Tag Archives: Transparency International

Golden Visa/Passport Programs Have High Corruption Risk and No Demonstrated Economic Benefit. So Let’s Abolish Them.

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We’ve had a couple of posts recently (from regular contributor Natalie Ritchie and guest poster Anton Moiseienko) about the corruption-related problem associated with so-called “golden visa” and “golden passport” programs (GV/GP programs), which grant either residency (golden visas) or citizenship (golden passports) in exchange for “investments” (or sometimes simply direct payments to the government) that exceed a certain threshold. Both Natalie and Anton reference recent reports by Transparency International-Global Witness and the European Commission, both of which focus in particular on the EU, and which are both very useful in documenting the risks associated with these residence/citizenship programs—including though not limited to corruption and money laundering risks. That said, the solutions proposed, while certainly helpful, feel a bit thin, in part because both the TI-GW and EC reports assume that these programs have at least some legitimate uses, or at the very least that it would be overstepping for outsiders (be they international bodies, other countries, or NGOs) to try to coerce states into abandoning these programs altogether.

My inclinations are somewhat different, and a bit more radical: I’d push for abolishing these programs entirely—certainly the golden passport programs, but probably the golden visa programs too. The risks associated with GV/GP programs are well-documented in Natalie and Anton’s posts, as well as the TI-GW and EC reports (and other sources), so I won’t dwell on them here. In short, as these and other sources convincingly demonstrate, GV/GP programs may provide safe havens for wealthy criminals and their money, often produce corruption in the programs themselves, and may also have more diffuse pernicious effects associated with the commodification and marketization of membership in a political community. I acknowledge that the risks associated with well-run programs may not be huge, but they’re not trivial, either. And I can’t for the life of me figure out what benefits these programs could have (to society, not to the governments that run them) that could possibly justify those risks.

The usual story is that these programs attract necessary foreign investment, stimulate the economy, and create jobs and raise government revenue. I’m no macroeconomist, and so I may be about to reveal my ignorance in embarrassing fashion, but I have yet to hear a convincing argument, let alone see a persuasive study, that establishes that these programs indeed have substantial economic benefits. Let me explain my puzzlement, and if I’m obviously misunderstanding some crucial point, either about how the programs work or about the economics, I hope some readers out there will correct me. Continue reading →

Proposed Changes in Brazil’s Anticorruption Legislation: A Summary and Critique

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Early last month, Brazilian Minister of Justice Sergio Moro (a former judge best known for his role in the so-called Car Wash corruption cases) introduced an extensive anti-crime legislation package. The package includes many measures, including some related to things like violent crime, but it notably includes five measures that are especially relevant to Brazil’s fight against corruption. What are these proposed changes, and what would their implications be?

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The Romanian Government Opposes the Appointment of Laura Codruta Kovesi as European Public Prosecutor. That’s Why She Should Get the Job.

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There’s so much bad news in the anticorruption world these days that it’s hard to keep up. But I’ve recently been reading up on the ongoing debates in Europe over the selection of the first European Public Prosecutor, and I think this issue deserves some discussion, and even more attention from the anticorruption community in Europe and around the world.

Here’s the quick background for those who aren’t familiar with this issue: Back in 2017, 20 EU Member States agreed to create a new institution called the European Public Prosecutor’s Office (EPPO), headed by a European Public Prosecutor, with authority to investigate and prosecute (in national courts) offenses connected to the EU’s financial interests, such as fraud or embezzlement involving EU funds. (22 EU countries have now agreed to participate in the EPPO system.) The EPPO is scheduled to begin operations in late 2020 or early 2021, and the EU is in the process of selecting the first EPPO head. The three finalists are a Jean-Francois Bohnert of France, Andres Ritter of Germany, and Laura Corduta Kovesi from Romania. Ms. Kovesi had been considered a frontrunner, and still might secure the post, but her candidacy is under attack from her own government. Indeed, it seems that intense lobbying against her by the Romanian government is what led the Committee of Permanent Representatives in the European Union to back Bohnert for the job, though the European Parliament’s Committee on Civil Liberties, Justice, and Home Affairs voted to support Kovesi. The selection process is still ongoing, and it’s not clear when a final decision will be made. For those getting cold feet about Kovesi, though, it seems that the opposition of her home government is a significant reason.

