Introduction
The presumption behind global corruption rankings is that by bringing public attention to a recognized problem, rankings contribute to anti-corruption advocacy. But rankings do more than just spotlight an issue; rankings work to define and structure that issue. For example, corruption rankings have been primarily applied to states, rather than private companies. This already structures the issue so that the focus is on public servants rather than market players. This chapter focuses on the manner in which corruption has been defined and structured by Transparency International’s (TI) Corruption Perceptions Index (CPI), reviewing and building on key substantive (rather than methodological) critiques of the CPI. The guiding question is whether the CPI rankings facilitate anti-corruption advocacy, or whether they are little more than a branding exercise for Transparency International. I argue that although the CPI has helped put corruption on the map as a concern for international institutions, its success has also inspired critiques which have successfully pushed for a move beyond rankings into other forms of analysis and anti-corruption advocacy.
Existing critiques of the CPI, and of the closely related but broader array of governance indicators put out by the World Bank’s Governance Indicators project,1 highlight three possibly perverse or deleterious effects of corruption rankings: such rankings can distract from more important facilitating conditions for corrupt activity and anti-corruption advocacy, as well as obscuring important differences in the type of corruption experienced by different countries; they can reinforce countries’ position on either the high or low end of the scale; and they lend themselves to political manipulation which can undermine anti-corruption efforts of opposition parties and grassroots organizations.
This chapter reviews and discusses the plausibility of these critiques, and concludes by acknowledging new developments in anti-corruption discourse and policy, which appear to have emerged at least partly as a result of a learning process brought on by the ascendancy of the CPI and commentary about it by those critical of TI’s approach. Although rankings continue to be highly valued in the marketplace of ideas, as evidenced by the explosion of ranking “products” highlighted in the introductory chapter of this volume, critiques of rankings have pushed scholars and activists to develop alternative, and possibly less technocratic, approaches to the problem of corruption. This chapter argues that moving away from the rankings-fueled technocratic approach to corruption is a positive development; anti-corruption advocacy requires human beings to exercise ethical agency, something which rankings and indices can neither capture nor directly promote.
The CPI and anti-corruption advocacy: A tenuous link?
In terms of the functions of RROs discussed in the introduction to this volume, Transparency International can primarily be classified as an advocacy organization. Arguably some of the most important work TI does is to establish country chapters, whose primary purpose is corruption monitoring and anti-corruption advocacy. TI also works with other organizations, public and private, to promote its mission of combating corruption. Its advocacy work has both depth and breadth not captured by considering the Corruption Perceptions Index alone. The CPI is just a small part of TI’s work, but it is probably the most visible of TI’s “products.” It may serve as a resource for anti-corruption advocates by putting a number on what might otherwise be construed as a hopelessly complex and culturally relativistic concept. The CPI also serves as the means by which TI asserts its “brand” as the leading organization devoted to combating corruption. Each year’s release of the CPI puts TI into the news, even if the day-to-day work of country chapters, or special focal points such as the promotion of integrity in sport, rarely make major headlines. There may be a price to pay for the branding function provided by the CPI, however, especially in that this particular form of branding may distract from and possibly at times even undermine other, more potent forms of anti-corruption advocacy.
The CPI is designed to measure expert perceptions of primarily administrative and political corruption in a large set of countries (183 in 2011, 176 in 2012, 177 in 2013, 175 in 2014). TI constructs its country rankings on the basis of survey data from a group of expert sources, which includes individuals involved in international business, financial institutions, foundations focusing on development, political risk analysis firms, and other research organizations and international institutions.2 The index assigns countries both a score and a ranking on the basis of this compiled survey data (it is a “poll of polls”). The results are generated and released annually, but are not comparable across time because rankings are relative and based on data from a given year; the data sources and countries covered or omitted may change from year to year. Despite this, even a cursory perusal of news articles will reveal that this methodological caveat does not stop people from making comparisons from year to year, and each release of the CPI is likely to stimulate editorial discussions of whether a country rose or fell in the rankings from the previous year.3
The annual release of the CPI generates a media flurry in many countries, complete with press releases, articles, and editorials in national news media responding to a country’s position on the index. Thus the CPI may contribute to TI’s advocacy function simply by publicizing the issue of corruption. But the CPI does more than publicize; it helps to structure the issue in terms of its definition and measurement. The process of issue construction has been underway since TI’s inception, and has been taken up by the World Bank, OECD, the IMF, and other institutions, including USAID. Economists and political scientists have made extensive use of the CPI, and later of the broader set of World Bank Governance Indicators, because the ability to render this traditionally normative and at least somewhat culturally relative phenomenon – corruption – in quantitative terms provides excellent fodder for empirical, comparative research.
Transparency International, along with the World Bank under the leadership of James Wolfensohn, can be at least partly credited for moving corruption onto the international agenda at a time, in the late 1990s, when it was generally not considered within the purview and authority of international institutions.4 According to Bo Rothstein, an important key to Wolfensohn’s success in putting corruption on the Bank’s agenda was that he “simply redefined corruption as an economic problem.”5 Approaching corruption from an economic (or in today’s World Bank parlance, “political economy”) perspective rendered it amenable to systemic, economic analysis rather than moral condemnation. This constitutes a technocratic turn in anti-corruption discourse.
