Is the United States Getting More Corrupt? The Most (And Least) Corrupt Nations In The World

People think that the United States is more  corrupt this year than last year, according to Transparency International’s widely followed Corruption Perceptions Index.

To be precise, the U.S. scored a 7.1 on the 10 point scale, down from 7.5 a year ago.  It fell from 19th to 21st place. As Reuters notes, Uncle Sam’s score was a record low and marked the first time in the 15-year history of the Index America did not finish in the top 20.  But even more depressing was the list of the other decliners which includes Czech Republic, Greece, Hungary, Italy, Madagascar and Niger.  The well-regarded non-profit theorizes that, “notable among decliners over the past year are some of the countries most affected by a financial crisis precipitated by transparency and integrity deficits.”

There are media reports abound with stories of money being wasted on TARP and the economic stimulus.  Pundits fretted that as much as $50 billion in government stimulus money would be siphoned off due to fraud.  Expect the Republicans to make ferreting out misspent funds a priority if, as expected, they take over one or both houses of Congress.

Before Americans digest the ramifications of the Transparency International numbers, they should consider what life is like in countries whose ratings also slipped.

In May, a new center-right government was elected in the Czech Republic on a promise to crack down on corruption which has stalled, according to an August 12 Wall Street Journal story. The English language Prague Daily Monitor reported earlier this month that the The Czech Government National Economic Council proposed 15 measures to fight corruption.

Greece, which needed a bailout from the IMF to avoid default, is being forced to confront corruption at all levels for years.  Prime Minister George A. Papandreou told the Brookings Institution earlier this year that he understood why many people were skeptical of his government’s promise to crack down on corruption.   That’s an understatement. Brookings estimates that corruption deprives Greece of at least 8% of its Gross Domestic Product annually.

Italian Prime Minister Silvio Berlusconi and his son are under investigation for tax fraud.   Bloomberg News is reporting that an Italian Senate committee this week is voting on a bill that would protect the country’s two highest institutional offices from prosecution by changing the constitution.

Hungary was warned last year by nine embassies in Budapest that instances of “non-transparent” behavior would discourage foreign investment.
One third of top Hungarian managers admitted in a survey that they regularly bribe politicians.

Corruption in Madagascar is a problem that the government “appears to be taking seriously”  because it’s perceived as being widespread, according to the Heritage Foundation. The breadth of the problem is breathtaking.  “As in many other countries, corruption is a daily part of life in Madagascar,” the U.S. Agency for International Development (AID) says. ” It is standard practice to pay bribes for the transportation of goods, a new permit, traffic violations, and even a high school diploma.”

Niger also has had endemic corruption for years.  Fighting corruption is a priority for the military government which the Voice of America says formed a 40-member commission of soldiers, tax experts and accountants to recover funds that might have been stolen during ousted President Mamadou Tandja rule, which ended earlier this year after a coup.

The entire list shows that poverty and government stability play a significant part in the ratings.

The agency says the basis of the report is its 2010 Corruption Perceptions Index (CPI), a measure of domestic, public sector corruption. The 2010 CPI shows that nearly three quarters of the 178 countries in the index score below five, on a scale from 0 (perceived to be highly corrupt) to 10 (perceived to have low levels of corruption), indicating a serious corruption problem. The CPI is a composite index, drawing on 13 different expert and business surveys which include the African Development Bank, Global Insight, IMD, and the Bertelsmann Transformation Index. The US ranks No. 22 (Score 7.1) on the list between Belgium and Uruguay. Source surveys for the 2010 CPI were conducted between January 2009 and September 2010.

Among the most corrupt nations, not surprisingly, are countries which are extremely poor, or have been up until recently, and are ruled by dictators or have unstable governments. Some of these nations have recently been exported for their oil or metal commodities deposits and there is no government rule of law in place to control the influx of new-found wealth that has caused sharp GDP growth. Every nation on the most corrupt portion of the list has been cited for human rights abuses. Among the least corrupt nations are some of the world’s oldest, many of which are located in Northern Europe. Those countries have had established democracies or monarchies which transformed into democracies.

