Corruption Perceptions Index 2012 and the European Financial Crisis

Europe’s rankings in the Corruption Perceptions Index 2012 are as diverse as the region itself.

Clearly the perceived level of corruption in Greece (94th, the lowest EU state) is entirely different from that of Denmark and Finland, tied with New Zealand in first place. However, the old adage that corruption only occurs in the countries of the South, rings rather hollow.

With a score of 36, Greece ranks 94, together with Colombia, Benin, Djibouti, India, Mongolia and Senegal.  Citizens of Italy (72nd), too, presumably will have pause for thought: sharing this rank with Bosnia and Herzegovina and Sao Tome and Principe, just before Bulgaria. In fact, Greece, Italy, Spain and Portugal, at the centre of the Euro crisis, were the four worst ranked countries in Western European countries in this year’s index.

The roots of crisis lie in varying factors from country to country, there is undeniably a link between corruption and the financial crisis, as the protestors on the streets of Athens, Rome, Lisbon and Madrid have been quick to point out.

Consider the recent story of the brave Greek journalist Kostas Vaxevanis arrested and tried for publishing a list of more than two thousand wealthy Greeks with Swiss bank accounts. The list had been lying unread on government desks for several years.

Leaving aside the blatant media gagging that the Vaxevanis case exemplifies, one also can ask why so many people allegedly were not paying taxes? Why did the Greek government fail to act as soon as they received the list? Why shoot the messenger, instead of looking into the allegations of tax evasion?

Vaxevanis, the Greek journalist now faces a retrial, even though he was found not guilty. The prosecutor believes the decision in the journalist’s favour “is legally wrong”;  Vaxevanis’s explanation is that, “the prosecutor’s office …. [is] doing whatever they can to get the result they want”. The revelation of the list raises questions about whether there are credible, enforceable measures in place to ensure that people pay their taxes in line with all requirements of the rule of law.

One could ask questions of the European Commission as well, as Bloomberg News tried to do.  However, the EU’s general court last week blocked an attempt to force the European Central Bank to release files showing how Greece used derivatives to hide its debt in the run-up to the financial crisis. Bloomberg brought the case under the EU’s freedom of information rule, but the court said disclosure of the documents, “would have undermined the protection of the public interest”. The ruling will mean that the question of whether EU officials knew of irregularities in Greece’s national accounts before they became public in 2009 will not be answered – at least, not for now.

The failure to put into place adequate measures to prevent, detect and root out legal and illegal forms of corruption is among the reasons for the financial crisis. It is obvious now that the public finances of countries like Greece, Italy, Portugal, Spain and Cyprus, and arguably the European Commission itself, were not sufficiently transparent and kept the debt crisis under the carpet for far too long.

But it’s far more complex as the Vaxevanis case illustrates – institutions like the judiciary, the audit office, political parties, the media, and so on, are like moving parts of a complicated machine – they all need to work, and work together, to allow the anti-corruption system to run smoothly and effectively. In Greece our TI chapter has done research showing that many of these institutions, political and business in particular, are failing the transparency test in Greece, and Vaxevanis’s case illustrates some of these institutional weaknesses.

In part because of the European crisis itself,  the complacency about corruption is now being exposed and the link between corruption, or a lack of transparency, and the political process is increasingly being made by Europe’s citizens. Three quarters of them think corruption is major problem in their country, according to the 2012 poll. It was 98 per cent in Greece.

Corruption that perhaps was concealed by strong or stable economic growth is now, increasingly, being laid bare, with a commensurate loss of trust in the political system and in politicians. Some measures are being taken but it remains to be seen whether Europe’s governments will respond to the changing economic and political climate with further measures to strengthen anti-corruption efforts. They need to ensure that institutions are transparent, their leaders accountable and laws are rigorous and enforced.

Fighting corruption is not only essential for democracy, it makes good economic sense as well.

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Anne Koch

About Anne Koch

Anne Koch was Regional Director for Europe and Central Asia at Transparency International.

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5 Responses to Corruption Perceptions Index 2012 and the European Financial Crisis

  1. Yuriy 9 December 2012 at 11:18 am #

    Печально наблюдать тот факт, что Украина, которая находится в географическом центре Европы полностью погрязла в коррупции на уровне многих слаборазвитых африканских стран. Поэтому очень важно делать В Украине, в Киеве seo оптимизацию сайтов, которые популяризируют данную информацию на просторах украинского интернета. Качество сайтов и их раскрутка могут в какой-то степени определить сознание людей, которые когда-нибудь будут делать правильный выбор.

  2. Michel van Hulten 13 December 2012 at 9:26 pm #

    121205-3, Eng. ‘new’ CPI is fake-new
    Dr. Michel van Hulten, Lelystad,

    [This paper reflects more or less what is written in the Dutch-language contribution on the website about the CPI-2012. A more elaborate paper in English about the CPI-2012 is in the making and will be placed on this same website within a few days]

    ‘New’ CPI-2012 is not new at all, it is fake
    (go to:

    9 December is the UN international anti-corruption day. A few days earlier, on 5 December 2012, the Transparency International (TI) Secretariat in Berlin launches the latest CPI, Corruption Perceptions Index 2012.

