We Now Have Twenty Years of Insight into Public Corruption Worldwide

U.S. dollars inside of partially opened briefcase

Transparency International released its annual Corruption Perceptions Index for 2014 today. For 20 years, it has solicited expert opinions to rank public sector corruption among the world’s nations. Started in 1995 with survey replies from international businessmen and financial journalists on their perceptions of corruption in 41 countries, there are now 175 countries ranked on the annual list.

The data for 2014 is not encouraging. More than two-thirds of the 175 countries and territories fell closer to “highly corrupt” (1 on a scale of 1 to 100) than they did “very clean”. No country received a perfect score of 100, which would indicate that the survey respondents believe bribery of public officials does not take place there.

In its statement released in conjunction with the scores, Transparency called for the G20 to take a leadership role to end money laundering and company facilitated corruption. Jose Ugaz, Chair of Transparency International, recommended that countries at the bottom adopt radical anti-corruption measures and countries at the top ensure they don’t export corrupt practices to other countries.

More than 25 years ago, the United States made a strong statement that corruption by American citizens and business operating abroad would not be tolerated when it passed the Foreign Corrupt Practices Act. Despite the strong position staked out by the U.S. Government condemning bribery, it appears corruption continues to be a worldwide problem.

Taking a look at the data from 1995 to 2014, there is some reason to be encouraged however. I pulled out the scores for five developing nations (China, Brazil, India, Mexico and Indonesia) which initially scored in the bottom half of the 1995 perceptions index. The average increase over the past 20 years in these five developing nations was 11.68 points.

The perception of each of the five countries has improved over the past 20 years. Four out of the five have improved by more than 10 points on a 1 to 100 scale (the totals were converted from an initial scale of 1 to 10). Only Mexico made a modest gain of 3.2 points (up just 2 points from its 1996 score). Indonesia, which scored below 20 points in both 1995 and 2000, finished 2014 with a substantially improved score of 34 out of 100.

The gains in these developing nations haven’t been matched by the countries I examined in the first world. Pulling out the scores for the United States, Canada, United Kingdom, Germany and Japan, they have, on average, decreased 2.58 points over the same period. Four out of the five fell on the index, with only Japan managing an increase of 8.8 points over its 1995 score.

The data for the United States is of particular interest given the FCPA. The US currently ranks 17th out of the 175 nations in the poll. After initially scoring between 76 to 78 in 1995, 1996 and 1997, it has been between 71 and 73 for seven of the past nine years.

I attempted to look at the data from 2010 to 2014 to see if there were any trends that would loosely correlate to the Dodd-Frank Act and SEC whistleblower program, but it is probably too early to draw any conclusions there.  Perhaps in another twenty years.

As part of our own effort to assist individuals in the fight against corruption,a FCPA whistleblower attorney at our law firm will provide a free, confidential consultation to individuals with evidence of bribery of foreign officials by a corporation.