, what its supporters often call the ‘global anti-corruption movement’ and critics the ‘anti-corruption industry’ is a relatively new phenomenon. Indeed, it may well be possible to pinpoint the birth of cross-national attempts to co-ordinate analysis of, and responses to, corruption to one date; the 1^st of October 1996. Not that attempts to tackle corruption started precisely then, but when James Wolfensohn, the then head of the World Bank, stood up and gave a speech denouncing what he termed the ‘cancer of corruption’, it became clear that for the international policy community tackling corruption was moving centre-stage.¹

Given that corruption is an age-old problem, why did it take so long for policy analysts to wake up to the challenge that it poses? And once tackling corruption did start to be taken seriously, what prescriptions did those who were concerned about corruption come up with? This chapter illustrates that whilst anti-corruption certainly ‘arrived’ in the 1990s, its path to centre stage was not without controversy. Although a consensus was quickly established across much of the international policy community as to what the key drivers of corrupt practices were, and subsequently what should be done to snuff them out, by the early 2000s a strong lobby was developing that felt not only that these anti-corruption methods and approaches were not working, but, even worse, they were in many ways detrimental to the cause and, for some, bordering on the self-serving.² The anti-corruption movement has subsequently found itself forced to reassess much of what it treated, through the 1990s, as self-evident common sense, questioning its own assumptions, ideological underpinnings and, subsequently, methods and strategies. This chapter illustrates that influential though many of the international organisations (and the policies that they espouse) remain, anti-corruption attempts in the second decade of the 21^st century are now much more nuanced and flexible than they were just a few years previously.

(Anti-)corruption: The dog that could barely raise a whimper

As has been widely discussed elsewhere, corruption and anti-corruption were off political scientists’ respective radars for much of the 20^th century. Indeed, as Michael Johnston has observed, ‘American political science as an institutionalised discipline has remained steadfastly uninterested in corruption for generations’.³ Political science was, however, not alone in its neglect of corruption and the studies that were produced tended to be few and far between. Through the 1950s and 1960s, for example, a group of developmental economists did begin to analyse the role that corruption was playing in the newly independent states of Africa and parts of Asia. With the advent both of independence and in many cases democratisation there was an assumption that these states would eventually increase in prosperity and come to move down a path of what – for better or worse – was termed modernisation. By the 1960s, however, it became clear that many states were either making painfully slow progress or were not on this path at all. Endemic corruption was seen as just one part of the explanation for this and a group of authors subsequently started to analyse not just how corruption was hindering development but also how, for some at least, it may also offer help in jump starting stagnant economies and hence a way forward.⁴

The debates of the 1960s none the less had something of a patronising feel about them. Corruption was seen as ‘symptomatic of a “backward” level of political development’ or of an inability to ‘modernise’ effectively.⁵ Given that the western world was long since believed to have grown out of such behaviour, corruption was subsequently seen as something that ‘immature societies’ suffered from; indeed, in the words of Samuel Huntington, ‘when the leaders of juntas and revolutionary movements condemn the “corruption” in their societies, they are, in effect, condemning the[ir states’] backwardness’.⁶ For political anthropologists in particular, these positions simply were not tenable and a considerable body of literature built up with the aim of refuting what they saw as such culturally skewed analyses. Their aim was certainly not to defend the antics of anti-democratic leaders and the at times deplorable behaviour of some of the developing world’s politicians, but, they argued, a little context was vital in understanding the processes and structures that corruption was flourishing in. The core tenets of this fight back were succinctly articulated by Elizabeth Harrison when she observed that ‘comprehension of how opportunities are shaped, both to engage in and to escape from corruption, is important’ before acerbically adding that unfortunately ‘it seldom occurs’.⁷

