We have seen recently a wave of high-profile corruption scandals throughout Latin America. There was for example the one in Guatemala involving the now former President and Vice-President; the one in Brazil, involving high level government officials linked to the partly state-owned oil and gas company Petrobras, and another that involves money laundering against a former President; the one in Bolivia involving the President’s former girlfriend and a Chinese company and another one involving the indigenous development fund; the one in Chile, involving the President’s son and another one involving her daughter in law; the one in Panama involving a former President, who left Panama to avoid pending prosecution for illegal wiretaps and misused of over $1 billion government funds, as well as the case of six of his former ministers and vice-ministers under investigation for stealing and misusing public funds; and the one in Honduras involving millions of dollars of public funds from the country’s health care system being used to fund an election campaign. These cases have nourished the high perception of corruption that continuous to plague Latin America. While corruption and this type of scandals is a challenge in every single society in our world today, it has been more consistently persistent in Latin America. Why?
Recent data confirms that corruption is perceived as one of the top five concerns for Latin America, along with crime and violence, economic opportunities, inequality and impunity. Moreover, a recent analysis looking at various indicators of government success in fighting corruption finds, on average, Latin America’s governments are less successful at fighting corruption than their counterparts in Western Europe and North America and trail Eastern Europe in promoting clean government. The latest Latinobarometro show that only 52% of Latin Americans believed their governments have the capacity to fight corruption.
Transparency International´s 2015 analysis showed that the average score for Latin American countries was 40 over 100 in the Corruption Perception Index (CPI). Within the region perceptions of corruption are also divergent. While in Chile and Uruguay the perceptions are relatively low, in Paraguay, Haiti and Venezuela are relatively high. Latin America has comparable levels of corruption with Asia and only slightly less, again on average, than Sub-Saharan Africa.
As I argued in a recent chapter of a book, perception data trends linked to earlier high economic growth rates suggested that perceived levels of corruption in Latin America were slightly falling. However, the slowdown of economic growth, the high profile scandals and weaknesses in a number of policy areas continue to nourish and reinforce perceptions of corruption. For example, series data from LAPOP surveys shows that the percentage of individuals who report being targeted for a bribe remains steady since 2006 at an average of 20%. In 2014, 1 in 5 people in Latin America reported that they had been asked for a bribe in the last year. Similarly, public officials in most of Latin American countries continue to be widely perceived as corrupt. According to LAPOP data, in 2014 over 38% of respondents said corruption was very common in their country and nearly 80% described corruption as “very common” and/or “common.” Since 2004, this trend has remain relatively steady.
As I documented in a recent chapter of a book the other side of persistent perception of corruption in Latin America is impunity. This is highlighted by the overall weak trust in judicial processes and in justice systems. The idea that there is no costs, moral, financial and/or otherwise for corrupt behavior emboldens corrupt individuals and fosters disappointment and apathy among citizens when they see that justice is not being served. In this context, external mechanisms (to the domestic institutional context) like the International Commission against Impunity in Guatemala (CICIG its acronym in Spanish) or more recently the Support Mission against Corruption and Impunity in Honduras (known by its Spanish initials MACCIH) become beacons of hope for better justice.
When citizens perceive and feel their governments are unable to manage, sustain and expand economic opportunities, curb corruption, and provide security it is likely that support for the democratic governance system will suffer. LAPOP data already shows this correlation. Thus while there is relative high expectations for democratic governance institutions in Latin America, legitimacy of the system to work for the majority is relatively low. As I argued previously in one Working Paper, specific elements of legitimacy in Latin America, such as low trust in the judiciary system, high perceptions of corruption and impunity, high citizen insecurity, low inter-personal trust, high perceptions of economic injustices, and opaque decision-making processes, are all spilling to cast a less than optimal support to the overall democratic governance system and are helping to sustain high perceptions of corruption.
The Latin American region has developed over the past three decades significant democratic rights. Moreover, an extensive analysis of the legal and institutional arrangements in Latin America will reveal that many good laws and institutions are in place to reduce and/or prevent de risk of corruption, although they are not fully enforced and/or implemented. And while impunity is still rampant, the legal and justice systems in Latin America are beginning to acquire capacity to manage allegations of corruption, investigate them and if evidence supports it, issue sanctions. Moreover, civil society and citizens are taking initiatives to fight corruption and impunity. In 2015 huge protests put pressure for the President of Guatemala to resign amidst allegation of a far-reaching customs corruption ring, and in Honduras, protests erupted when a local journalist revealed that millions of dollars of public funds from the country’s health care system had been used to fund a political campaign. In Mexico, civil society groups are promoting the law 3de3 initiative which would require public officials to disclose their tax statements, assets, and potential conflicts of interest.