In my view that’s not only wrong, but backwards. The Romanian government’s no-holds-barred, all-out attack on Kovesi is one of the best arguments for appointing her. I don’t know enough about the candidates to have a considered view of which of them, all else equal, would do the best job heading the EPPO, but assuming that they are all basically well-qualified, the Romanian ruling party’s panic over the prospect that Kovesi might get the job is exactly why she should be appointed, for two reasons:

  • First, the fact that government of one of the most corrupt countries in the EU—one with the greatest theft and misappropriation of EU funds—is terrified that Kovesi might get the job, but apparently fine with either of the other two choices, is strong evidence that she’ll be more effective. After all, if we were selecting the city police chief, and we found out that the local mafia boss strongly objected to candidate A, but was fine with candidates B and C, that seems like a point in candidate A’s favor, not a strike against her. (And if you think it’s unfair to compare the government of an EU member state to an organized crime family, well, read on.)
  • Second, the Romanian government is conducting a fairly blatant attempt to misuse its justice system in order to interfere with an EU decision process, in the context of a corrupt and increasingly illiberal ruling party. The EU is already struggling to deal with backsliding in Hungary and Poland, and it needs to show that it won’t be bullied or manipulated, and that if Member States want to be treated as good EU citizens, they need to comport with basic norms.

Now, given that I just made those statements with what sounds like great confidence, and the rest of this post may adopt a similarly confident tone, I should immediately add the caveat that I am not an expert on Romania, I’ve never been there, I don’t speak the language, and all I know about the situation, as the old saying goes, is what I read in the papers. So if you want to say I don’t know what I’m talking about, fair enough, you have a point. But I’ve been reading a lot about this, and what I’ve read seems both sufficiently scary, and sufficiently clear, to merit comment. Moreover, I think the Romanian government’s strategy relies in part on non-experts feeling like they don’t really understand what’s going on, so that it starts to feel like that, in the face of conflicting narratives (a sort of he said/she said), it’s best just to avoid controversy by supporting a “safe” choice for EPPO head. We’ve got to resist that impulse. Appointing someone other than Kovesi may seem like the safe choice, but that’s exactly why Kovesi is the right choice. Continue reading →

The Bolsonaro Administration is Quietly Reducing Transparency in Brazil

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Right-wing populist Jair Bolsonaro was inaugurated President of Brazil on January 1, 2019. As a candidate, Bolsonaro promised that his regime would break with the large-scale graft of Brazil’s former leaders and would ruthlessly pursue the corrupt and bring them to justice. At the end of January, Justice Minister Sergio Moro released, with much fanfare and press attention, a sweeping anti-crime legislation package that addresses both white collar crime and violent organized crime, and that incorporates some, though not all, of the anticorruption measures proposed by Transparency International. So does this mean that the Bolsonaro Administration is following through on its promise to make the fight against corruption a major priority, and to end the culture of impunity that has shielded Brazilian political elites?

Alas, no. While the anti-crime package (and other high-profile pieces of legislation, like tax reform) have been highlighted by the administration and attracted most of the media attention, less prominent yet equally consequential pieces of legislation related to corruption are being passed with little to no warning or public debate. Here are two examples of major events that have occurred within the first month of the regime that should give anticorruption scholars and the international community pause in their evaluation of the Bolsonaro government’s fight against corruption:

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

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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

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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:

DO NOT COMPARE ANY GIVEN COUNTRY’S CPI SCORE TO LAST YEAR’S SCORE TO MAKE CLAIMS ABOUT WHAT’S HAPPENING IN THE FIGHT AGAINST CORRUPTION.

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 →

Announcement: Transparency International Seeking External Experts for Its Helpdesk

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Transparency International (TI), as many readers of this blog may already be aware, runs a very useful “Anti-Corruption Helpdesk” service, which produces 10-12 page topic briefs in response to inquiries from members of the TI network and certain other stakeholders, and publishes those briefs on its website for anyone to download. The briefs are typically completed within 10 working days of the receipt of the inquiry.

TI is currently seeking external experts to assist in the preparation of Helpdesk briefs. The details of the consultancy (including responsibilities, necessary qualifications, remuneration) can be found here. This may be an especially exciting opportunity for young (and somewhat-less-young) professors and advanced graduate students. However, please note that the deadline for applications is the end of next week (January 25), and the application requires the completion of a writing assignment (which TI says shouldn’t take more than three hours, though I think doing it well may take somewhat longer). So, if this is of interest to you, I encourage you to check out the link above, download the relevant materials, and start work on your application now!

