Thursday, January 28, 2016

Australia and the Transparency International Global Corruption Perceptions Index

The release by Transparency International (TI) of the latest global corruption perceptions index has attracted attention in Australia (here for example) because of Australia's slide in the index. The apparent response is that this requires Australia to tighten its anti-corruption legislation. This is quite problematic.

To begin with, the idea that new legislation should be introduced based on other peoples' perceptions is highly suspect in public policy terms. We have far too much legislation as it is based on perceptions of problems as compared to actual problems.

The methodology used by TI to generate the the results is also quite unclear. Maybe someone can help me here. I couldn't find any discussion of methodology on the TI website.

Then, too, I am left with the uncomfortable feeling that Australia's pursuit of corruption from sport to the NSW Independent Commission against Corruption has, of itself, affected perceptions and at two levels. More things are classified as corruption, while the uncovering of problems in its turn heightens perceptions about the existence of corruption. In a way, the more we do, the worse our reputation becomes.

This is not to say that corruption is not an issue, although I would argue that our systems are relatively free of the endemic corruption found in some other countries. However, it is an issue that needs to be addressed in specific contexts. To suggest that we need to introduce new legislation just because our global ranking has slipped on a particular perception index is dumb.

If the slip in our global rankings is perceived to be a problem, then we have to ask why it's a problem. Does it reflect a real problem in this country? If so, we need to identify and act. Or is is just a perception problem? If so, how important is it, noting that Australia still ranks 13, a high number? If we classify perception as a real problem, then we have to look at the way the indices are calculated and their real meaning to define how we should address it..This might include surveys to provide independent validation.

These arguments do not invalidate the broader objectives that TI is trying to achieve. They just say that Australia needs to apply a degree of common sense so far as its own position and responses are concerned.


29 comments:

2 tanners said...

The Wikipedia article was reasonably enlightening, I thought. And a slide on the score from 81 to 79 over two years on a dubious methodology is not a good reason to get one's knickers in a twist. The report itself makes clear that perhaps half the OECD economies which do nicely at home have state-owned enterprises abroad with far dodgier records.

Also the index does not cover private industry - it's public sector only. In the US, if you are a corrupt local sheriff, you impact the score, if you work for Lehmann brothers and help trigger the GFC, you do not.

Finally, it is about perceptions. When you've never been out of the top 15, and you come down on overseas bribery like a hammer, perhaps legislative attention is better focussed somewhere else.

marcellous said...

The worst corruption is right out in the open only it isn't called corruption, it's called "influence."

So, for example, what unsolicited proposal can't James Packer get the NSW Govt to agree to?

Similar for Gina Rinehart - eg when she got the second inquest into her father's death and other examples since.

In one sense this is just a consequence of capitalism and the power of money - big players do well because they are big fish who can flail their tails around in a small pond. Sometimes it depends on special types of power, such as that of those with media interests, to which politicians are sensitive.

Likewise when proposals come forward which are promoted as having a positive economic consequences in a general sense, is it surprising that the most positive consequences privately are for those already best positioned to benefit?

Expressways, public housing 'renewal' all look likely to be instances of this.

Influence only gets reined in when it comes up against some other mighty influence (hence the impasse on media ownership "reform", but the public interest can rarely withstand it.

Anonymous said...

TI seems to be just another rent seeking NGO which has chosen as its 'cause' something vague, and way beyond its control - but my how good it feels to point and shout. Looks like a globalised version of GetUp! and equally as ineffective - except for the ability to raise funds to support its secretariat.

Contrast with Médecins Sans Frontières, or even our own Fred Hollows, or Ian Fraser, who actually do something.

kvd

Unknown said...

Actually, kvd, that comment is pretty unfair. TI does do good work in countries where it is needed, i.e. where public corruption threatens the well-being of the country and puts lives at risk. Headline grabbing "corruption perception indexes" are supremely unimportant in Australia, but they are a matter of real concern to Governments in countries which are not war zones but which do rate poorly, as they threaten (or warn off) international investment.

