By Roberto Martínez B. Kukutschka, Jorge Valladares and Jon Vrushi
Political integrity means exercising political power consistently in the public interest. However, defining exactly what constitutes the public interest is both difficult and contestable. At minimum, the public interest implies that decisions are taken independently of private interests and are not intended to simply sustain power holders’ own wealth or position.
Our 2018 research analysis of the Corruption Perceptions Index (CPI) highlighted the emergence over the past decade of populist leaders who capitalise on people’s dissatisfaction with established politics and promise rapid changes, purportedly in favour ordinary citizens over elite groups. What is apparent, however, is that reducing the undue influence over public policy decisions that entrenched privileged interests often enjoy is not as straightforward as some political opportunists would have us believe. Experience shows that attempts to shift the balance must be accompanied by measures to increase independent scrutiny of, and equal access to, decision makers.
The best way to ensure that governments consistently act in the public interest and are not disproportionately influenced by financial, criminal or other vested interests, is to design policy and decision-making processes that are inclusive, transparent and accountable. Anger at the widespread popular perception that certain interest groups have largely captured public policy is mounting, making this a timely issue.
As far back as 2013, our Global Corruption Barometer (GCB) reported that 55% of citizens worldwide shared to “a large extent or entirely” the opinion that their “governments [were] run by a few big interests looking out for themselves.” Overwhelming majorities in 17 out of 28 OECD countries were amongst them. In 2017, the GCB Europe also revealed that 65% of citizens in the region shared this opinion, while the 2019 results of the GCB Latin America show that 65% of citizens think their “governments are run by a few private interests”.
In many countries, fragile checks and balances and weak rule of law enable corruption to become systemic, effectively blurring the separation between public and private interests. In some specific policy areas, particularly those with high potential profit margins, private groups have been remarkably successful at capturing political decision-making processes. This ensures that their financial interests prevail over the public good. In extreme cases, the entire state apparatus can be captured and used as a vehicle to advance the narrow interests of a particular group.This underlines the importance of sharpening the separation between governments and private interests to promote political integrity, prevent “grand corruption” and reduce the risk of policy and state capture. Aligning policy decisions with the public interest and preventing corruption involves establishing mechanisms that limit the potential for undue influence. This means consistently restraining private interests during three related processes:
- selecting/appointing political power holders,
- designing public policies, and
- evaluating the decisions of those in power.
The scale of the challenge varies from one country to another. In countries where corruption is rampant due to inadequate checks and balances and weak adherence to the rule of law, any regulation, regardless of how well-designed, can be manipulated or flouted by those in power with little fear of repercussions.
What is political integrity?
Political integrity means exercising political power consistently in the public interest, i.e. not to sustain power holders’ own wealth or position, and independent of private interest.
Political integrity is enhanced and protected when:
- The recruitment of political power holders (e.g. elections, successions, designations, etc.), is free from the undue influence of vested interests.
- Decision-making by political power holders provides all concerned stakeholders with equal, open and meaningful opportunities to influence decisions.
- Decisions by political power holders are subject to scrutiny by the public and institutional checks.
Political systems that enhance the integrity of both political recruitment and decision-making processes are less vulnerable to political corruption.
Integrity-enhanced political systems combine interrelated measures to curb, among others:
- opaque and uneven political financing;
- opaque and unaccountable lobbying;
- patronage and clientelism;
- abuse of state resources for financial and political gain;
- conflicts of interest;
- revolving doors between private and public sectors;
- policy and state capture;
- political impunity
Step 1: Level the playing field for accessing politics
One way to build public interest safeguards into political decision making, is to ensure that the process of selecting and appointing those in power is not biased towards the preferences of a few narrow interest groups.
According to Freedom House data, as of 2019 almost 60% of countries were considered electoral democracies, where elections are the primary way of selecting who gets into power. Free and fair elections are essential to ensuring that the democratic process serves as a way to align government actions with the elusive concept of public interest. Free and fair elections also serve to legitimise those in power and build trust in the system. Curbing vote-buying, the abuse of state resources for electoral purposes and illegal campaign donations are essential stepping stones on the way to building political integrity.
Shedding light on who donates and how much, can expose the influence of money in politics and deter corruption and other pay-to-play situations. The role of big money in financing election campaigns can skew future policy decisions away from the public interest. As the Center for Responsive Politics explains, “a campaign contribution may carry an expectation that the money will get repaid in the form of favourable legislation, less stringent regulations, political appointments, government contracts or tax credits-to name a few forms of payback”. Campaign finance reforms are often seen as important for anti-corruption efforts.