The process of rendering policy problems amenable to technocratic solutions dovetails with the adoption of economic approaches and quantitative methods of analysis in political science. But as many have argued, the concept of corruption has an irreducible moral component, for which rationalist and economic approaches to the problem cannot adequately account. If controlling corruption requires people to act according to some vision of public good rather than for purely self-serving or particularistic interests, then the use of rankings and quantitative indicators may be only tangentially related to the problem of actually fighting corruption. Giving a country a ranking is not the same as engaging in an anti-corruption campaign, after all, and it takes more than “name and shame” to bring about comprehensive institutional reform. What quantitative indicators can do is aid in the development of hypotheses about causes and consequences of corruption, and such research in turn might suggest ways in which incentive structures could be altered so as to diminish the likelihood of corruption in specific contexts; such is the approach exemplified in Susan Rose-Ackerman’s definitive study, Corruption and Government.6 However, the ability to articulate what proper institutional incentives should look like, and the ability to actually create and implement such structures, are not the same thing.
The CPI may thus be a tool in the rhetorical arsenal of anti-corruption advocates, and it certainly has publicized and structured the corruption issue, but at a practical level it does not in itself constitute an anti-corruption movement, nor even a campaign. Rothstein has argued persuasively that controlling corruption requires neither incremental institutional alterations nor the tweaking of incentive structures, but rather large-scale and comprehensive transformation of social values and institutions:7
[C]orruption and similar practices are rooted in deeply held beliefs about the proper order of exchange in a society: personal-particularistic versus impersonal-universalistic. The implication is that to effectively curb corruption and establish QoG [quality of government], the whole political culture has to move from the “limited access” or “particularistic” equilibrium to the very different equilibrium characterized by “impersonal” or “universal” forms of exchange.8
The implication of Rothstein’s and other broad historical sociological studies of institutions is that we have yet to produce a “science” of the sort of institutional change required to comprehensively control corruption. Nevertheless, the World Bank and other international organizations concerned with broad questions of “governance” routinely deploy rankings and indicators in attempting to lay out some kind of scientific approach to institutional change, and the CPI is a resource for this technocratic activity.9 It is by no means obvious, however, that a set of rankings would in and of itself constitute advocacy designed to implement institutional change.
Even as a rhetorical anti-corruption tool or as a data set (rather than as a mechanism to produce institutional change), the CPI is not immune to misuse. CPI rankings may have perverse and unintended consequences which could actually work against anti-corruption advocacy. Three possible perverse effects can be gleaned from recent research on corruption, and will be further discussed below. First, focusing international attention on corruption as a characteristic of developing country governments can obscure the broader permissive context of the international financial architecture, through which activities such as offshore tax havens and money laundering operate to sustain corrupt payment systems, not to mention the facilitation of “state capture” by financial interests.10 This is one aspect of the “distraction” issue alluded to above. Second, it has been argued that rankings may reinforce whatever position a country has on the published scale; for example, if lenders and donors are inclined to withhold aid and investment to low-ranking countries, they may cut them off from some of the resources necessary to initiate substantial institutional change.11 Alternatively, their privileged position on the scale may create a self-reinforcing dynamic for “virtuous” countries, immunizing them against closer scrutiny. Third, globally legitimated anti-corruption norms in general may lend themselves to political manipulation for the purposes of boosting status and advantage of powerful political actors at the expense of their opponents. Although it is at least partly the intention of the CPI to be used as a political resource for corruption fighting, it is hard to see how it alone could be an effective resource for those who lack power and status. However, for those who already have power and status, anti-corruption campaigns may be used strategically in any number of ways. Political actors may engage in “mock compliance” with anti-corruption efforts to boost their status internally and among outside investors and donors, for example.12 Or, they may strategically use accusations of political corruption as a tool to undermine political opponents without actually doing anything about the overall corrupt political structure. Such strategic manipulation of anti-corruption campaigns is of course not a direct effect of the CPI per se, but arguably the issue visibility provided by the annual release of the CPI helps to make anti-corruption rhetoric a source of political legitimacy.
By helping to put corruption on the international agenda, TI and its CPI have also helped to structure the issue in a specific way, which in turn conditions the types of anti-corruption advocacy that are considered legitimate. The next section discusses definitions of corruption, and in particular the dilemma of cultural relativism in the face of efforts to set universal anti-corruption standards.
Defining corruption
Corruption is an ancient concept, as old as law and government. But the manner in which it is defined sets the agenda for efforts to combat it, so it is worth discussing definitional issues in some detail. Early in his voluminous study Bribes, John Noonan remarks that “from the fifteenth century B.C. on, there has been a concept that could be rendered in English as ‘bribe,’ the concept of a gift that perverts judgment.”13 The term corruption connotes more than bribes, of course, but bribes are certainly a significant and perhaps the most easily identifiable example of corruption. To understand a bribe as a bribe, one must have some notion that the bribe distorts the judgment of someone with power. Defining corruption requires reference to a broader array of societal norms as to what constitutes a just decision on the part of someone who holds power over others. Until TI, the World Bank, and the OECD articulated corruption as a global issue requiring multilateral responses, the societal norms in which the definition of corruption was anchored were largely national or sub-national, not global. International studies of corruption were primarily comparative studies of different systems, not studies anchored by a single standard or scale.14
Although the term “corruption” has many meanings, Transparency International has narrowed down this potential multiplicity to a concise “corruption is the abuse of entrusted power for private gain.”15 This definition is now routinely used in a broad array of scholarly work and policy-oriented commentary. The context in which this definition emerged was that of the post-imperial focus on modernization and development of political and economic institutions in formerly colonized territories, amidst intensifying global economic interdependence. Samuel Huntington in his book Political Order in Changing Societies saw corruption as an inevitable stepping stone on the path to modernity,16 but others later came to see it as an obstacle to both political and economic development. It was the latter perspective which infused and inspired the attempt to render corruption a problem deserving the attention of international institutions, and especially the World Bank. The presumption was that corruption could be curbed if proper institutional checks were put in place, and this would then improve conditions for foreign investment, integration into global markets, and economic development more broadly.
