Tag Archives: corruption

Populism and the Internet in Latin America

The rapid growth of the Internet in Latin America between 2001 and 2008. Today 57% of South Americans use the Internet. (Charts: ZookNIC)

The rapid growth of the Internet in Latin America between 2001 and 2008. As of 2014 57% of South Americans are online. (Charts: ZookNIC)

By William Vogt

Since the rise and fall of the Arab Spring, debate has raged in the fields intersecting communications, technology, and international affairs: will Internet growth be a liberalizing influence that will create stable, prosperous democracies?

So far, this answer appears to be a qualified “no.” Connected and educated youths have not created the groundswell necessary for reform in many politically unstable countries. On the other hand, investments in information communications technologies (ICTs) have greatly improved local economies in many developing countries and hold promise in exposing and rooting out corruption.

In this last point, fighting corruption, the rise of the Internet as a social and economic force has created perplexing political trends. Increased Internet penetration does reduce at least one key aspect of corruption affecting free market interactions: barriers to market entry (for producers and consumers) due to opaque regulations and powerful oligarchies. In fact, studies have shown that merely the act of searching broad terms like “corruption” on an online search engine has significant impacts on the ability of the state to engage in corrupt, anti-competitive practices like demanding bribes from businesses.

This trend, however, does not hold globally and there is one part of the world that has created a particularly worrying balance between the forms of democracy and what is functionally a system of corruption: Latin America. Over its long history this region has developed a unique political culture with a prominent role for the ideology frequently described today as “populism.”

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Can Ukraine Stamp Out its Corruption Culture?

euromaidan

Ukraine’s “Euromaidan” protests were driven by activists fed up with corruption. Can the new government turn things around?

When it comes to opportunity for anti-corruption reform on a massive scale, few countries have ever been as ripe for change as Ukraine today. Western countries and the International Monetary Fund are pushing hard for transparency and clean government. They enjoy unprecedented leverage over Ukraine’s political and economic elites, who need billions in loans to stave off economic ruin. Ukraine’s populace, which took to the streets a year ago to oust a president reviled for his flamboyant corruption, is maddened at the lack of a single, high-profile corruption prosecution since then. Investors, once attracted to Ukraine by a highly educated workforce, cheap industrial assets, and some of the world’s most fertile farmland, have made it clear that corruption is a deal breaker.

Freshly elected Ukrainian leaders committed to reform and European integration are taking seemingly drastic steps on the anti-corruption front. In October, they passed an impressive package of laws that provide the framework to investigate, prosecute and imprison wrongdoers. Just as important, the new laws require the training and monitoring of the tens of thousands of public servants – from traffic cops to school principals to MPs – who collectively represent the “demand side” of Ukraine’s corruption equation.

To implement these new laws and flesh out the details, Ukraine’s elected leaders are turning to technocrats from countries counted as anti-corruption success stories – mostly Georgia and Lithuania. They are laboring away this winter in various ministries and in the Presidential Administration, trying to figure out how to train and empower the men and women who, in the face of a decades-old corruption culture and vastly outnumbered by colleagues benefiting from the status quo, will be the shock troops of anti-corruption reform. Taken together, these are impressive, ambitious moves in a country of 45 million, by far the largest state in the post-Soviet space to attempt such a housecleaning.

All this was on display last week during a fact-finding mission by CIPE’s lead anti-corruption expert in Ukraine, Drago Kos, who also serves as the chairman of the Working Group on Bribery of the Organisation of Economic Cooperation and Development. Kos, a plainspoken man who began his career in the Slovenian police force, spent a week in Kyiv, building rapport and sharing opinions with the Ukrainians at the forefront of the anti-corruption effort.

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Outcry Against Corruption Helps Drive a Change of Leadership in Sri Lanka

Sri Lankan election officials carry ballot boxes under police guard. (Photo: VOA News)

Sri Lankan election officials carry ballot boxes under police guard. (Photo: VOA News)

While it is hard to identify all of the issues that drove Sri Lankans during the country’s recent – and for many observers, surprising – elections, a cry for change was evident. Voters had clearly grown tired of corruption, cronyism, and authoritarianism, and there have been widespread calls for investigations into a range of alleged human rights abuses.

