World Economic Forum Workshop

Session: Integrating Risk Mitigation and Capacity Building

Use of Information and Assessments

The Public Integrity Index: Assessing the Rules of the Game

Marianne Camerer

Director, Global Integrity

www.publicintegrity.org/ga

mcamerer@publicintegrity.org

Corruption as RiskCorruption as RiskCreates uncertainty by Interfering with “the rules of the game”Creates uncertainty by Interfering with “the rules of the game”

Undermines growth and development through hindering Undermines growth and development through hindering or deterring foreign and or local investmentor deterring foreign and or local investment

Affects the quality and composition of public expenditure Affects the quality and composition of public expenditure projectsprojects

Undermines the fiscus through non-optimal collection of Undermines the fiscus through non-optimal collection of taxes and revenues as the unofficial underground taxes and revenues as the unofficial underground economy flourisheseconomy flourishes

Distorts policy and resource allocations, thereby Distorts policy and resource allocations, thereby increasing inefficiencyincreasing inefficiency

(From expert testimony in Lesotho and South Africa on the (From expert testimony in Lesotho and South Africa on the impact of corruption on developing economies)impact of corruption on developing economies)

Corruption as RiskCorruption as RiskCreates uncertainty by Interfering with “the rules of the game”Creates uncertainty by Interfering with “the rules of the game”

Undermines trust and credibility in institutions and Undermines trust and credibility in institutions and proceduresprocedures

Introduces unjust access to often limited social and Introduces unjust access to often limited social and political goods and services, potentially creating social political goods and services, potentially creating social and political unrest and political unrest

corruption takes its greatest toll on the poor; andcorruption takes its greatest toll on the poor; and corruption bites into the moral fibre of society.corruption bites into the moral fibre of society.

(From expert testimony in Lesotho and South Africa on the (From expert testimony in Lesotho and South Africa on the impact of corruption on developing economies)impact of corruption on developing economies)

Corruption in the newsCorruption in the news

BrazilBrazil

Investors take fright as Brazilian scandal flares upInvestors take fright as Brazilian scandal flares up

Financial Times, 16 June 2005Financial Times, 16 June 2005 By RAYMOND COLITT By RAYMOND COLITT

Investor sentiment in Brazil again turned sour yesterday as fresh testimony rekindled concern over Investor sentiment in Brazil again turned sour yesterday as fresh testimony rekindled concern over corruption allegations against the ruling Workers' party (PT).corruption allegations against the ruling Workers' party (PT).

In early trading the Sao Paulo stock exchange had fallen by as much as 3 per cent, reversing its trend for In early trading the Sao Paulo stock exchange had fallen by as much as 3 per cent, reversing its trend for the third time in less than 24 hours.the third time in less than 24 hours.

"Initially the market thought the scandal was fading but there are enough unanswered questions to keep this "Initially the market thought the scandal was fading but there are enough unanswered questions to keep this crisis bubbling for some time to come," said Marcelo Mesquita, chief strategist with UBS in Rio de Janeiro. crisis bubbling for some time to come," said Marcelo Mesquita, chief strategist with UBS in Rio de Janeiro.

South AfricaSouth Africa

Wolfowitz pays tribute to MbekiWolfowitz pays tribute to Mbeki

He said the new leadership in South Africa, and leaders of other African countries, were intent on fighting He said the new leadership in South Africa, and leaders of other African countries, were intent on fighting corruption. “We have recognized that in the past a lot of governments in Africa did not spend money well. There is corruption. “We have recognized that in the past a lot of governments in Africa did not spend money well. There is a new leadership now that is taking responsibility to get rid of corruption. Africa is on the move”. (a new leadership now that is taking responsibility to get rid of corruption. Africa is on the move”. ( www.iol.co.zawww.iol.co.za, , 20 June 2005)20 June 2005)

Global Integrity ReportGlobal Integrity Report

An investigative report tracking corruption, openness An investigative report tracking corruption, openness and accountability in 25 countriesand accountability in 25 countries

Released 29 April 2004, National Press Club,Released 29 April 2004, National Press Club,Washington DCWashington DC

The Global Integrity ReportThe Global Integrity ReportComponentsComponents

Public Integrity IndexPublic Integrity Index– Generated by data collected in-country on Generated by data collected in-country on

the Integrity Indicatorsthe Integrity Indicators

25 Country Reports25 Country Reports Country FactsCountry Facts Corruption TimelineCorruption Timeline Corruption Notebook (reader comments)Corruption Notebook (reader comments) Integrity Assessment (reader comments)Integrity Assessment (reader comments) Integrity ScorecardIntegrity Scorecard Integrity Indicators (score, comments, Integrity Indicators (score, comments,

reference, reader comments)reference, reader comments)

