Author Archives: Matthew Stephenson

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About Matthew Stephenson

Professor of Law, Harvard Law School

Post-2012 CPI Scores Can’t Be Compared Across Time, Either

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In post last week, I emphasized what lots of others have already tried (without much apparent success) to point out: Prior to 2012, Transparency International’s Corruption Perception Index (CPI) scores are not comparable over time.  The fact that a country’s score from one year to the next goes up or down might reflect an actual change in perceived corruption, but might be due to a whole host of other factors (changing aggregation methodology, changing scope of country coverage, change in perceived corruption of other countries, etc.), such that simple year-to-year comparisons are unreliable.  In making this point, I was not criticizing TI itself, which has been quite clear that the pre-2012 CPI scores cannot be compared across years.

But what about 2012 and after?  In 2012, TI announced, with much fanfare, that starting with the 2012 CPI and henceforth, scores across years would be comparable, due to changes in methodology (described here).

Is this right?  If it were, it would be a huge benefit both to scholars and policy reformers who want to evaluate changes over time–and the impact of various interventions.  Alas, after reading through TI’s discussion of the revised methodology, I regret to say the answer is probably no.

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Announcement: New Collaborative Research Report on Legal Responses to Corruption

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Harvard Law School’s Law & International Development Society (LIDS) last year launched a new initiative — LIDS Global — to promote international collaboration on research projects related to the role of law in promoting development. The first LIDS Global project focuses on legal responses to corruption, emphasizing in particular legal mechanisms that will promote compensation of corruption’s victims, as well as other forms of remediation. This collaborative effort, which builds on a thoughtful and provocative article authored by several LIDS members last year, features contributions from teams in India, Tanzania, Singapore, and the Philippines. It’s definitely worth a look. The LIDS announcement and description of the project is here; the full text of the LIDS Global Report is here.

More on the Tension between Analysis and Advocacy for Anticorruption Academics

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A couple weeks back I posted some brief reflections that  alluded to the possibility of the tension,  between academics and advocates. I asserted this tension was something I’d observed, but I didn’t give any specific examples. Partly because of that weakness in the original post, I thought I’d follow up on this topic, using a concrete example of the tension I had in mind.

That example is drawn from a debate I’ve engaged in elsewhere on this blog with Maud Perdriel-Vaissiere, an advisor to the UNCAC Coalition. In brief, the substantive issue that she and I (and others) have been arguing about is the extent to which the UN Convention Against Corruption (UNCAC) obligates law enforcement agencies that recover judgments or settlements against bribe-paying firms to share those proceeds with the governments of the countries where the bribes were paid. I won’t go into all the details here. (For those who are interested, some of my earlier posts on the topic can be found here and here, and other contributors to this blog have discussed related issues here, here, here, and here.) In my most recent post on the subject, I specifically criticized Ms. Perdriel-Vaissiere’s discussion of the issue in a post she published on the UNCAC Coalition’s blog. Among other criticisms, I accused Ms. Perdriel-Vaissiere of failing to make basic distinctions between different types of legal recovery, of failing to acknowledge their different treatment under UNCAC, and of citing misleading statistics that conflated these different forms of recovery. I described the legal analysis in the post as “sloppy” and concluded with some harsh words: “The anticorruption community can and should do better.”

Ms. Perdriel-Vaissiere submitted a lengthy, detailed, and thoughtful rebuttal, which you can read in the comments section for the original post. Much of her response focuses on substantive matters where she and I respectfully disagree, and I leave it to interested readers to make their own determinations on those issues. But part of her reply caught my attention because it so nicely illustrates, in a much more concrete form, the “analyst vs. advocate tension” I alluded to generally in my post on the role of academics. Here’s what Ms. Perdriel-Vaissiere has to say in my response to my criticism that she cites misleading statistics that don’t take into account the differences between distinct forms of recovery: Continue reading →

Pre-2012 CPI Scores CANNOT Be Compared Across Time–So Please Stop Doing It!

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OK, I know (as Rick pointed out in a recent post) that a lot — maybe too much — of the content on this blog has focused on measurement issues, so I apologize for yet another post on that topic, but this has really been bugging me:

Transparency International has been publishing its well-known and widely-used Corruption Perceptions Index (CPI) since 1995.  The index has its pros and cons, several of which have been discussed on this blog (see here, here, here, here, and here).  But putting other debates about the CPI’s validity and utility to the side, one thing should be perfectly clear: At least prior to 2012 (when TI changed its method and scoring system for the CPI), a country’s CPI scores CANNOT be compared across years.  The fact that Country X scores, say, a 4.4 in 2002, and scores a 4.9 in 2005, does NOT mean that (perceived) corruption has declined in country X.  Maybe it did, but it might have stayed the same, or gotten worse.  At most, the pre-2012 CPI provides information about country’s ranking relative to other countries, within a single year, with respect to corruption perceptions.