In these countries, TI is often in the papers, talking knowledgeably about specific cases and putting pressure on governments. It is not the shrill sort of self promoting NGO that does exist in far too many cases.

2 tanners said...

AS usual, forgot to sign my comment. Apologies.

Anonymous said...

Sorry tanners. If you are even remotely suggesting that TI's production of an annual bodged-together summary of opinions and perceptions is anything more than a one day wonder then I disagree. And if there is a potential international investor out there who relies upon the GCPI for primary (secondary, tertiary) confirmation in any decision to do business in a country then I'd suggest his/their goal is in fact to avail themselves of said public corruption - e.g. where can we peddle our banknotes next?

The on-the-ground publicising of specific issues is a good thing, but handled far better by local organisations (the very people who must have alerted TI to said problem for them to become involved), and in any event has nothing to do with the annual publication about which Jim posted.

At least GetUp! is honest enough to hold a poll of its member base to see what to get fussed about, and hence what will drive the pledges which support them.

kvd

Anonymous said...

And anyway, that was yesterday. Today we have the Human Rights Watch 2016 World Report - with "donate now" button in top right corner.

Somebody needs to globally co-ordinate the release of these annual reports; the field is getting quite crowded. I'd volunteer if you'd only donate to my 'cause' :)

kvd

Anonymous said...

Here's another one to get exercised about - the Global Peace Index - saved some trouble by linking directly to their "Take Action" page (aka donate now) http://www.visionofhumanity.org/#/page/take-action

Dunno when their annual index is released; hope it wasn't Melbourne Cup day.

kvd
ps not to be confused with Winton's World Happiness Index (donate now) as I'm sure that's on the up and up...

Anonymous said...

I guess my simplistic point is that – as with political parties – the absolute first priority of any of these NGOs is self-perpetuation – no matter what the ostensible ‘cause’ they promote. Here’s another view, in an American context:

Consider the conservative nonprofit establishment, which seems to employ most right-of-center adults in Washington. Over the past 40 years, how much donated money have all those think tanks and foundations consumed? Billions, certainly. (Someone better at math and less prone to melancholy should probably figure out the precise number.) Has America become more conservative over that same period? Come on. Most of that cash went to self-perpetuation: Salaries, bonuses, retirement funds, medical, dental, lunches, car services, leases on high-end office space, retreats in Mexico, more fundraising. Unless you were the direct beneficiary of any of that, you’d have to consider it wasted.

Lest you think that a leftist hatchet job I should note that it was written by one Tucker Carlson – not your average leftist. But the funny thing is this brief response by a conservative defender of those non-profits:

First, Tucker ought to know that the spending on Movement Conservative thinktanks is balanced by the spending of the Open Society, the Ford Foundation, the Sierra Club, the NAACP, etc. There had better be that resource, or else conservatism is going to get run over. "


- thus evading the point by conflating "level of funding" with "accomplishing things”.

kvd

2 tanners said...

OK, here we go:

Think tanks are usually made up of highly paid professionals with (a) a strong academic or business reputation (b) a defined political orientation or (c) both. They spend billions, much of it publicly funded, to do research designed to persuade governments in influential countries towards a certain course of action. In teh case of (a), generally speaking the suggested policy goal comes AFTER the research. These organisations are usually national and highly focused on domestic poltics. They bear little resemblance to TI and ought not be conflated with them.

Domestic charities fall into at least two visible classes - the self perpetuators and the oily rags. Self perpetuators generously pay their fund raisers. I read, I think in Choice, that the on-the-street mob often give teh first year's subscription straight to the fund raiser, not to the charity. Others, often large ones, would be lost without their volunteer workforce. Both are pretty good at bleating for extra funding. Two of my tests are to check the CEO's salary and to see if the organisation is willing to bite the government hand that feeds it during policy disputes.

