by Tina Søreide.
In the decade following World Bank President Wolfenson’s 1996 speech on “the cancer of corruption”, players in the private sector as well as governments became more aware of corruption as a threat to fair markets and development. In particular, we observed a substantial increase in ethical codes of conduct implemented by firms. Even if corruption was already prohibited by most legal standards, the assumption was that a set of ethical guidelines would make it easier for firms to avoid being entangled in corruption. International standards for self-regulation emerged, such as the UN-initiated Global Compact and ISO 26000. In frustration, some business people would proclaim that “everything is different” and “you cannot even offer a dinner without getting into conflict with the codes of conduct”. Those of us who followed these developments could easily get the impression that the propensity to offer bribes decreased substantially in many firms. Leggi il resto di questo articolo »
According to Iranian President Ahmadinejad, “ capitalism and capitalists are the main source of corruption in the world”. Let’s play the game to take out of context Ahmadinejad statement. True or false? Neither. Precisely because capitalism is prevalent today and there are no meaningful terms of comparison, this statement is “ not falsifiable”. Certainly capitalism is accompanied sometimes or even often, with high levels of corruption. If we consider the past, the same could be said, and with greater force, for socialist regimes.
But if we look not at who owns the means of production, but at how goods and services are exchanged, empirical investigations indicate greater economic freedom, open markets and competition are associated with lower levels of corruption.
Iran is not in fact a place whose leaders can offer lessons about corruption. Iran occupies the 146th position in ICC ranking of Transparency International, and a worst position in accordance with our excess perceived corruption index.
Iran is probably damaged in its corruption ranking from its oil situation. Natural riches are a source of enviable income for those who control them, which is reflected in the so-called “resource curse”: weak institutions, high corruption, and anemic economic growth. After all, if in Italy one day we were to discover a huge oil field, don’t you think corruption would increase?
Is there a direct correlation between the level of foreign investment and the degree of corruption? In North Africa, few doubt it. This is confirmed by a report, recently published by the International Institute for Applied Systems Analysis (IIASA), as to the link between climate change and corruption (see also the post of Annalisa Castelli). The Climate Change Corruption Report presents the results of a survey conducted between June 2010 and March 2011 to identify the potential risks of corruption in cases where substantial international investments are allocated to North Africa to build infrastructure for renewable energy.
The answers given by representatives of NGOs, academia, private and public sector and international organizations active in North Africa suggest that “bureaucratic corruption” is an obstacle more feared than “grand corruption”. In particular, two data worry. First, the majority of stakeholders (58 percent) expects an increase in administrative and political corruption in case of direct investment inflow to develop renewable energy sources in the region. The risks relate to the expected demand for money and gifts from officials, the unauthorized sale of public property and licenses, the “manipulation” of rules and regulations, misuse of personal data and other information. Second, 77 percent of respondents who agreed to answer (this percentage has increased in the last survey period, in correspondence with the crisis of the dictatorial regimes of North Africa) believes that the procedures for the acquisition of permits are the most problematic aspect, much more than the construction and infrastructure management.
Compared to this not very reassuring situation, what impact is bound to produce the fall of political regimes in non-democratic countries of North Africa we are currently seeing? And is it reasonable to expect a reduction in the overall level of corruption, fueled by decades of power structures crystallized and removed from the principles of transparency and accountability of liberal democracies? The report suggests an ambiguous response : yes, the political crisis of those regimes could lead to a reduction of “grand corruption”, but it is much more unlikely that the crisis could have a positive impact on “bureaucratic corruption”. Stakeholders believe that only the start of a socio-economic development process will lead to a reduction of administrative corruption.
No positive correlation, therefore, between administrative corruption and investment projects in this field? And if, instead, it were precisely those projects, properly monitored and linked to the principle of conditionality, to generate the incentives needed to guide the ongoing transition towards building a modern legal framework based on the principles of transparency and administrative simplification? Certainly it would not be enough, but – as demonstrated by similar experiences – it would be an important step in the right direction.
We’re almost there. We had already dealt with it and we will do it again soon, because a meeting is scheduled for next Wednesday at the U.S. Securities and Exchange (SEC-called) in order to enact rules that will govern in detail the important new legislation (passed by Congress in 2010) on programs designed to facilitate the whistleblowing against internal fraud by corporate employees.
Most U.S. companies are extremely worried. These rules are going to move the collector of such complaints from the internal hotline, owned by the same companies, to the external government offices. And this explains the delay of more than one month in the publication of the SEC rules, a SEC duty. Probably some concessions will be made to the companies.
