Today is international anti-corruption day

By resolution 58/4 of 31 October 2003, the UN General Assembly adopted the United Nations Convention against Corruption (UNCAC) and urged all States and competent regional economic integration organizations to sign and ratify the Convention as soon as possible in order to ensure its rapid entry into force. The Convention was open for signature from 9 to 11 December 2003 in Merida, Mexico and thereafter at the United Nations Headquarters in New York until 9 December 2005. Guyana acceded to the Convention in April 2008

International Anti-Corruption Day

In order to raise awareness of corruption and the role of the Convention in combating and preventing it, the General Assembly decided that 9 December should be designated International Anti-Corruption Day. The Fifth Session of the Conference of State Parties to the Convention, held in Panama during the period 25-29 November 2013, emphasized the importance of this day. Accordingly, it launched the new campaign for 2013 under the theme “Zero Corruption – 100% Development”. The focus is on how corruption: (a) hinders efforts to achieve the internationally agreed upon Millennium Development Goals (MDGs); (b) undermines democracy and the rule of law; (c) distorts markets; (d) erodes the quality of life; and (e) allows organized crime and other threats to human security to flourish.

The 2013 Corruption Perceptions Index

Accountability WatchLast Tuesday, Transparency International released the results of the 2013 Corruption Perceptions Index (CPI). The CPI is based on experts’ opinions of public sector corruption. It scores and ranks countries based on how corrupt a country’s public sector is perceived to be. It is a composite index, a combination of surveys and assessments of corruption, collected by a variety of reputable institutions, such as the African Development Bank, the World Economic Forum, the World Bank, and the Economist Intelligence Unit. In total, 13 such institutions were involved in the surveys and assessments worldwide.

Corruption generally comprises illegal activities, which are deliberately hidden and only come to light through scandals, investigations or prosecutions. There is no meaningful way to assess absolute levels of corruption on the basis of hard empirical data. Possible attempts to do so, such as by comparing bribes reported, the number of prosecutions brought, or studying court cases directly linked to corruption, cannot be taken as definitive indicators of corruption levels. Instead, they show how effective prosecutors, the courts, or the media are in investigating and exposing corruption. Capturing perceptions of corruption of those in a position to offer assessments of public sector corruption is the most reliable method of comparing relative corruption levels across countries. The CPI is the most widely used indicator of corruption worldwide that guides investors, lending institutions and other interested parties in their dealings with individual countries.

Most of the countries surveyed consider the CPI as an authoritative pronouncement of what is perhaps the best substitute measure of actual levels of corruption in their countries. They share a deep concern for transparency, good governance and greater accountability; they accept the index in good faith; and they strive to bring about improvements in their rankings and scores in the next round. The first step, however, is the recognition of the existence of corruption and the extent to which it is perceived to have existed. Broad progress in this area will remain elusive if countries that do not score well continue to be in a state of denial and as a result fail to take appropriate measures to bring about improvements.

Methodology used in the compilation of the CPI

The CPI aggregates data from a number of different sources that provide perceptions of business people and country experts of the level of corruption in the public sector. Each data source must: (a) quantify perceptions of corruption in the public sector; (b) be based on a reliable and valid methodology which scores and ranks multiple countries on the same scale; (c) be performed by a credible institution and expected to be repeated regularly; and (d) allow for sufficient variation of scores to distinguish between countries.

The scale of 0-100 is used where a 0 equals the highest level of perceived corruption and 100 equals the lowest level of perceived corruption. This is done by

subtracting the mean of the data set and dividing by the standard deviation and results in z-scores which are then adjusted to have a mean of approximately 45 and a standard deviation of approximately 20 so that the data set fits the CPI’s 0-100 scale. The mean and standard deviation are taken from the 2012 scores, so that the rescaled scores can be compared over time against the baseline year.