Over the last decade, many countries embarked on reforms that limit campaign spending, and ban certain types of contributions such as anonymous or foreign donations. According to VDEM data, for example, out of the 180 countries covered by the CPI this year, 112 have rules mandating politicians to disclose the sources of their campaign donations. While this is an important first step, the data also reveals that enforcement remains a challenge: 50 of these 112 countries (45%) do not enforce the rules. International IDEA’s Political Finance Database reveals that political parties’ campaign finance reports were only submitted in 12 of the 86 countries (14%) surveyed. Even when the data is submitted, it often remains difficult for the public to access: only 15 countries had disclosure websites with searchable, machine-readable databases of campaign finance reports.
It is unsurprising that the lack of enforcement of existing campaign finance regulation is associated with lower scores on the CPI. Figure 1 shows that, on average, countries where disclosure requirements for political campaigns do not exist, or where they exist but are either not enforced or not systematically enforced, have an average CPI score of 34 and 35, respectively. This number is 20 points lower compared to that of the group where the regulatory campaign finance framework is not as comprehensive as it could be, but where the existing requirements are properly enforced.
The group of countries where the disclosure regime for campaign donations is comprehensive and successfully implemented get an average CPI score of 70, suggesting that opportunities for corruption in this group are much lower. This last group, however, is composed of just 14 countries: France, Lithuania, Costa Rica, the United Kingdom, Singapore, Ireland, Canada, Norway, South Korea, Georgia, Portugal, Belgium, the Czech Republic and Finland.
A weak and poorly enforced campaign finance framework can cast a long shadow on the outcomes of democratic processes. When big money finds its way into campaigns, citizens might perceive that the moneyed few have an undue advantage in shaping electoral outcomes and even handpicking winners. This association is also borne out by the strong correlation between the CPI 2019 scores and the perception that “rich people buy elections” taken from the Expert Survey of Perceptions of Electoral Integrity.
The results show that the notion that the wealthiest groups in society use their money to alter electoral outcomes is more prevalent in countries with higher levels of corruption as measured by the CPI (see Figure 2). The case of the USA is worth highlighting. Despite its relatively high CPI score of 69, the perception that the rich buy elections is higher than in countries with much lower CPI scores, such as Russia (28) or Venezuela (16).
Step 2: Improve access to the policy-making process and manage conflicts of interest
A second step to help ensure that governments align with the public interest is to make sure that all relevant interests and stakeholders are considered when making decisions. When those in power listen only to a few narrow interests, policy decisions and outcomes are likely to benefit the few over the many. Data obtained from the V-Dem project suggests that when it comes to social and infrastructural spending in the national budget, 24 of the countries covered by the CPI still see most or all of their public budget channelled towards specific corporations, social groups or constituents.
In another 66 countries, around half of the government’s budget in these areas is allocated to specific groups to the detriment of the wider public good. Only 14 countries in the CPI sample allocate most of their social and infrastructure spending on goods and services in a manner that benefits all communities. This finding is in line with some of the most recent anti-corruption literature, which finds that a particularistic distribution of goods (i.e. through clientelism, bribery, patronage, nepotism and other corrupt behaviour) is the norm in most countries. Table 1 below, shows that CPI scores are, on average, much lower in countries where half or more of social allocation is directed to specific groups.
That the CPI results show a strong association with the way in which power is distributed in society is not surprising. Lower CPI scores are associated with societies where wealthy people enjoy a virtual monopoly on political power and the influence of average citizens, particularly marginalised groups, is minimal. Inversely, the highest CPI scores are associated with contexts where political power is more equally distributed across economic groups (see Figure 3).
Promoting more inclusive policy-making processes, with wider ranges of consultation, is one way to prevent the disproportionate influence of groups with more economic power over government decision-making processes. By allowing all groups affected by a specific decision or discussion to participate in the debate, decision-makers gain access to different points of view and can better assess where the public interest lies. Having all relevant information before making decisions also makes it more difficult for politicians to justify a course of action that favours narrow interests over the public good.
A comparison between the CPI 2019 data and the V-Dem “range of consultation” variable, which captures the extent to which groups not represented at the government level or not politically aligned with the government are involved in the policy-making process, shows that countries with more open consultation processes rank, on average, higher on the CPI (see Figure 4). The relationship also shows that countries perform better where consultations involve not only political and economic interests, but also civil society groups.
Another way to reduce undue influence in the policy-making process is to establish systems to detect and manage conflicts of interest. Conflicts of interest occur when a person is in a position to derive personal benefit from actions or decisions made in their official capacity. Such situations risk placing the private interest of the political decision-makers above the public interest. Laws regulating how to manage such situations are paramount, as is the disclosure of financial interests and assets of political power-holders.