On January 8, in an unexpected turn of events, 15 million Sri Lankans, representing a 75 percent voter turnout, went to the polls and ousted incumbent President Mahinda Rajapaksa in favor of Maithripala Sirisena, Rajapaksa’s former Health Minister who shocked many by declaring his intent to run for office. Rajapaksa, who was South Asia’s longest-serving political head of state, in office since 2005, had turned increasingly authoritarian. He called these elections two years early, seeking a third term. It seems unlikely that he anticipated the defection of Sirisena and a number of other parliamentarians.

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How the Trade Facilitation Agreement Fights Corruption at the Border

Moving goods across borders is a source of corruption around the world.

The process of moving goods across borders is a major source of corruption around the world.

As the world commemorates International Anti-Corruption Day, renewed progress in the implementation of the Trade Facilitation Agreement (TFA) provides a reason for optimism in the fight against corruption.

Reached during last year’s World Trade Organization (WTO) accord in Bali, the TFA creates binding commitments across 159(+) WTO members to expedite movement, release and clearance of goods, improve cooperation on customs matters, and moreover, help developing countries effectively meet these obligations.

The TFA is also a potentially invaluable tool for tackling corruption as the simplification of customs procedures can greatly reduce opportunities for corruption. As the World Bank’s Customs Modernization Handbook sets forth, customs procedures are a key source of corruption, as officials and workers seek bribes in order to move goods in and out of the country.

Given the formidable barrier that corruption poses for both developed and developing countries, one may question how explicitly this agreement will challenge corruption, and what this will look like in terms of activities creating outcomes. In an Economic Reform Feature Service article released by CIPE today, Laura B. Sherman, senior legal adviser at Transparency International USA, breaks the larger TFA into its individual components and addresses in practical terms how each will translate into activities that prevent corruption.

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Building a Culture of Compliance in Emerging Markets

ac-guide-launch

Corruption is a destructive tax on business that hampers entrepreneurship and economic development. In the last two decades significant progress has been made in making the fight against corruption a top priority for governments and businesses worldwide.

Yet many challenges remain, including spreading best practices in anti-corruption compliance beyond large companies to smaller firms in global value chains. The launch of CIPE’s new guide on anti-corruption compliance for mid-sized companies in emerging markets, held yesterday in Washington, DC, at the OpenGov Hub, focused on ways to boost third party compliance in difficult environments.

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TI-USA Recognizes James Wolfensohn with Integrity Award

James_D._Wolfensohn_2003

The World Bank was founded on the principle of non-interference in the political affairs of its member countries, with the focus exclusively on fighting poverty through economic development. For decades, that meant that corruption was a taboo subject in the global discourse on development, even as it crippled the economies and societies of countries around the world.

That changed on October 1, 1996 when then-President of the World Bank, James Wolfensohn delivered his famous speech at the Annual Meetings where he called corruption what it is: a cancer on development.

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Could Rana Plaza Help Make Labor Standards a Corruption Issue?

rana-plaza

In recent years, the private sector has been increasingly responsive to supply chain issues. This is a result of two distinct forces – one related to corruption, and the other related to issues such as human trafficking and child and other labor issues. While the focus on corruption has largely resulted from legislation such as the FCPA and UKBA, interest in labor-related supply chain issues has often been spurred by NGOs, public pressure, and the media.

However, investigations resulting from the Rana Plaza garment factory collapse may change that. On April 24, 2013, over 1,130 people were killed in the building collapse while many employees were making clothing for western companies. While the accident and the resulting public outcry drove some companies to sign accords promising to establish fire and building safety programs, other companies did nothing.

In July of this year, the Bangladesh Anti-Corruption Agency filed charges against 18 people in connection with the disaster, finding that they “grossly breached the building code.” Although bribery may have played a role in the accident — municipal workers were held liable for giving Rana permission to build more floors on top of the existing structure, although they had no authority to do so — the commission’s decision makes no mention of bribery or corruption. Instead, they hold private sector actors accountable directly on the basis of violating local building codes.

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