The Persistence of Phony Statistics in Anticorruption Discourse

Early last month, UN Secretary General António Guterres delivered some brief opening remarks to the Security Council at a meeting on the relationship between corruption and conflict. In these remarks, Secretary General Guterres cited a couple of statistics about the economic costs of corruption: an estimate, attributed to the World Economic Forum (WEF), that the global cost of corruption is $2.6 trillion (or 5% of global GDP), as well as another estimate, attributed to the World Bank, that individuals and businesses cumulatively pay over $1 trillion in bribes each year. And last week, in her opening remarks at the International Anti-Corruption Conference, former Transparency International chair Huguette Labelle repeated these same figures.

Those statistics, as I’ve explained in prior posts (see here and here) are bogus. I realize that Secretary General Guterres’ invocation of those numbers shouldn’t bother me so much, since these figures had no substantive importance in his speech, and the speech itself was just the usual collection of platitudes and bromides about how corruption is bad, how the international community needs to do more to fight it, that the UN is a key player in the global effort against corruption, blah blah blah. Ditto for Ms. Labelle–her speech used these numbers kind of like a rhetorical garnish, to underscore the point that corruption is widespread and harmful, a point with which I very much agree. But just on principle, I feel like it’s important to set the right tone for evidence-based policymaking by eschewing impressive-sounding numbers that do not stand up to even mild scrutiny. Just to recap: Continue reading

More Phony Numbers–This Time on the Anticorruption Impact of Open Data

OK, I know I’m beating a dead horse. Within the last month I’ve already posted several times (see here, here, and here) about bogus anticorruption statistics, as has Rick. And I promise that after this post, I’ll move on to other topics. But I can’t help commenting on this latest release from Transparency International, criticizing the recent World Economic Forum (WEF) meeting for not explicitly addressing corruption. As its lead example, TI faults the WEF for not addressing issues like open data (and openness more generally). I’m sympathetic to TI’s policy position, but in making the case, TI asserts, “One study suggests that open data could reduce the costs of corruption by about 10 percent.”

I was curious (and, admittedly, skeptical) about yet another seemingly precise estimate of something that’s inherently hard to measure. So I clicked on the link to the “one study” that “suggests” that open data technologies would reduce the costs of corruption by 10%. This “study” is actually a report (really, an advocacy document) from an Australian consulting firm (Lateral Economics), commissioned by a philanthropic fund (the Omidyar Network) that invests in open data initiatives. How does this “study” reach its conclusion that open data could reduce the costs of corruption by 10%? I will now quote in full the entirety of the evidence and analysis supporting that conclusion: Continue reading

It’s Time to Abandon the “$2.6 Trillion/5% of Global GDP” Corruption-Cost Estimate

In my post a couple weeks back, I expressed some puzzlement about the source of the widely-quoted estimate that corruption costs the global economy approximately $2.6 trillion, or roughly 5% of global GDP. I was hoping that someone out there in GAB Reader-Land would be able to point me to the source for this figure (as several GAB readers helpfully did when I expressed similar puzzlement last year about the source for the related estimate that there are approximately $1 trillion in annual bribe payments). Alas, although several people made some very insightful comments (some of which are in the public comment thread with the original post), this time it seems that nobody out there has been able to point me to a definitive source.

I’ve done a bit more poking around (with the help of GAB readers and contributors), and here’s my best guess as to where the $2.6 trillion/5% of GDP number comes from: Continue reading

Where Does the $2.6 Trillion Corruption Cost Estimate Come From?

Last year, I published a post expressing my puzzlement regarding the source of the widely-cited statistic that over $1 trillion dollars are paid annually. I was pleasantly surprised by the speed with which several GAB readers pointed me to the original source that described the methods and data used to calculate that number—and while I wasn’t entirely satisfied, it was at least nice to know where the number came from.

I’m hoping someone out there can help me with a very similar question: Within the last few months, I’ve been at several conferences and meetings where someone has quoted the figure that worldwide corruption (not just bribery) imposes annual costs to the global economy of approximately $2.6 trillion, roughly 5% of global GDP. I’ve looked and looked, and I cannot for the life of me figure out where this number comes from. Continue reading