Wednesday, October 12, 2011

Corruption in Latin America

My blogpost about Brazil and its struggle to combat corruption, made me curious about corruption-levels in other Latin American countries. I was interested in historical data to evaluate each country. I wanted to know in which countries corruption is increasing or decreasing and in which countries corruption-levels remain more or less stable.


LatAm Corruption Charts

Transparency International publishes each year its well known Corruption Perceptions Index about corruption in the public sector and wherein 178 countries are ranked and indexed. TI's CPI is an aggregate indicator that ranks countries in terms of the degree to which corruption is "perceived" to exist among public officials and politicians. It is a composite index drawing on corruption-related data by a variety of independent and reputable institutions. While the source of the data is based on perceptions, each score that is calculated is also accompanied with a "confidence interval". The confidence intervals reflect the precision of the CPI scores. They indicate the range within which the most accurate value of the CPI score is most likely to fall. The wider a confidence interval is, the less precise the score. So, these CPI scores are basically rough indicators.
CPI-indexes are published by TI since 1995. The early indexes had only data and scores of 41 countries and also had wider confidence intervals than the later indexes. Omissions of scores in later years did occasionally occur for countries that had scores in earlier years. Historical data is not available per country at TI. You have to collect the specific data from each annually published CPI. Wikipedia shows historical data from 2002 on. I did collect historical data from 1995 on. I made three charts: countries that are successful in combating since 5 or 10 years and showing an uptrend; countries that are showing a downtrend and flat-liners.

Chart of Latin American countries over the years 1995-2012
that have a more or less constant corruption-level
(Click to Enlarge)

Chart of Latin American countries over the years 1995-2012
that are getting less corrupt
(Click to Enlarge)
Chart of Latin American countries over the years 1995-2012
that are getting more corrupt
(Click to Enlarge)

The Origin of Corruption

Corruption is an intriguing phenomena. If you grew up in a country where corruption hardly exists, it's very difficult to understand where it comes from when you're confronted with it abroad. On the other hand when you grew up in a corrupt country, you can't imagine what life is without corruption and you will probably be corrupt yourself without realizing it because corruption is all around you...Until you experience a country where corruption is practically absent and you see how much prosperity elimination of corruption can bring a society. Then you start to ask yourself how corruption can arise in a country; why it's growing fast when it's not combated adequately; if it can be combatted successfully at all; how many years it takes to combat corruption successfully...and so on.

There is much more to tell about corruption than I can possibly write in a thousand blogposts here. I will try to arouse your interest on this subject here by giving a few answers. I'm no expert but I've studied some books on corruption and have read quite a few reports. I found out it's hard to find a study that describes the main cause of corruption. You can find many theories and explanations for particular forms of corruption in many countries. For instance some causes mentioned in the Treisman study:
  • Countries with Protestant traditions and those with more developed economies have higher quality governments.
  • Countries with a history of British rule are robustly rated ‘less corrupt’.
  • Federal states are more ‘corrupt’ than unitary ones, presumably because the competition between autonomous levels of government to extract bribes leads to ‘overgrazing of the commons’
  • A long period of exposure to democracy is significant for low levels of corruption
  • Openness to trade may reduce corruption levels
A theory that describes the overall main cause seems not to exist. Therefore I will try to describe my own unproven theory here:

I think corruption is the default for every society/state. Corruption will arise - in time - unless economic development, civilization and solidarity get a chance to develop and these developments result in strong institutions, laws, law-enforcement and judiciary, which could take several hundreds of years to establish. Wars, disasters or economic downfall could destroy rapidly what was created in hundreds of years. However sometimes occupation for a longer time by a foreign country with strong institutions, may speed up the corruption elimination process. If economic downfall persists and at least one generation of people grows up in poverty, corruption will start to develop in all its known forms. For the new generation that has been grown up in poverty, corruption has become a way of life and a way to survive. Those who escaped poverty might develop an excessive greed. If excessive greed gets cultivated by a society's culture, you need strong anti-corruption programs to keep corruption levels down.  After two or more generations of people that have lived with strong survival instincts and/or excessive greed, corruption has become part of the culture.

In the core, corruption is a survival mechanism of the poor individual and if a considerable percentage of a society is acting in a corrupting way, you will end up wit a corrupt society as a whole. People living in extreme poverty have learned to only trust their family and very close friends. They will steal from and disadvantage strangers if they can, just to survive. Their horizon is often no further than the next day, therefore they are careless of any consequences.

All European countries that have a high score on TI's Corruption Perceptions Index (countries that have low corruption-levels), were very corrupt in the middle ages. Europe was ruled by landlords and feudalism. It took hundreds of years to eliminate corruption and extortion. But even in countries with very low levels of corruption and high levels of good governance, corruption is always lurking.

High poverty usually means high corruption and this is what is seen all the time in most countries. While poverty triggers corruption because of survival mechanisms of the population, there is also a reverse indirect relationship: corruption creates more poverty. Corruption has direct consequences on economic and governance factors, intermediaries that in turn produce more poverty.
Control of Corruption

 Latin America has only freed itself from (neo-)colonialism a short time ago and is still suffering from US-interventions today. Never the less we see that corruption levels of quite some countries are decreasing or stable at a high level. Take a look at the success stories of Chile or Uruguay. A good thing! On the other hand there are some disappointing stories as well like Venezuela and Peru. Some Latin American leaders don't seem to realize that a long-term strong anti-corruption policy will benefit the country very much, because it will attract more foreign investment, stimulate domestic business, create more jobs and so on.

More to read:

1 comment:

  1. Transparency International published its latest 2012 corruption index. I updated the charts in this blogpost. It looks like that most flat-liners found there way up again.