About Matthew Stephenson

Professor of Law, Harvard Law School

Anticorruption Bibliography–January 2021 Update

An updated version of my anticorruption bibliography is available from my faculty webpage. A direct link to the pdf of the full bibliography is here, and a list of the new sources added in this update is here. As always, I welcome suggestions for other sources that are not yet included, including any papers GAB readers have written.

This Year, Let’s All Resist the Temptation to Emphasize Changes in Individual Country’s CPI Scores!

Later this week (if I’m not mistaken, a couple of days from today) Transparency International (TI) will publish its annual Corruption Perceptions Index (CPI), together with some press materials and additional discussions. And if this year is like previous years, many media outlets — and TI itself — will make much of how individual countries’ scores and rankings have changed from the previous year. Often these discussions will be situated into some narrative (usually along the lines of, “Country X’s anticorruption efforts are failing, as we can tell from its declining score”). In fact, sometimes politicians and activists will point to their country’s score changes as evidence on the question whether they are making progress on the fight against corruption.

This comparison of annual CPI scores for individual countries is, with vanishingly few exceptions, a pointless, misleading, intellectually bankrupt exercise, for reasons that I’ve tried to explain pretty much every year for the last seven years. See here, here, here, here, here, here, here, and here. To be clear, I’m a fan of the CPI and will continue to defend it as a worthwhile measurement exercise, despite its flaws. And many of the folks on the TI research team who work very hard on this index are smart, serious people who are doing their best. Indeed, if you know where to look, you can sometimes find TI research documents on the CPI that include appropriate caveats. But TI’s press releases and public comments, and most of the media commentary on the CPI, continue to treat individual changes in each country’s score as some kind of meaningful indicator.

This year, I’m going to try something new. Instead of waiting until after the CPI is published, and then sitting back in my (metaphorical) armchair in the Ivory Tower and hurling criticisms at those who portray year-to-year changes in individual countries’ CPI scores as meaningful, I’m going to try raising this issue before the CPI is published, in the hopes that this might have more of an impact in how the CPI numbers are presented, especially by the folks at TI. (And I know some of you read this blog!!!) It’s not too late! Please please please go over your press release and other materials and make sure you’re not presenting your (very important!) work as telling us anything interesting or useful about which individual counties are getting better or worse as compared to last year (or the last few years). Please please please emphasize that the CPI is not meant to be used as an indicator of policy success or failure. Please please please, at the very least, make sure that you emphasize the uncertainty (that is, the “noisiness”) of the perception estimates (which is not the same as the point that perceptions are different from reality, which TI already emphasizes), and for goodness’ sake, don’t emphasize score changes that your own data indicates are not statistically significant at conventional levels.

And in case any of you folks in the media happen to be reading this blog, you can do better too! The CPI is a great “hook” for discussing corruption-related issues in your country, but you do your readers a disservice if you cover the CPI as if it’s a league table, or try to construct a narrative around random noise.

(Oh, by the way, all of the above exhortations are premised on the validity of my critique of year-to-year country CPI comparisons. If anyone out there thinks that critique is misguided, I would also welcome a substantive rebuttal. I’m not going to restate all the elements of my critique here; anyone who is interested can click on the links above and read my posts from previous years.)

Let’s see if this preemptive strike is any more successful than past years’ after-the-fact criticisms…

The Trump Administration and Corruption: A Preliminary Retrospective

As of yesterday at 12 noon, U.S. East Coast Time, Donald Trump is no longer the President of the United States of America.

First, let’s all breathe a collective sigh of relief.

OK, now we can start thinking about what we’ve learned from this traumatic experience. There is no shortage of political and cultural commentary on the Trump era and its implications, and I have little of substance to add to that general discussion. But, given that this is a blog specifically focused on corruption, let me offer a few reflections on the implications of the last four years for corruption and anticorruption in the United States.

