Let’s Talk About Monaco

Monaco, the sovereign city-state on France’s Mediterranean coast, is many things. It is the second smallest country in the world, following only Vatican City. It boasts the highest GDP per capita of any country. It is a constitutional monarchy, ruled by the same family for over 700 years. It is known for its opulent casino, expensive real estate, and swaggering F1 drivers.

It is also willfully resistant to the Council of Europe’s anticorruption transparency recommendations – or any transparency measures at all, for that matter.

Perhaps due to its small size, Monaco has flown somewhat under the radar in international corruption monitoring. The city-state doesn’t feature in Transparency International’s annual Corruption Perceptions Index, and TI’s web page for Monaco is quite blank. Despite being an international tax haven and banking center, Monaco is conspicuously missing from both the World Bank’s Doing Business rankings and the Heritage Foundation’s index of economic freedom. It’s not that Monaco is a corruption-free paradise. In the few lists in which it does appear, Monaco does not score particularly well: In the RAND Corporation’s Business Bribery Risk Assessment, for instance, Monaco ranked 72nd out of 192 jurisdictions. And a number of recent corruption scandals have involved Monaco, either directly or indirectly. Last year, for example, two brothers who ran a Monaco-based consultancy called Unaoil pleaded guilty in the United States to charges involving millions of dollars in bribes paid between 1999 and 2016. Corruption alarms were also raised in July 2019, when Monaco’s justice minister abruptly blocked term renewal for a judge leading a corruption inquiry that involved a Russian billionaire, a former Monaco justice minister, senior Monaco police officials, and others. More recently, in late November 2020, former French president Nicholas Sarkozy went on trial for attempting to bribe a French magistrate with a prestigious job in Monaco.

These incidents have largely come to light because of involvement outside of Monaco: international companies, legal battles that cross borders, and foreign politicians. Monaco itself remains something of a black box. As a 2017 report from the Council of Europe’s Group of States Against Corruption (GRECO) noted, there are no records whatsoever of criminal or disciplinary proceedings related to corruption in Monaco’s parliament. This lack of reported cases, GRECO concluded, is likely due not to an absence of corruption, but to a lack of oversight. As the report noted, Monaco has “few mechanisms to ensure satisfactory transparency of parliamentary work and consultations,” and lacks a “code of conduct that would govern, among other things, the acceptance of gifts and other benefits, the management of conflicts of interest, or relations with lobbies and other third parties seeking to influence parliamentary processes and decisions.” The GRECO report further observed that although judicial proceedings are typically public, there is a carve-out for holding court behind closed doors where public proceedings “might cause a scandal or serious inconvenience.” Cases “concerning the internal operation of courts” are also not public. In practice, there is even less transparency than the official policies would indicate, as most criminal cases are in fact dealt with in France, behind closed doors.

Without a code of conduct against corruption-related activities, with no mechanisms to provide oversight, with any corruption scandals that do occur likely to be tried in secret, and with little international attention on the issue beyond infrequent GRECO reports, Monaco can keep its corruption well hidden. Although occasional scandals might pop up around Monaco, the country makes it difficult to know the nature and extent of its corruption.

Continue reading

New Podcast, Featuring Gary Kalman

A new episode of KickBack: The Global Anticorruption Podcast is now available. In this week’s episode, we’re delighted to welcome back to the podcast Gary Kalman, the Director of Transparency International’s United States office. I was fortunate to be able to interview Gary a little over one year ago, just before he stepped into his new role as TI’s U.S. Director. In our more recent conversation, we had the opportunity to discuss how his first year in this position has gone, touching on some major successes–most notably the passage of the Corporate Transparency Act, which requires companies to provide the government with information on their true beneficial owners–as well as ongoing challenges. Gary discusses some of the advocacy strategies that proved effective on the corporate transparency issues, and suggests how similar strategies might be deployed to advance other aspects of the anticorruption agenda. He also lays out what he sees as the highest priorities for TI’s advocacy work in the United States, and what vulnerabilities have been exposed by the experience with the Trump Administration and how those might be addressed. 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.

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…

Guest Post: A Defense of Anticorruption Orthodoxy

Robert Barrington, Professor of Anti-Corruption Practice at the University of Sussex’s Centre for the Study of Corruption, contributes today’s guest post.

The international anticorruption movement, which has been so successful over the last 25 years in putting this once-taboo issue squarely at the forefront of the international agenda, is suffering a crisis of confidence. The aspiration to eliminate corruption now seems to many like a fantasy from the dreamy era of the fall of the Berlin Wall. And what had appeared to be an emerging consensus about how to diagnose corruption, and how to respond, is fracturing. There has long been a lively debate within the anticorruption community about the best ways to understand and respond to corruption; and likewise, a growing challenge from several different quarters (including governments, businesses, journalists, and academics) on areas such as measurement, what has been successful, and whether the evidence matches the theory for fundamental approaches such as transparency. The debate and challenge have been broadly healthy, and have led to sharper thinking and improved approaches. But some criticism has veered towards attacking simplistic caricatures of the perceived orthodoxy, or launching broad-brush critiques that, intentionally or not, serve to undermine the anticorruption movement and provide nourishment for those that would prefer to see the anticorruption movement diminished or fail.

