Corruption slows efforts to implement sustainable policymaking in the OECD and EU

By Christof Schiller and Leon Klein

Corruption is once again a hot-button issue, and not just because of the cash-for-influence scandal involving the European Parliament’s former vice president, Eva Kaili, who is currently sitting in prison. Today’s release of Transparency International’s 2022 Corruption Perceptions Index (CPI) also paints a gloomy picture of corruption and graft around the world. The CPI, which has been assessing perceived corruption in 180 countries since 1995, draws on several sources, including the data provided by the Bertelsmann Stiftung’s Sustainable Governance Indicators (SGI).

Since 2009, the SGI project has been examining the resilience of OECD and EU countries in terms of the robustness of their democratic processes and institutions, the quality of governance and the sustainability of their policies targeting economic, social and environmental issues. Overall, SGI findings show a strong and stable correlation between success with preventing corruption on the one hand and good governance as well as the formulation of effective and sustainable policies on the other. In short, countries that effectively curb the abuse of office are also better at implementing more sustainable policies.

This correlation is reason enough for us to take a closer look at the developments and observable trends associated with the SGI indicator assessing corruption prevention. As is the case with all other 70 indicators included in the SGI, country experts draw on the rich assessment data provided by individual country reports in order to rate (on a scale from 1 to 10) the policymaking gains made in 41 OECD countries. The corruption prevention indicator, for example, assesses the extent to which legal, political and public integrity mechanisms prevent those in public office from abusing their position. The issues of interest here include audits of government spending, the regulation of party financing, the media and citizens’ access to information, the accountability of officeholders (asset declarations, conflict of interest rules, codes of conduct), transparent public procurement systems and the effective prosecution of corruption.

From 2012 to 2016, the average score for the indicator assessing corruption prevention measures improved in OECD and EU countries. However, things have taken a turn for the worse since then, with the average score falling from 6.6 in 2017 to 6.3 in 2022.   

According to our country experts, 12 states failed to establish the institutional arrangements needed to effectively prevent public officials from abusing their office. In countries like Hungary and Turkey, this has led to a situation in which corrupt state officials no longer live in fear of criminal prosecution.  

In Hungary for example, positions relevant to battling corruption, such as the attorney general or the head of the Court of Audit, are held by people with close ties to the ruling party Fidesz. This kind of conflict of interest has stymied investigations into members of the Fidesz party for their involvement in various scandals and the Orbán government’s less-than-transparent activities.  It has also diminished the impact of regulations targeting corruption in public contracting processes. Public procurement regulations in Turkey are also highly susceptible to corruption. For example, the country’s so-called Turkey Wealth Fund is not subject to the Court of Accounts’ auditing authority. In addition, the country’s transition to a presidential system has had a negative impact on how the court operates as some of its new responsibilities and its jurisdictional scope have yet to be clarified.

Poland has also faltered significantly in recent years with regard to the prevention of corruption. Under the rule of the right-wing populist PiS party, the country has, since 2016, gradually fallen from the upper midfield to the lower third of this indicator’s ranking, landing at 32nd place. Given that current Minister of Justice Zbigniew Ziobro has also been appointed to serve as the prosecutor general under the PiS government and the fact that Poland’s highest courts, in the wake of new appointments,  can no longer be considered to be independent, efforts to battle corruption are effectively weakened. In addition to these institutional shortcomings, the Polish government also lacks the will to put up a vigorous fight in this area. So far, Poland has simply ignored the various recommendations issued by the Council of Europe’s Group of States against Corruption (GRECO).

At several points along the way through Donald Trump’s presidency, it looked as if the United States would follow a similar path to that observed in Poland. This was due in large part to Trump’s thinly veiled disregard for the established norms with regard to avoiding conflicts of interest. A relevant difference between Poland and the United States and ultimately the main reason as to why the latter has not followed the former’s trajectory has to do with the fact that the United States continues to feature a robust institutional framework that is designed to battle corruption and ensure vigorous public auditing standards. Identifying the fight against corruption as a key U.S. security interest, President Biden recently directed his government to adopt new anti-corruption measures lain out in the “United States Strategy On Countering Corruption.” The strategy calls for improvements in several areas, including transnational cooperation in the fight against corruption, global efforts to curb illicit financing, and taking steps to reduce corrupt actors’ ability to act with impunity. To what extent the White House’s initiative will prove successful remains to be seen. 

Estonia has only recently become a leader in corruption prevention. The country’s performance in this regard derives from the variety of instititonal mechanisms the Estonian government has introduced as a response to concerns about corruption and abuses of power. In addition to its Anti-Corruption Act, Estonia also has a National Audit Office and an Anti-Corruption Select Committee that operates under the auspices of the parliament and is tasked with monitoring the implementation of measures provided for in the Act. The country also benefits from the presence of its Financial Supervision and Resolution Authority.  These efforts have proved successful, as the number of registered corruption offenses decreased significantly from 2019 to 2021.

An analysis of our SGI data shows that institutional weaknesses in fighting corruption are often part of a much broader problem involving efforts to dismantle democratic standards and processes. In countries where anti-corruption efforts remain underdeveloped, democracy as a whole has been under pressure for some time.

This points to the relevance of successful corruption prevention measures as part of a broader effort to ensure a sustainably democratic polity. Even top performers such as Denmark, New Zealand and Sweden – which have been rocked by various scandals in recent years – must sustain efforts to successfully curb corruption.