At the risk of self-indulgence, I’ll frame this preliminary discussion in terms of my own guesses, as of four years ago, about how the Trump Administration would affect U.S. corruption and anticorruption policy. Immediately after Trump’s election, I wrote a despondent post about why I thought that Trump’s election would be a disaster for the fight against corruption on many different dimensions. Roughly a year later, I did a follow-up post assessing my own predictions, concluding that on some issues my pessimistic forecasts proved inaccurate (for reasons I did my best to assess), while on other dimensions the Trump administration was as bad or worse than I had feared. Now that Trump is finally out of office, it’s a good time for another retrospective assessment—both to understand where things stand now with respect to U.S. policy and leadership on anticorruption issues, and also to see what lessons we might be able to draw from the experience of the past four years. Continue reading

New Podcast Episode, Featuring Lola Adekanye

A new episode of KickBack: The Global Anticorruption Podcast is now available. In this week’s episode, my collaborators Nils Köbis and Christopher Starke interview Lola Adekanye, a Nigerian-American lawyer who currently leads the Business Integrity and Anti-Corruption Programs in Africa at the Center for International Private Enterprise (CIPE).

After discussing her own background and how she began working on anticorruption issues, Ms. Adekanye describes the work that CIPE does at the intersection of the private and public sector, including the advocacy of market-oriented reforms to drive up the cost of corruption and drive down the cost of compliance. More concretely, she describes some concrete anticorruption initiatives that CIPE has worked on, including the Ethics First initiative in Africa, which seeks to make due diligence screening and verification in Africa more feasible and effective. CIPE’s guidance to companies as to how to deal with bribery by firm employees emphasizes what Ms. Adekanye calls the the “three Rs”: (1) Giving firm employees clear and realistic instructions on how they should RESPOND to requests for bribes; (2) Ensuring that the compliance department RECORDs the bribe request and reports it to a higher level; and (3) REPORTING bribe requests to governments and business organizations, to provide a clearer picture of how bribery is distorting markets, lowering government revenue, and undermining government projects.

You can find the episode here. You can also find this episode and an archive of prior episodes at the following locations:

KickBack is a collaborative effort between GAB and the ICRN. If you like it, please subscribe/follow, and tell all your friends! And if you have suggestions for voices you’d like to hear on the podcast, just send me a message and let me know.

Guest Post: Time for UNCAC Mark II?

GAB welcomes back international anticorruption consultant Alan Doig, who contributes the following guest post:

The United Nations Convention against Corruption (UNCAC), which came into force in 2005 and has been ratified by 187 countries, is the oldest and most comprehensive Convention solely devoted to the prevention, detection, and investigation of corruption. Yet today UNCAC, for all of its importance, is not serving as an effective blueprint or framework for promoting innovative and effective responses to corruption. There are four main reasons for this:

  • First, perhaps due to UNCAC’s genesis in the UN Convention against Transnational Organized Crime, UNCAC is skewed too heavily toward the criminal justice aspects of anticorruption, as demonstrated by the fact that nearly 80% of UNCAC’s substantive Articles relate to law enforcement, asset recovery, and related issues.
  • Second, UNCAC left too many key terms undefined or underspecified, allowing for significant interpretation (or misinterpretation) of the Articles, and some 40% of UNCAC’s substantive Articles are non-mandatory; these factors tend to undermine the efficacy of the Convention.
  • Third, UNCAC’s review mechanism is too slow and fragmented, and fails to employ a sufficiently holistic framework that assesses performance and progress in implementation and impact.
  • Fourth, and most significant, UNCAC is not amenable to updating. This has meant that issues which were only emerging back in 2005, such as political-party funding or beneficial ownership transparency, only received limited attention. Issues that were once addressed, if at all, through ad hoc references scattered throughout the Convention are assuming more importance. The difficulty of updating the Convention derives in part from the insistence of the UN Office of Drugs and Crime (UNODC) that UNCAC may be used as a legal document suitable for treaty purposes—even though other international instruments serve similar purposes and its value as a treaty has been limited (as demonstrated by, among other things, the fact that UNCAC has been used for mutual legal assistance only 17 times in over a decade).

So, with a reboot of the existing Convention unlikely, maybe it’s time for a new Convention—an UNCAC Mark II. An UNCAC Mark II— which we might perhaps call the UN Convention on the Prevention of Corruption (UNCPC)—could provide a framework that promotes innovative, flexible, and forward-looking means to address corruption challenges, going beyond technical and compliance approaches.