Take, for example, two common lines of attack against the “orthodox” approach to tackling corruption, one concerning the diagnosis of the problem and the other concerning appropriate responses: Continue reading

Do Stronger Campaign Finance Disclosure Rules Reduce Corruption? A Critical Assessment of Transparency International’s CPI Report

Transparency International (TI) released its latest Corruption Perceptions Index (CPI) last month. A couple weeks back, in what has unfortunately become a necessary annual tradition, I posted a warning that one should not attach significance to short-term changes in any individual country’s CPI score. Today, I want to turn to another matter. In recent years, whenever TI releases a new edition of the CPI, the organization plays up certain themes or claims that, according to TI, the CPI reveals about corruption’s causes or impact. This year, one of the main themes in the report is the connection between corruption and campaign finance regulation. As this year’s lead TI press release on the CPI declares, “Analysis [of the data] shows that countries that perform well on the CPI also have stronger enforcement of campaign finance regulations.… Countries where campaign finance regulations are comprehensive and systematically enforced have an average score of 70 on the [100-point] CPI, whereas countries where such regulations either don’t exist or are so poorly enforced score an average of just 34 or 35 respectively.” (On the CPI, higher scores indicate lower perceived corruption.)

How did TI arrive at this conclusion? The report accompanying the CPI, and the longer research brief on this topic, give a bit more explanation. TI used another index, from the Varieties of Democracy (V-Dem) project, on “Disclosure of Campaign Donations.” The V-Dem index rates countries’ disclosure requirements for campaign donations on a 0-4 ordinal scale. TI took this scale, collapsed the 0 and 1 categories into one (allegedly for “data visualization purposes,” though I’m not sure what this means), and then calculated the CPI score for the countries in each of the four categories. The results:

  • For those countries with a V-Dem disclosure score of 0/1 (no disclosure requirements or requirements that are partial and rarely enforced), the average CPI score was 34.
  • For countries with a V-Dem score of 2 (uncertain enforcement of disclosure rules) the average CPI was 35.
  • For countries with a V-Dem score of 3 (disclosure requirements exist and are enforced, but may not be fully comprehensive), the average CPI score was 55.
  • Countries with a V-Dem score of 4 (comprehensive and fully enforced disclosure requirements) had an average CPI score of 70

That looks like pretty strong evidence that strong campaign finance disclosure rules are associated with lower corruption, and that’s certainly the story TI wants to tell. As the report puts it, “Unregulated flows of big money in politics … make public policy vulnerable to undue influence.” The research brief similarly explains, “Shedding light on who donates and how much, can expose the influence of money in politics and deter corruption and other pay-to-play situations.”

The claim may ultimately be correct, but on closer inspection, the evidence TI adduces in support of that claim is deeply problematic. Continue reading

Small Year-to-Year Changes in CPI Scores Are Meaningless. Small Year-to-Year Changes in CPI Scores Are Meaningless. Small Year-to-Year Changes in CPI Scores Are Meaningless

Last month, Transparency International (TI) released the latest version of its Corruption Perceptions Index (CPI)–an index that I continue to believe is useful and important, and that I regularly defend against the blunderbuss critiques sometimes leveled by a few of my colleagues in the academy. Yet every year when the CPI comes out, we see a spate of articles and press releases that focus on individual countries’ score changes from one year to the next. (For some examples from this year, see here, here, here, here, and here.) TI contributes to this: Despite the qualifications and cautions one can find if you search TI’s web site diligently enough, TI’s lead press release and main CPI report inevitably play up these changes, connecting them to whatever larger narrative that TI hopes to convey. This year was no exception. This time around, the press release emphasizes that “(f)our G7 countries score[d] lower than last year: Canada (-4), France (-3), the UK (-3) and the US (-2). Germany and Japan have seen no improvement, while Italy gained one point”–and TI treats this as evidence for the assertion, in the title of the press release, that the “2019 Corruption Perceptions Index shows anti-corruption efforts stagnating in G7 countries.”

Sigh. I feel like I have to do this every year, but I’ll keep doing it until the message sinks in. Repeat after me:

  • Small year-to-year changes in an individual country’s CPI score are meaningless.
  • Small year-to-year changes in an individual country’s CPI score are meaningless.
  • Small year-to-year changes in an individual country’s CPI score are meaningless.
  • Small year-to-year changes in an individual country’s CPI score are meaningless.
  • Small year-to-year changes in an individual country’s CPI score are meaningless.
  • Even big changes in an individual country’s CPI score may well be meaningless, given the fact that, in a collection of 180 countries, random noise will sometimes produce unusually large changes an a handful of countries (for the same reason that if you flip a set of five coins 180 times, odds are a few of those times you’ll get five heads or five tails).
  • Because year-to-year changes in an individual country’s CPI score usually meaningless, they are not newsworthy, nor can they be invoked to make substantive claims about corruption’s causes or consequences, or the success or failure of different countries’ anticorruption policies.

