Where's corruption worst?

Transparency International (TI) published the 2006 update of its Corruption Perceptions Index (CPI), back in early November: Corruption Perceptions Index 2006 (November 6, 2006) :

The 2006 Corruption Perceptions Index is a composite index that draws on multiple expert opinion surveys that poll perceptions of public sector corruption in 163 countries around the world, the greatest scope of any CPI to date. It scores countries on a scale from zero to ten, with zero indicating high levels of perceived corruption and ten indicating low levels of perceived corruption.

Here's a summary of the results, but there's much more detail at the web site:

 

There are other corruption indices available.  The private firm Political Risk Services will sell you data.  Their site quotes a price of about $191 for 2006 cross-country data on their corruption index.  World Bank data on control of corruption may be found here: GRICS: Governance Research Indicator Country Snapshot. 

In December, the Economist described the etiquette involved in offering and receiving bribes (The etiquette of bribery. How to grease a palm. (Dec 19 - subscription required)

In a testament to most people's basic decency, bribe-takers and bribe-payers have developed an elaborate theatre of dissimulation. This is not just to avoid detection. Even in countries where corruption is so common as to be unremarkable and unprosecutable - and even when the transaction happens far from snooping eyes - a bribe is almost always dressed up as some other kind of exchange. Though most of the world is plagued by corruption, even serial offenders try to conceal it.

One manifestation of this is linguistic. Surprisingly few people say: "You are going to have to pay me if you want to get that done." Instead, they use a wide variety of euphemisms. One type is quasi-official terminology. The first bribe paid by your correspondent, in Ukraine in 1998, went to two policemen so they would let him board a train leaving the country. On the train into Ukraine, the customs officer had absconded with a form that is needed again later to leave the country. The policemen at the station kindly explained that there was a shtraf, a "fine" that could be paid instead of producing the document. The policemen let him off with the minimum shtraf of 50 hryvnia ($25).

Another term widely used at border crossings is "expediting fee"...

Double meaning can help soothe the awkwardness of bribe-paying... Swahili-speakers can take advantage of another ambiguous term. In Kenya a machine-gun-wielding guard suggested to a terrified Canadian aid worker: "Perhaps you would like to discuss this over tea?" The young Canadian was relieved: the difficulty could be resolved with some chai, which means both "tea" and "bribe".

Along with the obscurantist language, bribe-taking culture around the world often involves the avoidance of physically handing the money from one person to another. One obvious reason is to avoid detection, which is why bribes are known as "envelopes" in countries from China to Greece. But avoidance of a direct hand-over is common even where there is no chance of detection. There will always be some officials who will take money right from a bribe-payer's hands, but most seem to prefer to find some way to hide the money from view. A bribe to a border guard may be folded into a passport. A sweetener to a traffic cop is often placed in the ticket-book that is handed to the driver....

In October 2006 TI released its "Bribe Payers Index or BPI (Bribe Payers Index 2006 , Oct 4, 2006)."  The Index really focuses on bribe offers by foreign firms doing business locally:

The BPI is a ranking of 30 leading exporting countries according to the propensity of their firms to bribe abroad. This survey looks at the use of bribes by companies with headquarters in 30 of the world's leading exporting countries (either in global or regional terms). It is based on two questions asked of 11,232 business executives from companies in 125 countries, who are surveyed about the business practices of foreign firms in their country. To assess the international supply-side of bribery, executives are asked about the propensity of the foreign firms that do the most business in their country to make undocumented extra payments or bribes. The survey is anonymous.

The index relies on 2 questions.

Respondents were first asked:

"From the list of countries below, please select those nationalities of the foreign-owned companies doing most business in your country."

They then had to score countries on a 7-point scale system (from 1=bribes are common, to 7=bribes never occur) by answering the question:

"In your experience, to what extent do firms from the countries you have selected make undocumented extra-payments or bribes?"

To facilitate the construction of the index, the 7-point scale is converted into a 10-point scale system. An average is calculated for each country based on the number of assessments provided by all respondents, except assessments of their own country. The countries are then ranked based on the mean scores obtained for each country.

The 125 countries include developed, as well as less developed, countries.

The results are summarized following table.

TI summarizes:

• The results of the BPI 2006 show that there is a relatively small range of scores, with Switzerland ranking first at 7.81 and India at the bottom with a score of 4.62. Therefore, with all countries falling well short of a perfect score of 10, the results show a considerable propensity for companies of all nationalities to bribe when operating abroad.
• Nonetheless, the cluster analysis highlights the particularly poor performance of the lower two clusters of countries. Cluster 3 comprises Hong Kong, Israel, Italy, South Korea, Saudi Arabia, Brazil, South Africa and Malaysia. Cluster 4, the worst group of countries according to the BPI 2006, comprises Taiwan, Turkey, Russia, China and India.
• Analysis has shown that companies from the 30 countries ranked in the BPI 2006 exhibit a different propensity to bribe in different areas of the world. While companies from most countries perform considerably better in OECD countries than the full sample, companies from the 30 countries are far more likely to resort to bribery when working in Low Income Countries and in Africa.
• The rankings of the CPI 2005 [last year's corruption perceptions index (CPI), the 2006 version came after the BPI and is described above - Ben] and BPI 2006 [BPI is the Bribe Payers Index - Ben ] are closely correlated. Although the indices consider different aspects of corruption, countries that perform poorly on the CPI rank among the worst on the BPI. The same trend can be seen with the better performers.

Comments

[r4 dsi gold]

Hi,
In terms of economic impact, the debilitating affect of corruption is tangible: More than 5% of global gross domestic product, or $2.6 trillion, was smuggled, used for bribes or stolen from taxpayers in the past year, says the World Bank in a recent report. For honest companies, moving from a low corruption climate to one where corporate and government misdeeds are more prevalent can represent as much as a 20% additional tax on top of the normal costs of doing business.