TI itself could not be more explicit about this, stating bluntly “CPI scores before 2012 are not comparable over time.”  Yet I keep coming across sources — news articles, presentations by leading international organizations, academic papers — that use year-to-year CPI comparisons to make claims about how corruption in a particular country or region is improving or worsening, or about whether a particular policy intervention is working or not.  YOU CAN’T DO THIS!  PLEASE STOP!!

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Guest Post: The Impact of Foreign Anti-Bribery Laws on the Demand-Side Countries

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Francesco De Simone, an Advisor at the U4 Anti-Corruption Resource Centre, contributes the following guest post:

What are the consequences of “supply side” foreign bribery laws, like the US Foreign Corrupt Practices Act (FCPA) and UK Bribery Act (UKBA), on the developing countries that are often the bribe receivers in foreign bribery cases (the “demand side”)? When can OECD country (say, the United States) prosecutes a company for paying a bribe in a developing country (say Nigeria), what are the implications for Nigeria – for its institutions and for its overall corruption environment and anti-corruption framework? How does the investigation or prosecution affect Nigeria’s ability to investigate prosecute the same case? What are the consequences if the U.S. case is settled? How can Nigeria obtain restitution of the proceeds of the bribe? And should it?

Although foreign anti-bribery laws like the FCPA have attracted a great deal of analysis and discussion (including on this blog: see here, here, here, here, and here), there is much less material on those sorts of questions. (An exception is the work by Professor Kevin Davis, see here and here, also discussed on this blog.) In a new U4 paper I co-wrote with Bruce Zagaris, we attempt to provide a more in-depth analysis of how supply-side enforcement of foreign anti-bribery laws by OECD countries affects parallel investigation and enforcement action in the demand-side country whose officials allegedly took the bribes. Unfortunately, reliable information on how many supply-side enforcement actions result in parallel investigations by the demand-side host countries is not currently available (so far as we know), but we were able to extract a great deal of useful information from FCPA and UKBA cases, as well as other recent studies like the Stolen Asset Recovery Initiative (StAR) Left Out of the Bargain report.

The main takeaways from our study can be summarized as follows: Continue reading →

Who Cares How Madison and Hamilton Defined “Corruption”?

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We’ve had a few posts in recent weeks on Fordham Law Professor Zephyr Teachout’s ultimately unsuccessful, but surprisingly effective, campaign for the New York governorship (see here and here). Teachout’s campaign has had the side effect of increasing the attention to her scholarly work, most notably her recent book Corruption in America.  Rick has already posted a more general discussion of Teachout’s major thesis regarding the allegedly corrupting effects of money on American democracy (and a follow-up yesterday). I want to touch on a somewhat narrower point, but one that has attracted a great deal of attention: Teachout’s claim that the people who framed and ratified the U.S. Constitution had a much broader understanding of the meaning of “corruption” than is reflected in contemporary U.S. Supreme Court decisions on campaign finance. (I should acknowledge up front that I have not yet had the opportunity to read Teachout’s book, though I have read her earlier article making substantially the same point, as well as an excerpt from the book posted online.)

The basic argument, which Teachout persuasively documents, is that for the founding generation — including leading members like James Madison, Benjamin Franklin, Alexander Hamilton, George Mason, and others — the term “corruption” had a much broader meaning than the exchange of money or other material benefits for official acts; the term instead included an institution’s “improper dependence” on some outside party. My colleague Larry Lessig made this argument the basis of an amicus brief he submitted to the Supreme Court in the McCutcheon case. In his post discussing the brief, Lessig asserts that the evidence of how the term corruption was used in the Founding generation “suggest that only a non-originalist could support the idea that ‘corruption’ refers to ‘quid pro quo’ corruption alone.”