The main focus of the proposed UNCPC, as the name implies, should be on mainstreaming prevention of corruption, both for its own sake and as a means toward wider objectives, such as trust in public institutions, good governance, and the rule of law. Chapters of such a convention could address, for example: risk assessment, developing strategic approaches, promoting public integrity, transparency and accountability, managing the political and partisan dimensions of public life, preventing profiting from corruption, prioritizing citizen-facing public services, and developing measurable progress and performance. In particular, and largely missing from the current Convention, a UNCPC should address the roles and expectations of a wide range of named in-country public and private sector organizations, as well as in civil society, to collectively mainstream the Convention as part of their work.

Such a Convention needn’t start from scratch. Its contents and coherence would come from synthesizing and integrating the wide range of the corruption prevention initiatives, most of which post-date UNCAC. These include, for example, the Kuala Lumpur Statement on Anti-Corruption Strategies, the international standard on anti-bribery management systems (ISO 37001), the Council of Europe’s work on public ethics, the extractive industries and other transparency initiatives, and the work of organizations like the UN Global Compact and the UNCAC Civil Society Coalition. The contents of a new Convention could also draw on the empirical evidence from GRECO reviews and Transparency International National Integrity Studies. Engaging with all these organizations, who have a stake in prevention, will foster a collective sense of ownership, and they can also take a leading role in monitoring and reviewing implementation of the Convention.

In contrast to UNCAC, this proposed new Convention should not seek global membership. Rather, the UNCPC should require both serious substantive commitments and acceptance of a rigorous whole-Convention peer-review system focused on demonstrable performance and progress. At the same time, evidence from practice on the ground will inform an equally rigorous review and revision of the Convention to ensure its relevance. The overall goal is a more comprehensive and dynamic Convention that provides a collective, mutually-supportive approach to anticorruption, one that seeks to achieve meaningful results within realistic timeframes.

It’s Not Just the Corporate Transparency Act: Other Reasons To Welcome the Passage of the U.S. NDAA

Last week I posted about the Corporate Transparency Act (CTA), the new law requiring companies to provide the government with information about their ultimate beneficial owners. The CTA, which was passed (over President Trump’s veto) as part of the National Defense Authorization Act (NDAA), has been getting a lot of attention in the anticorruption and anti-money laundering (AML) community, and rightly so. The product of decades of tireless and shrewd advocacy, the CTA—despite its limitations and imperfections—will make it substantially harder for kleptocrats, terrorists, organized crime groups, and others to abuse corporate structures to facilitate their crimes and hide their loot. But the CTA is not the only part of the NDAA that may have a substantial positive impact on the fight against corruption and money laundering. And while it’s entirely understandable that most of the attention (and celebration) in the anticorruption community has focused on the CTA, I wanted to use today’s post to highlight several other provisions in the NDAA that may also prove important in combating corruption and money laundering. Continue reading

A Few Thoughts on the Passage of the U.S. Corporate Transparency Act

[Note: I drafted the post below earlier this week, before yesterday’s shocking events in the U.S. Capitol. I mention this only because it might otherwise seem odd, and perhaps a bit tone-deaf, to publish a commentary on new corporate transparency rules when we just saw an attempted insurrection incited by the siting U.S. President. I don’t really have anything to say about the latter events (at least nothing that others haven’t already said), so I decided to go ahead and publish the post I planned to publish today anyway.]

Last week, as I suspect many readers of this blog are well aware, the United States Congress enacted one of the most significant anticorruption/anti-money laundering (AML) reforms in a generation. The Corporate Transparency Act (CTA), which was incorporated as part of the annual National Defense Authorization Act (NDAA), will require—for the first time in the United States—that corporations, limited liability companies, and similar entities will have to provide the U.S. government (specifically, the Treasury Department’s Financial Crimes Enforcement Network (FinCEN)) with the identities of the ultimate beneficial owners of those entities. That beneficial ownership information, though not made publicly available, will be provided to law enforcement agencies, as well as to financial institutions conducting due diligence (with customer consent). This reform will make it substantially harder for kleptocrats and their cronies—as well as other criminals, including human traffickers and terrorists—to conceal and launder their assets in the United States through anonymous shell companies, and will make it substantially easier for law enforcement to “follow the money” when investigating possible criminal activity.