Eventually aligning with a neoliberal push to roll back government interference in markets, anti-corruption advice came to focus on constraining the discretionary power of public officials.17 Even as neoliberalism begins to lose its status as dominant ideology (the timing of this decline is sure to be in dispute), the development discourse has adopted the rhetoric of “good governance” as crucial to development. This too aligns very nicely with a focus on providing proper incentives to public officials so that they are less likely to behave in corrupt ways. So although TI’s anti-corruption advocacy and the CPI were born in the age of the Washington Consensus, they appear to have survived the erosion of that consensus. The manner in which TI’s mission has been articulated dovetails just as well with the concept of “good governance” and the focus on improving institutions as it did with the notion that the discretion of public officials should be curtailed.
From the beginning, an explicitly stated objective of the economic approaches to corruption was to avoid moralizing.18 As Joseph Nye and others have argued, if analysts could present scientific, empirically compelling arguments laying out the deleterious effects of corruption on political and economic development, and suggest policies and institutional changes on the basis of empirical evidence and dispassionate scientific methodology, this would be preferable and presumably more effective than decrying the moral failings of corrupt leaders. This approach is technocratic in the sense that it does not require us to engage in debate about public goods, moral ends, and virtue; everyone can presumably agree that economic development is a good thing. If an empirical link can be found between lower levels of corruption and better development results, then policy prescriptions can take on the appearance of value-free technical advice on achieving a goal whose value is given and thus need not be subject to debate. Just as everyone can agree that a well-constructed bridge is preferable to a poorly constructed one, a less corrupt government obviously performs its function (development) more effectively than a more corrupt one.
This avoidance of moralizing continues to be the case today, perhaps best illustrated by the World Bank’s articulation of governance and anti-corruption as a “systemic” issue:
Governance is multi-dimensional. A governance system comprises a wide variety of processes, systems, organizations, and rules (that is, institutions) on the public bureaucracy “supply” side and on the “demand” side through which non-executive oversight institutions and citizens hold the bureaucracy accountable for performance.19
The technocratic approach tries to deal with the problem of cultural and moral relativism by avoiding morality entirely, or discussing cultural relativism as a side issue distinct from the formal framework of analysis.20 But this sidelining of moral issues has not been entirely successful, because the problem of cultural relativism still has to be faced, bringing the moral issues in through the back door. When confronting practices deemed corrupt, analysts and policymakers have always faced the problem that practices which appear acceptable in some societies are seen as corrupt in others. Gift-giving and patronage are obvious examples of how difficult it can be to draw the line between unacceptably corrupt and culturally accepted and legitimate practices. Does this mean that corruption is an entirely relativistic concept with no universal content? If so, then how can citizens of one country condemn the practices of those of another country as corrupt? If what counts as corruption can only be determined by the people living within a specific society, then ranking countries according to a single standard is either meaningless or imperialistic, and international institutions should apply the standards of whatever country they are operating in. Indeed, this was the attitude that seems to have prevailed until the emergence of a global anti-corruption effort in the 1990s, as evidenced by the common practice in many countries of allowing corporate tax deductions for bribes paid to foreign public officials, even when such bribes were illegal in the home country. The US Foreign Corrupt Practices Act of 1977, which applied a universal standard and marked the first time a country made it illegal for its citizens to bribe the public officials of a foreign country, was an outlier and an anomaly until the 1990s.21
It is very hard, however, to fully accept the claim that corruption is entirely relative and in the eyes of the beholder, or subject only to the unique standards of a specific society. As John Noonan’s study has shown, the notion of corrupt dealings can be found in just about every society and culture in human civilization (although Noonan is careful to show that for a bribe to be seen as bad requires the bending of what he sees as the most fundamental norm of social life: reciprocity).22 If every culture has some concept of corruption, some notion that certain activities – particularly those pertaining to the exercise of political authority – should not be subject to reciprocal exchange, then is there not some universal or near-universal aspect to the concept?