I’m not sure I can improve on Jill Lapore‘s assessment of Teachout and Lessig’s evidence about the historical usage of corruption: “This isn’t uninteresting, but it’s not especially helpful, either.” I agree wholeheartedly. At the risk of belaboring the issue (about which I’ve written before, in the context of the McCutcheon case), let me say a bit more about why I think the evidence that Madison, Hamilton, and other members of the Founding generation used “corruption” in a broader sense is (mostly) irrelevant to contemporary discussions of campaign finance and other issues. Continue reading →

The Role of Academics in Anticorruption: Some Tensions

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As I mentioned in a couple of previous posts (here and here), I was fortunate enough to attend a conference last month, hosted by the UN Office of Drugs and Crime, for academics who write and teach on anticorruption and related subjects. Virna di Palma of TRACE International, who also attended the conference, has posted a very nice overview and discussion of some of the conference themes on the B20 Collective Action Hub’s blog. Ms. di Palma accurately summarizes three main roles that academics can and do play in this field:

  1. Research: “[A]cademic research into the nature of corruption and measures to reduce it is needed … Academics [also] need to challenge existing information on anti-corruption and to filter out low-quality research.”
  2. Activism/advocacy: Professors can serve as “activists and play a firsthand role in shaping public opinion and policy issues.”
  3. Teaching: “Academics educate future policy makers and business executives, directly shaping social, economic and political structures and values…. Academics can influence behavior, promote international standards and norms, counter rationalizations before they become ingrained and mold future leaders.”

I agree with all of this (and I get a warm, fuzzy feeling when someone who is not a professor says something nice about my tribe). But I want to highlight a potential tension between goals 1 and 2 (research and activism/advocacy), and point out how that same tension may play out in the context of goal 3 (teaching). Continue reading →

Guest Post: Countering Corruption in Nigeria with Results-Based Financing

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Lauren Abel and Andrew Blackman, recent graduates of the Harvard Kennedy School’s Masters Program in International Development, contribute the following guest post:

The Ebola virus spreading through West Africa has reached Nigeria. While the number of Ebola cases in Nigeria is small, the highly contagious disease can spread quickly, especially in a country with chronically low-quality health services. One might think that the biggest economy in Africa should have the resources and infrastructure to battle the health threat, but despite billions of dollars in annual oil revenues, Nigeria’s poor health services are putting the country at risk of spreading the epidemic. Unfortunately, the problems with public service delivery in Nigeria do not stop with health. Authorities have recognized that Nigeria is unlikely to achieve any of the Millennium Development Goals (MDGs) by 2015 (see the Government’s full review here).

Why the dearth of public services in a booming economy? Corruption. Above all else, pervasive and endemic corruption remains the Achilles Heel of the Nigerian economy. As the Finance Minister recently noted, “Corruption is a serious issue for us because it is destroying our country, eating deep into the fabrics of the economy, we can’t have infrastructure and development with these level of corruption.” In an environment of such endemic corruption, what can be done to help translate huge natural resource revenues into tangible improvements in the lives of the 110 million Nigerians living on less than US$1.25 a day?

In a recent study conducted with the Centre for the Studies of the Economies of Africa – an Abuja-based economic think-tank – we put forward an approach designed to improve the provision of public goods and services that we believe could work within the current Nigerian system. That approach is known as Results-Based Financing (RBF). (For an example of the RBF approach, see this World Bank initiative; the approach is conceptually similar to other ideas such as Pay for Performance, Cash on Delivery Aid and Output-Based Aid.) Continue reading →

Guest Post: The Potentially Perverse Effects of Campaign Finance Disclosure Laws

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Professor Michael Gilbert from the University of Virginia Law School contributes the following guest post:

Since at least the 1970s, proponents of campaign finance regulations in the United States and elsewhere have supported mandatory disclosure of monies spent on politics.  Notwithstanding some significant loopholes, those proponents have in many respects gotten their way in the United States and many other countries. Much of the enthusiasm for disclosure is based on the notion that it helps combat a certain kind of corruption—the exchange of campaign support for policy favors. Publicizing the flow of money to politicians exposes illicit relationships and quid pro quos.  In Justice Brandeis’s famous phrase, “Sunlight is said to be the best disinfectant.”

This logic is correct but incomplete.  Disclosure does indeed provide information that officials and the public can use to combat corruption.  But, as Ben Aiken and I argue in a new paper, corrupt actors can also use that information to overcome an impediment to illegal exchanges:  lack of trust.  Private parties cannot sign enforceable contracts with politicians for quid pro quos. Instead, they must trust one another—if I give you the money today will you deliver the vote tomorrow?  That need for trust means that both sides to a potentially corrupt exchange must assess one another’s credibility. Disclosure laws can, perversely, help foster that undesirable trust. After all, disclosure of campaign donations reveals which parties reward compliant politicians; this same disclosure, combined with politicians’ voting records, reveals which politicians reward their financial supporters most consistently.  Through those channels disclosure can bring conspirators together and reduce the uncertainty that inheres in illegal transactions.  As a colleague put it, “disclosure is like match.com for criminals.” Continue reading →

Anticorruption Bibliography – Sept. 2014 Update

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