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East: Transparency International Issues Corruption Index

Transparency International released its Corruption Perception Index for 2002 today. The survey, which includes 102 states, measures how people living and doing business in various countries assess corruption in the public sector. The index is billed as a "poll of polls," drawing on 15 surveys from nine independent institutions. RFE/RL spoke to Transparency International's executive director for Central and Eastern Europe about the findings.

Prague, 28 August 2002 (RFE/RL) -- For most of the world's inhabitants, corruption continues to be a daily reality, unless you live in a handful of the planet's most prosperous countries. Even rich states, however, as recent financial scandals in the United States have shown, cannot claim to be untouched by fraud, graft, bribes, or outright theft.

Each year, Berlin-based Transparency International, a global nongovernmental organization dedicated to fighting corruption, publishes its Corruption Perception Index, which measures the perception of the public sector by people living and working in a particular country.

Seventy percent of the countries surveyed this year received scores of less than 5.0 out of a corruption-free 10. Russia, Uzbekistan, Georgia, Ukraine, Kazakhstan, Moldova, and Azerbaijan all received less than 3 out of 10.

At the other end of the scale, Finland received a near-perfect 10, making it the world's least corrupt country, according to the study. It was followed by Denmark and New Zealand. The United States ranks 16th, while Bangladesh and Nigeria come in at the bottom of the charts.

Miklos Marschall is Transparency International's executive director for Central and Eastern Europe. He shared some additional details in an interview with RFE/RL. "Georgia, Ukraine, [and] Kazakhstan are extremely corrupt, according to our index. The worst country, unfortunately, is Azerbaijan. That takes the position of 95 out of [102] countries and its score was 2.0 -- no improvement. Unfortunately, Moldova has deteriorated. The situation has deteriorated, according to our index. Last year, Moldova scored 3.1; this year it scored 2.1," Marschall said.

Because of the methodology Transparency International uses -- a country can only be included on the list if its corruption levels have been assessed by at least three independent institutes in comparable ways -- some states were not included in the survey, among them Armenia.

The organization noted some positive trends in Russia, helping to move its score from a dismal 2.3 to a slightly better 2.7. Bulgaria also moved up from a score of 3.3 in 1999 to 4.0 for 2002.

Further east, Marschall confirmed that Central Asia remains mired in extreme levels of corruption. He made a direct link between the lack of democracy in the region and graft. "It is true that Central Asia is still one of the most corrupt regions of the world, and that is because you have an elite [who are seeking a steady source of bribes] -- many of them former Communists coming from the former Communist elite -- who are very much against any reasonable reforms. And they score, in every other survey, very badly, as well. So if you look at democracy, if you look at the openness of society, if you look at privatization, at all levels, they score rather poorly," Marschall said.

Transparency International's survey concentrates on public-sector corruption, and its results are principally based on replies given by businesspeople, both foreign and local, on the degree to which they have to bribe government officials in order to be allowed to conduct business. "Participants in those surveys are mainly businesspeople, and just to let you know what kind of surveys we are using, we are using the surveys of the Global Competitiveness Report, done by the World Economic Forum every year. Then we use the surveys of the World Bank: the World Business and Environment Survey. We use the Economist Intelligence Unit's annual survey. This year, we used an expert panel from Columbia University. We used Freedom House's Nations in Transition Report. So altogether, this year we have used 15 independent and comparative surveys," Marschall said.

Marschall noted a direct correlation between businesses having to bribe state officials and the degree of democracy and openness in an economy. When the levers of a country's economy are mainly controlled by state-appointed bureaucrats who do not owe their allegiance to an electorate, the possibility for corruption is usually great. "Corruption is very much dependent on the overall economic and social situation of the country. It has been true for many years that there has been a very obvious correlation between democracy and corruption. So the more democracy you have, the less corruption you have. In a narrower economic sense, it is also true that the bigger the privatized share of the economy is, the less corruption you have. That is definitely true for the transition economies, for instance," Marschall said.

Because Transparency International's survey mostly focused on the public sector, the recent corporate scandals that have shaken the United States did not have a big effect on the study's results. But Marschall said the phenomenon of corporate fraud is one that affects many countries and should be taken into account in the future. "Our index reflects changes and trends. And one of the trends is that more and more corruption can be identified in private business. I am thinking of these very current corporate scandals and also in the political sphere. I think these are two new emerging phenomena which we will have to deal with in the future. So we will have to revisit our approach of focusing mainly on corruption in the public sector. We will have to deal more with corruption in the private sector and with political corruption, which is also a rising phenomenon in transition economies," Marschall said.

Transparency International criticizes some of the world's leading industrial powers for helping to foster a climate of corruption in many developing and transition economies. Often, Western corporations do not shy away from bribing officials in foreign countries to win lucrative contracts. "Germany, the U.S., Italy -- corporations from those countries are pretty corrupt [in this respect]. The least corrupt exporting countries are the 'usual suspects,' the Scandinavian exporting countries," Marschall said.

One bright spot in Transparency International's survey is Slovenia. The most corrupt-free of the former communist states of Eastern Europe ranks 27th, ahead of European Union and NATO members Italy, in 31st place, and Greece, in 44th place.

For comparison's sake, Hungary ranks 33rd; Poland 45th; Croatia 51st; and the Czech Republic, Latvia, and Slovakia all rank in 52nd place.

(The full report can be found on the Internet at