Political scientists only really entered the fray in the late 1980s and the early 1990s. The reasons for this are threefold. Firstly, a move towards a more probing style of investigative journalism led both to more corruption scandals being uncovered and subsequently the (western) public’s attention being drawn to them. Indeed, no western country was spared the phenomenon of at least a small number of prominent politicians being drawn into – frequently very unedifying – stories of grand or petty corruption.⁸ Secondly, and linked with this, public and academic discourse began to change. Rather than write off individual indiscretions as the actions of the odd bad apple, citizens (and academics) began to ask if something in contemporary society was fundamentally flawed. Was there something corrosive about modern capitalism and, if so, what can and/or should be done about it? Finally, the end of the Cold War prompted not only changes in the way the West dealt with corrupt ‘friends’ in places like Indonesia, the Philippines and a whole host of African states but also how it approached the idea of institution-building in central and eastern Europe.⁹ How, in other words, could newly democratising states avoid importing corrupt practices when developing their own institutional frameworks?

Once the academic floodgate was opened, then the trickle of articles and books that we had seen in the 1980s became, in the 1990s, a veritable torrent.¹⁰ And it was here that the move towards an ‘anti-corruption movement’ gathered momentum. If former World Bank head James Wolfensohn’s description of corruption as a cancer marked a sea change, then the creation of Transparency International (TI) in 1993 marked a critical juncture along the way to this point. In particular, TI’s Corruption Perceptions’ Index (CPI), launched in 1995, has played ‘a pivotal role in focusing attention on corruption’¹¹ and even those with (often strong) reservations about the methodology that underpins it acknowledge the role that the organisation itself has played in pushing corruption on to national and international policy agendas.¹²

Transparency International and the quantification of corruption

Transparency International was founded by Peter Eigen, a former employee of the World Bank. TI has risen from relatively humble beginnings to become a complex organisation, with a yearly budget in the range of

9/10m, more than 90 national chapters and a well-staffed secretariat in Berlin.¹³ Each national chapter enjoys considerable independence and can subsequently look and act quite differently.¹⁴ As an organisation, TI itself is now the major force in pushing issues of anti-corruption forward.

TI’s most well-known product remains the Corruption Perceptions’ Index (CPI), published yearly in November/December. The CPI is a composite index and a variety of other data sources are used to create what is in effect a poll of polls on perceptions of corruption in a given country. Data is gathered from surveys of business people and country experts with the aim of measuring ‘perceptions … of corruption in the public sector including corruption involving public officials, civil servants or politicians’.¹⁵ TI provides a detailed account of where its data comes from and also how it uses it, and this is accessible via TI’s own website.¹⁶ The CPI was first published in 1995 and it included 41 countries, with New Zealand achieving the best score (i.e. nearest to 10) and Indonesia the worst (nearest to 0). By 2011 the CPI had expanded to 183 countries, with New Zealand still at the top of the pile (although it had been joint first in 2010 alongside Denmark and Singapore) and North Korea and Somalia respectively registering the lowest scores.¹⁷ The data produced is used, in varying ways and for varying purposes, by journalists, other anti-corruption organisations and not least politicians, and the CPI has developed into the key brand name in the study of corruption worldwide.

The CPI’s prominence has certainly not shielded it from criticism. Indeed, criticising the methodology that underpins the CPI has become very commonplace. Andersson and Heywood, for example, see a number of basic problems. Firstly, the CPI measures perceptions of corruption rather than corruption itself. Secondly, there are fundamental definitional problems leading us to be very unsure of what respondents actually understand the term corruption to mean. Indeed, frequently it appears that the terms bribery and corruption are used interchangeably and are for many one and the same thing. Thirdly, the CPI suffers from ‘false accuracy’ and there is no way of knowing what the real difference between scores that are closely grouped together is in practice. A difference, in other words, of just a few decimal places can lead to countries being a fair distance apart in the league table and yet we are not at all sure that these differences actually reflect what is happening in the real world. Finally, responses to the various surveys are very likely to be shaped by – whether directly or indirectly – the assumptions and attitudes of the western business community; for the simple reason that the majority of people asked have roots in this particular milieu.¹⁸

