Factors promoting corruption

The causes or factors that promote corruption are those that affect the demand (by the public) for corrupt acts and those that affect the supply (by public officials) of acts of corruption. Among the factors affecting the demand, the most important are (1) regulations and authorizations; (2) certain characteristics of tax systems (3) certain spending decisions; and (4) provision of goods and services at below-market prices. Among the factors affecting the supply of acts of corruption are (1) the bureaucratic tradition; (2) the level of public sector wages; (3) the penalty systems; (4) institutional controls; (5) the transparency of rules, laws, and processes; and (6) the examples set by the leadership. (for more information see http://www.imf.org/external/Pubs/FT/staffp/1998/12-98/pdf/tanzi.pdf )

Measurement of corruption

    No one has ever tried to measure the exact amount of corruption worldwide.  The extent of corruption in all parts of the world is anyone's guess.  Some research suggests that corruption is more endemic in communist and socialist societies, but other research suggests that constitutional republics with strong federalism (strong state or provincial governments) have more endemic corruption.  As will be shown in a moment, a veritable industry has evolved among business leaders to try and estimate the levels of "perceived corruption" in the form of indexes.

If corruption could be measured, it could probably be eliminated. In fact, conceptually it is not even clear what one would want to measure. Simply measuring bribes paid would ignore many corrupt acts that are not accompanied by the payment of bribes. An attempt to measure acts of corruption rather than the amounts of bribes paid would require counting many relatively unimportant actions and identifying each act information that is simply not available. While there are no direct ways of measuring corruption, there are several indirect ways of getting information about its prevalence in a country or in an institution.

  The way the IMF and other international organizations look into the question of where corruption occurs is quite subjective, relying upon self-reported surveys.  Survey data being what it is, this public-perception approach is the best the world has at the moment.  Where corruption is worst, survey findings show that "commission" payments in foreign aid are usually laundered through intermediaries who divert the money from essential services like education and health (where bribery potential is low) to grandiose projects like transportation and defense (where bribery potential is high).  The World Bank also conducts annual surveys which produce a Corruption Perceptions Index (CPI) published by Transparency International showing which countries are highly corrupt (0 = corrupt; 10 = clean).  This index is remarkably consistent from year to year, and a sampling of countries and their rank scores is as follows:

Corrupt and Clean Countries
Corrupt		Clean
Myanmar Somalia Uzbekistan Sudan Laos Guinea Congo Venezuela Bangladesh Turkmenistan Zimbabwe Kazakhstan Russia Syria	1.4 1.4 1.7 1.8 1.9 1.9 2.0 2.0 2.0 2.2 2.4 2.4 2.5 2.9	Denmark Finland Singapore Sweden Netherlands Switzerland Canada Australia United Kingdom Austria Ireland Japan France United States	9.4 9.4 9.3 9.2 9.0 9.0 8.7 8.6 8.4 8.1 7.5 7.5 7.3 7.2

(For more information see https://www.transparency.org/cpi2014/results).