More recently, Oskar Kurer has articulated the problem of definition, and the tension between the universal and relativistic aspects of corruption, in a fruitful manner:
Whereas the concept of corruption is one that is well-nigh universal and thus hardly suffering from cultural specificity, its content – the specific non-discrimination norms – is not; what in practice will count as corrupt will depend on prevailing norms and conventions. This explains the paradox that although the term ‘corruption’ is readily understood and readily applied everywhere, there is hardly any agreement on where precisely the boundary between a corrupt and a non-corrupt act should be drawn.23
The key principle on which Kurer bases his general definition of corruption is that of impartiality. Bo Rothstein in his recent book, The Quality of Government, follows up on Kurer’s analysis and also makes the concept of impartiality central to his conception of quality of government:
The norm that is violated when corruption occurs is the impartiality principle governing the exercise of public power, whose core component is the notion of nondiscrimination, whether for money, race, religion, or sex/gender. The advantage of this definition of QoG is that impartiality rules out not only all forms of corruption but also practices such as clientelism, patronage, nepotism, political favoritism, discrimination, and other “particularisms.”24
If we accept (as I think we should) the argument that corruption at its core involves the violation of the impartiality principle, we are left with enough flexibility in the definition of corruption to account for a great deal of variation in specific cultural and political contexts. We are also left with plenty of room to vary the context in which impartiality is deemed an appropriate behavior, since there are many conceivable contexts, such as the distribution of certain types of benefits or punishments, or the implementation of affirmative action-type policies, in which public authority should be partial rather than impartial.25
Evoking corruption as a problem leads directly into discussing quality of government issues, as Rothstein has argued, and different societies may face different sorts of corruption problems, as Johnston’s excellent book charting out distinct “syndromes” of corruption so clearly illustrates.26 However much one wishes to avoid “moralizing,” the corruption concept inevitably necessitates moral judgment, because corruption is generally considered a bad thing. That moral judgment is part of the definition regardless of how much economists and rational choice theorists might enjoy pointing out the functionality of corruption in certain situations, that is, corruption can be “good” from an economic perspective if it facilitates the by-passing of “bad” – i.e. rent-seeking – laws. Just because a bad action might yield a good result does not mean that we should re-define that action in ethically neutral terms. The idea that those who hold authority over others ought to exercise that authority impartially is at its core an ethical one.
The potential power of the corruption concept further lies in its ability to evoke deep reflection on the institutional and normative underpinnings of a particular society. As political theorist J. Peter Euben has argued, one can productively think of corruption in a very broad sense as “the debasement of the foundations or origins of a political community,”27 and following this strand find a classical articulation of the problem in Thucydides’ Melian Dialogue, and his account of the civil war in Corcyra. Political philosophers from Aristotle to Machiavelli to Thomas Jefferson have probed the problem of corruption in their reflections on the difficulty of sustaining political institutions in time.
However, our contemporary economic and technocratic definitions seem to preclude such reflection, either because they take the ends of political life as given (something on the order of developing or growing the economy), or because they accept the relativistic view that each culture has its own standards and that it is therefore inappropriate to judge others by our own standards. At the same time, the construction of global rankings gives the impression that there is actually a global standard to which all governments are expected to adhere. The technocratic evasion of moral issues is ironically accompanied by an assertion of global standards. But as I have argued elsewhere, this “hollowing out” of the moral content of corruption precludes reasoned discourse about the appropriate ends of government and public authority.28 At its worst such a rhetorical move entails an exercise of power without the consent and participation of the “governed” – this was a core problem of the neoliberal discourse, which has received plenty of critiques we need not re-hash here. A further practical effect of this technocratic reticence about the deep moral content of anti-corruption discourse, when coupled with the fact that in the international context corruption tends to get discussed as primarily a “developing country” problem, may be to close off scrutiny and debate about the quality of institutions in the wealthier, “developed” countries. But as J. C. Sharman has shown, when it comes to playing by the rules of financial transparency (surely a key issue for sustained anti-corruption advocacy), it is the richest and most powerful countries who are the greatest violators of the principles they would have others follow.29
The assertion of corruption as a global issue thus came along with a specific definition of corruption (abuse of public power for private gain), and in the context of a certain approach to political and economic development, which went through many permutations, the latest being neoliberalism and then the “post-Washington Consensus” on the importance of “governance.” The practice of global corruption rankings has been a central part of the construction of the corruption issue as a global, rather than comparative, country-specific, issue. The process has favored a technocratic over a moral conception of corruption, and as I have already suggested, this manner of structuring the issue has had practical consequences in how the anti-corruption agenda has developed. It has also evoked important critiques. I first flesh out the process of issue structuring and issue linkage in a bit more detail, and then turn to the critiques.
Transparency International and the global anti-corruption agenda
Since its inception in 1993, Transparency International has been pivotal in casting corruption as a global issue. The scholarly and policy discourse in the period following the 1995 launch of the CPI shifted from silence or tacit and sometimes even explicit acceptance of corruption as an inevitable aspect of doing business abroad to widespread condemnation.30 In a section of his 1968 book Political Order in Changing Societies that was subsequently reprinted in Heidenheimer and Johnston’s comprehensive edited volume on political corruption, Samuel Huntington famously noted that corruption was to be taken as an indicator of modernization in a society.31 In the 1970s and 1980s, economists and rational choice theorists had suggested that corruption could in fact be seen as a rational response to inefficient, rent-seeking regulations – a sort of covert assertion of the market mechanism in what would otherwise be a hostile environment for market rationality.32 But in the 1990s things began to turn around, and policymakers and scholars began to argue not only that corruption was a bad thing, but also that it was the business of international institutions and governments to fight it in a comprehensive way.