Obviously a government more active in investigating improprieties increases costs for businesses, but it is also true that society as a whole should gain from it, too, if it is true that these rules will push toward a higher rate of complaint (the basic idea of those who ask for these rules is that employees are now discouraged from reporting a crime within the same company, fearing reprisals).
There will be a prize for those who report violations of internal rules and laws: if accusations are actually proved, it’ll be equal to a fraction ranging from 10% to 30% of the fines collected by the Government (if totalling more than one million dollars). Such significant amount of money are justified, depending on who supports these rules, by the fact otherwise no one would expose himself to blow the whistle.
The Washington Post reports another crackdown against corruption among Mexican custom agents. Psychological, anti-drug and lie-detector (yes, those to see if you tell the truth) tests will be carried out.
There is also a proposal for a more frequent rotation of officers.
Rotation doesn’t appear such a good idea. Beside the fact it affects negatively the improvement of skills over time, the incentive to invest in relationships and the learning process of “the good guys”, it is unclear why a public official who knows about having to rotate more often should not speed up the collection (and size) of bribes in the shortest time at his disposal.
Where there are cartels, rotation furthermore increases the bargaining power of corrupt agent, not the probability the crime wouldn’t be committed.
From Space for Trasparency (http://blog.transparency.org/)
by Christian Humborg, Managing Director of TI-Germany.
With India’s ratification of UNCAC this month, Germany is one of the last three G20-countries to have not ratified the UN Convention against Corruption, together with Japan and Saudi-Arabia. This is not only embarrassing; it also undermines the credibility of Germany’s efforts to fight corruption at international level, hampering the government’s ability to create a level playing field for German companies in international anti-corruption negotiations, even while these companies will find themselves on the radar of German prosecution for bribing abroad.Many people from abroad ask me disbelievingly why Germany does not ratify.
In fact, the German Ministry of Justice already tabled a bill some years ago that would have brought German law in line with UNCAC. However, at the request of the German parliament, this bill did not include tougher regulation on the bribery of parliamentarians, because, Parliament wanted to draft itself such an additional bill. But it never did. So with the end of the legislative period the original bill lapsed.
The relevant paragraph, 108e of the German Criminal Code, only penalizes the acceptance of money for votes in committee or in plenary. If you bribe a German parliamentarian for a vote taken during an internal party meeting, or if you give the money to the parliamentarian’s partner, in this country you will get away with it.
Last summer, the current president of the German parliament, Norbert Lammert from the ruling CDU party, even made it clear that the parliament has no intention in tightening the paragraph dealing with bribery of parliamentarians.
This is the topic of the Global Corruption Report 2011, recently published by Transparency International. The connection between the two phenomena is immediate: environmental policies, aimed at reducing emissions and combating the effects caused by our presence on the planet, are embodied in money flows with 6 zeros: so very attractive.
In addition to this, receiving aid countries seem to be the most corrupt ones. In particular, countries classified by the Maplecroft’s Climate Change Vulnerability Index as extremely dangerous from an environmental point of view (CCVI) are also characterized by high levels of perceived corruption according to the Corruption Perception Index (CPI). Among these, there’re economies extremely promising in terms of growth such as Bangladesh, India, Philippines, Pakistan and Vietnam, all very corrupt according to the CPI.
Precisely the consideration of their high growth potential leads me to examine their situation regarding the level of corruption, as measured by the Excess Perceived Corruption Index (EPCI) we have elaborated. In fact, this index is shaped on the basis of the relationship between the ICC and Human Development Indicator (HDI), used as an index of development, and indicates how much the country is above or below the expected level of perceived corruption according the country’s degree of development.
What emerges then is a more varied picture. India shows a virtuous conduct in the fight against corruption, showing a lower level than the one we would expect looking to its level of development. It’s a little less a good result the one we see for Bangladesh and Vietnam and even less for Pakistan and the Philippines, far more corrupt, according to the ECPI index, than their expected level.
Welcome to Norway ithen, a country that believes and invests in the protection of the planet (see but since the environmental action needs to be global, one more reason to accompany it, and even precede it, with a global fight against corruption.
The integrity of trees is at risk. The projects to combat deforestation need money, and often the countries that are fighting against forests destruction are the poorest ones; in order to do it, they receive funds from richer countries that have an obvious interest in the global good called environment. But now they are tired of seeing their money being used, instead to repopulate forests of developing countries, to fill the pockets of the rulers of the moment. Corruption, you guessed it. Norway seems to be the only rich country that still believes and wants to continue to fund the fight against deforestation: “if we wait for the moment that Congo will become like Switzerland good-bye trees” said the Environment Minister Erik Solheim. Yes, you read correctly: the integrity (and pragmatic) Norway.
