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Can we Eliminate Corruption?


If you ask most people, corruption is everywhere–our government is corrupt, our businesses are corrupt, everything is corrupt. You can’t escape it. Is this even a problem we can fix?

Americans in particular love to gripe that our government is corrupt. This is akin to saying water is wet, though. Every government is corrupt, as every government is inhabited by human beings who are imperfect, and some of whom are unethical. There will always be inefficiencies, waste, and graft. What matters is the scale of those flaws. According to the Transparency Project, the US is fairly typical among Western countries. Our corruption perceptions index places us 16th out of 168 countries. In fact, scores that rank how corrupt Americans think our government is rate us pretty highly.

On the other hand, almost three quarters of Americans believe our efforts to fight corruption are ineffective and that the level of corruption in this country is increasing. What institutions are viewed as the most corrupt? Our political parties, Congress, public officials and civil servants, followed by business and the private sector, in that order.

The problem with perception of corruption is that it may not represent the reality of corruption. Why is only perception measured? Transparency’s website explains:

Corruption generally comprises illegal activities, which are deliberately hidden and only come to light through scandals, investigations or prosecutions. There is no meaningful way to assess absolute levels of corruption in countries or territories on the basis of hard empirical data. Possible attempts to do so, such as by comparing bribes reported, the number of prosecutions brought or studying court cases directly linked to corruption, cannot be taken as definitive indicators of corruption levels. Instead, they show how effective prosecutors, the courts or the media are in investigating and exposing corruption. Capturing perceptions of corruption of those in a position to offer assessments of public sector corruption is the most reliable method of comparing relative corruption levels across countries.

This makes a good point. So, what can we really take a corruption index to mean? It probably doesn’t indicate how corrupt a government is, per se, but instead stands in as a measure of how much faith the citizens of a country have in their public institutions. Transparency’s 2014 infomap shows that the US, for all our political problems, ranks relatively highly. There’s a very clear trend: the US, Europe, Australia, New Zealand, and Japan are all seen to have relatively low (but certainly not zero) levels of corruption. For the rest of the world, results are much spottier. Most of Africa and Asia report high levels of perceived corruption, with bright spots being the United Arab Emirates, Chile, Uruguay, and Botswana.

If we take perception of corruption to signify a lack of faith in public institutions, what’s causing that lack of faith?

Cross-referencing the corruption index to various other indexes, I soon noticed that the Human Development Index–a composite measure of life expectancy, education, and living standards–corresponds quite strikingly to corruption perception. Countries with a high HDI tend to rank low on the corruption index. It turns out I wasn’t the first to notice this, as The Economist has an interesting, brief piece from 2011 on this very correlation:

Comparing the corruption index with the UN's [Human Development Index]( (a measure combining health, wealth and education), demonstrates an interesting connection. When the corruption index is between approximately 2.0 and 4.0 there appears to be little relationship with the human development index, but as it rises beyond 4.0 a stronger connection can be seen. Outliers include small but well-run poorer countries such as Bhutan and Cape Verde, while Greece and Italy stand out among the richer countries.

The idea is pretty simple: countries with a high corruption perception and a low development index stick out like sore thumbs to their own people. It becomes obvious to citizens that government officials are spending money and resources enriching themselves, rather than improving the country.

Take a look at The Economist’s chart:


There are a few things to notice here. One is the shape of this curve, which suggests that a moderate level of development can result in substantial decreases in corruption perception. This makes sense, since people who feel relatively well off (especially compared to where they were before) will have more faith in their government. The lopsided nature of the data shows that the vast majority of countries have high corruption indexes, and a number of them also have high HDIs, but not a single country with a corruption index below 5 has an HDI of 0.9 or above. Of the 8 or so countries with the highest HDI, they also have corruption indexes above 5.

There is clearly a diminishing return at work, too, otherwise the best-fit curve wouldn’t look logarithmic but would instead be more of a diagonal line. A few clusters can be made out: a high corruption, low development cluster at the lower left; a moderate development, high corruption cluster at the mid-to-upper left; and then a more scattered series of high development, low corruption countries along the upper right. Quite conspicuously, countries with low development _and_ low corruption perception essentially don’t exist. Even so, high development doesn’t guarantee low corruption.

Returning again to the idea that perception of corruption really signals faith in government, it makes even more sense. What does a good government do? Above all else, it protects its people and offers them increasingly secure, better lives, with access to healthcare, education, and consumer goods. In other words, it offers its people a path that will move them up the development index. When a government fails to do this, it then makes sense that people will speculate as to where their money and resources went, and the easiest thing to assume is that it was consumed by corruption: it was paid out in bribes, in protection money, wasted on extravagances, embezzled, and so on.

Rather than take the corruption/development connection for granted, let’s take a quick look at the five countries with the lowest HDI, and see why they are in such a state:

  1. Burundi -- Landlocked, lacking in resources, with poorly developed civil institutions. Corruption is thought to be a significant outgrowth of the latter factor.
  2. Chad -- Low foreign investment due to political turbulence, heavy reliance on subsistence farming, refugee crises, poor infrastructure, rampant corruption.
  3. Eritrea -- Economy hampered for years by warfare, though one of the world's fastest-growing now. Corruption stems mostly from single-party presidential rule, although seems to be less intense than other low-HDI countries.
  4. Central African Republic -- Largely lacks a formal economy, citizens face major government abuses, poor civil institutions. A resource-rich country, but without the requisite infrastructure and development indicators to profit from it.
  5. Niger -- Reliant on agriculture that is frequently hampered by drought and desertification. Country is large and landlocked. Poor infrastructure limits development. Corruption may be rampant due to weak enforcement.

Clearly, corruption is a common element in each of these countries, but they share some other traits as well. Each is extremely poor, with uneducated populations that depend almost entirely on agriculture to survive. Civil institutions are weak to non-existent. Political power is either concentrated into a single individual or party, or expressed at the barrel of a gun. Each country is also located in Africa, and all have been subject to attempts at colonization and other imperialist exploitation. A topic worth investigating further–and which I may explore in a future post–regards the failure of modernization theory, in which countries surviving at a subsistence level can somehow be brought into a modern, industrial state of development given enough focus and investment.

If it’s actually not possible for all low-HDI countries to become high-HDI countries, then it would seem they are doomed to remain dysfunctional, failed states with high levels of corruption. This is a depressing thought, and provokes more creative approaches that I should dig into in future posts.

Taken in this context, maybe the US isn’t that corrupt after all, and we should be grateful for the kind of government we do have, while still working diligently to improve it.

Photo by watchsmart