It was in the mid-to-late 1990s that the World Bank (and to a lesser extent the IMF) began to put corruption and “governance” more generally at the forefront of its agenda. This shift coincided with the rise of Transparency International; TI’s founder Peter Eigen worked for the World Bank prior to founding the organization, and TI has had close ties to the Bank since its founding (and the Bank is now one of its donors). A number of anti-corruption treaties and conventions were passed since the inception of TI, most notably the 1997 OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions.33
TI and especially its CPI can probably claim a good deal of credit for helping to shift attitudes about corruption among academics and policymakers away from toleration and toward condemnation. It is surely no accident that once a quantitative index of corruption was made available not only to the public but to scholars, we began to see studies correlating corruption to all sorts of development ills, and in particular to lower growth and less foreign investment. The CPI has fed into the quantitative, empirical, data-oriented, behavioralist, and institutionalist turns in the study of politics.34 It gives number-crunchers some new numbers to crunch, whatever the limitations of those numbers. So, since CPI’s inception, scholars have produced numerous studies showing relationships between a country’s position on the CPI and other sorts of measurable variables, from foreign direct investment to press freedom, to place on the human development index, to human rights. Overall, indices like the CPI have done much to help extend the tools of economic analysis into the study of international relations. Meeting analysts’ demands for numbers to crunch is not the same thing as advocacy. However, the studies which appear to systematically link corruption to other social ills, and in general a failure to “develop,” can certainly be used to fuel the arguments of anti-corruption advocates. But such studies inevitably structure the arguments in a specific, technocratic, amoral manner.
It would be unfair to deny TI’s important achievements in putting corruption on the global policy and scholarly agenda, and in mobilizing people to work to curb corrupt practices as well as to engage in empirical studies linking corruption to various other social ills. At the same time, however, the CPI rankings, given that they are important to “branding” TI as an organization, and given their use in a broader array of empirical studies of corruption as a global phenomenon harmful to development, have helped to shape and limit the anti-corruption agenda and channel its focus toward government officials taking bribes, rather than toward business people offering bribes, and toward “developing” countries rather than “developed” countries. The most influential core insight that emerged from TI’s campaigns and the scholarship that has emerged using the CPI has been to associate high levels of corruption with low levels of economic development. The idea that corruption hurts economic development has taken on the status of conventional wisdom. That has been probably the most powerful association, the one that has propelled the CPI and the anti-corruption agenda into the realm of international institutions and government policy.35 From this linkage, the discourse has fanned out to link corruption to such highly visible and popular global issues as environmental degradation, poverty, and poor performance on human rights.
Other issue linkages articulated in TI’s strategic framework prior to its reformulation in 2011 (of which more below) were that corruption hurts democracy and rule of law, distorts national and international trade, jeopardizes government and private sector ethics, undermines security of natural resources, reinforces gender discrimination, and compounds political exclusion.36 Despite this extensive list of issue linkages, and despite TI’s claims that its understanding of corruption encompasses more than bribery, bribery has long remained the central focus by virtue of how TI defines corruption: the CPI reinforces the association of corruption with bribery, and sustains a spotlight on those who receive bribes. TI has recognized this and has developed a “Bribe Payers Index” (BPI), which surveys business executives and ranks the world’s leading economies according to how likely companies from these wealthy countries are to offer bribes to foreign public officials and, more recently, to other private sector executives. The focus of the BPI remains on bribery, but attempts to put a spotlight on the private sector as a source of the “supply side” of the bribery equation. But the BPI has less resonance than the CPI; it has only been published five times since its inception in 1999, the latest survey being released in 2011.
As Andersson and Heywood have astutely noted, “[n]otwithstanding the caveats required in any overarching definition, it could be objected that the TI definition explicitly refers to the payment of bribes.”37 It is precisely on the issue of bribery that there has been the most official legal progress: the 1997 OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, and its progressive (though far from perfect) incorporation into the domestic laws of its ratifying states. By association and timing, TI’s CPI certainly deserves some credit for pushing along the OECD Convention (and thus enhancing TI’s advocacy function), though credit also has to go to pressure from US businesses who have lobbied against the competitive disadvantages imposed upon them by the US Foreign Corrupt Practices Act. The pressure for the OECD convention is surely also a product of such business pressure (though it cannot be reducible to US business lobbying alone, since the time lag strikes me as too long – FCPA is in place by 1977 and the OECD convention comes into force twenty years later).
Over a decade after its inception, however, the anti-bribery framework has proven itself quite limited in its capacity to combat corruption, in ways that go beyond problems in its implementation. Transparency International itself has been vocal in criticizing OECD countries for failing to implement anti-bribery rules, publishing eight annual reports to date reviewing the implementation of the Convention, with gloomy results.38 The lack of success in implementing the OECD Convention suggests that the wealthier OECD countries are not particularly susceptible to the type of public pressure exerted by Transparency International, even with the support of an international legal framework; without more active participation by those responsible for the “supply side” of the global bribery and kickback network, progress is likely to remain limited. The 2011 BPI notes no real progress in curbing the supply side of bribery.39 But lack of proper implementation is not the only problem of the technocratic approach to corruption facilitated by corruption rankings. There may be deeper consequences, as sketched out in the next section.
Perverse effects of corruption rankings?
As introduced above, I focus here on three possibly perverse effects facilitated by global anti-corruption rankings: distraction, reinforcement, and vulnerability to manipulation.
