Corruption levels show no improvement, tested in part by COVID-19

Corruption levels globally remained the same as in past years, and an international group monitoring perceived corruption says the COVID-19 pandemic has been challenging even for nations seen as less corrupt.

Transparency International's annual Corruption Perceptions Index shows that 131 of 180 countries tracked have made no significant progress against stopping corruption in the past decade and that the pandemic "has tested top-scoring countries' resistance to corruption".

Collectively, the corruption level of countries remained the same as in recent years, at an overall rating of 43 on a scale of 0 (highly corrupt) to 100 (very clean). Two-thirds of countries score below 50. Transparency International says that corruption enables human rights abuses and financial crimes.

"Despite the increasing international momentum to end the abuse of anonymous shell companies, many high-scoring countries with relatively 'clean' public sectors continue to enable transnational corruption," the 2021 report said.

Denmark, Finland, and New Zealand are tied for the top spot on the list, with a rating of 88. The UK is 11th (78), and the US is tied with Chile for 27th (67). That US rating is the same as last year but down from 2015's rating of 75 in the CPI.

The index score is a measure of the perceived amount of corruption in a country's public sector. According to Transparency International, the score is a combination of at least three data sources drawn from 13 different corruption surveys and assessments. The data sources include the World Bank and the World Economic Forum.

Transparency International says people should make four demands of their governments "to end the vicious cycle of corruption, human rights violations and democratic decline":

• Uphold the rights needed to hold power to account. The report says governments should roll back disproportionate restrictions related to freedom of expression and assembly introduced at the onset of the pandemic.
• Restore and strengthen institutional checks on power. The report says that public oversight bodies such as anti-corruption agencies and audit institutions "need to be independent, well-resourced and empowered to detect and sanction wrongdoing".
• Combat transnational corruption. Progress can be made towards this objective by closing "legal loopholes" and regulating "professional enablers of financial crime".
• Uphold the right to information in government spending. The report says that countries must make good on promises made in response to the pandemic to include anti-corruption safeguards in procurement. Germany was one of several countries in which government spending on COVID-19-related safeguards was called into question.

Armenia had the greatest five-year increase in the index, going from 35 in 2017 to 49 in 2021, indicating that corruption had eased a bit over that period in that country. Canada had the sharpest five-year decline, down 8 points to 74, which demonstrates a shift towards more corrupt tendencies during that time.

— To comment on this article or to suggest an idea for another article, contact Neil Amato at Neil.Amato@aicpa-cima.com.