Global Integrity Countries 2004Global Integrity Countries 2004

25 COUNTRIES:25 COUNTRIES:

Argentina, Australia, Brazil, Germany, Argentina, Australia, Brazil, Germany, Ghana, Guatemala, India, Indonesia, Ghana, Guatemala, India, Indonesia, Italy, Japan, Kenya, Mexico, Namibia, Italy, Japan, Kenya, Mexico, Namibia,

Nicaragua, Nigeria, Panama, the Nicaragua, Nigeria, Panama, the Philippines, Portugal, Russia, South Philippines, Portugal, Russia, South

Africa, Turkey, United States, Ukraine, Africa, Turkey, United States, Ukraine, Venezuela, ZimbabweVenezuela, Zimbabwe

Measuring (the other side of) Measuring (the other side of) Corruption: Corruption:

Assessing the rules of democratic governanceAssessing the rules of democratic governance

By its nature, corruption is almost impossible By its nature, corruption is almost impossible to measure with any degree of accuracy.to measure with any degree of accuracy.

It is however possible to assess the laws, It is however possible to assess the laws, mechanisms, institutions that prevent abuses mechanisms, institutions that prevent abuses of power.of power.

I.e. the Public Integrity Index is a measure of I.e. the Public Integrity Index is a measure of the national anti-corruption architecturethe national anti-corruption architecture

The Public Integrity Index The Public Integrity Index measures:measures:

ExistenceExistence of institutional mechanisms that of institutional mechanisms that prevent abuses of power (i.e. corruption)prevent abuses of power (i.e. corruption)

EffectivenessEffectiveness of these anti-corruption of these anti-corruption mechanisms that promote public integritymechanisms that promote public integrity

Citizen accessCitizen access to public information to hold to public information to hold public officials accountablepublic officials accountable

Constructing the Public Integrity Index: Constructing the Public Integrity Index: 6 Governance Categories6 Governance Categories

(based on anti-corruption and governance literature)(based on anti-corruption and governance literature)

I. Civil Society, Public Information I. Civil Society, Public Information and Mediaand MediaCivil Society Organizations; Access to Civil Society Organizations; Access to Information; Freedom of the Media Information; Freedom of the Media

II. Electoral and Political II. Electoral and Political ProcessesProcessesNational Elections; Election Monitoring National Elections; Election Monitoring Agency; Political Party FinancesAgency; Political Party Finances

III. Branches of GovernmentIII. Branches of GovernmentExecutive; Legislature; JudiciaryExecutive; Legislature; Judiciary

IV. Administration and Civil ServiceIV. Administration and Civil ServiceCivil Service Regulations; Whistle-Civil Service Regulations; Whistle-Blowing Measures; Procurement; Blowing Measures; Procurement; PrivatizationPrivatization

V. Oversight and Regulatory V. Oversight and Regulatory MechanismsMechanismsNational Ombudsman; Supreme Audit National Ombudsman; Supreme Audit Institution; Taxes and Customs; Financial Institution; Taxes and Customs; Financial Sector RegulationSector Regulation

VI. Anti-Corruption Mechanisms VI. Anti-Corruption Mechanisms and Rule of Lawand Rule of LawAnti-Corruption Law; Anti-Corruption Anti-Corruption Law; Anti-Corruption Agency; Anti-Corruption Agency; Rule of Agency; Anti-Corruption Agency; Rule of Law and Access to Justice; Law Law and Access to Justice; Law EnforcementEnforcement

Integrity ScorecardIntegrity ScorecardSouth AfricaSouth Africa

Very strong tier: Category 5 Strong tier: Categories 1, 3, and 6 Weak tier: Categories 2 and 4

Overall, South Africa ranks 6th out of 25 countries on the Public Integrity Index, falling into the “strong” category.

The Future VisionThe Future Vision

To refine, repeat and expand the study to To refine, repeat and expand the study to include +- 100 countries (eg. MCA/IDA)include +- 100 countries (eg. MCA/IDA)

To create an independent non-profit entity To create an independent non-profit entity to continue this workto continue this work

To analyze, communicate and publicize To analyze, communicate and publicize the data and findings more effectivelythe data and findings more effectively

To diagnose and encourage reforms To diagnose and encourage reforms based on the findingsbased on the findings