Distraction
One important line of critique that has emerged following the consolidation of the anti-corruption/anti-bribery consensus is its neglect of the related issues of tax havens, tax evasion, capital flight, and the offshore world. Why has TI’s anti-corruption discourse not developed more in the direction of focusing on tax evasion, tax havens, and capital flight? Nowhere in TI’s strategic framework for 2008–2010 was there a mention of tax havens, tax evasion, capital flight, or the offshore financial world. Tax havens do not appear in TI’s publications subject list, although recently the topic of “financial markets” has been added, and money laundering does make an appearance. There have been some changes in the wake of the global financial crisis of 2008, and the anti-corruption movement does seem to be shifting its focus to include the global financial architecture. But that it neglected it for so long is certainly a problem, and possibly a puzzle demanding further explanation. One possible explanation is that the manner in which the corruption issue has been structured in the CPI-focused discourse puts the onus on governments (they are the ones being ranked, after all), rather than the private sector. This dovetails with the neoliberal context in which the anti-corruption agenda evolved, emphasizing the need to curtail the state and restrain public officials.
However, private sector activities, for example those centered on tax evasion and capital flight, in addition to the offering of bribes for evasion of costly regulations, are surely important lubricants for corrupt activities, and are also implicated in undermining the “good governance” that is the underlying objective of anti-corruption efforts. In a paper entitled “New Estimates of Capital Flight from Sub-Saharan African Countries” economists Ndikumana and Boyce argue that:
The analysis of capital flows to and from Africa presents a stunning paradox. On the one hand, African countries are heavily indebted and must make difficult decisions with regard to the allocation of national resources between debt payments and provision of vital social services to their populations. Over the past decades, African countries have been forced by external debt burdens to undertake painful economic adjustments while devoting scarce foreign exchange to debt-service payments. On the other hand, African countries have experienced massive outflows of private capital towards Western financial centers. Indeed, these private assets surpass the continent’s foreign liabilities, ironically making sub-Saharan Africa a “net creditor” to the rest of the world.40
Dev Car (formerly of the IMF) and Devon Cartwright-Smith, two economists working with a project called Global Financial Integrity, a program of the Center for International Policy in DC, estimate that over the thirty-nine-year period 1970–2008, Africa lost US$854 billion in cumulative capital flight, “enough to not only wipe out the region’s total external debt outstanding of around US$250 billion [as of 2008] … but potentially leave US$600 billion for poverty alleviation and economic growth.” Moreover, “cumulative illicit flows from the continent increased from about US$57 billion in the decade of the 1970s to US$437 billion over the nine years 2000–2008.”41
Nicholas Shaxon, who has written on the oil and the resource curse in Nigeria and elsewhere, argues that “we need to investigate the role of tax havens and the international infrastructure that provides an enabling environment for corruption or, in other words, a supply side furnishing the international corruption services.”42 The existence of tax havens and the whole “pinstripe infrastructure” (that term comes from John Christensen of Tax Justice Network43), infrastructure which facilitates the offshore world, is not just a problem for developing countries; it is a problem for all governments struggling to balance their books in the present era of global financial instability. Tax dodging corrupts by undermining public confidence and trust in the fairness and legitimacy of the tax system. Shaxon has made the further point that tax systems are a fundamental mechanism for holding public officials accountable to their populations. Yet by systematically deregulating global financial flows in the 1980s,44 the OECD countries have helped to create the infrastructure for corruption. Surely the CPI overlooks something significant, and that something has to do with not just the supply side of international bribery, but with the financial infrastructure which facilitates all the activities that undermine public trust in governments’ ability to deliver public services.
The criticism that the CPI approach has helped to deflect focus away from the financial infrastructure facilitating corruption is reinforced by some further observations. First, the CPI has developed alongside or just after the deregulation and liberalization of global financial flows; timing of its “take-off” in the 1990s comes right on the heels of the liberalization of capital markets. Second, aside from timing, we can see something of a norm convergence, an affinity between two sets of norm complexes: between private corporate interests in profit maximization via often perfectly legal financial innovation and tax evasion on the one hand (an interest that was facilitated by liberalization and loosening financial regulations in the OECD), and on the other hand a norm-entrepreneur TI-driven social movement to combat corruption (which consolidated into the OECD anti-bribery convention). The latter movement may constrain the flexibility of firms in trying to curtail their ability to pay bribes with impunity (though the success of this is questionable), but it still directs our focus to the problem of public officials engaging in individual transactions with private firms – that is, on a certain act of exchange, the bribe – rather than on the overall system which facilitates these exchanges.
Moreover, to the extent US pressure to create the OECD convention was propelled by firms worrying about effects of FCPA on their competitiveness abroad, this helped to cement the focus on public officials taking bribes as the core problem in the global anti-corruption agenda and also suggests that the interests of at least some multinational businesses were an important driver of the anti-corruption discourse. Transparency International itself cultivates relationships with the business community, including private risk-rating agencies and accounting firms, and so it is no surprise that the construction of the global anti-corruption agenda is business-friendly in many respects. Much of the information that goes into the CPI comes directly from the multinational business and financial community.
Finally, innovative experimental research done by J. C. Sharman has shown that the worst offenders permitting the sort of corporate secrecy (i.e. lack of transparency) which fuels the financial infrastructure and supply side of corrupt practices and money laundering are the United States and EU countries. By contrast, the relatively smaller, weaker countries which tend to get branded as tax havens, such as the Bahamas or the Seychelles, do much more to comply with financial transparency standards than do the powerful rich countries which push these standards upon others but do not follow them themselves.45
All of this suggests that the structuring of the corruption issue around the CPI, in a context of global financial deregulation and initial ideological dominance of neoliberalism (since replaced by a focus on “governance”), was overall quite favorable to multinational business, while facilitating a highly suspicious attitude towards politics, politicians, and public authority. No matter how well-founded such suspicions were, they may have distracted attention from the broader issue of the businesses actually offering bribes, and of a financial infrastructure highly permissive of other sorts of practices that could be construed as being just as corrupt as bribery, namely tax evasion, money laundering, and dubious financial innovations which generated the sorts of systemic risks that brought on the global financial crisis of 2008. Further, it may be that the narrow focus on limiting the discretion of bribe-taking public officials inhibits our capacity to reflect more deeply and critically on the role of money in public life. Finally, rankings like the CPI do nothing to ameliorate the role of power and the hypocrisy of the countries such as the US and the EU member states who display a “do as I say, not as I do” attitude toward financial transparency rules; indeed, by making wealthy countries appear more virtuous than their developing country counterparts, the rankings might distract from the role of power in the world political economy.
