Study Sheds Light On Corruption Finds Dishonest Dealing Costly For Developing Nations

Doing a deal in Denmark is likely to be straightforward, but watch out in Nigeria - the country ranked last in an annual survey of corruption.

The global study, released Thursday, found bribes, kickbacks and nepotism common in developing countries, where Western standards often clash with customs of influence-buying and favoring friends.

The Corruption Perception Index, calculated by Berlin-based Transparency International, is actually a “measure of lost development opportunities” because corruption discourages foreign investment, said its chairman, Peter Eigen.

“Every day the poor scores in the Corruption Perception Index are not being dealt with means more impoverishment, less education, less health care,” he said.

While developing countries rank lower than industrialized ones, the governments are not necessarily more corrupt, Eigen said. Corruption often comes from multinational corporations using bribes and kickbacks to buy contracts in the developing world.

“We must bear in mind that many of these business people are part of the problem,” Eigen said, noting that in Germany, businesses can use money they spend on bribes as tax write-offs.

The index scores countries on a one-to-10 scale, with Denmark rated highest, with 9.94. Lowest-ranked Nigeria received 1.76.

Eigen noted some countries have taken steps since last year’s survey to crack down on corruption - most notably Pakistan, where new laws were passed and several people have been arrested, including the father-in-law of ousted Prime Minister Benazir Bhutto.

Although still in the bottom five, Pakistan improved its standing from 1.00 in 1996 to 2.53 this year.

After Denmark, the 1997 list was led by Finland with 9.48, Sweden with 9.35, New Zealand with 9.23 and Canada with 9.10. The United States scored 7.61, slightly worse than 1996.

After Pakistan, the bottom-dwellers were Russia at 2.27, Colombia at 2.23, Bolivia at 2.05 and Nigeria.

Scandinavian countries top the list because their governments are the most “transparent” - the most open to the public, according to Carl Mohn, Transparency International’s program officer.

In Sweden, records are rarely sealed, giving politicians and business people a strong incentive for honesty.