Guest Post: A New Additional Indicator for Measuring Progress Toward SDG 16

GAB is delighted to welcome back Dieter Zinnbauer, Programme Manager at Transparency International, who contributes the following guest post:

A very interesting discussion has evolved on this blog (see here, here, here, and here), and in the wider world (for example, see here), on about the indicators that should be used to measure progress toward the Sustainable Development Goals (SDGs) goals for improving governance and reducing corruption (Goal 16). There are already some very good suggestions on the table, including the use of Transparency International’s Global Corruption Barometer (GCB) to measure progress toward Target 16.5, on reducing corruption and bribery in all their forms. (TI has used the GCB since 2005 to compile one of the largest data troves on the detailed experience with corruption of households and individuals around the world. Using a GCB-type indicator for the bribery dimension of SDG 16.5 is supported by a wide variety of stakeholders, including the World Bank, UNDP, and Save the Children.)

Yet most of the indicators proposed so far, including the GCB, speak to very specific aspects of corruption (such as bribery) and don’t quite do justice to Goal 16’s broad ambitions and its emphasis on public accountability. So to spice up this stew a bit, let me suggest another possible indicator, one that complement to some of the ideas that are already on the table. My proposed indicator of progress toward SDG 16 is as follows:

What percentage of national-level parliamentarians (and perhaps top level members of the executive) have made assets, income, and interest disclosures (AIIDs) in a format that is publicly accessible online at sufficient level of detail, in timely manner, and in a machine-readable data format.

Using AIID as an additional SDG 16 indicator might at first seem to be a step backwards, since such an indicator measures “outputs” rather than “outcomes.” But let me try to convince you that in fact AIID would be an extremely useful complementary indicator for progress toward SDG 16:

  • First, though AIID is an output measure, this output is closely associated with the outcomes that SDG 16 emphasizes. The best available empirical evidence suggests that AIID has a strong correlation with better governance and less corruption, while concerns that strong AIID requirements might deter competent candidates from running for office have been empirically rejected. Moreover, AIID is a foundational marker of a strong culture of public accountability, in which citizens are entitled and able to inspect whether their representatives and senior public executives are compromised in their independence when exercising their entrusted powers. As such it captures a fundamental quality of government-citizen relations.
  • Second, AIID is relevant to many aspects of integrity and good governance, and thus can complement measures that focus on specific problems like bribery. Lack of sufficient AIID is a red flag that suggests underlying systemic deficiencies and compromised decision-making processes that lead to policy capture, conflicted policy-design, and illicit enrichment. Indeed, AIID can function as a kind of “super-indicator” that captures not only the anticorruption objectives of Target 16.5, but also the accountability and transparency dimension of Target 16.6 and the responsiveness and decision-making inclusiveness goals of Target 16.7.
  • Third, AIID is not only a useful indicator in its own right, but if countries do adopt better AIID laws, the resulting disclosures will supply data that can in turn be used as inputs into all sorts of other anticorruption and good-governance diagnostic tools, from following-the-money to scanning for collusive public procurement, from life-style monitoring exercises to important research on rent-seeking, revolving door premiums, and so forth.
  • Fourth, using AIID as a progress indicator strikes the right balance between ambition and realism. The most comprehensive study to date, looking at 175 countries, shows a roughly even three-way split between very weak, weak, and somewhat stronger performance. And this split is not too strictly and unproductively divided along North/South lines with both industrialized countries and developing countries among the better and worse performers. Furthermore, it is very easy (or at least straightforward) for countries to take action to improve their performance on the proposed AIID indicator, since the required disclosures can be mandated and enforced through national legislation, or established as an expected requirement by political parties for their candidates, or advanced through individual voluntary initiatives by office holders.
  • Fifth, the required data is relatively easy to collect and verify (at least compared to other proposed SDG 16 indicators), due to its focus on online public disclosure. Existing initiatives such as the World Bank’s Financial Disclosure Law Library already provide a good starting point for this exercise. Moreover, an AIID indicator is easy to scale up from its core focus on national legislators to, for example, senior office-holders in the executive and judiciary, or to subnational institutions.
  • Sixth, AIID is easy to understand, and progress on this indicator is easy to track and communicate to the public. As a result, this indicator promises to attract widespread support and public traction. As an illustration, TI Mexico’s ongoing 3de3 initiative—which asks candidates for political office to disclose assets, income, and interests—has been very well received by civil society, office-holders, and the broader public.