Reinforcement
Another line of critique of the CPI rankings approach to corruption has focused on the issue of whether the rankings help to reinforce the existing positions of countries on the scale, thereby enacting something of a self-fulfilling prophecy. Although this argument has a certain logical plausibility, it is difficult to find concrete evidence to either support or undercut it. Andersson and Heywood have suggested that the CPI has helped to create a “corruption trap” for poor countries, which reinforces their inferior position on the scale, as they are viewed over time as bad investments and are thus unable to muster the resources to make the governance changes needed to alter their ranking. This is a plausible argument if governments must now demonstrate some sort of anti-corruption efforts in order to qualify for foreign aid and loans from multilateral agencies and major donor governments.46
In terms of the institutional rhetoric of aid and development leaders like the World Bank and USAID, it is certainly the case that aid, loans, and investment are increasingly being made conditional on improvements in anti-corruption and governance more broadly. USAID has embraced the anti-corruption movement as structured by TI’s CPI, including the issues linkages discussed above, and includes anti-corruption and governance issues in its programming.47 The World Bank has also incorporated anti-corruption in its overall development strategy.48 Preliminary evaluations of the Bank’s strategy provide some, but not unambiguous, evidence for the contention that poor scoring on governance indicators makes a country less likely to receive Bank resources.49
These observations should be balanced by an awareness that implementation of governance and anti-corruption conditionality on the ground is difficult and probably highly inconsistent. While some countries may indeed experience a corruption trap in that their CPI position seems to reinforce donors’ and investors’ unwillingness to commit resources to them, others which score at the bottom of the ranking, such as Afghanistan, nevertheless remain money magnets for reasons having nothing to do with governance and anti-corruption criteria.
Another angle on the reinforcement issue is the question of whether, by focusing on corruption as a problem primarily faced by developing or transitioning countries, the CPI and related indices serve to reinforce the apparently “virtuous” reputation of countries such as Switzerland and Canada, for example. As already suggested above, countries on the upper end of the CPI certainly tend to be richer, and there may be a self-reinforcing cycle in that. But one way in which global publicity about corruption may have seeped into rich-country discourse is to sully the reputation of politics and politicians in general, even in countries not perceived as particularly corrupt. Michael Atkinson, for example, finds that Canadians view corruption as a much bigger problem in their country than Canada’s high (i.e. good) ranking on the CPI would suggest.50 He argues that this discrepancy is not due to there being more corruption in Canada than the CPI can capture, but rather that Canadians have developed a very dim view of politics, and have come to associate politics in general with corruption. I would venture to guess that one might find something similar were one to study the opinions of the US electorate. The construction of corruption as abuse of public power, and the accompanying privileging of market mechanisms and economic analysis in studying corruption, may reinforce public attitudes about politics as being in essence a dirty game, even in societies with strong institutions and good quality of government.
Strategic manipulation
Perhaps the most readily identifiable perverse effect of global anti-corruption advocacy, and more generally of the stamp of legitimacy that may come from pursuing an anti-corruption/good governance agenda, is its vulnerability to manipulation by political actors. Anecdotal evidence abounds for the strategic manipulation of anti-corruption campaigns by political actors seeking to shore up their positions and eliminate rivals. In the highly unstable state of Pakistani politics, for example, corruption charges are a routine part of efforts to discredit political rivals.51 In a power struggle within the African National Congress, South Africa’s ruling party, Jacob Zuma faced a leadership challenge in which one of the central contentions of several of his rivals is that he is too weak on corruption.52 While it is difficult for outsiders to get the full story, the fall of Bo Xilai on corruption charges in China was surely not simply about virtuous party officials ferreting out a corrupt player in their midst. A 2011 editorial in India’s Economic and Political Weekly argued astutely that anti-corruption campaigns facilitated the rise of dangerous populist politics:
What this caution and call for introspection does is to alert us to the possibility that anti-corruption struggles, under their apparent progressive exterior may be a Trojan Horse for another, more dangerous form of politics, one which has contempt for the vote, mass politics, and democratic institutions.53
In Azerbaijan, an opposition journalist decried an anti-corruption campaign as a show designed to please international organizations.54
The list of stories is potentially endless, and surely there is an opportunity here for a scholarly study of the political dynamics and consequences, not of corruption per se, but of corruption charges and anti-corruption campaigns, perhaps along the lines suggested by the Economic and Political Weekly editorial cited above. By inciting a global “movement” to contain corruption, and by making anti-corruption credentials a ticket to political legitimacy in the eyes of the World Bank and USAID, has TI inadvertently placed a new tool into the arsenal of partisan politics, a tool which might be dangerous, particularly in countries with highly unstable and unconsolidated democratic systems? I think this is a line of thought worth exploring, though it would be entirely unfair to blame the CPI itself for facilitating such manipulation.