The most basic prerequisite to manage conflicts of interest is the clear separation of state budgets from private wealth. In many countries, including some that score above the average on the CPI such as Qatar and Saudi Arabia, this separation does not exist in practice. Rulers in these countries have both extensive monopolistic and discretionary powers as well as unfettered access to material resources, chiefly through oil rents, a problem exacerbated by the near-total opacity of public financial management.
In Qatar, the royal family wields extensive influence over the country’s sovereign wealth fund, to the extent that “the state is not autonomous from private interests.” Similarly, in Saudi Arabia, massive amounts of revenue from oil sales are reportedly channelled via off-budget spending to fund the ruling family’s lavish lifestyles, while the net worth of the House of Saud’s fortune remains a closely guarded secret.
While virtually no information is available domestically about the regime’s finances, work by investigative journalists and whistleblowers offers glimpses into the astonishing wealth those at the top have accumulated. Over fifty members of the Al-Saud family are mentioned in the Panama Papers, Swiss Leaks and Offshore Leaks. The virtual absence of oversight in states like these produces an environment in which corruption at the top can thrive. There are few checks and balances to ensure that private interests do not drive public policy or exert undue influence over state functions.
Managing conflicts of interest is also crucial in democratic countries. According to data from International IDEA, while more than half of the more than 170 countries in their database have provisions to manage conflict of interest for political candidates and elected officials, enforcement remains a challenge. This is even the case in countries with strong rule of law and institutional constraints that rank high on the CPI. A report from TI Switzerland, for example, found that "246 members of parliament have a total of 2,000 vested interests in 1,700 organisations” but often fail to declare their interests as there are no adequate oversight mechanisms in place. Similarly, a recent report by Transparency International chapters in Latvia and Lithuania revealed, “most data on MPs’ interest and asset declarations, despite being publicly available, is not in a user-friendly format”. Problems range from types of searches, ID requirements or machine readability.
Step 3: Subject political and policy decisions to proper oversight and scrutiny
The third step to ensure further alignment between the government and the public interest is to avoid the concentration of power in just a few hands. When discretionary decisions can be taken by a single person or a small group without any scrutiny, corruption is more likely to occur. For this reason, meaningful political opposition and strong institutional checks and balances are often cited in the academic literature as important deterrents of corruption and pillars of good governance.
Oversight and scrutiny on policy decisions allows for opportunities to revert or rectify outcomes that are either illegal or against the public interest. According to the World Justice Project, “supervision enhances public services, develops trust in government and promotes the fulfilment of citizens' needs”. Checks and balances, such as parliamentary oversight and an independent judiciary, offer the prospect of credible sanctions on political power holders in case of corrupt or illegal behaviour.
Other actors such as an independent media and civil society can also act as watchdogs to monitor how power is exercised. As captured in our analysis from the 2017 CPI, civil society organisations (CSOs) can play a key role in denouncing rights violations while also monitoring service delivery, government spending and the implementation of social programmes. Similarly, a free and independent media serves an important function in investigating and reporting incidences of corruption.
The voices of both civil society and journalists shine a spotlight on the corrupt, which can in turn trigger action by law enforcement. For civil society and the media to be able to perform this function, they require access to relevant government data. Access to information laws are an important piece of the puzzle. It is worth emphasising, however, that access to information goes beyond simply publishing large amounts of data. Information needs to be reliable, accessible and of good quality for it to be useful to those seeking to evaluate policy outcomes to detect potential favouritism cases, clientelism or other forms of corruption.
Preventing undue influence in elections, ensuring that policy-making is not captured by narrow interests, and strengthening oversight and scrutiny of the decisions taken by those in power, are three of the basic building blocks for anti-corruption and good governance.
Our analysis of the CPI results over the past eight years, shows that over 60% of countries that have registered a statistically significant change in their CPI scores over this period, have strengthened their regulation of the disclosure of campaign donations. This includes countries like South Korea, Italy, Greece, Guyana, Myanmar and Tanzania. On the other hand, more than half of the countries showing statistically significant declines in the index have either weakened the disclosure requirements for political campaigns or taken no action to improve transparency and enforcement in this area. These countries include Bosnia and Herzegovina, Hungary and Ghana.
Similarly, when it comes to improving openness and participation in the policy-making process, we see that over half the countries that have significantly improved their CPI scores since 2012 have broadened their range of consultation. This includes the case of Guyana, Cote d’Ivoire, South Korea and Ecuador. In contrast, 60% of the countries that have significantly deteriorated on the CPI over the past seven years have also seen a decline in the number of stakeholders who actively participate in policy consultation, in countries such as Nicaragua, Hungary, Turkey and the Congo.
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