Corruption Costs

26 October 2010



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Transparency International Issues 2010 Corruption Perceptions Index

Transparency International is one of the do-gooder non-governmental international organizations that works to clean up corruption around the world. Given that it has only the media spotlight as a tool, its Corruption Perceptions Index does a decent job in ranking 178 countries on 13 factors to decide what countries are the most corrupt and which the least. Hardly surprising is the positive correlation between corruption and poverty; poverty stricken Somalia is the most corrupt, well off Denmark New Zealand and Singapore tied for the least corrupt. Russia is the most corrupt of the G20, while the US has fallen to 22nd least corrupt.

Naturally, these assessments are inherently subjective, but by examining 13 different factors, the relative rankings make some objective sense, especially the more extreme comparisons. No one believes Somalia is less corrupt than Singapore, for example. By the same token, small moves are less significant. The US decline from 19th to 22nd can be seen as a rounding error or an improvement on the part of Chile, which has moved ahead of the US (although it will shock many Americans to note that their nation isn't number 1). The detailed methodology is available from TI directly.

The most troubling results are those for China (ranking 78, tied with Colombia, Greece, Lesotho, Peru, Serbia and Thailand), Pakistan (143, behind Zimbabwe and tied with the Maldives and Mauritania) and Russia (154, behind Haiti and tied with Cambodia, the Central African Republic, the Comoros, Congo-Brazzavile, Guinea-Bissau, Kenya, Laos, Papua New Guinea and Tajikistan).

With the second largest economy in the world, China's corruption represents nothing more and nothing less than a huge tax on everyone in China and everyone who does business with China. When TI put out the CPI in 2001, China tied with Argentina for 57th place on the list. In 2002, China ranked 59th; in 2003, 66th. Since 2004, it has been in the 70s. The trend is not a good one.

Pakistan's corruption represents a huge problem not just for the global economy but also for global security. Pakistan receives large amounts of military aid from the US and other nations, but only a fraction actually reaches the troops. In a culture like this, it is no surprise that a man like A.Q. Khan would arrange for nuclear technology to go to North Korea and elsewhere. It is difficult to say how the Pakistani situation could be improved.

Finally, Russian corruption makes the country resemble an African dictatorship more than a European democracy. "How can a country claiming to be a world leader, claiming to be a major energy power, be in such a position?" asked Yelena Panfilova, director of the Moscow office of Transparency International. "It's a situation of national shame." Actually, it's the result of never figuring out how to get rid of communism's legacy. Ex-KGB men run the nation as KGB men ran it before. Now, though, they are allowed to plunder the nation's wealth. A year ago, Prime Minister Medvedev started a campaign against corruption he called "Forward Russia," but he has admitted the program has achieved nothing. Under communism, breaking the rules to get by was known as living on the left (zhit na levoi). Now, it's called national policy. It's a difficult thing for a huge commodity exporter, a nuclear power and a nation trying to get into the World Trade Organization.

© Copyright 2010 by The Kensington Review, Jeff Myhre, PhD, Editor. No part of this publication may be reproduced without written consent. Produced using Ubuntu Linux.

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