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According to 2021 Corruption Perception Index produced by Transparency International, these are the top performers:

  1. Denmark

  2. Finland

  3. New Zealand

  4. Norway

  5. Singapore

  6. Sweden

  7. Switzerland

  8. Netherlands

  9. Luxemburg

  10. Germany

My question is: What are the commonalities between these countries' institutions which helped them reduce perception of corruption?

For instance, do they have a corruption watchdog specifically for investigating and prosecuting corruption? Or do their legislation demand higher transparency among public officials?

It would be ideal for the answers to include practical actions that can be replicated in other countries.

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  • I think this is more about the public perception of these institutions then the formal structure of them. If people believe institutions to fight corruption are doing honest, fair work they will supply them with information and resources they need. If they believe these institutions are just a tool the powerful use to fight each other they will not.
    – quarague
    Aug 26, 2022 at 6:35
  • @quarague Quote: "The CPI does not cover: Citizens’ direct perceptions or experience of corruption,..." That is measured through the Global Corruption Barometer.
    – ccprog
    Aug 26, 2022 at 13:08
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    @ccprog My point was more along the lines that people in countries with low corruption believe they have low corruption and act accordingly which helps make their belief come true.
    – quarague
    Aug 26, 2022 at 13:16
  • @quarague Reading the explanations by Transparency, their use of the word "perception" seems mostly to mean: How much corruption can be observed by the public, because it came to light. You use the same word, but differently, as in: How much fight against corruption grabbed the public attention? Just to avoid mix-ups.
    – ccprog
    Aug 26, 2022 at 13:29

4 Answers 4

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(Investopedia) Corruption Perceptions Index (CPI) Definition

According to a publishing in 2002 in the Journal of Business Ethics, countries and territories that have low CPI rankings (and therefore high corruption) also have what the study authors called an overabundance of regulation and a thriving black market. Countries or territories with a high real gross domestic product per capita (RGDP/Cap) also had a high CPI ranking (and therefore low levels of corruption).

All things being equal, if a government employee does not hold power over you, they are less liable to ask for a bribe.

(Washingon Post)

Predictably, the best performing countries share a wide array of characteristics. They are open, liberal democracies with a free press. They embrace the notion of transparency, therefore helping citizens see where their hard-earned money gets spent. They have independent judiciaries, and all support long-held assumptions about increased accountability leading to lower levels of corruption.

Notice how I did not highlight liberal? Singapore (4th) is anything but.

Now, you probably don't have to be democratic, but it brings accountability to governments. None of the bottom are remotely democratic.

Now, there are 2 other metrics where there is a correlation:

Wealth

(from Investopia):

that countries and territories with higher CPI rankings were more likely to experience more long-term economic growth and that they experienced GDP increases of 1.7% for every point added to their CPI score. The higher a country or territory’s CPI ranking, the higher that state’s rates of foreign investment. Therefore, corruption has been found to have a negative impact on a nation or territory’s economy.

As a comment says above, high CPI countries tend to be rich. True, but it could be the causation is CPI -> wealth, rather than wealth -> CPI.

Then again, ill-paid public servants, esp. police, will be tempted to "supplement" their income. So, a richer country, with a not-too-big and well-paid civil service, will be better there than a poor country with a sprawling, underpaid, bureaucracy.

(UN)Core factors of police corruption

police corruption arises primarily from deficiencies in four major areas: (a) recruitment, training and promotion; (b) resources, such as pay and equipment; (c) systems of accountability within departments, courts and the law; and (d) cultural traditions that inhibit the develop- ment of professional police standards.

You'll find the top 10ers do pay reasonable wages.

Trust

And also trust. But again, it is difficult to tease out causation vs correlation. Is a society more trusting because it is less corrupt? Or does greater trust in others promote honesty (the reverse of "everyone else steals, why shouldn't I?").

Election cost and funding?

I wonder if, in rich, stable, democracies there isn't also an inverse correlation between cost of elections per capita, source of campaign funds, and corruption. Certainly, while I was living in France in the 90s, a lot of scandals had to do with campaign finances.

And lobbyists would stand to have less power if their money was less important to political parties.

Size? Not really.

The bottom 10 are smallish or at most medium sized countries. Canada, usually in the top 10, but lately at 13, is big, diverse ethnically and has poorer regions.

The US, a big country by any measure, used to do rather well:

In the annual Corruption Perceptions Index (CPI), the United States fell to a low of 67 out of a maximum possible score of 100, down from a high of 76 in 2015.

(76 would put the USA in 13th in 2021, while 67 puts it in 27th place).

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  • The "bottom 10" just don't make any useful argument.
    – alamar
    Aug 30, 2022 at 8:35
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What are the commonalities between these countries' institutions which helped them reduce perception of corruption?

Frame challenge: Institutions are not terribly important. What really matters is the legal culture of a country.

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All of the top ten countries are from a contiguous region of Europe, except New Zealand, which was a colony of another country in the same region that mostly overwhelmed the indigenous Maori population, and Singapore, which was also a British colony and adopted its legal institutions with a particular emphasis of following the rules imposed by the government.

Also, note that not all of the countries are small. Germany has 80 million people give or take. The United Kingdom, with about 60 million people, is #11. Both Germany and the United Kingdom are large federal states (and Switzerland is a small federal state), rather than small homogeneous unitary states. Three of the next four are also former British colonies: Hong Kong, Canada, and Ireland, and Iceland is derived from immigrants from Norway, which is in the top ten.

