Corruption rankings are one of the great deceptions of our era

Second from left: Transparency International chair Jose Ugaz. EPA

David Cameron’s microphone gaffe, during which he accused Afghanistan and Nigeria of being “fantastically corrupt” in front of the Queen, led many in the media to rehearse old arguments about corruption being practically endemic in poor countries. In the words of the UK’s foreign secretary, Philip Hammond, the prime minister had “merely been stating a fact”. But are these facts? The reality deserves more discussion.

As is usual during corruption discussions, the coverage referred to the global indexes in which poor countries invariably get the worst ratings. The media rarely acknowledges that there is no such thing as an objective measure of corruption, and that how you define it is intensely political.

There are several indexes that are particularly well established. The most prestigious and widely used is the Transparency International Corruption Perception Index. It is based on the perceptions of 3,000 international business people in 30 countries.

Friend or foe? Transparency International, CC BY-SA

Transparency International is an NGO that was established in 1993. Funded by the World Bank and various countries and multinational companies, it portrays itself as an “international movement” that is fighting corruption through “national, regional and global coalitions, embracing the state, civil society and the private sector”.

Other corruption measures include the Global Competitiveness Report Index, which is based on a survey of 14,000 private firm managers and executives in top and middle management in 144 countries. It looks at corruption as part of a much wider set of country variables. It is produced by the World Economic Forum, the Swiss NGO behind the annual Davos world summit of politicians and business leaders. The WEF is funded by many of the biggest companies in the world.

The International Country Risk Guide index tries to capture the extent to which government officials expect bribes. It is based on the opinions of staff experts collecting political information in 140 countries, and is a product of the US-based private company PRS Group.

Finally, there is the Economist Intelligence Unit’s Democracy Index, which assesses corruption as a major component of its democracy rankings. It is based on the opinions of about 60 staff experts, backed up informally by a network of about 600 contributors worldwide. The Economist Group is mainly owned by the Cadbury, Rothschild, Schroder and Agnelli families.

What these indexes have in common is that they are all largely based on surveys about perceptions on corruption – personal judgements, not hard data. They don’t reflect the actual degree of corruption in a country but rather what westerners think of the political culture. Without meaning to undermine their contribution, we need to take their severe limitations into account.

One of the reasons why we rely on these indexes is because we have struggled to come up with anything better. Corruption by its very nature usually takes place away from the public eye and records, which makes it difficult to measure. Academic studies have attempted to measure it by combining several social science methods, but none have been able to provide a more balanced picture.

Diplomatic issues.

Finger pointing

The subjectivity in the corruption indexes is not the only problem with them, however. They all define corruption in similar ways, namely as involving government officials seeking illicit payments in the course of their work. But this overlooks the contrasting ways in which corruption can be defined. I would argue that it should be more a question of the connection between wealth and power. This might bring in everything from tax havens to top universities being filled with the children of the wealthy – implicating many Western countries, in other words.

Not only do the leading indexes ignore all these activities, sometimes they use their influence to persuade others to ignore them, too. Transparency International was instrumental in persuading Asian countries such as Indonesia and Bangladesh to incorporate bribery into their legal definitions of corruption in the 1990s, for instance.

It is also worth pointing out that discussions about corruption go hand in hand with the politics of promoting democracy around the world. Countries that are not perceived as democratic are usually the same ones that are seen as corrupt. More than that, the narrative that comes out of the West is that such countries lack the values or culture that is necessary for democracy and reducing corruption.

Islamic countries are a very good example. Even Turkey, which scores better on democracy than many neighbours, sees its shortcomings blamed on the culture. In recent weeks, we have seen the corruption scandal around president Erdoğan’s children linked to his efforts to bring religion into politics, for example.

When it comes to promoting democracy, the West tends to ignore the economic factors that might be at play. It promotes free and fair elections rather than policies to address the inequalities that might be preventing such elections from taking place – even though in many cases it will have contributed to them.

Omit the full picture and you just produce a distraction from the reality. This is what is happening with the corruption indexes and democracy promotion, yet the political implications of labelling a country as corrupt or undemocratic are immense. In the case of Cameron, given the context of the Panama Papers leaks and the UK’s involvement in international tax avoidance, it is also astonishingly hypocritical. If we accept these indexes as the standard way of grasping corruption and democracy, objectivity will have been replaced by an unmistakable political agenda. It is high time we stopped pointing fingers and looked closer to home.