Other analysts have also not been slow in coming forward with their criticisms. Steve Sampson, speaking for many in the development studies community, is sceptical of what he regards as ‘corruption becoming a scientific concept’ as measurement tools like the CPI can, and have, easily become objects of political manipulation.¹⁹ Even fellow quantifiers such as Stephen Knack and Anwar Shah from the World Bank have criticised some of the statistical techniques that TI have employed.²⁰ Indeed, Shah and Theresa Thompson leave no one in any doubt as to how grave they think the CPI’s methodological shortcomings are when they state that ‘closer scrutiny of the methodology … raises serious doubts about the usefulness of aggregated measures of corruption’ and ‘potential bias introduced by measurement errors lead to the conclusion that these measures are unlikely to be reliable, especially when employed in econometric analyses’.²¹ Knack’s careful dissection of the CPI also makes uncomfortable reading for TI defenders; he argues, for example, that no eastern European or central Asian state’s score in 2005 was based on the same set of sources that were used in 2004. This is evidence, he claims, of the unreliability of scores even within one country, let alone on a cross national basis.²² He also raises further significant issues about the independence – in a statistical sense – of the data used, claiming that many of the ‘statistically significant’ changes that TI claims to have uncovered would not in reality be so if ‘appropriate corrections for interdependence’ had been made.²³

For its part, TI has certainly tried its level best both to be open about the methodological shortcomings of the CPI (as well as its other corruption indices) and also to adjust them wherever possible. The founder of the CPI index, Johann Graf Lambsdorff, for example, is careful to acknowledge some of the methodological issues inherent in all composite indicators and he is always careful to describe changes in country scores from year to year as changes in perceived corruption rather in actual corruption levels.²⁴ TI has also tacitly admitted that the CPI has its limitations by the very fact that it has developed a whole host of other indices – such as the Bribe Payers Index and the Global Corruption Barometer – looking at both the perceptions and experiences of specific groups of stakeholders (ranging from businessmen to households).²⁵ One of TI’s founders, Jeremy Pope, has been rather more explicit, claiming that ‘the CPI’s major usefulness is in the past’ and the TI has to be ‘a lot more sophisticated these days’.²⁶

And yet, all these criticisms not withstanding, the CPI has done one indisputable thing; it has put the issues of corruption and anticorruption well and truly on the policy map.²⁷ Indeed, as Andersson and Heywood observe;

We should not underplay its significance in the fight against corruption: its value goes beyond the stimulation of research activity, since the publication of the CPI each autumn has generated widespread media interest across the world and contributed to galvanising international anti-corruption initiatives, such as those sponsored by the World Bank and the OECD.²⁸

Even staunch critics of the quantification of corruption have begrudgingly admitted that ‘whatever its limitations’ the development of the CPI has ‘undoubtedly done much to promote the anti-corruption agenda’.²⁹ It is also doubtful that any of the more nuanced second (and soon to be third) generation indices that both TI itself and other organisations have developed would have seen the light of day if the CPI hadn’t existed before them.³⁰

As indicated above, TI has been at the forefront of generating more sophisticated ‘second generation’ indices. Given the methodological challenges inherent in creating broad indices, the emphasis has shifted towards greater detail rather than increased breadth. Subsequently we now have indices looking at, amongst other things, state capture, the (legal and illegal) influence of the lobbying industry and the quality of the business environment. The WGI (see Chapter 2) are a fundamental part of this, just as are TI’s own Global Corruption Barometer (GCB) and Bribe Payers Index (BPI). The development of the GCB in 2003 was a clear response to criticism of the CPI as too elite focused. The GCB is a public opinion survey that in 2010 asked over 91,000 citizens in 86 countries whether and how often they themselves have experienced what they regard as corruption.³¹ The intention of the GCB is to bring ordinary people in to a field where their experiences and perceptions have traditionally been neglected. The BPI, meanwhile, looked specifically at incidences of bribery in (in 2008) firms from 22 ‘top exporting countries that account for roughly 75 per cent of total Foreign Direct Investment (FDI) outflows and export goods worldwide’ and includes interviews ...