The Political Economy of Corruption Indexes

Abstract

Corruption indexes, such as the Transparency International’s Corruption Perceptions Index and the World Bank’s Control of Corruption indicator, have played a pivotal role in focusing global attention on corruption. Since they came into existence, these indexes have been influential on research and investigations into corruption. Aid donors have also relied extensively on these indexes to determine the allocation of aid to developing countries. Despite the intense anti-corruption initiatives over the past decade, corruption still remains one of the greatest stumbling blocks for sustainable development. The lack of success of these anti-corruption initiatives has cast significant doubts on the contemporary mainstream perspective on corruption. In this thesis, I examine the underlying concepts and theoretical assumptions of the mainstream approach to corruption which has its roots in neoclassical economics. It defines corruption as bribery and views it as a rent-seeking behaviour. I argue that this understanding of corruption is too narrow and does not reflect the realities of corruption. A more appropriate framework draws on the insights of institutionalism. Focusing on the institutional structures and its violation in its analysis, this alternative defines corruption as the subversion of institutions and rules of an organisation or society which results in the corrosion of the institutional and social fabric. This alternative approach provides a broader and more realistic understanding of the realities of corruption. In theory, it may be possible to construct a corruption index based on this alternative framework. In order to give the developing countries a real chance at tackling corruption, it is necessary that the international community, in particular the World Bank and IMF, alter the way they understand corruption.