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Reliability of Corruption Indicators and Development Aid
09/09/2008 9:42 am
Global indicators of corruption and, more broadly, of governance, based principally on experts’ perceptions, are widely used today for determining the allocation of public aid for development. However, IRD economists from research unit UR 047 (DIAL) compared results of household surveys conducted simultaneously in eight African countries with corresponding surveys of experts and showed that the latter have an inaccurate understanding of the true extent of corruption.
http://www.ird.fr/fr/actualites/fiches/
Reliability of Corruption Indicators and Development Aid
In September 2000, the Millennium Declaration, initiated by the UN, was signed, committing States to work to reduce poverty and favor world economic growth in the years to come. Acknowledgment of failure of structural adjustment programs (1) has led to a certain rehabilitation of the role of the State. With that has come the adoption of new strategies for fighting poverty that place factors other than just traditional economic considerations at the heart of development programs: governance (2), people’s adherence to policies or their involvement in public life. To measure the impact of governance, and especially corruption, global indicators were created and international databases have proliferated. These indicators, devised initially by private agencies for their clients (banks, investors, etc.) or by researchers for their studies, gradually became institutionalized. They allow a mark to be assigned to each country, which then serves to rank them according to how well they perform on each criterion. Today, they are widely used, notably for allocating development aid to countries of the South.
At the IRD, researchers of the DIAL research unit (3) focused on the usefulness and limitations of using these global indicators, which are essentially based on the perception of experts (business people, researchers, specialists, senior civil servants, politicians, etc.). They have put special emphasis on petty bureaucratic corruption that people are subjected to in their dealings with administrative bodies (4). Their analysis is based on an original system, involving comparison of two types of surveys, conducted simultaneously between 2001 and 2003 in eight African countries on the same subject. The first involved household surveys (5) and the second consisted of surveys conducted by experts both from the North and South—the “mirror surveys.” The household surveys, involving 35,000 people, provide an objective measure of petty bureaucratic corruption and its characteristics, whereas the expert survey drew upon the perceptions of 350 experts interviewed on the subject. A side-by-side examination of these two sources of information led to an accurate assessment of the error of appreciation made by these experts as to the extent and nature of this form of corruption.
The portion of people stating that they had been direct victims of corruption during the year preceding the survey varied from country to country, from between 8% in Benin to more than 16% in the Ivory Coast and Madagascar, with the latter countries having also suffered severe political and economic crises. This portion averaged 13% over the eight countries concerned. Comparison of this figure with the one declared by experts showed that almost all of the latter (94%) overestimated the degree of corruption local people suffered. Their assessment put the number of people affected at 52%, four times greater. The same discrepancy was found when each country was considered individually. Although they recognized the severity of small-scale corruption, the experts were unable to quantify the real size of the phenomenon. Furthermore, the ranking of countries based on their perception does not reflect reality. This can be explained by patchy knowledge of the daily life of ordinary citizens and of poor people in particular. However, the evaluation made by experts in the “mirror survey” proved to be closely associated with global indicators of the perception of corruption, derived from the major international databases. This result, which validates the “mirror-inquiry” sample, does not, however, provide knowledge as to whether or not this correlation comes from prior knowledge of international rankings or a vision shared by experts as a whole. Moreover, experts’ error of appreciation is all the more significant in that the countries have been given poor rankings on the international level. In this way, the poorest countries, poorly governed, would be penalized and deprived of the aid they need. Added to that is an ideological bias, since some experts tend to overestimate the degree of corruption of countries that do not follow their own personal leanings on economic policy.
By putting the opinion of experts in perspective, these results emphasize some weaknesses in the system of global corruption indicators; some of these weaknesses are recognized by the creators of the indicators themselves. However, they do not call into question the overall validity of these indicators, as the study examined only eight countries. Looking at a larger number of cases could of course lead to different conclusions. Another point is that these indicators include various forms of corruption and not just bureaucratic corruption. Therefore, researchers advocate a more selective use of these global indicators, both in research work and in determining economic policy and development aid allocation. In addition, they recommend the development of surveys that take into account the point of view of the people concerned and the experiences they have in their daily lives.
(1) These programs have been applied in most developing countries since the 1980s, on the initiative of the IMF and the World Bank. The measures advocated (devaluation of national currency, public spending cuts, privatization, opening up to the market, etc.) were intended to encourage growth.
(2) The concept of governance has no internationally recognized definition. According to the OECD Development Aid Committee, it is “the use of political authority and exercise of control in relation to the management of the resources of a society in view of economic and social development.”
(3) The research unit 047 DIAL “Développement, institutions et analyses de long terme” (development, institutions and long-term studies) participates in an international program which groups together the Observatoire statistique et economic d’Afrique sub-saharienne (statistic and economic observatory of Sub-Saharan Africa), the general secretariat of the Andean Community and 13 national statistics institutes from Africa and Latin America. See scientific bulletin no. 128 www.ird.fr/fr/actualites/fiches/2005/fiche218.htm
(4) “Grand corruption” (attribution of public-sector contracts, budget fraud, etc.) and political corruption (financing of political parties, vote buying, etc.) are not examined here because they are not easy to access directly through representative surveys.
(5) Surveys 1-2-3, elaborated by DIAL on employment, the informal sector, and poverty, to which specific modules on governance and democracy have been added.
Written by Marie Guillaume-Signoret (IRD) http://www.ird.fr
IRD
Bulletin no. 259. February 2007.
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