TI is an international charity. The word charity is being used loosely, but they bring out a product which governments of the day very definitely do not want, intended to help the people. They have individual organisations in each country focused on that country's performance plus an overarching body to give policy direction, unity and representation. Quite a few organisations, religious and otherwise, follow this model. that's the real work of value - pointing to direct instances of non-transparency, or congratulating governments on improvements. Most of this is done at country level.

I agree that international indices are a bit of a joke and I've already noted that movement of one or two places on a comparative, one-score scale, is nothing any government should take seriously. The World Bank Ease of Doing Business Index is a similar case.

Being in the bottom 10%, or moving very hard in one direction or the other should, however, draw attention of a Government. TI's not going to get money from Australia by saying it's dropped, nor from Sweden by saying it is a high ranker with corrupt Government owned businesses.

I think that TI and many other do a good job. In TI's case it's a strictly limited brief and as Jim said, for a government in Australia's position to legislatively react to a report like that is foolish. Equally, I don't think it's a bid for money.

Anonymous said...

"I read, I think in Choice,"

Good example tanners. From their 2014-15 financials I see Choice total revenue of $20M less one-off grant of $2.8M = ongoing $17.2M. Further down I can see "employee benefits expense" $8.2M - i.e. almost 50% of revenues dedicated to employees. But I can't answer your query re CEO salary: when I typed that into Choice's "Hi, what are you looking for?" box, I got Whoops we couldn't find any results for "salary of alan kirkland" You could try searching again with some different keywords.

Well, no.

My point is not that these various NGO's don't a good job, or any job in fact. (My sister in law is herself a gentle standing joke within the family for not ever making any decision on anything unless it has been reviewed with approval by Choice)

Rather, Choice plus all the entities you mention (Think tanks are usually made up of highly paid professionals) have as their highest priority self-perpetuation. Or, at the very least, their executives do.

Perhaps this primary target is confused in your mind by the endless shifting between organisations of those you admire? Take Alan Kirkland, CEO Choice, for instance. You can read about his career here http://www.piac.asn.au/staffprofile/alan-kirkland at the Public Interest Advocacy Centre Ltd - an admirable fellow, engaged in admirable things - but seems to me to be a "professional" (your word) concern troll.

But don't hit the "Donate Now" button (top left this time) on the PIAC link - unless you feel the need for even more unearned virtue :)

kvd

2 tanners said...

I'd always thought of Choice as a for-profit provider of consumer advice to paying consumers, not an NGO. It's of no moment to me, nor will I dispute it - I only mentioned Choice because that's where I thought I read the findings I referenced.

You have claimed that TI is "just another rent seeking NGO" having "chosen as its 'cause' something vague and way beyond its control" and that it is ineffective. I've seen it in action in 3 countries, forcing changes to policy, in one case resulting in a change of Government although that wasn't hard. They've been threatened with expulsion from at least 2 for failure to shut up. Getting expelled is not really good for self-perpetuation.

You've also shifted your ground to now argue that self perpetuation is its primary role, and in fact that of all NGOs if I read you correctly.

There are many NGOs who are just like you describe. I just think that in this case, you have the wrong people. No doubt you have had the evidence to set me right all along.

Anonymous said...

tanners you mentioned Choice and I found that a 'target' much easier to get to grips with - because it is local, and because it adheres to Australian laws. Like you I attach no more significance to it than that. Except it is instructive of a class.

"Getting expelled is not really good for self-perpetuation". Quite the contrary - it is precisely to the point. It 'proves' their 'worthiness'. Best thing that happens to Greenpeace is the annual whaling confrontation. It's all for your support; donate now!

"Shifted your ground"? Not really. You alluded to my initial comment re "rent seeking". I haven't shifted from what I understand to be meant by that, and I did not think that was in any way controversial.

If, in the particular case of TI, you believe I am wrong then I can live with that. But not on the evidence you provide, nor on the evidence (not so) publicly available. You can't honestly believe TI would just fold up and go away if (to state an impossibility) there were no corruption?

