Most Countries Making Little Progress on Anti-Corruption Efforts, Transparency Group Reports

Trade Update • JANUARY 31, 2021

Last week, Transparency International released its annual Corruption Perceptions Index for 2021, showing that many countries around the world have stalled in their efforts to improve their image regarding the level of public sector corruption within their borders.

Transparency International’s CPI ranks 180 countries on a scale from 100 (“very clean”) to 0 (“highly corrupt”) based on the situation between May 2020 and May 2021. By this measure, Denmark, New Zealand, Finland, Singapore, and Sweden are perceived as being the least corrupt nations in the world — a huge difference from those viewed as the most corrupt, such as Syria, Somalia, and South Sudan, which scored 13 and 11 out of 100 respectively in 2021.

The global average remains unchanged for the tenth year in a row, at just 43 out of a possible 100 points. “Despite multiple commitments, 131 countries have made no significant progress against corruption in the last decade,” the Berlin-based advocacy group said.

Two-thirds of countries score below 50, indicating that they have serious corruption problems, while 27 countries are at their lowest score ever.

The findings of the Berlin-based anti-corruption advocacy group come in the midst of a recent push by the Biden administration to “establish the fight against corruption as a core U.S. national security interest.”

Scoring the U.S. and Canada

With a score of 67 out of 100, the United States ranks 27 on the list — behind Hong Kong, Uruguay, and the United Arab Emirates.

Although the country’s score remained unchanged in 2021—after dropping from 76 in the year prior to the Trump administration—for the first time in a decade, the U.S. has also lost its position among the top 25 best-performing countries on the CPI.

Canada’s score dropped in 2021 to its lowest ever—74 out of 100—an eight-point slide from five years ago. Even so, the country still ranked 13th, along with Austria, Estonia, Ireland, and Iceland.

Factors cited for the recent decline include ethical breaches by the Trudeau government and not doing enough to prevent bribery overseas or to address the problem of widespread money laundering in real estate, casinos, and luxury goods.

Despite both countries’ scores suggesting a fairly “clean” perception of corruption in the public sector, Transparency International describes them, along with Australia, as “significant decliners” — i.e., top-performing countries that have experienced a statistically significant drop in their perceived level of corruption.

“Their backsliding offers a cautionary tale about complacency, which is detrimental not only to global anti-corruption efforts but also to top-scoring countries’ own affairs,” the group said.

What’s in a Score?

Each country’s score is a combination of at least three data sources drawn from 13 different corruption surveys and assessments. These data sources are collected by a variety of reputable institutions, including the World Bank and the World Economic Forum.

Research examining the economic consequences of corruption perception, as defined by the CPI, has found a correlation between a higher CPI and higher long-term economic growth, as well as an increase in GDP growth of 1.7% for every unit increase in a country’s CPI score.

Why It Matters

In a statement issued last June announcing the release of the first-ever U.S. Strategy on Countering Corruption, President Biden said corruption “is a cancer within the body of societies—a disease that eats at public trust and the ability of governments to deliver for their citizens.”

With more specific regard to global trade, as explained by the Chr. Michelsen Institute, a development research institute based in Norway, “tax and customs administration is particularly prone to corruption due to the complexity and technical nature of regulations and processes, the high discretionary powers of revenue officials, and the disproportionate financial gains which can be made compared to the risk and cost of getting caught.”

Corruption in this area generally takes the form of evasion (by taxpayers/importers), collusion (between taxpayers/importers and officials), and extortion (by officials).