Transparency and Corruption, 2013

Transparency_internationalTransparency International has just released its latest, the “2013 Global Corruption Barometer.” It’s a fascinating read (and the website is brought to life by a bunch of great infographics). And it’s an important topic for anyone with a serious interest in what makes business work, or fail. Corruption after all is corrosive to markets. It’s not just a political problem, but a business problem. Corruption of all kinds drains money from more productive uses, and makes the ‘playing field’ of business uneven and muddy. The GCB is a measure of just how muddy and uneven the playing field is perceived to be in each of 107 countries.

The GCB includes lots of interesting findings, such as the following:

  • In Sierra Leone, 84% of people said they had paid a bribe to someone in a position of authority in the last twelve months, compared to just 3% in Canada and 7% in the U.S. (Not coincidentally, Sierra Leone is one of the poorest countries on the planet.)
  • In Afghanistan, about the same number of respondents felt that NGOs are extremely corrupt (34%) as thought that business is corrupt (34%).
  • In the U.S., 60% of respondents thought that corruption had increased there over the previous year (compared to only 10% who thought corruption had decreased.)
  • In Canada, the most mistrusted institution is political parties (62% of Canadians think those are either corrupt or very corrupt), followed by business (48%), parliament (47%), and the media (39%).

It is worth emphasizing that the GCB is a measure of opinion. To generate this report, TI surveyed 1,000 people in each country (or 500 people in small countries) to ask them about whether they feel, for example, that corruption has gotten better or worse in their country in the last 12 months. So the report doesn’t (and of course couldn’t) measure actual corruption. Still, the report is meaningful. It is of course possible that the people in a given country are systematically mistaken about levels of corruption. But even if that were the case, it would say something interesting about that country. And in the end, when it comes to corruption, perception matters: even perceived corruption is enough to corrode trust, and without trust meaningful commerce simply cannot happen.

2 comments so far

  1. Curt Day on

    My question is this, doesn’t maximizing profits lead to corruption? I ask this because, isn’t maximizing profits a reductive philosophy that has only one ethic?

    • Chris MacDonald on

      Many things lead to corruption. Note, for example, that NGOs are in some places perceived as being just as corrupt as businesses.

      And the answer to your second question is “no.” Profit maximization is one goal, which can be bundled along with many others and made part of many different ethical viewpoints.

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