The Most Corrupt:

1. Somalia. (Score: 1.1) According to the CIA and the recently re-established Central Bank of Somalia – despite experiencing civil unrest, Somalia has also maintained a healthy informal economy, based mainly on livestock, remittance/money transfer companies, and telecommunications.

2. Myanmar. Score (1.4) The official name of the country used by the government is the Republic of the Union of Myanmar, which was established as part of the 2008 Constitution and formally adopted in 2010. Prior to this, the country had been known formally as the Union of Myanmar since 1989

3. Afghanistan. (Score: 1.4)   Since the late 1970s Afghanistan has experienced a continuous state of civil war punctuated by foreign occupations in the forms of the 1979 Soviet invasion and the October 2001 US-led invasion that overthrew the Taliban government.

4. Iraq. (Score: 1.5)  The current government of Iraq is less than a decade old, as it its constitution. The survival of the government is still dependent on the US occupying force.

5. Uzbekistan. (Score: 1.6) The nation is considered a presidential republic, but the limiting of individual rights is significant. Uzbekistan is often criticized for its human rights policies.

6. Turkmenistan.(Score: 1.6) The country was ruled by President for Life Saparmurat Niyazov, who died in 2006. The country has a new government which is still considered repressive, and is operated under a de facto single party system.

7. Sudan. (Score: 1.6) One of the world’s poorest nations, Sudan has been ruled by dictators off and on for decades. One of the nation’s recent presidents was charged with war crimes by The International criminal court.

8. Chad (Score: 1.7) Chad’s major export is oil and there is a widely held belief that kickbacks are a regular part of the industry. The country is ruled by the Patriotic Salvation Movement and there has been at least one coup attempt recently.

9. Burundi (Score 1.8) The country has the lowest GDP per capita of any nation in the world, according to the CIA Factbook. The nation has been torn by decades of tribal warfare. Burundi’s most significant exports are agricultural products and metals.

10. Republic of Equatorial Guinea (Score: 1.9) Crude oil is the nation’s largest export. The nation is regularly criticized for its human right policies. The government has been unstable and the current president came to power after a coup.

The Least Corrupt:

1. Denmark (Score: 9.3) Denmark has a high level of income equality because it is essentially a socialist state. Various surveys have ranked it as the happiest place in the world and the best place to do business.

2. New Zealand (Score 9.3) The nation is a long-time democracy which shares political roots with the UK, the US, and Australia. GDP per capita is among the highest in the world. Education ratings are high.

3. Singapore (Score 9.3) The population of Singapore has a high mix of foreigners. GDP per capita is extremely benign. The government has strong laws against corruption and a legal code which is among the strictest among developed nations.

4. Finland (Score: 9.2) One of several Scandinavian nations high on the list. It is, as is true of its neighbors, largely a welfare state with a high quality of life and political stability.

5. Sweden (Score 9.2) The nation has been politically stable since the mid-17th century. The country has a highly skilled labor base with significant technology training. Sweden also has large lumber and ore exports.

6. Canada (Score: 9.1). Another parliamentary democracy with an advanced legal system, a strong multi-faceted economy, well-trained, and a highly educated work force.

7. The Netherlands. (Score 8.9) One of the oldest parliamentary democracies in the world, the nation is home to the World Court, and several other global legal authorities.

8. Australia (Score: 8.7) This former penal colony is now one of the major democracies of the world and the closest ally of both the US and other Western nations in the Pacific. The population is well-educated and the country’s freedom of speech is among the broadest in the world.

9. Switzerland (Score: 8.7) Known for its neutrality and private banking system, the nation’s population is homogenous and well-educated. The Swiss reputation may have been damaged, however, by scandals regarding foreigners parking money in its banks.

10. Norway (Score 8.6). The fourth Scandivinian nation on the list, another country which has been ruled by the Anglo-Saxon law code which goes back over 1,000 years.

Story by Jon Berr. Statistical work by Douglas A. McIntyre