More on Corruption in Mongolia According to Transparency International: Further Comparisons

A couple of days ago, I offered some initial observations on Mongolia’s jump from 120 to 94th least perceived-to-be corrupt public service.

I find this business of the construction of various  indices in political risk analysis and other fields, quite interesting, so here are some more thoughts.

More Comparisons

In order to get a better sense of Mongolia’s ranking in a comparative context, I’ve tried to add some information to the TI datafile to be able to make different comparisons. In my previous post I listed the comparison with Asia Pacific countries already, and tried to eyeball post-state socialist countries and mining jurisdictions.

Now I’ve taken one of the indicators that flows into the CPI and used that to categorize countries. The Bertelsmann Foundation produced a Transformation Index that evaluates countries in transition on a whole range of criteria.

I have now compared Mongolia to all transition countries and to those transition countries in the Post-Soviet Eurasia category.

Post-Soviet Eurasia

This includes: Armenia, Azerbaijan, Belarus, Georgia, Kazakhstan, Kyrgyzstan, Mongolia, Moldova, Russia, Tajikistan, Turkmenistan, Ukraine, and Uzbekistan.

In this group, Mongolia ranks second jointly with Moldova following the much higher-ranked Georgia. Armenia follows at (105 on global ranking) and it’s downhill fast after that, ending with Uzbekistan and Turkmenistan at 170.

This is a very relevant comparison, I think, in that these are all countries that would have been in a roughly similar position in 1990. Note that of these countries, only Mongolia is rated “free” by the Freedom in the World report (Freedom House, 2012).

Transition Societies

The Bertelsmann Foundation includes a total of 128 countries in this listing. On the CPI this includes some countries with very low perceived corruption (Singapore, Chile, Uruguay, various Gulf states, Baltic countries, Eastern Europe, etc.).

Among these 128 transition countries, Mongolia ranks 55th with Moldova, Benin, Colombia, India. Other countries in this group at a similar rank would be Morocco, Thailand, Zambia, Senegal. That places Mongolia ahead of some countries such as Argentina, the Philippines, Indonesia, Vietnam, before the list ends with the highly corrupt Turkmenistan, Uzbekistan, Sudan, Afghanistan, North Korea and Sudan.

All in all, this leaves much room for improvement for Mongolia, but if the CPI is to be believed than Mongolia is already doing well in comparison to some obvious groupings of countries, and seems to be building momentum toward further improvements.

Potential Bribe Payers

Obviously, it takes two to be corrupt, so what about the potential bribe payers in Mongolia? Clearly, there would be a category of domestic bribes that might range from the banal (traffic tickets) to the more serious (allocation of public funds, jobs, etc.). [This is the kind of corruption in Mongolia that Astrid Zimmermann has worked and published on, for example in her chapter in Change in Democratic Mongolia.]

For the more serious (in terms of amount of financial benefit potentially gained, as well as harm done to the nation) corruption, most people think of property transactions and especially the mining sector in Mongolia. Mining is a sector that has attracted many foreign investors whether it is N American, Australian, and European junior mining companies with exploration projects, largely Chinese investors who are operating small and medium-sized industrial mining operations, or global investors buying into the Oyu Tolgoi project.

One of the components of the CPI is the Bribe Payers Index that is compiled by Transparency International as well. The 2011 edition ranked some of the most prominent foreign investor countries active in Mongolia as follows: Germany and Japan 4th, Australia and Canada 6th, U.S. 10th, South Korea 13th, Hong Kong 15th, India and Turkey 19th. While China and Russia come in at 27th and 28th, respectively, note that only 28 countries are included in the index and that mining is ranked 15th among 19 sectors according to the likelihood that companies in this sector bribe. The BPI does not correlate countries or sectors with specific destinations for bribes, so it offers no direct conclusions about (the perception of) corruption in Mongolia, the array of significant foreign investors is surely an important part of the context.

Methods

Yes, back to methods. I guess it’s the social scientist in me…

Frankly, I still can’t quite figure out whether the Corruption Perception Index is simply a mathematical formula standardizing a number of other indicators through a mathematical formula, or whether there is some expert judgement or additional scoring by TI involved. What puzzles me even further is that the sources listed on the Mongolia page, don’t correspond exactly to the sources listed in the datafile that TI makes available for download (XLS). As far as I can tell so far (I’m continuing to look into individual scores), none of the sources point to a significant change in scores for Mongolia, so I’m puzzled where the jump in score and ranking comes from in the CPI.

 

This entry was posted in Business, Civil Society, Corruption, Foreign Investment, Mongolia and ... and tagged . Bookmark the permalink.

1 Response to More on Corruption in Mongolia According to Transparency International: Further Comparisons

  1. Pingback: Results from the Corruption Perception Index 2013 | Mongolia Focus

Leave a Reply

Your email address will not be published.