The 2014 CPI Data Demonstrates Why, Even Post-2012, CPI Scores Cannot Be Compared Over Time

A little while back, I expressed some skepticism about whether Transparency International’s Corruption Perceptions Index (CPI) scores can be compared across time, even after TI changed its methodology in 2012 and claimed that its new scores would now be comparable across years.  More recently, I criticized TI’s 2014 CPI for burying the information on the margins of error associated with the CPI values, and for wrongly asserting that changes in the CPI score between 2013 and 2014 for certain countries (most notably China) were substantively meaningful.  (In fact, not only does the change in China’s score between 2013 and 2014 seem not to be statistically significant, but the change was due almost entirely to the dropping of a source in which China did abnormally well in 2013, and an abnormally large movement in a single other source.) I decided to follow up on this by taking a closer look at the other ten countries that TI singled out as having experienced significant CPI changes (in either direction) between 2013 and 2014.

Upon closer examination, I’m even more certain that CPI scores cannot be compared over time. I’m also more confident in my judgment that TI has been unforgivably sloppy — and downright misleading — in how it, and its representatives, have portrayed the substantive significance of these CPI changes. It turns out that the problem I found with the China calculations was not unusual. For almost all of the eleven countries TI identified as big movers, the CPI changes were driven by (1) the addition or elimination of sources from year to year for particular countries, and/or (2) abnormally large (indeed, implausibly large) movements in a single source. Until TI fixes its methodology, the safest thing to do is to ignore year-to-year changes in the CPI. And for the sake of preserving its own integrity and credibility, TI should either (A) persuasively explain why I am wrong in my analysis of the data (in which case I will gladly concede error), or (B) issue some sort of retraction or correction to its earlier press releases, and either drop the claim that post-2012 CPI scores can be compared across time or fix its methodology going forward.

Allow me to elaborate my analysis of the data: Continue reading

Corruption in Turkey Poised to Worsen

A year ago, a spate of corruption allegations leveled at high-ranking officials in Turkey’s ruling Justice and Democracy Party (AKP) placed the country’s graft problem and political tumult squarely in the international spotlight. Prosecutors alleged misconduct involving over $100 billion by more than 90 top officials, including then-Prime Minister (now President) Recep Tayyip Erdogan’s son. AKP supporters believe the charges were politically motivated, pursued by supporters of Islamic cleric Fethullah Gulen in an effort to undercut the AKP. (Gulenists, whose marriage of convenience with the AKP dates back to the early 2000s, had secured key positions in the bureaucracy, police, and judiciary. But Erdogan’s growing power and disagreements over foreign policy strained the alliance, and tensions between the two grew.) In a swift response many believe was led by Erdogan, thousands of police were removed from the corruption probe. Prosecutors and judges were likewise dismissed, and the AKP-dominated Parliament passed a bill restructuring the Supreme Council of Judges and Prosecutors (HSYK) to give the political branches greater control over the judiciary.

Erdogan’s government put the nail in the corruption investigation’s coffin last month with a bill that bolsters executive police powers at the expense of the judiciary’s oversight function. In brief, the new law reduces the power of incumbent judges in two top courts through a restructure and proscribes broader search and seizure power to police. Both moves are designed to give the AKP the upper hand in future disputes with the judicial branch.

The erosion of judicial independence will make anticorruption prosecutions more difficult in the future. But Turkey’s problems run deeper. In short, these recent developments are merely an extension of a corrosive pattern of governance and weakening rule of law: (1) a steady expansion of executive power and (2) infringements on freedom of expression–developments that have been countered, if at all, by (3) an illiberal counterweight, in the form of the Gulen movement. Getting corruption in Turkey under control will require tackling each of these three underlying causes.

Continue reading

Guest Post: The OECD Phase 3 Report on Turkey

GAB is pleased to welcome back Gönenç Gürkaynak, the managing partner and head of the Regulatory and Compliance Department at ELIG, Attorneys-at-Law (Istanbul), who contributes the following guest post:

The OECD Working Group on Bribery (“WGB”) has published its Phase 3 Report on Turkey, following the Phase 2 and Phase 2Bis Recommendations (“Follow-Up Report”) of March 2010, to assess Turkey’s efforts in implementing the OECD Anti-Bribery Convention. The Phase 3 Report is dominated by criticism of Turkey’s low level of enforcement and its inaction with respect to detecting, investigating, and prosecuting acts of foreign bribery. This result is consistent with the assessment provided by Transparency International in its 2014 Exporting Corruption report, which found that Turkey had “little or no enforcement” of its foreign anti-bribery laws. Indeed, despite the fact that Turkey is the 17th largest economy in the world, and has trade relations with many countries presenting potentially high risks of foreign bribery, Turkey has had only six foreign bribery investigations (only one of which was a result of pro-active detection by Turkish authorities) and no foreign bribery convictions in the 14 years since the Convention entered into force in Turkey. Thus the Phase 3 Report is yet another reminder that Turkish law enforcement regarding foreign as well as domestic bribery has still a long way to go.

As one might imagine given the disheartening enforcement statistics just noted, many of the WGB Phase 3 recommendations emphasize the need for improvements in Turkey’s mechanisms for gathering information to ensure effective detection of foreign bribery allegations and to enhance investigations by engaging with other investigative authorities. But there are three other important features of the Phase 3 report that are at least as important, and deserve more attention: First, the ambiguity of Turkey’s corporate liability laws; second, the inadequacy of Turkey’s whistleblower protections; and third, the significance of Turkey’s recent controversies over domestic anticorruption enforcement issues. Continue reading

Turkish Turmoil and Politically-Motivated Anticorruption Enforcement

At the Project Syndicate website, Dani Rodrik had a very nice commentary last month about the recent power struggles in Turkey, which have included prominent anticorruption actions against senior government figures. These actions have been brought by prosecutors sympathetic to one faction (the Gülenists) against high-ranking figures affiliated with Prime Minister Erdoğan and his party (the AKP). For people like me, who know next to nothing about Turkey, Rodrik’s post provides a nice overview (albeit one with a strong editorial slant). In addition, one passage in Rodrik’s post caught my attention, as it seems related to a common pattern, and problem, in the world of anticorruption enforcement:

The Gülenists have dressed up their campaign against Erdoğan in the guise of a corruption probe. No one who is familiar with Turkey would be surprised to learn that there was large-scale corruption surrounding construction projects. But the corruption probe is clearly politically motivated, and Erdoğan is right to question the prosecutors’ motives. The current round of judicial activism is as much about rooting out corruption as previous rounds were about [other alleged malfeasance] – which is to say, not much at all.

This seems to be a frequently recurring pattern: (1) one party or faction launches an aggressive anticorruption probe against a rival party or faction; (2) it is almost certainly true that most or all of the targets of the corruption investigation did in fact engage in corruption—often serious corruption; yet (3) it is also often the case that those pushing the investigations are doing so not only, or even primarily, out of genuine concern about corruption, but rather as a way to damage a political rival. The most familiar manifestation of this pattern occurs when a new party or faction comes to power and launches corruption investigations against its predecessors or main rivals, as part of what may amount to a purge (or, more mildly, an effort to consolidate power). There’s a plausible argument that this is what’s happening right now in China. The Turkey situation is a bit different, in that a faction that does not currently control the government nonetheless has enough support within the justice system (police, prosecutors, judges, etc.) to launch politically-motivated corruption probes of government officials. Continue reading