It would simply metastacise.

kvd


Jim Belshaw said...

The self perpetuation of NGOs is a real issue, indeed a problem. As a CEO or board member you tend to develop a commitment to the organisation as such and indeed a vested interest in you particular cause. This does not mean, of course, that the organisation is not doing useful work at a point. It does give the organisation a vested interest in the status quo, a reluctance to accept downgrading or closure.

2 tanners said...

kvd,

You've made a number of claims about TI and failed to back them up. I have suggested, I thought reasonably mildly, that in taking strong action in individual countries they do a job which is not vague, which is valuable and which often has good results.

You have not provided evidence of rent seeking, of self preservation or anything else as it relates to TI. Instead, you've broadened your assertions to somehow associate TI with Greenpeace.

I might point out that strictly read, your condemnation has to be applied to MSF and Fred Hollows, for whom you earlier expressed admiration. But if not, then now is the time to put up the evidence that TI is a "shrill", "rent-seeking", "self=perpetuating" body with "vague" aims and do-nothing actions (by comparison to MSF and FHF).

Anonymous said...

Hi tanners - thank you for forcing me, once again, to reassess my views of this sector. It has been interesting, in a desultory sort of way. There is not enough room to fully address your objections to my stance (happy to via email if you wish) but I'd like to make a couple of comments which are not ordered or prioritised as to importance; just top of the head stuff:

1) From the last publicly available annual report of TI-S (the "international secretariat” of TI based in Germany):

Transparency International is the global civil society organisation leading the fight against corruption; through more than 100 chapters, chapters in formation and contact groups worldwide and an international Secretariat in Berlin, it raises awareness of the damaging effects of corruption and works with partners in government, business and civil society to develop and implement effective measures to tackle corruption.

That’s pretty strong stuff - invoking visions of many hundreds/thousands of workers fighting the good fight on the scale of, say, the World Bank, or UNESCO

2) From the same source: Total revenues Eur26M - roughly Aus$40M. (11 years ago, when I retired, my largest client had revenues of $38M – and it was a middle-sized fish in a small sector of the Australian economy) I would suggest that $40M to fight the entire gamut of international corruption wouldn’t get you past morning teatime on day one. Further, the Managing Director’s remuneration in that report was slightly less than one partner’s entitlement in than old client of mine. It’s really not very big stuff.

3) The Annual Report acknowledges the valuable contribution made to its efforts by "interns" - a code word to be found in a lot of these organisations for “unpaid, idealistic, educated young people hoping to get work experience”. (I blame that TV show The West Wing for introducing the concept :)

4) Back to the Annual Report - page 7 lists TI’s 6 “strategic priorities” which were adopted in 2010 as part of a “five year strategy”. Read them yourself, but basically they boil down to either 1) vague or 2) motherhood. Example of 1) Strengthened ability to work together Example of 2) Higher levels of integrity demonstrated by organisations and people, especially youth and those in leadership positions around the world

5) One report they did release during 2015 was in regard to the analysis of potential corruption risks in 11 European countries who were to be granted development funds. The report findings and recommendations amounted to nothing much more than any first year auditing clerk would have drummed into him/her: “division of duties”, “regular reporting and review”,
“independent audit”, “properly authorised and retained documentation”.

I get the drift that there is a certain vagueness about TI’s concrete aims (never mind outcomes) and in terms of “leading the fight” against corruption, they are contributing a little less than one HB pencil’s worth to the effort – despite their name – and despite what is no doubt a worthy goal.

kvd
ps hope those bits of copy/paste above come out properly formatted - apologies if not

Anonymous said...

Earlier comment has been spammed - no doubt far too long - oh well :)

But I meant to add that, in regard to FHF which we both mentioned, it fixes eyes, and trains in-country staff to continue fixing eyes. And yes - they also probably have "interns" - but those are of the medical sort, learning how to carry on the work.

Have a nice day, all!

kvd

Jim Belshaw said...

Sorry about that, kvd. Comment unspammed!