Singapore and Hong Kong aren't linguistically or ethnically the same as their European counterparts but share their legal culture and legal heritage. Finland's namesake language is not Germanic and the same is true of some of the Swiss languages.

The legal systems of Iceland, Germany, and Switzerland are very different from the common law systems of the former British empire and hence institutionally very different.

But all of these countries have a legal culture that spans different legal institutions and embraces the rule of law and a lack of tolerance for corruption.

Institutionally, lots of the countries with high corruption were established with the same governmental institutions, but those institutions didn't work without the underlying legal culture upon which they were premised.

For example, Sudan started out with British legal institutions when it became independent, but had not absorbed the British legal culture very deeply at the time it became independent, and the result was a corrupt disaster.

This is reinforced by studies in development economics in Africa that find that economic development rates more strongly tracks the ethnic boundaries of populations that share common cultures, than the artificial, colonially imposed boundaries of the countries in Africa (with each country having its own institutions).

For example, regions that are predominantly ethnically Igbo people (mostly in Nigeria) have tended to experience more economic development than adjacent regions in the same political subdivisions where other ethnicities are predominant.

In the same vein, while Japan's civil code comes from a foundation that was almost a verbatim translation of the German civil code, the way that the legal systems of the two countries work in practice is very different, because the legal culture of the two countries is very different.

Culture matters more than institutions when it comes to rates of economic development and some of those cultural matters relate to perceptions of corruption.

Put another way, what matters is the people in the system who operate it, not the system itself.

It would be ideal for the answers to include practical actions that can be replicated in other countries.

Lack of corruption due to an established legal culture is very hard to replicate, since cultural leanings run deep and take centuries, or at least, many decades, to establish.

There is strong evidence, for example, that the political and legal cultures of different regions of the United States have been largely stable since the colonial era more than two centuries ago and can be traced back even further to the historical experiences of the immigrant populations in these regions. You can find similar evidence from regions within Germany.

One of the famous examples of a reformer leveraging the recognition that it was culture and not institutions that was most important was Mustafa Kemal Atatürk, whose radical reforms including dictates on how people in Turkey should dress and whether they should wear beards, in addition to many less obvious matters, because it was hard to know what parts of a culture mattered to a successful transition to modernity, and which didn't. His extreme cultural reforms, many of which were later rolled back, are ridiculed to a great extent today. But as a result of his approach, the legal and political culture in Turkey is closer to the West than almost any other predominantly Islamic country in the world (although still, obviously, far away from countries that have had a Western style legal culture for a longer period of time).

But, the focus of practical actions to improve the situation should be on how civil servants, legal professionals, and business people in the society are socialized (ideally starting at a young age), not on the substantive legal rules and institutions involved.

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For entries 1 through 9 their distinctive property is their small size. All of them are countries under around 10 million population.

Arguably, such countries have much more uniform economy, much more direct government and are easier to tackle than large countries. They also benefit from not having large and opaque underdeveloped regions as many larger countries do.

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    @Jim Do you have evidence that these countries value honesty more than, say, the UK or France? Aug 26, 2022 at 17:31
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    Among the 12 lowest-ranking states (index below 20) there are also two below 10 million inhabitants, and two with less than 12 millions. I don't think there is much substance to this argument.
    – ccprog
    Aug 26, 2022 at 17:33
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    If you want to find a correlation, the per-capita GDP does fit much better. The least wealthy country of the ten above is New Zealand (29th), while none of the top 30 wealthy nations rank lower than an index of 59 (Israel). Among the lowest-ranking, Turkmenistan is the richest with only a fourth of the per-capita GDP of New Zealand.
    – ccprog
    Aug 26, 2022 at 17:34
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    Switzerland is hardly known for honesty; its main reputation is for banking secrecy, hoarding Nazi gold, and Islamophobia; although it is ranked highly in some human rights indexes. Luxembourg is another tax haven, but not sure it has a reputation for much else. The Nordic countries have a very different reputation as stable and honest. And Singapore is known for authoritarianism and its poor human rights record, rather than openness. worlddata.info/tax-havens.php worldpopulationreview.com/country-rankings/…
    – Stuart F
    Aug 27, 2022 at 14:14
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    Singapore definitely doesn't share a common culture among its inhabitants, and Luxembourg has one of the largest immigrant populations in the EU so any attempt to explain this by cultural homogeneity smacks of prejudice rather than evidence.
    – Stuart F
    Aug 27, 2022 at 14:17
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The site actually links to the methodology used in computing CPI.

The "Technical Methodology Note," from the link, says

The CPI draws upon 13 data sources which capture the assessment of experts and business executives on a number of corrupt behaviours(sic) in the public sector, including:

  • Bribery
  • Diversion of public funds
  • Use of public office for private gain
  • Nepotism in the civil service
  • State capture

Some of the sources also look at the mechanisms available to prevent corruption in a country, such as:

  • The government’s ability to enforce integrity mechanisms
  • The effective prosecution of corrupt officials
  • Red tape and excessive bureaucratic burden
  • The existence of adequate laws on financial disclosure, conflict of interest prevention and access to information

Since these are the factors used in establishing the CPI score, the commonality must be not having significant problems in most of those areas.

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