Benchmarking Corruption

By Julian Dierkes

In January, Transparency International released the most recent instalment of its corruption perception index. I’ve already commented that Mongolia’s drop in the CPI rankings was not very meaningful. The more I’ve looked at the CPI over the years, the more I have questioned its validity and meaningfulness given that it is/has become largely a meta-index of expert judgments. This does not strike me as a great way to assess corruption and the fact that the fluctuations in Mongolia’s ranking do not really seem to be related to government policy, nor to prominent corruption cases, reinforces my sense of the overall utility of the CPI on an annual basis.

What global indices are good at, however, is to provide some kind of trend line relative to other countries that are similar in some way, be it there starting position, their policy responses to corruption or some other factor.

Given that it’s been five years since I last placed Mongolia’s ranking on the CPI in a context, let me return to that exercise here.

Mongolia’s Performance over the Past Five Years

Before I look at the index here, I would recall that corruption has been talked about a lot during this period in Mongolia. The DP has always embraced this as an important topic in its campaign, but the other parties are equally dedicated to corruption, as least rhetorically. On the policy side, some measures have been introduced and strengthened, like parliamentarians’ obligation to disclose assets, and the EITI, for example. The fate of the Anti-Corruption Agency has been more mixed during this point. While it has gained in prominence, it has also seemingly been instrumentalized by various political actors during this time period. The “Offshoreleaks” and “Panama Papers” cases have renewed public attention to corruption, as have the recent discussions around the purchase of 49% of Erdenet Mine from Russian investors.

With all this activity in the policy space and the public eye, few people seem to express a sense that much has changed about corruption, it is generally seen as still endemic.

The Asia Foundation’s  2016 Survey on Perceptions and Knowledge and of Corruption, does show that corruption is no longer seen as urgent a “major problem” as other issues, like unemployment for example. The proportion of respondents speaking of corruption has thus declined from nearly 30% in 2006 to under 10% in the last several years. At the same time, the assessment that “corruption is a common practice in our country” has not budged, in fact it has been rising since 2014, with roughly 2/3 of Mongolians agreeing with that statement. The regularity of the SPEAK survey allows us to compare its results to CPI rankings.

2012 2013 2014 2015 2016
CPI Score 36 38 39 39 38
Proportion: Agree with “common practice” 64.4% 62.7% 64.6% 65.7%

Mongolia Compared to Other Groups of Countries

TI itself offers a regional comparison, including Mongolia in the Asia Pacific grouping. The logic behind the regional approach is that perhaps there is some kind of a contagion effect that has an impact on corruption. When the CPI is constructed in Berlin, that may make a lot of sense, especially given the extent to which the EU radiates some of its policies and practices Eastward. But for Mongolia the regional grouping that includes as disparate and unconnected cases as Japan and Mynamar, with no meaningful regional interactions, this grouping makes less sense to me.

Substantively, I would be most interest in comparing Mongolia to a) post-state socialist countries, b) democracies, c) resource economies.

Mongolia and Post-State Socialist Countries

Let’s look at post-Soviet countries in Eurasia first.

In this group, I would include Armenia (AM), Azerbaijan (AZ), Belarus (BY), Georgia (GA), Kazakhstan (KAZ), Kyrgyzstan (KG), Mongolia (MN), Moldova (MD), Russia (RU), Tajikistan (TJ), Turkmenistan (TM), Ukraine (UA), and Uzbekistan (UZ).

Just like was the case in 2012, Georgia stands out in this group with a 2016 score of 57 that is far better than Belarus (40), Mongolia (38), Armenia (33), Azerbaijan and Moldova (30), Ukraine, Russia and Kazakhstan (29), Kyrgyzstan (28), Tajikistan (25), Turkmenistan (22) and Uzbekistan(21).

In this group comparing 2012 scores with 2016 shows some improvement (BY + 9, GA + 5, TK +5, KY +4, UZ +4, AZ +3, TJ +3, UA +3, MN +2, AM +1, RU +1, KAZ +1). Only one country shows a decline in its 2012 vs 2016 score: MD -6. In this grouping then Mongolia’s long-term trend is not very impressive.

Emerging Resource Economies

What countries could we group with Mongolia as an emerging resource economy for 2012-2016?

A place to start might be data on % GDP derived from mineral rents. Then let’s select countries where this percentage has been above 8% for the period 2011-15 (no data for 2016 from the World Bank yet.

Burkina Faso (BF), Chile (CL), Dem Rep of Congo (CD), Guyana (GY), Liberia (LR), Mali (ML), Mongolia, Suriname (SR), Togo (TG), Zambia (ZM).

That seems like a reasonable comparison group, though Chile is hardly “emerging” at this point and the % of GDP from mineral rents has not increasing in any of these countries.

CPI scores increased in: SR +8, BF +4, GY +6, MN +2, TG +2, ZM +1. The score stayed the same in the CD and declined in: CL -6, LR -4, ML -2.

Again, Mongolia’s performance here is middling at best. Take Suriname as an example. Mongolia and Suriname were very close in scores in 2012 (36/37, respectively), but the difference had widened to 7 (38/45). Why I don’t know anything about this improvement in Suriname, even with doubts about the CPI generally, this seems like an important comparison for Mongolia.

Guyana has also made rapid progress to almost reach the score of Mongolia. Generally, African countries with large resource sectors have fared worse than Mongolia.

Democracies

To find some comparable democracies for Mongolia, let’s start with the Freedom House ranking of 1.5. Countries at that level are: Israel, Ghana, Mongolia, Belize, Croatia, Latvia, Grenada, Mauritius, Poland, France, Lichtenstein. Of these Croatia, Grenada, Latvia, Poland became democratic around the same time as Mongolia.  They all have much higher corruption scores than Mongolia. This is a pretty amorphous group, however, and it would be more useful to somehow find a grouping of countries to compare to that is defined similarly, perhaps around constitutional forms, i.e. semi-presidential democracies? I’m not sure where I might find such a listing.

Some Conclusions

Rather than focusing on year-on-year changes in the CPI score, I’ve tried to compare Mongolia in the medium-term trend in the CPI to countries that are characterized by similarities with Mongolia in terms of history and economy. This comparison suggests that Mongolia’s performance on the CPI criteria has been moderately positive. There are examples of similar countries who have performed much better, and examples of countries where corruption is perceived to have become much worse.

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