Conclusion
The initial launch of the CPI, and the globalization of an anti-corruption discourse, coincided with the rise of a neoliberal agenda of shrinking government interference in the operation of markets. Even with neoliberalism on the wane, replaced by a more robust “governance” agenda spearheaded by the World Bank, the CPI continues to facilitate the structuring of the corruption issue as one primarily affecting developing countries, and requiring the monitoring and constraining of public officials. Combined with the practice of ranking according to CPI, the neoliberal agenda served to narrow the scope of anti-corruption discourse, rendering it on balance hostile to politics (or at least hostile to the discretion of politicians) and favorable to the notion that market forces could be counted on to efficiently allocate resources, and that market competition could reduce corruption.
The 1997 Asian Financial Crisis was an important turning point because in its aftermath some scholars, as well as a few analysts within the IFIs themselves, began to question the wisdom of neoliberal prescriptions, especially the notion that too much regulation provided more opportunities for corruption and thus undermined financial stability and hindered development. The mutually reinforcing relationship between neoliberalism and anti-corruption was most deeply undermined by the global financial crisis of 2008. It was then that the “state capture” argument which had been a part of the analysis of developing country corruption began to be redirected at the wealthy countries of the capitalist core, most notably in a popular Atlantic article by former IMF economist Simon Johnson, who argued that regulatory agencies in the advanced democracies had themselves experienced “state capture” – which is really another term for corruption.
The 2008 financial crisis, as well as the European sovereign debt crisis that has followed on its heels, have shaken up some of the unexamined assumptions and explicit hypotheses that have long been used to keep the beam of anti-corruption scrutiny focused primarily on the “developing world.” These assumptions and hypotheses include: the tendency to define corruption primarily as bribery of public officials; the idea that limiting the discretion of government officials by shrinking the scope of government regulation reduces corruption; the notion that privatization and the unleashing of market forces produces competition, which reduces corruption; the belief that democratic competition reduces corruption; and the hypothesis that regulatory harmonization reduces opportunities for corruption.55 In short, anti-corruption efforts can no longer be comfortably subsumed within a neoliberal agenda.
This is especially evident if one takes into account the major differences regarding how corruption was “read” as a contributing cause of the East Asian crisis of 1997. While the East Asian crisis reinforced, however wrongly, the notion in the West that the most problematic and destabilizing types of corruption primarily occurred in non-Western states – especially the vilification of Asian “crony capitalism”56 – the aftermath of the crisis, which included clear evidence of the failure of neoliberal prescriptions and, alternatively, the possibility that previously frowned-upon measures such as capital controls might be applied successfully by governments, proved a prelude to the much bigger shock of 2008, when the “core” was exposed as being as crisis-prone as the periphery and semi-periphery.
Even if corruption rankings no longer seem to reinforce the “clean” image of the wealthier countries, they still seem to be reinforcing the bad image of the poorer, lower-ranking countries, though the evidence that this makes any difference to levels of investment could be tough to find. Beyond this, the manner in which the corruption issue has been globally structured may continue to perpetuate the view that politics is dirty everywhere, basically by definition. So although we have shaken off the neoliberal agenda to some extent, it is far from clear that the subsequent “governance” agenda has developed a more nuanced view of politics and public life. Politics is still very much in the service of economics. Further, under some conditions anti-corruption campaigns, and corruption charges, become useful political tools in the battle for electoral power, further reinforcing the impression that politics is a dirty game. In the meantime it is still a challenge to sustain a focus on the permissive context of a global financial architecture which provides the dirt – money – that makes politics so dirty.
Although the CPI still gets plenty of attention (there is even a CPI app!) and works well as a branding device for TI, the index no longer enjoys a monopoly as the leading symbol of a global anti-corruption effort; alternative approaches to addressing the problem of corruption have emerged and gained traction both within the TI “family” of products and initiatives, and outside it. To TI’s credit, it has worked with other organizations and initiated projects to amplify its advocacy and broaden its approach to corruption. Ranking countries on a single scale of corruption is becoming an increasingly tenuous proposition as cultural differences have reasserted themselves, particularly in Asia but also in Latin America and indeed around the world. The focus on public officials enshrined in CPI’s definition of corruption is being supplemented by renewed calls to address business practices. Such organizations and campaigns as the Extractive Industries Transparency Initiative (EITI), the Financial Action Task Force, the Global Financial Integrity Project, the Financial Transparency Coalition, the Association for Accountancy and Business Affairs Offshore Watch, Global Integrity, the World Bank’s Governance Indicators project, and TI’s own Global Corruption Barometer survey and Bribe Payers Index have begun to push global anti-corruption efforts beyond a process focused on ranking states according to a single scale, as engendered by the annual CPI ranking. Thus, anti-corruption advocacy is changing and moving beyond the CPI. What is important is the possibility that corruption issues are being re-defined in such a way as to get at problems which were obscured by the CPI, especially problems having to do with the resource curse, offshore financial centers, capital flight from developing countries, “capture” by financial interests of wealthy-country regulatory agencies, and the continuing complicity of rich-country multinationals in facilitating corruption and lack of transparency, not only in the “developing” world but within their own home political systems and institutions.57 Re-definition of a problem is not a solution, but it can be construed as progress.