Anonymous said...

Thanks Jim! Was a disappointment to be treated thusly :)

kvd

2 tanners said...

1. Fortunately, a bit more effective than UNESCO at a fraction of the price.
2. Yes, the budget is small. It relies almost entirely on unpaid workers and does not seek large government funding, due to the conflict of interest. So much for 'Rent Seeking' On the same topic, yes, the CEO is paid sod-all and the Board is honorary. So much for self-interested executives. BTW, because many members are in-country volunteers, to be expelled is to lose their jobs and their admission rights to many other countries. Their whole careers are on the line.
3. Yes, they use interns. So does the ILO. So do many other UN agencies, legal and accounting firms and even the Australian Public Service. I'm not sure of your point.
4. Totally agree. Haven't met a 5 year strategy that isn't full of motherhood. I invite you to read one with objectives including "leading brand and international profile" and "Global business systems that provide access to information and ensure transparency and efficiency". It's not Unilever, It's Fred Hollows. As I'm sure you'd agree, the 5 year strategy is not reflection on the effectiveness of the organisation.
5. Many countries (and this is an area of speciality for me) are not capable of producing those 'first year audit clerk' reports. They can be awfully useful in showing that the grand new project might have a few barnacles before they even start.

I just don't think you've demonstrated that TI is primarily a smug, achieve-nothing, self-publicising resource-sucking self-preservers, as you originally claimed. If you disagree, then I think we won't have a meeting of minds.

Perhaps we'll have more luck with modern art. :)

Anonymous said...

tanners, some of the below is pretty esoteric as far as the common man goes – but I’m paying you the compliment of assuming you know how to read accounts, and how many (and it seems, not that many) beans make five:

Turning now to Transparency International, Australia - (TI-A) – from published accounts for the y/e 30 June 2014 (important, because TI-S works on a calendar year basis, and that’s what I looked at in previous post – specifically, y/e 31 Dec 2014)

1 Revenue $168k, “Administrative Expenses” $111k, Surplus $57k – with no hint of the makeup of said expenses - except in notes to the accounts there’s this:

Note 5 Directors Remuneration - blah blah – no. of directors in receipt of remuneration in the band $0-10,000 – 13

Now I’ve audited local bowling clubs (45 years ago) with 10 times that revenue, and for an entity with the word “Transparency” in its name, there isn’t any indication of just how much of the $111k admin expenses is actually represented by that mystic “Directors’ Remuneration”. It can’t be $0 otherwise surely they’d state “No director received … blah blah”. And note also that quite specifically the reimbursement of OOP expenses is excluded from the above – i.e. I assume separately included in the total $111k expenditure.

2 Here I have a difficulty – in that whenever I load TI-S accounts now, I get a dump in my Firefox browser. But that aside, I did see that the Australian government, via DFAT, had contributed some 6M Euros of which (by some method) about 4M was declared as current to the calendar 2014 year for TI-S. And I can’t now reconfirm, but I thought I saw some $4M expended by TI-S in Australia? This was unexceptional at the time – except now, for the TI-Australia accounts disclosing nothing more than what might be the cost of air tickets, port and cigars AFAICS. And btw the company – TI-Aus – has one paid employee.

3) Summary: In Australia, TI-A is a “useful hat” to be worn by the various directors, in their various (no doubt remunerative) other roles.

Over to you :)

kvd

Anonymous said...

Funny thing: tanners accused/suggested my use of the word "shrill" was over the top. I was puzzled by this, so have searched comments, and found the only time "shrill" in evidence was tanners' own comment - plus his then berating me about using same.

Getting old; can't remember the proper terminology about "straw man" or even what the term is for arguing off-topic. But I do accept the charge of using "rent-seeking", "self perpetuating" and "vague". Seems only fair, in the spirit of robust debate :)

kvd

2 tanners said...

My humble apologies, kvd. The use of 'shrill' was indeed not based in anything you wrote.