    This ‘product’ of the global NGO that is leading in the fight against corruption played a useful role in 1995 when it was first launched as a wake-up call to the world that failed to see one of the major dangers to our society and economy.
    Over the years since that launch, criticism of its methodology and research techniques to make this ranking of countries perceived as more or less corrupt was growing. Regretfully, the ‘TI-product’ could not stand scientific criticism, and the criticism that was published, among others by me , in serious contributions to the scientific debate were never answered by TI. The main producer of the CPIs from 1995 till 2010, Professor Dr Johann Graf Lambsdorff of Passau University in Germany, withdrew his collaboration in 2011. The message was widely spread by TI-Berlin that an overhaul of work on this ranking effort could be expected that would improve its quality and that realization would begin with the 2012-edition.
    As announced, the CPI-2012 was published on 5 December 2012. The complete ranking begins with Denmark as number 1 (with Finland and New Zealand, all three the same score of 90 points on a scale of 100) and Somalia as number 176, the last one, also with a similar score of 8 out of 100 points for North Korea and Afghanistan.
    The Netherlands scored 8.9 (on a scale of 1 to 10) in 2011 en got ranked nr. 7. This year the Netherlands score 84/100 and ranks nr. 10 (Canada scores also 84/100 but ranks as nr. 9 because the ‘C’ preceeds the ‘N’).

    The change from a decimal system with scores from 0.0 to 10.0 is replaced by scores from 1 to 100. Indeed a renewal, but not really big! The effort to make one scale in use for all results from all sources instead of qualifying per source the results on separate scales, is laudable. The number of sources used for the ranking effort is diminished from 17 in 2011 to 13 in 2012. Indeed this is an improvement as three sources are eliminated that doubled with earlier editions in the same series for successive years. And it is announced that the results as given in the CPI-2012 will now be the benchmark against which future results of the ranking exercises will be measured. Why the Asian Development Bank Assessment is omitted in the CPI-2012, although it had been used in the CPI-2011, is not clearly explained. As renewals, that is it.

    I regret that this is all. There is no ‘new’ CPI! Most important criticism from earlier years is not honored, it is not even mentioned as reporting says ‘we want to look forward not into the past’.

    Strangely enough is not explained in the CPI-2012 report how it is possible that Germany scores in the CPI-2012 with 79 points (rank 13) among the top-best countries, as a few weeks earlier the TI-president in her keynote address in the International Anti-Corruption Conference held in Brasilia, mentions that the German economy is plagued in 2012 by corruption-related losses of 250 billion (nine zero’s) euros. I asked the Berlin Secretariat an explanation, which could not be provided.

    The new CPI-methodology continues to use ‘perceptions’ of observers, businessmen and scientists/researchers. Of course, those involved and used as informants or respondents know what is going on in the world. It is most likely that they are experts in corruption-affairs. Most of them probably live in the shit that corruption is. It is all around them, if they are not at the paying and giving end of a lot of the corruption.

    Every day, news about corruption among the high and mighty in the world reaches our media. Hundreds of researchers report their findings wherever they are asked to delve into corruption affairs. Numerous courts deal with corruption cases. Why then is TI continuing to use ‘perceptions’, ‘thoughts’, ‘images’ if you wish, instead of facts to establish a ranking order of corruptness of countries (or companies, or persons, or groups)? The world knows now more than in 1995 and in the early years of the CPI (and of TI). The organization should have matured as many of the researchers in this field are now uncovering more of the secrets of corruption than ever before.

    Moreover, the perceptions that are used come from biased sources. Most informants and respondents are white, have a business background, are board room types, Anglophone, well-educated, well-earning, expatriate men. Among the informants and respondents are few, if at all the colored, blue collar workers, lower ranking in their companies or administrations, poor, handicapped, sick, women. In short the ‘perceptions’ come from those in power, not from the powerless that might have totally different perceptions of the reality of the world around them.
    I emphasize that it is not racism that forms the dividing line. It is power, class. The CPI is based on persons’ views that come (nearly) all from the same socio-economic background. Maybe there is a reason to work this way as it is more than likely that among those that were allowed to give their perceptions of corruption, perpetrators of corrupt behavior are numerous? If so why not mentioned? Do these perpetrators have the knowledge we need as corruption-fighters, but have too much power and influence? They are better served if corruption remains unknown?
    Just have a look at the reports and the investigations that are used and mentioned as the sources of the CPI. It is inescapable that those delivering information are one-sidedly lined up with the powerful. And as we all know: power creates corruption.
    On the sideline I remark that francophone, lusophone and Chinese studies have not been used. Why not?

    I do not understand why the two scientists mentioned (from Columbia University and from LSE), that gave advice how to improve the CPI methodology, are ‘content with the sources’ as they have been used for this CPI-2012. I do not understand this as a year earlier they explicitly mentioned in their report with proposals that the CPI would win credibility and strength, if it also used the knowledge of reliable facts, at least added to the perceptions-approach, an advice that is not followed by TI.

    I also wonder why TI does not report which other rankings in the world have been studied before choosing these 13 as the baseline studies to make the CPI?
    I assume that TI-staff has scanned tens of options before deciding which ones to be used and which ones not to be used for the resulting composite index called the CPI-2012. As reviewers of the final result we could win more insight if we knew.

    I doubt whether it is good for TI to be co-financed for nearly one hundred percent by governments. The TI-budget was paid by the Dutch in 2010 for €750,000 and in 2011 for €1.2 million. Financing came also from Australia, Belgium, Canada, Denmark, Finland, France, Germany, Ireland, New Zealand, Norway, Spain, Sweden, Switzerland, Thailand, UK, and USA. Their collective contribution of over €21 million stands against not even a million from foundations, companies and others (some private persons). Against all trends, the Dutch government pays now more than in earlier years and guaranteed already to continue to do so till 2014. Another global player, Amnesty International, refuses to accept governmental money, it relies on members. Why is TI so close to governments? Does this closeness help the fight against corruption?



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