Why Transparency International’s 2020 corruption ranking of Pakistan is structurally flawed?


Syed Sharfuddin

On 25 January, 2021 Transparency International (TI), the Berlin based global watchdog on corruption issued its Corruption Perception Index (CPI) for 2020 in which Pakistan ranked 124 out of 180. This came as news to Pakistanis who had come to believe that the Pakistan Tehrik-e-Insaaf (PTI) government of Prime Minister Imran Khan was the ‘cleanest’ of all the governments Pakistan has seen since the restoration of civilian democracy in Pakistan in 2008.  In that year, when General Musharraf left power and Pakistan People’s Party (PPP) formed a representative government following a free and fair election, TI’s CPI ranking for Pakistan was 134 out of 180. In 2013 when PPP lost the general election and Pakistan Muslim League (Nawaz) came to power, Pakistan’s CPI rank was 127 out of 177. In 2018, when PTI won the general election and formed government, Pakistan’s CPI rank was 117 out of 180. In 2019 it slipped 3 points to 120 out of 180. In 2020 it came down another 4 points to 120 out of 180. This contrasts sharply with Pakistan’s CPI rank during 2015-2018 in the PML (N) government when it fluctuated between 116 and 119. Pakistan’s 2020 rank stands close to the 2014 CPI index of 126 out of 180. This is despite the fact that the PTI leadership has zero tolerance for corruption and TI has not taken it into account in scoring Pakistan’s ranking in its global index.

TI uses thirteen different databases from twelve international and private institutions, which provide perceptions of business people and country experts about the level of corruption in the public sector of a country under scrutiny. Their databases focus on a specific theme on which the concerned institution collects data and shares with TI. The institution also asks specific questions in its area of specialization to assess whether corruption exists in the political system and public sector. For assessing Pakistan’s ranking in 2020, TI relied on the data provided by the following nine institutions.

Bertlsmann Stiftung Transformation Index (BFTI). The questions were: 1) to what extend public office holders who abuse their positions are prosecuted or penalized? 2) to what extent government successfully contains corruption?

Economic Intelligence Unit (EIU). The questions were: 1) are there clear procedures and accountability governing the allocation and use of public funds? 2) do ministers/public officials misappropriate public funds for private or party political purposes? 3) are there special funds for which there is no accountability? 4) are there general abuses of public resources? 5) is there a professional civil service or are large numbers of officials directly appointed by the government?  6) is there an independent body auditing the management of public finances? 7) is there an independent judiciary with the power to try ministers/public officials for abuses? And, 8) is there a tradition of a payment of bribes to secure contracts and gain favours?

Global Insight Business Conditions (GI). Their questions were: 1) do individuals/companies face bribery or other corrupt practices in carrying out business, or securing major contracts or being allowed to import/export a small product or obtaining everyday paperwork? and, 2) if so, is there a threat to the ability of individuals / companies to operate in a country, and do they run the risk of facing legal or regulatory penalties and reputational damage?

IMBD Yearbook 2020. The question asked was: do bribery and corruption exist?

The PRS Group International Country Risk Guide 2020. The questions were: 1) does financial corruption exist in the form of demands for special payments and bribes connected with import and export licenses, exchange controls, tax assessments, police protection or loans; and, 2) is there actual or potential corruption in the form of excessive patronage, nepotism, job reservations, exchange of favours, secret party funding and suspiciously close ties between politics and business?

World Bank Country Policy and Institutional Assessment 2019. The questions were: 1) is there transparency for accountability and corruption of the executive to oversight institutions and of public employees for their performance? 2) does civil society have access to information on public affairs? and, 3) is there State capture by narrow vested interests?

World Economic Forum (WEF) Executive Opinion Survey 2019. Questions put to business executives were:  1) how common is it for firms to make undocumented extra payments or bribes connected with the following:a) imports and exportsb) public utilitiesc) annual tax paymentsd) awarding of public contracts and licenses, and,e) obtaining favourable judicial decisions? and, 2)how common is diversion of public funds to companies, individuals or groups due to corruption?