Admittedly, using AIID as a complementary SDG 16 indicator would face some difficulties and possible drawbacks. Thrashing out the methodology and working towards a standardization of assessments of AIID across countries might present some challenges, but there are existing methodologies to draw on, such as the one created by Djankov et al., as well as new data architectures such as My Society’s Every Politician (which has created basic data dockets for every national parliamentarian in more than 190 countries). A more serious concern is that it is very late in the game, so trying to put AIID on the agenda for official inclusion as an SDG 16 progress indicator might not be advisable. Even if not, though, this indicator could still be used by NGOs as part of a “shadow” assessment of progress toward the SDGs, which would run alongside and ideally complement the official reporting on SDG 16 and its indicators.

In a nutshell, AIID is highly relevant for the ambitions of SDG 16. The underlying data collection effort seems very feasible and is very useful in itself, and the results are easy to communicate and can be turned into accessible stories. All this bodes well for a highly visible and impactful co-existence with official SDG 16 reporting. So let’s get started!

3 thoughts on “Guest Post: A New Additional Indicator for Measuring Progress Toward SDG 16

  1. Dieter: I welcome this suggestion, and as a general matter I’m very sympathetic to AIID as a policy worth pursuing. That said, I’m not sure that the empirical evidence on the efficacy of AIID as an anticorruption measure is quite as strong as you suggest.

    The leading study on this (the one you link to) is the Djankov, La Porta, Lopez-de-Silanes & Shleifer (DLLS) “Disclosure by Politicians” paper. This paper does indeed find that making AIIDs publicly available is associated with a statistically significant improvement in control of corruption, as measured by the ICRG score. However, this baseline specification controls only for per capita GDP and for whether the country has been continuously democratic since 1950. In a robustness check that also controls for per capita fuel exports and press freedom (as measured by the Freedom House Index), public AIID disclosure no longer has a statistically significant correlation with the ICRG corruption-control score. This suggests that it might not actually be AIID that’s driving the reduction in corruption, but rather that certain kinds of countries that are likely to have lower corruption for other reasons (say, countries that have a free press, or a more open political culture more generally) are more likely to adopt AIID. Now, the study also shows that the correlation between public AIID disclosure and better corruption control does persist — even with the additional control variables — if the sample is limited to “strong democracies” (mostly wealthy countries in Western Europe, North America, and Oceania). But that perhaps suggests that AIID is unlikely to be as effective in reducing corruption in the countries where such reductions are most needed.

    Second (and relatedly), this study makes no attempt to sort out the direction of causation. The phrasing in your post is both careful and accurate — you note that this study “suggests a correlation” between AIID and corruption control — but the overall tone of your post might be (mis?)interpreted as implying that the former causes the latter. We don’t actually know that — yet.

    I think these caveats are important, but I also want to be clear that I’m very much sympathetic with your larger point. Though the empirical evidence may not yet be all the way there, your arguments strike me as quite plausible, and I hope civil society takes up your suggestion and makes progress on this front a point of emphasis.

    • Dear Matthew, thanks for pointing out these empirical issues that I certainly share. So happy to emphasize that I invoked this study to further the plausibility of but not to proof my points.
      I am not all too enthusiastic about whole-world regressions in the first place and should have perhaps added a few other empirical nuggets that may support my cause. For example a recent Dow Jones survey of more than 250 compliance professionals: an astounding 63% reported that their companies had called off or delayed new partnerships because they could not sufficiently assess related corruption risks. (Dow Jones Risk&Compliance: 2015 Anti-Corruption Survey Results, April 2015). And in personal conversations that I had since then with compliance professionals opacity around beneficial ownership and asset/incomes of senior officials were consistently mentioned as two of the most significant issues in this regard.

      Or, another impressive recent anecdote from the US: as I understand from news reports, the recent landmark corruption case against Sheldon Silver was among other triggered by leads from his asset/income disclosure filings under updated New York State ethics legislation. (NYT, Nov. 30, 2015: Sheldon Silver, Ex-New York Assembly Speaker, Is Found Guilty on All Counts ; NYT, July 3, 2013: Legislators Reap Benefits of Part-Time Jobs at Law Firms, Filings Show).
      Admittedly, all this is very anecdotal but it further supports the point that AII is a pretty important building block for effective anti-corruption and stronger accountability and thus in my view merits to be measured and tracked around the world.

  2. Here’s a related suggestion: “What percentage of national-level parliamentarians, top level members of the executive, and civil servants occupying positions of high bribery or fraud risk, are listed in international anti-money laundering risk databases, (eg. World-Check) with sufficient and timely details of assets and income?”

    At no cost (aside from staff time) Papua New Guinea’s Financial Intelligence Unit entered such data into World-Check and noticed an immediate increase in valuable Suspicious Activity Reports from Banks.

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