What Are the Costs of Corruption?
There are many economic and social costs associated with corruption, not to mention links to criminal operations and violence. On the financial front, the World Bank has attempted to attach a monetary figure to the extent of bribery (which does not include the embezzlement of public funds or the theft of public assets). Based on worldwide economic data compiled in 2001-2002, the World Bank estimated that the amount of money paid in bribes globally was some $1 trillion.3
want to see their business continue. A booming cocaine trade is also breeding corruption in West Africa, particularly in places like Guinea-Bissau which, notes the UN, “is saddled with high-level corruption and a near-total absence of the rule of law, allowing cocaine gangs to operate with impunity.”5 In other words, criminals involved in drug trafficking are bribing public authorities so that they can operate without interference.
Finally, corruption has links to conflict. Although corruption is not likely to be the only factor responsible for the destabilization of a country, it can have a major impact on undermining the government—and public confidence in governing institutions—which, in turn, can become a driver of conflict. The links between corruption, governance, and conflict are complex and interrelated, and they are a reality in many countries. For example, in the Caucasus, corruption and conflict are intertwined in the states and breakaway regions. Corrupt rulers, powerful and contending clans, and networks of elites who have a shared stake in corruption in states such as Georgia, Armenia, and Azerbaijan have used “state power to intrude into the economy with impunity” and created “violence and protection” markets.6 As a result, governing institutions are weak and there is a pervasive insecurity. While nationalism and ethnic loyalties have also played a part in conflicts in the Caucasus, links to corruption are intertwined with these and have contributed to the region’s instability. Charges of widespread corruption were at the heart of the public demonstrations that led to the overthrow of Kyrgyzstan’s President Kurmanbek Bakiyev in March 2010.
Where Is Corruption Most Prevalent?
Corruption is very widespread and, because of its diverse forms, it is extremely difficult, if not impossible, to measure. Nathanial Heller, Managing Director at Global Integrity, compares measuring corruption to “trying to measure a black hole. You can’t measure it because you can’t see it,” he adds.7 Global Integrity, therefore, does not measure corruption, but rather assesses its opposite. That is, it examines the anti-corruption and good governance institutions, mechanisms, and practices that are in place. On this basis, the countries it identified in 2008 as not having these elements and, thus, being at “serious risk for high-level corruption” included Angola, Belarus, Cambodia, China, Georgia, Iraq, Montenegro, Morocco, Nicaragua, Serbia, Somalia, the West Bank, and Yemen.8
And, there are other corruption indices that are commonly referenced and provide a global picture. Since 1995, Transparency International has published an annual Corruption Perceptions Index (CPI) that ranks the countries of the world according to “the degree to which corruption is perceived to exist among public officials and politicians.” It measures how corruption affects people where they live, such as how much they might have paid in bribes over a given period, for example. The latest CPI in 2009 draws on 13 different polls and surveys from 10 independent institutions. Countries with the lowest scores—or the perceived highest levels of corruption—included Somalia, Afghanistan, Myanmar, Sudan, Iraq, Chad, Uzbekistan, Turkmenistan, Iran, and Haiti.9
Transparency International notes that “Fragile, unstable states that are scarred by war and ongoing conflict linger at the bottom of the index…. demonstrate[ing] that countries which are perceived to have the highest levels of public-sector corruption are also those plagued by long-standing conflicts, which have torn apart their governance infrastructure.” Indeed, some of the top states on the list of the Fund for Peace’s Failed State’s Index10 are the same as those on the CPI, such as Somalia, Sudan, Chad, Iraq, Afghanistan, Myanmar, and Haiti. Among others, these states show sharp economic declines, little government legitimacy, a deterioration of public services, and arbitrary applications of the rule of law.
In many of these cases, systemic corruption exists—that is where corruption has become a key part of the economic, social, or political order and where the major institutions of government are captured by corrupt individuals or groups. It’s interesting to ponder whether corruption like this exists because the state has failed, or whether corruption among elites has led to state failure. Whichever is the case, the link between corruption and failed states is a strong one.