Essay #1: Peter Eigen’s and Transparency International
The Vanderbilt Latin American Opinion Project (LAPOP) study’s seminal contribution to analysis of corruption in Latin America is discussed in Peter Eigen’s TED talk covers what is described by he as “one of the world's most baffling social problems” (LAPOP, 2013, TED, 2013). According to Eigen corruption can be “traced to systematic, pervasive government corruption, hand-in-glove with global companies” in response to limited attention to adequate regulatory provision in both developing and developed countries. Since the global financial crisis of 2008, the increase in transnational corruption has been widespread.
No longer the provenance of sovereign rule or regulation the spread of corruption by way of the Internet, electronic financial transactions (EFT) and global trade channels has been further exacerbated by the fact that government officials participate by deriving unassigned benefits from every source that might become available. This includes everything from allocations theft to deep pockets litigation of gross negligence, tortfeasor lawsuits.
Comparison of surveys conducted on corruption tend to review targeted issues such as money laundering, secrecy and organized crime, yet underneath this general trend are other problems to consistently emerge like unfair tax competition, sovereignty, trust, and reputation. Low attention to security infrastructure is another dependent variable that is increasingly noted as a driver.
Some companies are willing to sustain some risks, as the promise of revenues where stakes are highest in developing and emerging economies, are also sites where capital may lead to exponential profits. At least part of this dynamic is related to flexible security provisions contrary to the enforcement of more narrow regulatory constraints in developed markets.
If corruption has a host, syndicalism or the infiltration of state interests by organized crime groups is perhaps the most extensive in terms of black market control of economies of scale. In his discussion, Eigen describes counter-attacks such as the one strategized by his organization, Transparency International (TI) (Transparency International, 2013).
Eigen outlines his role as Director of the World Bank in Nairobi, where he saw firsthand how devastating corruption can be in terms of replication across an entire society. His history in Nairobi prompted his interest in founding Transparency International, a lead nongovernmental organization (NGO) working to create anti-bribery awareness amongst international companies and their stakeholders. The prevalence of bribery initiated by officials in Latin American is exceptionally high, suggests the Vanderbilt LAPOP study (Oppenheimer, 2013).
When asked: what is corruption, Eigen responds to inquirers that corruption is the abuse of entrusted power for private gain; an act that most often leads to substantial harm of all parties involved. With the integrity of people and their livelihood and happiness threatened, corruption is evidenced in its most basic form. The mission of TI is to persuade companies to cease corruption. In developing economies such as Latin America, such a goal requires raising awareness about the issue, as well as public action by official parties.
The import of facing corruption as an egregious and unsustainable wrongdoing is of key import where other abuses such as human rights violations and environmental pollution are concerned. Lack of obligation to a duty to a reasonable standard of care in business relations, or even baseline ethical responsibility poses a serious problem in contexts already rife with corruption. To not buy that corruption is a way of life, and must be at the center of planning and strategy in order to control for risks to employees, partners and society at large.
If we are to tackle common tensions associated with the world of commerce in Latin America, and across the globe at the present time, says Eigen, it requires more than agency by corporate actors. Public voice or discourse about corruption and the potential of transparency must be met with concrete response. Public hearings offer an official forum for changing the circumstance of corruption, by opening up the power relations at their core.
Essay #2: (35 points)
Assessment of a combined dataset derived from the indices of the World Bank’s (2008) Institutional Quality in Latin America, Transparency International’s (2012) Corruption Perception Index (CPI) and the World Economic Forum’s (2012-2013) Global Competitive Index serve as an econometric framework for analysis of jurisdictional distinctions between national economies in relation to institutional performance, corruption and global competition (Appendix A) (The World Bank, 2008, The World Economic Forum, 2012-2013, Transparency International, 2012).
The World Bank index reporting each country’s world rank for corruption as well as competitiveness corresponding with the Global Competitiveness Index stress test figures. World Bank statistics are drawn from crime indices, particularly financial crimes and a number of variables parallel to the Transparency International (TI) Corruption Perception Index (CPI).
What comes out of nominal comparison of the indices is found in The World Economic Forum’s reporting of Latin American is that in aggregate those countries rank according to median perceptions of corruption, yet with broad deviation between those nations (The World Economic Forum, 2012-2013). Corruption figures offered by the World Bank statistics from 2008 illustrate actual ranks based on crime (The World Bank, 2008).
TI’s CPI looks at Q1. Lost business due to bribery; Q2. Persistence of corruption; Q3. Business responsibility; Q4. Getting involved; Q5. Corporate measures in place; Q6. Efficacy of internal corporate measures; and Q7 (Transparency International, 2012). Efficacy of external measures (Transparency International, 2012. Perception of public sector corruption in 176 countries, recorded on a scale of 0 (highly corrupt) to 100 (low corruption) is the basis to the index (Transparency International, 2012).
The CPI ranks countries and territories according to public sector corruption. The public sector corresponds to government oversight, policy, administration and infrastructure used in development of private sector interests (Transparency International, 2012). The CPI also covers internal efficiencies and their impact on market participation.
Confidence intervals illustrate uncertainties in relation to a particular CPI score on the index. Computation of score range or median frequency, along with mean standard reporting of those scores contributes to interpretation of deviance from most common score and intervals from average mean between countries (Transparency International, 2012). Demonstration of government attention to corruption as a priority is inferred.
The CPI is relevant to governing orders of transparency in financial audit, organizational controls and regulatory provision in adherence to international law (Transparency International, 2012). Here, Latin American countries exhibit mean ranking, with near median consistency in score.
If one examines the history of Latin America, including North American country, Mexico and Central and South America, economic policies directed at structural adjustment of former public sector entities through privatization measures in the late-1990s led to future changes with varied effect. Those measures, attendant to major shifts in political-economy in response to democratization and sweeping reforms in law, followed the fall of the South American dictatorships of Argentina, Brazil, Chile, Uruguay and to some extent, Paraguay and other conflicts in the North (i.e. The Drug War).
The more recent incorporation of infrastructure formerly privatized as public sector administration under new governments since the global financial crisis of 2008 as a measure to balance national debts, has once again caused confusion in regard to responsibility; and especially financial obligations connected with those actions.
