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Murky Data | Transparency International

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The lead editorial from this week’s Época Negócios.

How corrupt is a given country? Its citizens would certainly be interested to know, as would foreign investors, NGOs, elected officials and so on.

Opinions on the degree of corruption in Brazil, for example, are as common as they are pointless. A variety of organizations study “perceptions” of corruption in a given country, based on interviews with business owners, lawyers, academics and anyone who does business in or studies the country.

The best-known of this sort of research is Transparency International  –for which I once worked as a consultant on another project.

The «I» is Sérgio Praça, an EN columnist.

The most recent edition was published today and assigns Brazil a score of 43, where zero indicates a very corrupt environment and 100 a corruption-free zone.

This index is based on 13 surveys, none of them carried out by TI and each based on different questionnaires and objectives. Among the few things they have in common is posting the question as to the respondent’s rating of corruption in his or her own country.

TI admits that it “cannot know the proper weighting of objective information as it applies to average public opinion of the country under study.” Nor can it measure the degree to which respondents rely on personal experience, or whether they reflect a deeper understanding of the business environment, or whether they are arrived at based on reading newspapers, or whether they are founded on hearsay.”

As Cláudio Weber Abramo, former director of Transparência Brasil, pointed out in 2005 that “this type of ranking is useless with respect to the integrity of institutions, much less to their development over time.”

Another point needs making. In this year’s index, China scores 39, indicating that it is only a little more corrupt than Brazil, in 43th place. But China is one-party dictatorship in which civil service requires party affiliation, while Brazil is a competitive democracy with a relatively apolitical public sector.

Relatively.

If Transparency International is not very enlightening as to corruption throughout the world, two researchers, Miriam Golden and Lucio Picci, have come up with an ingenious way to satisfy the need for data on the subject.

Among the articles produced by the researchers, a history of pork-barrel politics in Italy, 1953-1994, and a proposal for Reputation-Based Governance of Public Works. But returning to the column:

Golden and Picci have calculated the difference between the budget planned for infrastructure — roads, hospitals, schools — and what engineers say were actually spent on these projects in all 20 regions studied during 1997.

Puzzled? Ask an engineer, I always say. I miss my old job interviewing the Engineer Scots of Wall Street.

Taking only the budget plan into account, for example, southern Italy seemed much better served than the north. When the researchers factored in actual spending, however, the opposite turned out to be true: the north has more schools, hospitals and so on. The researchers ask, with a hint of sarcasm, where the money went. In the southern region of Campânia, it cost four times as much to complete a road than the national average.

And what is Italy’s Transparency International score? 42, just a little more corrupt than Brasil.

So what does this index say about budgets, civil service employment, prosecutions of corrupt civil servants, and nepotism? Absolutely nothing.