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The Michelin Guide to Corruption

Paul Mitchell's picture

The recent release of Transparency International’s Corruption Perception Index (CPI)  used to be as eagerly awaited by political leaders as chefs wait for the Michelin Guide’s ratings. Leaders of countries that move up the list or have improved their ratings were quick to announce the findings, taking all the credit for improvements.  Leaders of countries whose ratings have fallen in the index did not seem as motivated to go public accepting responsibility or promising to improve.
 

The majority of the 180 countries included in the 2009 index score below five on a scale from 0 to 10. No country scored 0, perhaps signaling optimism even in the worst circumstances. Given the lack of progress among the most corrupt countries is anyone trying new ways to reduce corruption?

 

Bribery, cartels and other corrupt practices undermine competition and create a massive drain on scarce resources for development especially in the poorest countries. The World Bank’s 2008 Global Poll,  which interviewed opinion leaders in 48 countries for their perceptions on development issues, found that between 67 and 89 percent of people in the six Regions where the Bank works, believed corruption had a serious impact on economic growth and poverty. Deepa Narayan’sVoices of the Poor”  which interviewed 60,000 poor people almost a decade ago, found that daily corruption was the main impediment to their development. A study today would likely find little change.
 

So called “fragile states,” countries mired in conflict or suffering the legacy of previous conflicts, linger at the bottom of the index. The five most corrupt countries, in order, are Somalia, Afghanistan, Myanmar, Sudan and Iraq. It is no coincidence that countries perceived as the most corrupt are frequently those that are plagued by long-standing conflicts, poor political leadership, and poorly functioning or non-existent governance structures.
 

Transparency International (TI) believes that countries at the bottom of the index should not be shut out from development efforts. Instead TI calls for strengthening institutions for low CPI countries. However, many of the countries that rank low in the recent report have languished at the bottom for years and two—Afghanistan and Iraq—have  received hundreds of billions of dollars of donor aid or private sector investment and yet high levels of corruption persist.
 

Industrialized or donor countries are not exempt from the stain of corruption. Bribery and facilitating corruption often involve businesses based in industrialized countries. In fact, several members of the G8 and EU, rank below the 2009 CPI median rating of 5, meaning they are perceived as very corrupt. Investors and donors should be equally vigilant of their operations and as accountable for their own actions as they are in demanding transparency and accountability from developing countries.  Donor countries with low CPI rankings lack the moral authority – and perhaps even the mechanisms - to offer advice or recommendations to developing countries about reducing corruption, although that does not stop them from trying!
 

The annual output of studies, policy papers, speeches and conferences devoted to reducing corruption and building good governance run into the hundreds. Similarly there are constant efforts towards institutional reforms to improve governance, or reduce the environment for corruption. In many poor countries the judiciary, police, and financial management institutions are weak, yet the development community continues to funnel support into reforming these institutions and then depends on them for enforcement and accountability in the public sector.
 

Maybe we need to change our perspective and tactics on how to help countries improve their CPI ranking.
 

For example, in pursuit of higher Michelin ratings, chefs must examine not only each minute component of their business, but also how all these aspects complement and reinforce each other to maximize the restaurant experience. This requires more than merely shuffling the boxes of décor, menu and business model. Similarly improving corruption ratings requires more than putting more money into the same methods that have been used in the past.
 

A complementary approach to reducing corruption adopts the users of public services as a starting point. This approach engages citizens at the bottom of the public service delivery chain by providing them with easy access to information on the performance of public programs intended for their benefit. This empowers citizens to demand standards of service, monitor service delivery, and challenge abuses by officials they interact with in their daily lives. Improving communication and public access to information is a crucial part in this bottom-up strategy. Typical reforms aim to increase service providers’ accountability to policymakers, not service users. In the Michelin analogy that would be like the chef and the waiters being accountable to the business model – rather than the diners.
 

“Increasing transparency and access to information in all parts of the public sector also help reduce state capture by supplying information that the media, civil society and the broader political processes can use to demand accountability and uncorrupt behavior from political leaders. Support for these measures has been the most important way to date that the Bank has advanced the anti-corruption effort," according to a study published by the World Bank Independent Evaluation Group (IEG) that reviewed the Bank portfolio on public sector reform.  
 

Despite recognized development results, this approach remains outside the mainstream of funding anti-corruption work.
 

The 2008 World Bank Global Poll examined the views of opinion leaders in developing countries on how to deal with corruption.  Asked what the World Bank should do in cases of high levels of government corruption, 32 percent said the Bank should not provide funds to the country until the government took serious action to fight corruption; 34 percent said the Bank should provide funds to NGOs or local governments and not the central government. Only a scant 8 percent of respondents were in favor of continued funding regardless of corruption in the country.
 

Maybe it is time to listen to clients, including the service users, and experiment with some of the radical interventions they suggest. Introducing some new elements to the standard formula for reducing corruption by improving the communication environment and working from the bottom up appear to be logical steps. This might help might countries improve their corruption scores in the next Corruption Perceptions Index.
 

Note: The TI CPI was published last week, as were the Michelin Guides for New York, Tokyo, and San Francisco.
 

Photo Credit: Flickr user mirando

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