Of course, I stand by the rest of my arguments. Until also disproven. :)

Regards,

2 tanners

Anonymous said...

tanners, regarding your 11.54 a.m. comment (which I assume Jim has released from the spammer at some point as I have only just now seen it), using your numbering:

1. Easy to claim, but I see no proof of comparative effectiveness.
2. “does not seek large government funding…so much for rent seeking”. You do realise that Euro 24M of the total 26M donor income is described as “governmental agencies”?
3. “interns”: My point stands.
4. I see we agree on something! But that does not detract from the basic point that an organisation touting itself as “transparent” uses similar opaque language.
5. Surely, if it is an area of specialty for you, you must resent such dross being presented as something useful – let alone “new” or “insightful”?

I just don't think you've demonstrated that TI is primarily a smug, achieve-nothing, self-publicising resource-sucking self-preservers, as you originally claimed. If you disagree, then I think we won't have a meeting of minds.

First it was “shrill”, now it’s “smug”? I may as well just let you write my responses in toto :)

kvd

Jim Belshaw said...

My spam system appears nothing but fair in mistreating you both equally!

2 tanners said...

kvd

I condensed " its 'cause' something vague, and way beyond its control - but my how good it feels to point and shout" into 'smug'. If you feel that's unfair, I retract.

Your response to my response
1. You made the initial assertions about effectiveness, as per the above quote from you. You haven't backed up with any evidence to date.
2. 24m Euros for an organisation represented in over 100 countries with an international coordinating body is penny-ante in the NGO game.
3. My point is that it is standard practice in the NGO and non-NGO arena. Not sure what you are finding controversial here. My inbox has internships advertised for UNDP, UN Women, World Bank, ADB, and many others.
4. That is how you get you 24 million euros. No management-speak, you can't be 'serious'. Silly, but that's how it works. In this case, blame the clientele.
5. Exactly the opposite. What happens when firms (or countries) ARE NOT subjected to even the most primitive auditing?

On your other posting

1. As for Directors, yes they are usually unpaid and often required to meet their own expenses as well.
2. As you're doubtless aware, AusGov budgets are accrual-based and sometimes a contract triggers the entire payment (over x years) in the year of signature. I am not asserting this is the case.
3. I'm not sure how this follows from your other points. Could it not equally be the case that directors choose to devote time and resources to TI-A instead of (say) becoming the District Governor for Rotary, because that is what attracts their interest?

1 paid employee is a pretty lean operation, for mine. Check out the FHF site and see what they are advertising for right now. Or anyone else - don't want to pick on FHF.

Anonymous said...

tanners, with the greatest respect for your enthusiasm in defending TI-S, I think we are now 'talking past' each other.

Earlier you made the comment "TI ... does not seek large government funding…so much for rent seeking” - but when I pointed out that they declared 24 of a total 26M Euros donor funding was from "Governmental Agencies" you blithely dismiss this as "penny-ante in the NGO game".

You simply cannot have it both ways:

1) they are primarily funded to the point of rent-seeking (your partial definition, not mine, but with which I agree) and
2) they are so insignificant as to be irrelevant ("penny-ante" - which I also agree with, but then you seem to suggest this makes the rent-seeking somehow ok?)

The difficulty I have with TI-S is their actual role. i.e. what is it that they actually "do" as opposed to just hold conferences about? We all know corruption is a serious problem - we actually get it! - but continuing to point out that the sky is blue is not a particularly effective use of ones' resources - except for those in receipt of same.

And I don't actually understand where you are going when you state that some in-country people choose to be a DG of Rotary, while others volunteer as directors for TI. I mean, is corruption a serious issue, or is it just a useful pastime or tick on the resume: useful for the contacts and conferences.

Anyways, I think you nailed it earlier by politely suggesting "we won't have a meeting of minds" on this. I politely agree.

kvd
ps re "smug" I accept how you got there, but I would not have.

2 tanners said...

kvd

Cheers. May your roast beef be as red as the matched Shiraz you have with it.

2 tanners.

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