Transparency International's Anti-Corruption Suggestion Box
"But the transaction is often enabled by professionals from many fields. Corrupt intermediaries link givers and takers, creating an atmosphere of mutual trust and reciprocity; they attempt to provide a legal appearance to corrupt transactions, producing legally enforceable contracts; and they help to ensure that scapegoats are blamed in case of detection"
This comment is followed up with recommendations which indicate that TI is moving away from its overweening pre-occupation with sinners in the public sector and is accepting that there might be systemic problems amongst private sector players, including financial intermediaries and their professional associations. These recommendations include:
Promotion and, where necessary, adoption of corruption-specific codes of conduct by professional associations for their members, for instance the International Bar Association, International Compliance Association, and professional associations for accountants,
Public education to ensure that honest intermediaries better understand their role;
Legal or professional sanctions for legal, financial and accounting professionals that enable corruption;
Greater scrutiny of the role of insufficiently transparent financial centres in facilitating corrupt transactions.
Drawing tax havens and offshore finance centres into the corruption debate is long overdue, but this doesn't go far enough. TI needs to publicly acknowledge that corruption extends to issues unrelated to bribery, including tax dodging which costs developing countries far greater revenue loss than bribery.
I have argued elsewhere that the perceptions index perpetuates a false impression of corruption. This matters because it impacts on country credit ratings and attractiveness for investors. So TI has an obligation to get these things right. The current index draws on the wrong perceptions from the wrong sources.
I do not dispute the pernicious impact of bribery on developing and developed countries, but I do dispute the narrowness of TI's definition of corruption. Far greater weighting needs to be attached to the role of financial intermediaries and other facilitators in aiding and abetting corrupt practices, and tax dodging should be rated as highly, if not higher, than bribery in terms of its impact on tackling poverty and undermining pro-growth development strategies.
TI has started to acknowledge the importance of these issues. Further progress is required. As far as I am concerned the jury remains out as to whether the Corruption Perceptions Index can be modified to take account of the serious and valid criticisms we have raised.