In spite of this progress, corruption perception persists. Why? Over the past decade, Latin America has become a region of middle-income-countries (MICs). Haiti is the only country in the region that can be classify as a Lower Income Country (LIC). The overwhelming majority in the region are not poor countries, but their wealth is not distributed equitably. There is emerging evidence showing that corruption and inequality can be mutually reinforcing factors. But inequality only partially explains persistent corruption perception in Latin America. There is also a democratic governance angle to it. We must recognize that an overwhelming majority of the countries in the region have consolidated their electoral component over the past three decades. However, the degree of democratic governance performance is divergent. While, a handful of countries enjoy growing and consistent levels of democratic governance performance, the majority of the countries find themselves still coping with the challenges of expanding citizens’ voice and participation, equity and inclusion, and strengthening transparency and accountability systems. It would be difficult to pin point to specific issues that determine corruption risks in Latin American countries. Rather, corruption risks are the result of a combination and/or inter-play of a number of actors and factors. Also, given the diversity and growing heterogeneity in Latin America, in some cases, it might be easier to identify, prevent and manage corruption risks. In other cases, corruption risks are more complex, multi-dimensional and systemic with a multiplicity of actors, institutions, and sectors involved.
There are, however, a number of common drivers and structural issues that can explain high levels of perception of corruption in Latin America. For example:
- High Gini Index (income inequality)
- Disparities in Human Development (any progress seen in aggregate data, disappears and/or is significantly reduced when human development data is disaggregated within countries);
- Dependency on commodity/extractive based economies, which curtail the creation and/or expansion of more innovative and knowledge based capacities and helps to perpetuate clientelistic and fatalistic thinking;
- For many countries the informal sector still represents a key source of employment that is formally outside direct government control and regulation;
- Low mobility and opportunities (despite domestic economic growth, remittances are still significantly important), which among many sectors help to justify clientelism and/or corrupt behavior to access to employment and services;
- Low inter-personal trust and in democratic institutions (risk of vulnerability, divesting from democratic values, and adversely effecting resilience and collective action);
- High centralization and centralized top-bottom decision making processes, in detriment of equitable fiscal policy and distribution of resources, which reinforces discretion and opaqueness in decision making;
- Opaque budget processes (little data, incomplete open government);
- Un-measured government performance (lack of metrics and if there are, they are not made public and/or analyzed);
- Low citizen participation and divestment in collective action and public good goals; and
- Co-opted and/or capture media
At the same time, one finds an extreme concentration of power in the Executive Branches of government and in the personalistic figures of presidents. This pattern remains, in spite of some movement towards a more decentralized and/or pluralistic set of institutional arrangements. Checks and balances are still weak and provisions for ensuring the autonomy of regulatory or control institutions are few, unless they are backed by external actors (e.g., CICG in Guatemala supported by the United Nations).
The fact of the matter is the State in Latin America remains weak and permeable, and since little substantive investment was done, the State has a weakened democratic and control infrastructure that continues to be vulnerable to clientelism and opaqueness. Since, other more effective approaches to manage public resources have not been strengthened and/or institutionalized, the old and traditional practices feed the forces of systemic corruption to overtake the State. Clientelism, corrupt practices and impunity thrive under these conditions, more so when there is little pressure from citizens and civil society. While simplistic and generic, this narrative helps to frame some of the most salient issues that affect high perceptions of corruption in Latin America.
Can something be done to reduce high perceptions of corruption in Latin America and change this narrative? The short answer is yes. Corruption perception and practices can be addressed with short, medium and long term democratic governance reforms and actions. These have to address all the dimensions of the problem, such as the individual, organizational, institutional and systemic dimensions. While the solution depends on both governments and the governed, governments will generally not take the necessary initiatives or steps, unless they feel pressure from constituencies. Societies rarely bring corruption under control through penalties, morality campaigns, constitutional reform, and/or administrative reforms alone. Rather, societies and communities need to strengthen their individual and collective ability to analyze and size-up the challenge of corruption, mobilize to act together against corrupt practices and elevate democratic governance values and principles to the top of the political agenda, so leaders can take action to begin to break the vicious circle of corruption.