This important reform has already gotten a ton of coverage in the anticorruption/AML community (see here, here, here, and here), as well as the mainstream media (see here, here, here, and here), though mainstream coverage has understandably been overshadowed by both the coronavirus pandemic and President Trump’s attempts to subvert the recent election. And we’ve had quite a bit of discussion of the issue on GAB prior to the passage of the NDAA (see, for example, here, here, here, here, and here). So, I’m not sure I really have that much to add to what others have already said. Nevertheless, it felt strange to allow this landmark event to go entirely undiscussed on GAB, so at the risk of self-indulgence, I’d like to throw out a few additional thoughts and observations related to the CTA. Continue reading

New Podcast Episode, Featuring Norm Eisen

A new episode of KickBack: The Global Anticorruption Podcast is now available. In this week’s episode, I interview Norm Eisen, currently a Senior Fellow at the Brookings Institution. Mr. Eisen previously served as the White House Special Counsel for Ethics and Government during the Obama Administration, as the U.S. Ambassador to the Czech Republic from 2011-2014, and as counsel to the U.S. House Judiciary Committee during the impeachment proceedings against President Donald Trump. Mr. Eisen is also a founder and previous board chair of the Citizens for Responsibility and Ethics in Washington (CREW), which, among other activities, sued President Trump for allegedly receiving unlawful emoluments from foreign and state governments. My conversation with Mr. Eisen–like my conversation with my Jack Goldsmith last month–focuses primarily on what the Trump Administration has taught us about the strengths and weaknesses of the U.S. system for constraining corruption, conflicts of interest, and other forms of wrongdoing by the President and senior members of the executive branch, as well as what kinds of institutional reforms and policy changes would help prevent such wrongdoing going forward. Mr. Eisen emphasizes the resilience of U.S. institutions in the face of the “stress test” provided by the Trump Administration, outlines some of the most important reforms he’d like to see adopted to address the corruption risks that Trump experience has highlighted, and discusses some of the international implications of this issue. You can find this episode here. You can also find both this episode and an archive of prior episodes at the following locations: KickBack is a collaborative effort between GAB and the ICRN. If you like it, please subscribe/follow, and tell all your friends! And if you have suggestions for voices you’d like to hear on the podcast, just send me a message and let me know.

Guest Post: Sierra Leone’s Tenuous and Incomplete Anticorruption Campaign

Felix Marco Conteh, an independent research consultant based in Sierra Leone, contributes the following guest post:

Sierra Leone has a serious corruption problem. And while the importance of fighting corruption unites Sierra Leoneans—who tend to blame corruption for all the country’s socio-economic and political challenges—the citizens of this intensely polarized country remain divided on how to do so. The country seems to have fallen into a pattern in which each new administration pledges to tackle corruption, but adopts strategies that are aimed more at appealing to domestic and international constituencies in the short-term, rather than lay a foundation for longer-term success. The new administrations’ short-term strategies too often involve criminalizing politics in a way that appears to target the political opposition, contributing to deeper polarization and instability. Continue reading

Guest Post: Why Nigeria’s Main Anticorruption Body Should Not Become a Debt Collection Agency, and How to Stop It

Today’s guest post is from Pallavi Roy and Mitchell Watkins, respectively Research Director and Research Fellow at the University of London, SOAS Anti-Corruption Evidence Consortium (SOAS-ACE).

Nigeria’s Economic and Financial Crimes Commission (EFCC), established in 2003, was initially effective at investigating and prosecuting bribery, fraud, tax evasion, money laundering, and a host of other financial crimes. Indeed, it was instrumental in prosecuting senior political leaders and corporate actors involved in illegal activities, as well as in recovering significant stolen assets that belonged to the Nigerian state. More recently, however, the Commission has been subject to frequent political interference and corruption. For example, a recent SOAS-ACE study found that private actors—commercial banks, businesses, and high net-worth individuals—routinely exploit the coercive power of the EFCC to help them recover their debts, rather than turning to the courts and other civil dispute resolution mechanisms. This occurs even though, as a matter of law, civil debt collection lies outside the EFCC’s jurisdiction. Continue reading