Transparency International Organization

An international organization called Transparency International (TI) is dedicated to curbing corruption through international and national coalition encouraging governments to establish and implement effective laws, policies and anti-corruption programs. Among its various activities, TI conducts an international survey of businesspeople, political analysts, and the general public to determine their perception of corruption in 145 countries. In the Corruption Perception index (CPI), shown in Exhibit below, Finland with score of 9.7 out of a maximum of 10, was perceived to be the least corrupt and Bangladesh and Haiti with scores off 1.5 as the most corrupt.

Transparency International Corruption Index

Higher number corresponds to a lower prevalence of bribe taking. Top and bottom are shown; see for the most complete and up to date listings.

Rank Country CPI Score

1 Finland 9.7
2 New Zealand 9.6
3 Denmark 9.5
5 Singapore 9.2
10 Netherlands 8.7
11 United Kingdom 8.6
12 Austria 8.4
15 Germany 8.2
16 Hong Kong 8.0
17 Belgium 7.5
122 Bolivia 2.2
122 Niger 2.2
122 Ukraine 2.2
133 Congo 2.0
133 Ivory Coast 2.0
133 Georgia 2.0
142 Myanmar 1.7
144 Nigeria 1.6
145 Bangladesh 1.5
145 Haiti 1.5

TI also ranks 21 bribe paying countries and the ranking is reported in Exhibited 5.6 in its entirely.

Transparency International Bribe Payers Index:

Higher scores correspond to lower levels of bribe paying internationally>>

Rank Country 2002 OECD Convention
(as of 14 May 2002)

1 Australia 8.5 Ratified
2 Sweden 8.4 Ratified
4 Austria 8.2 Ratified
5 Canada 8.1 Ratified
6 Belgium 7.8 Ratified
9 Singapore 6.3 Not signed
11 Spain 5.8 Ratified
13 Japan 5.3 Ratified
15 Hong Kong 4.3 Not Signed
15 Malaysia 4.3 Not Signed
19 Taiwan 3.8 Not signed
21 Russia 3.2 Not signed

Ti is very emphatic that its intent is not to expose villains and cast blames, but to raise public awareness that will lead to constructive action. As one would expect, those countries receiving low scores are not pleased; however the effect has been to raise public ire and debates in parliaments around the world – exactly the goal of TI.

Transparency International’s CPI is also proving useful in academics studies of the causes and consequences of bribery. Completely consistent with our discussion of the origins and elements of culture described, higher levels of bribery have been found in low income nations and nations with a communist past, both aspects of the political economy. Additionally higher levels of bribery have been found in collectivistic (IDV) and high power distance (PDI) countries. Moreover higher levels of bribery and the Foreign corrupt Practices act have deterred American firms’ participation in such countries. Finally, forms seem to generally eschew investments in corrupt countries as well.

Bribery: Variations on a Theme

Although bribery is a legal issue, it is legal issue, it is also important to see bribery in a cultural context in order to understand different attitudes towards it. Culturally attitudes are significantly different among different people. Some cultures seem to be more open about taking bribes, whereas others, like the United States are publicly contemptuous of such practices. But US forms are far from virtuous – we believe the TI grade of a C (7.5) to be about right. Regardless oif where the line of acceptable conduct is drawn, there is no country where the people consider it proper for those in position of political power to enrich themselves though illicit agreements at the expenses of the best interest of the nation. A first step in understanding the culture of bribery is to appreciate the limitless variations that are often grouped under the word bribery. The activities under this umbrella term range from extortion through subornation to lubrication.

Bribery and Extortion: The distinction between bribery and extortion depends on whether the activity resulted from an offer or from a demand for payment. Voluntarily offered payment by someone seeking unlawful advantage is bribery. For example, it is bribery if an executive of a company offers a governmental official payment in exchange for the official incorrectly classifying imported goods so the shipment will be taxed at a lower rate than classification would require. On the other hand, it is extortion if payments are extracted under duress by someone in authority from a person seeking only he or she is lawfully entitled to. An example of extortion would be a finance minister of a country demanding heavy payments under the threat that a contract f millions of dollars would be voided.

On the surface extortion may seem be less morally wrong because the excuse can be made that if we don’t pay we don’t get contract or the official (devil) made me do it. But even if it is not legally wrong, it is morally wrong –and the United States it is legally wrong.