Guest Post: Toward Global Standards for Defense Sector Governance

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Amira El-Sayed, Program Manager for Transparency International’s Responsible Defence Governance program, contributes today’s guest post:

The governance of military power presents one of the great global challenges of our age. The defense sector is large, powerful, and secretive, and for those reasons especially vulnerable to corruption. In many countries, small groups of elites divert defense resources for personal enrichment, which can create risks to a state’s stability and security. Perhaps ever more troubling, in many countries powerful militaries run vast and secretive business empires exempt from oversight. Some of these businesses, such as resource extraction, are nominally legal, but militaries are often enmeshed with illegal activities like the trafficking of drugs, arms, and people. This too threatens state security, in at least two ways. First, poorly governed, corrupt militaries may be unable to respond effectively to genuine national security threats. Second, when the military uses its power to secure economic advantages for elites, this may contribute to the public resentment and frustration that can fuel violent extremist movements.

Improving governance in the defense sector is especially challenging. Defense sectors have historically hidden behind an “exceptional” status that has been used to stymie governance reform, with “national security” invoked as a sweeping justification to evade legitimate scrutiny from independent institutions and experts, such as auditors, anticorruption institutions, and civil society organizations. And this is not just an issue in authoritarian states: even in democracies, militaries are often exempted from meaningful oversight by parliamentary committees, judiciaries, audit offices, and anticorruption bodies, even as oversight by those bodies expands in other areas. While the need for secrecy may well be more pressing with respect to certain aspects of military and defense policy, the exemption of the defense sector from meaningful scrutiny is often overbroad, unjustified, and used to mask corruption, misuse of resources, and incompetence.

So how do you address one of the most complex challenges in governance, in a sector that has been exceptionally secretive, opaque, and impenetrable? Some of the work has to be done at the national level in individual countries, tailored to the each country’s specific circumstances. (There are many examples of such work by Transparency International (TI) and other civil society organizations. For instance, in Ukraine TI worked to establish high-level defense anticorruption committee called NAKO, and in Nigeria TI worked with the Air Force to take examine its governance structures and anticorruption systems.) But what about global standards, along the lines of what has been developed in other areas, like human rights and labor? Here there appears to be a significant gap. True, some security-related instruments do provide some principles for state/military behavior in specific areas, such as the OCSE Code of Conduct, UN Arms Trade Treaty, the NATO Building Integrity Programme, and the Tshwane Principles. And some of the general anticorruption or governance-related instruments, such as the UN Convention Against Corruption and Open Government Partnership, have some limited applications to the defense sector. But none of these instruments offers a comprehensive global approach to defense governance.

To fill this gap, TI is launching an initiative to formulate, formalize, and promote a set of global principles that underpin responsible, accountable governance of military power—principles that would embrace the idea that the military must be accountable to the people and that would, if followed, improve domestic governance of the defense sector. That is, TI is working with national governments, other civil society organizations, and the international community to develop Global Standards for Responsible Defense Governance, embodied in a Declaration on the Responsible Governance of Military Power. Continue reading →

Guest Post: How to Fix TI’s National Integrity System Country Assessments

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GAB welcomes back Alan Doig, Visiting Professor at Newcastle Business School, Northumbria University, who contributes the following guest post:

Transparency International (TI) has developed a number of tools to assess corruption in different countries. The best-known is probably the Corruption Perceptions Index (CPI), which purports to reduce each country’s level of (perceived) corruption to a number, to facilitate international comparisons. But TI has also developed another tool, the “National Integrity System” (NIS) assessment, which evaluates an individual country’s governance system with respect to both internal corruption risks and its capacity to fight corruption in the society more broadly; the NIS evaluations typically focus on a number of governance “pillars,” such as the legislative, executive, and judicial branches, audit agencies, anticorruption agencies, media, civil society, etc. (TI maintains a number of more recent NIS assessments on its website.)

Recently, the NIS evaluations have been subjected to withering critiques. For example, last year on this blog Rick Messick summarized a critical article by Professors Paul Heywood and Elizabeth Johnson, which argued, on basis of the NIS for Cambodia, that the NIS reviews relied on a “narrowly conceived institutional approach,” displayed “insufficient appreciation of cultural distinctiveness,” failed to properly conceptualize the notion of “integrity,” and over-emphasized “compliance-based approaches to combating corruption at the expense of the positive promotion of integrity.” Alas, this critique largely misses the mark, and in fact goes a long way (as does Mr. Messick’s blog post) to perpetuating myths and incorrect assumptions about the NIS approach. It’s true that something has gone badly awry with TI’s NIS assessments—on that point, I agree with Heywood, Johnson, and Messick. But though these authors tell us what is wrong with the NIS, they never bother to ask themselves why; more importantly, they make the mistake of confusing errors in execution (on the basis of a single country!) with inherent problems with the concept itself. Continue reading →

Guest Post–Assessing Corruption with Big Data

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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 →