Table Of ContentDo International
Corruption Metrics Matter?
Do International
Corruption Metrics Matter?
The Impact of Transparency
International’s Corruption
Perception Index
Omar E. Hawthorne
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Contents
1 Rethinking the Role of Civil Society in The Twenty-First Century 1
2 Whose Perceptions Are These Anyway? 33
3 Political Responses to Transparency International’s CPI 49
4 Economic Responses to Transparency International’s CPI 77
5 Jamaica’s Policy Responses to Transparency International’s CPI 97
6 Lip Service At Its Best? 129
7 Conclusions: From 1995—To Date and Onwards 149
Index 153
About the Author 159
v
Chapter 1
Rethinking the Role of Civil Society
in The Twenty-First Century
It is often said that civil society, locally and globally, ought to play a greater
role in taming the beast of corruption. There is no doubt that corruption
continues to plague countries in every region of the world. But, as Sandholtz
and Koetzle state, “corruption, like the poor, will probably always be with
us.”1 Thus, the manner in which we as a society recognize and deal with
the issue of corruption, its effects on development, growth, sustainability,
and well-being of others, is intrinsic to the overall growth of society. Daniel
Kaufmann, on the issue of corruption, reiterated quite convincingly that,
“nobody disputes the ethical failings associated with corruption. Yet the
ambiguities about corruption, its causes, its effects, and its cures cause many
to wonder whether fighting it should be a true priority or merely a rhetorical
one. Not in dispute is the fact that fighting corruption has become a rhetorical
priority.”2 Thus the focus on holding governments accountable and demand
for greater transparency might ultimately lead to some reduction in corrup-
tion, or at least the perception of a reduction.
Corruption, according to Transparency International (TI), “is operationally
defined as the abuse of entrusted power for private gain.”3 The issue of cor-
ruption is not new; it is probably as old as the state as a political organiza-
tion with the prerogative to allocate resources. Episodes and investigations
of corruption activities are found within public administrations in numerous
countries around the world. Hunger, child mortality, illiteracy, poverty, etc.
cannot be eradicated as long as corruption continues to sap resources from
the world’s poorest countries.
Economic development is generally regarded as being tied to corruption.
Rarely is there a development plan that does not speak of the need to address
corruption. Corruption is widely seen as the main hindrance to development
and growth. With this pressing need to eliminate corruption a correlation,
1
2 Chapter 1
which TI officials and other development scholars have pointed to, is that, “one
key lesson from the last 30 years of development efforts is that the progress in
poverty alleviation in the world’s poorer countries with high level of corrup-
tion and weak institutions has not been substantial and/or sustained.”4 It can
also be argued further that environmental regulation such as forest and biodi-
versity protection will not be effective as long as law enforcement and other
decision-makers cannot be influenced by the lengthy tentacles of corruption.
Academic disciplines have examined corruption from many perspectives:
sociology, economics, political science, law, development studies et al.,
However, to my knowledge there has not been any research that has studied
the impact of TI’s Corruption Perceptions Index (CPI) on changing behaviors
of businesses, investors, governments, countries or their officials as a result of
the publication of the TI CPI report. It is only befitting that TI, often cited as
the most influential global civil society on corruption, be examined. After all,
the CPI is unique in the sense that it was the first index created specifically
to address this once taboo topic in development issues. It assigns numbers
to countries and TI has justified why the ranking and changes of countries
occurs over the years. Undoubtedly “corruption affects the poorest the most,
in rich or poor nations, though all elements of society are affected in some
way as corruption undermines political development, democracy, economic
development, the environment, people’s health and more.”5
Today corruption is a major problem in many of the world’s developing
economies. According to one World Bank estimate it accounts for “over $1
trillion per year accounting for up to 12% of the GDP of nations like Nigeria,
Kenya, and Venezuela.”6 Quite often the argument has been made that pov-
erty is a cause of corruption, the argument is that the existence of a high level
of poverty is a breeding ground for antisocial and unethical behavior such
as bribe taking. That argument is supported by “all the surveys conducted
since 1995 matching wealth/poverty of nations to their levels of corruption.
The world’s most corrupt nations are also among the poorest.”7 Augustine
Nwabuzor made a critical observation that “while poverty is certainly a
plausible explanation for the so called ‘petty corruption’ the really serious
incidents of corruption in developing nations are perpetuated by top govern-
ment officials and well-placed executives not by the nations’ poor.”8 This is
a seemingly common trend in many developing countries. The perpetrators
occupy positions of influence and power in government, industry and com-
merce. Consequently, the individuals who hold high-ranking positions in
society and their positions of privilege are often accused of abusing their
positions. General poverty in society cannot explain the actions of such cor-
rupt senior officials. With stronger civil society to keep reports and/or inci-
dences debate to the fore. The creation of National Chapters of TI in countries
seeks to strengthen TI’s work and reporting efforts on incidents of corruption.
Rethinking the Role of Civil Society in The Twenty-First Century 3
Over the years numerous studies on corruption have been researched and
presented, hence outside the academic debate it will be interesting to see the
actual effects of TI’s CPI changing behavior. While TI is the leading Inter-
national Non-Governmental Organization (INGO) focusing on corruption, it
is yet to be ascertained whether this index, established in 1995, actually has
any impact on the economy, market and political policies as it relates to the
countries on its index. Thus, this study is relevant for a number of reasons: it
assesses the impact of the prominent index on corruption, and will evaluate
the following: (1) does TI’s CPI influences markets and investors as it relates
to a developing country? (2) What are the world’s political responses to the
CPI? (3) Does CPI have political impact within countries, or does it have any
impact/effect on political responses from World Bank, United States Agency
for International Development (USAID), foreign aid, etc.? (4) Do countries
adjust their behavior to improve their CPI score?
Corruption, ranked as the most frequently discussed global problem, sur-
passing climate change, extreme poverty and hunger in 2010, has been at
the forefront of academic and policy debates for many years.9 Transparency
International’s CPI is often touted as an indicator of corruption levels within
countries and it is often credited10 with putting greater focus on the issue of
corruption on the international agenda. Perhaps as interesting as the yearly
ranking of countries’ corruption perceptions is the method by which countries
are ranked as corrupt and the variation in the methodology used by TI over
the years.
Given the significance that policymakers and scholars give to the effect
of corruption on development, Transparency International’s CPI has become
very influential. The CPI is widely cited by academic literature and uses it is
used extensively in studies of development. A claim purported by the donor
community is that essentially billions of dollars in official development assis-
tance depends in part on a recipient’s CPI scores. Given this evident impor-
tance, one would expect that large-scale indicators of development—amounts
of foreign aid; foreign direct investment; credit ratings, bond yields; corrup-
tion enforcement —will respond to changes in the CPI. Thus one would expect
negative movement in the CPI to cause donors to withhold aid and firms to
forego business in a corrupt country. Surprisingly, however, no one has yet
examined whether the CPI has these hypothesized effects on development.
Transparency International has carved out a niche for itself in the civil soci-
ety groups. With TI being the leading source for corruption ranking it comes
as no surprise that many question the veracity of the index. Theresa Thomp-
son and Anwar Shah’s “Transparency International’s Corruption Perceptions
Index: Whose Perceptions Are They Anyway?”11 provides in-depth analysis
on TI’s CPI. Additionally, whose interest is the index representing? One of
the purposes of this research is to examine whether TI’s CPI is a status quo