I don’t want to repeat everything I’ve written before explaining why this is so; I explained this at length in my post last year, after the 2018 CPI came out. (That post, in turn, relied on my prior writing on this topic: See here, here, here, here, here, and here.) I’ve kind of given up hope that TI will actually modify the way it talks about within-country year-to-year CPI score changes in its press releases. I know enough people at TI (great people, I should add) who are aware of what I (and plenty of others) have had to say on this topic that I can only assume that the failure to change is a deliberate decision on the part of TI’s leadership and communications team. I strongly suspect that the serious researchers at TI who work on the CPI are slightly embarrassed by how the index is framed by the organization for public and media consumption, but there’s nothing they can do about it. Despite the apparent futility of my prior efforts, I’ll keep harping on this, in the vain hope that the message will gradually trickle out.

Some Good News and Bad News About Transparency International’s Interpretation of its Latest Corruption Perceptions Index

In my post last week, I fired off a knee-jerk reaction to Transparency International’s latest Corruption Perceptions Index (CPI). My message of that post was simple and straightforward: We shouldn’t attach much (or perhaps any) importance to short-term changes in any individual country or region’s CPI score, and the bad habit of journalists—and to some extent TI itself—of focusing on such changes is both misleading and counterproductive.

Since I was trying to get that post out quickly, so as to coincide with the release of the CPI, I published it before I’d had a chance to read carefully all of the material TI published along with the new CPI, and I promised that once I’d had a chance to look at those other materials, I would follow up if I had anything else to say. I’ve now had that chance, and I do have a few additional thoughts. The short version is that the way TI itself chose to present and discuss the implications of the 2018 CPI, in the accompanying materials, is both better and worse than I’d originally thought.

So, first, the bad news: Continue reading

A Reminder: Year-to-Year CPI Comparisons for Individual Countries are Meaningless, Misleading, and Should Be Avoided

Today, Transparency International released its new Corruption Perceptions Index (CPI) for 2018. At some point, hopefully soon, I’ll have time to look closely at the new data and accompanying materials, and if I have something to say about it, I’ll post it here. But that will probably take a while, and since the media coverage of the CPI is usually pretty intense in the first few days after the release, and dissipates in a week or two, I wanted to get out at least one post right now, on the day of the release, with a plea to everyone out there–especially journalists, but civil society activists and others as well:


Just don’t do it. Don’t. I know the temptation can seem overwhelming. Who’s up? Who’s down? Things are getting better! Things are getting worse! Nothing is changing! So many stories can be written based on these changes (or non-changes).

But these sorts of comparisons are virtually all completely useless, and probably counterproductive. Continue reading

Guest Post: Towards an African Voice on Anticorruption

Today’s guest post is from Selemani Kinyunyu, Senior Policy Officer for Political and Legal Matters at the African Union Advisory Board on Corruption. The views expressed in this post are his own.

The African Union (AU) has declared the year 2018 is the African Anti-Corruption Year, and the fight against corruption was a central focus of the 31st Summit of the AU, which was held this past July 1 and 2 in Mauritania. The Summit, along with other recent developments, have made clear that there is an emerging African voice on this issue, one that emphasizes certain issues of pressing importance and that articulates a distinctive perspective on these issues. The AU Summit in particular highlighted four notable issues: Continue reading

Guest Post–Assessing Corruption with Big Data

Today’s guest post is from Enestor Dos Santos, principal economist at BBVA Research.

Ascertaining the actual level of corruption is not easy, given that it is usually a clandestine activity, and much of the available data is not comparable across countries or across time. Survey data on corruption experience can be helpful, but it is often limited to very specific kinds of corruption (such as petty bribery). Researchers and analysts have therefore, quite reasonably, tended to rely on subjective corruption perception data, such as Transparency International’s well-known Corruption Perceptions Index (CPI). (The CPI aggregates corruption perception data from a variety of other sources, mostly expert assessments.) But conventional corruption perception measures (including those use to construct the CPI) have well-known problems, including limited coverage (with respect to both years and countries) and relatively low frequency (usually annual). And they rely on the perceptions of a handful of experts, which may not necessarily be representative. These limitations mean that while traditional perception measures like the CPI may be useful for some purposes, they are not as helpful for others, such as measuring the impact of individual events or news reports on corruption perceptions, or how changes in corruption perceptions affect government approval ratings.

To address these concerns, a recent study by BBVA Research, entitled Assessing Corruption with Big Data, offered an alternative, complementary type of corruption perceptions measure, based on Google web searches about corruption. To construct this index, we examined all web searches classified by Google Trends in the “Law and Government” category for individual countries, and calculated the proportion of those searches that contain the word “corruption” (in any language and including its misspellings and synonyms). Our index, which begins in 2004, covers more than 190 countries and, unlike traditional corruption indicators, is available in real-time and with high-frequency (monthly). Moreover, it can be reproduced very easily and at very low cost.

Here are some of our main findings: Continue reading