Two decades ago, corruption was the problem that no one talked about. “You couldn’t use the words ‘bribery’ or ‘corruption’” at institutions like the World Bank, said Michael Hershman, who helped found Transparency International in 1993.
Thankfully, all that has changed: corruption is now widely recognized as one of the biggest stumbling blocks to economic development around the world — a rot that drains economies and governments, sabotages aid programs, and erodes trust in public and private institutions. This new attitude can be attributed, in large part, to the work of Transparency and its individual country chapters — a history which Hershman shared with CIPE staff at a brownbag discussion this week.
It is difficult to overstate the profoundly negative impact that corruption has on society. The abuse of entrusted power for private gain does violence to our values, our prosperity, and even our security. — U.S. Secretary of State John Kerry
Endemic corruption is one of the biggest hurdles facing the developing world on its path to economic prosperity. CIPE believes that the private sector, which one of the biggest victims of corruption, can also play a key role in stopping it. That’s why fighting corruption is often at the core of our work with the private sector around the world.
Combating corruption requires more than just harsh punishment for individual perpetrators: it is a systemic problem that needs a systemic solution.
For example, consider a corrupt tax collector who demands bribes from businesses under threat of harsh penalties. Prosecuting this corrupt official will help a little — until another takes his place. But simplifying the tax code, automating payments, and reducing the individual discretion of tax collectors can eliminate the opportunity for corruption altogether. These are the sorts of systemic changes that CIPE’s partners advocate for in order to stamp out corruption.
This week, in honor of International Anti-Corruption Day, the blog will focus on how the CIPE approach is effectively fighting corruption in countries around the world — including exciting new efforts focusing on value chains. Stay tuned!
Jon Custer is Social Media and Communications Coordinator at CIPE.
Last Thursday we held a Twitter chat for Global Entrepreneurship Week to discuss mentors, role models, and the entrepreneurship ecosystem. Read a summary of the chat below!
If you missed any of our coverage of entrepreneurship around the world last week, you can read all our GEW 2013 stories here.
Millions of entrepreneurs around the world are working day in and day out to build their businesses and create a better life for themselves, their families, and their communities. Each year for Global Entrepreneurship Week we take the opportunity to highlight their contributions.
At CIPE, we recognize the vital role that entrepreneurs play in driving economic growth, creating opportunity, and driving innovation in the developing world. Unfortunately, entrepreneurs in many countries are forced to channel their resourcefulness and drive into overcoming artificial barriers like convoluted registration procedures, lack of property rights, or difficulty in obtaining financing, rather than starting and growing their businesses. That’s why CIPE supports the private sector in advocating for entrepreneurship-friendly policies that help build a supportive “ecosystem” for entrepreneurship success.
Next week, the CIPE blog will feature stories from our programs and partners supporting entrepreneurs and entrepreneurship around the world. Stay tuned to the CIPE Development Blog and the #GEW hashtag on Twitter, and don’t forget to check the official Global Entrepreneurship Week website for events in your country!
Jon Custer is Social Media / Communications Coordinator at CIPE.
In September, Pakistan passed an important democratic milestone: its first peaceful handover of power from one elected government to another, breaking the long cycle of coups and military dictatorship the country has suffered through since its independence.
This moment was a long time in the making, the culmination of many efforts by many different segments of society. Could the slow-and-steady transition be a model for other countries to follow?
Not counted: Nigeria’s GDP model is based on the year 1990. (Photo: Wayan Vota)
In 2014, one small policy tweak will grow Nigeria’s economy by 40 percent, causing it to overtake South Africa as the largest in the region. A similar change in Ghana caused that country’s economy to grow 60 percent, while in Guinea-Bissau and Gambia the economy doubled in size. Even the United States increased its output by 3.6 percent using the same technique. What happened?
GDP rebasing. Simply put, these countries are all changing the way they measure their Gross Domestic Product — the sum total of all economic activity in a country in a given year — to better reflect what’s really happening the economy.
When Nigeria’s rebasing is complete, it won’t mean the country is actually producing 40 percent more goods and services. Living standards won’t jump by 40 percent — the government will just be counting more accurately. But it’s still hugely important.
Markets thrive on transparency. (Photo: Wikimedia Commons)
Many of the world’s largest and fastest-growing companies now come from emerging markets. But according to a recent report, these companies lag behind their more established peers in transparency — a handicap that could prevent them from becoming true global leaders in their fields.
Looking at 100 large multinational companies from 16 emerging market countries, Transparency International found an average transparency score of just 3.6 out of 10. A 2012 report on the world’s largest companies using the same methodology found an average score of 4.7. And while only one in five of the emerging-market multinationals had a transparency score above 5.0, just under half of the largest companies did.
These results should be deeply concerning for the executives of these companies, their investors, and the governments and citizens of countries where they operate.