For a country to be included in the CPI, a minimum of three sources must assess that country. The CPI score is then calculated as the average of all standardised scores available for that country. Scores are rounded to whole numbers. The CPI is accompanied by a standard error and confidence interval associated with the score, which capture the variation in scores of the data sources available for that country/territory.

The following sets out the methodology used by the four institutions in arriving at Guyana’s ranking and score on the 2013 CPI:

International Country Risk Guide: ICRG produces political, economic, and financial risk ratings for countries/territories important to international business. ICRG staff collect political information and convert it to risk points on the basis of a consistent pattern of evaluation. The most common form of corruption met directly by businesses is financial corruption in the form of demands for special payments and bribes connected with import and export licences, exchange controls, tax assessments, police protection, or loans. The assessment is most concerned with actual or potential corruption in the form of excessive patronage, nepotism, job reservations, exchange of favours, secret party funding, and suspiciously close ties between politics and business.

Global Insight Country Risk Ratings: GICRR provides a six-factor analysis of the risk environment in 204 countries/territories – political, economic, legal, tax operational and security. The corruption risk score used in the CPI is drawn largely from the evaluation of operational risk. The assessments are made by over 100 in-house country specialists, who also draw on the expert opinions of in-country freelancers, clients and other contacts. The ratings reflect expert perceptions of the comparative level of the problem in each country. They also assess the broad range of corruption, from petty bribe-paying to higher-level political corruption and the scores assigned to each country are based on a qualitative assessment of corruption in each country/territory.

Experts are asked to assess: (a) corruption, particularly as it affects operational activities for businesses, with analytical emphasis on the economic and political drivers of the problem; and (b) from a business perspective, whether corruption is a particular concern in relation to obtaining business permits and favourable policy and planning decisions.

World Bank Country Policy and Institutional Assessment: The CPI assessment rates all IDA-eligible countries against a set of 16 criteria grouped in four clusters: (a) economic management; (b) structural policies; (c) policies for social inclusion and equity; and (d) public sector management and institutions. The criteria are focused on balancing the capture of those factors critical to fostering growth and poverty reduction against avoiding undue burden on the assessment process. The Bank has prepared guidance to help staff assess country performance, by providing a definition of each criterion and a detailed description of each rating level. Bank staff assess the countries’ actual performance on each of the criteria, and assign a rating. The ratings reflect a variety of indicators, observations, and judgments based on country knowledge, originating with the Bank or elsewhere, and on relevant publicly available indicators.

Experts are asked to assess transparency, accountability and corruption in the public sector. This criterion assesses the extent to which the executive can be held accountable for its use of funds and the results of its actions by the electorate and by the legislature and judiciary, and the extent to which public employees within the executive are required to account for the use of resources, administrative decisions, and results obtained. Both levels of accountability are enhanced by transparency in decision making, public audit institutions, access to relevant and timely information, and public and media scrutiny. Each of the following three dimensions is rated separately: (a) accountability of the executive to oversight institutions and of public employees for their performance; (b) access of civil society to information on public affairs; and (c) state capture by narrow vested interests

The World Economic Forum: WEF is committed to improving the state of the world by engaging business, political, academic and other leaders of society to shape global, regional and industry agendas. The Executive Opinion Survey (EOS) is the Forum’s annual survey of business executives and has evolved over time to capture new data points essential to the Global Competitiveness Index (GCI) and other Forum indices. The Forum’s Global Competitiveness and Benchmarking Network works closely with a network of over 160 Partner Institutes that administer the survey in their respective countries/territories. They are selected because of their capacity to reach out to leading business executives as well as their understanding of the national business environment and their commitment to the Forum’s research on competitiveness. The Partner Institutes are, for the most part, well-respected economics departments of national universities, independent research institutes or business organisations.

Survey respondents were asked: (a) how common is it for firms to make undocumented extra payments or bribes connected with the following: imports and exports; public utilities; annual tax payments; awarding of public contracts and licensing; and obtaining favourable judicial decisions?” and (b) how common is diversion of public funds to companies, individuals or groups due to corruption?

– To be continued –