World Justice Project (WJP) Rule of Law Index. The question asked was: to what extent government officials, employed in public health system, regulatory agencies, the police, military and judiciary use public office for private gain. Pakistan scored low in this data collected from experts.

Varieties of Democracy Project. The question asked was: how pervasive is political corruption? Pakistan scored low in this data collected from experts.

The other four institutions that supplied data to TI did not cover Pakistan. These were: 1) Freedom House which, in this context, deals with counties in democratic transition; 2) African Development Bank, which deals with counties in Africa; 3) Bertismann Stiftung which deals with countries in the EU, and 4) Political and Economic Risk Consultancy which deals with specific countries in the Asia Pacific region and the US.

There are gaps in the methodology used by TI to rank countries on corruption. Firstly, not all the thirteen data providing institutions assess all 180 countries, which raises a question about the quality of information used to make an assessment for each country. Secondly, with the exception of a few, most of the institutions collecting data are private risk assessment firms, which sell country reports to governments and foreign investors on commercial terms. Interestingly, although TI website provides information about the url sources of its data, the private institutions providing the data to TI do not make their reports open to public without registration. This raises the next question about transparency of data collection and country ranking.

TI Pakistan website does not give information about who was approached in the business and expert sector to provide specific answers to the data collecting institutions. In a country like Pakistan where opinions are so openly divided between pro government and pro-opposition lobbies, it is hard to rank perceptions.

Thirdly, TI methodology does not explain how weightage is assigned to different data sources. For instance, Pakistan scored low in the questions asked by two institutions: the World Justice Project and Varieties of Democracy Project but its scoring in the answers to questions by other seven institutions did not prevent its slippage by four points in 2020.

The World Justice Project is a US based database covering the views of households, legal practitioners and experts. WJP assesses countries in eight specific areas, namely, constraints for government powers, absence of corruption, open government, fundamental rights, order and security, regulatory enforcement, civil justice and criminal justice. TI’s selection of this institution to assess the level of corruption in a country is inaccurate because WJP does not specialise in corruption. Its focus is on rule of law and the factors that impede respect and enforcement of rule of law. Unlike TI’s coverage of 180 countries, WJP covers only 128 countries.

The Varieties of Democracy Institute is an academic Sweden-based democracy-rating project, which studies the state of democracy in a country in five specific areas. These are: electoral democracy and its liberal component; government manipulation of media, civil society, rule of law and elections; polarization of society and use of hate speech by political leadership; spread of disinformation in the cyber age; and political, executive and public sector corruption. The institute relies on the work of about a dozen researchers, a similar number of managers and 2000 country experts. Its core work is democracy and not corruption. TI’s use of this institute to rank counties in the CPI index is therefore not convincing.

Even if it is conceded that Pakistan fails almost all the criteria of V-Dem Institute on democracy benchmarks and has a large democracy deficit in the rule of law index of WJP, it cannot be attributed to the level of corruption in the country in 2020 compared to the corruption levels in the previous years.

To provide evidence of improvement in anti-corruption in a country, one needs to look at the commitment of the government for eliminating corruption at political, executive and public sector levels. One also needs to see if the regulatory bodies in a country are willing and able to translate the political commitment into action. In 2020, Pakistan met the requirement of having such a political commitment at the highest level. Its anti corruption bodies also delivered on this commitment. The country’s main anti corruption agency, the National Accountability Bureau made tremendous efforts in 2019 to 2020 to recover Rs. 390 billion of embezzled public money. The Public Accounts Committee also made recoveries worth Rs 300 billion. In 2020 the public fundraising drive launched as the Prime Minister’s COVID Relief Fund did not fall prey to public corruption in the collection of donations or distribution of funds to the poor.

This is not to say Pakistan has scored better in tackling corruption and must be placed somewhere close to 90 in the CPI ranking. As stated earlier, corruption cannot be eliminated in a short period of one or two years. There are democracy and corruption related issues that will take a while to remove such as the constitutional requirement of organizing a general election under a neutral caretaker government, because the incumbent government whose electoral term comes to an end after five years cannot be trusted to hold a free and fair election. Or take for example Prime Minister Imran Khan’s suggestion to pass a constitutional amendment to conduct the Senate election by a show of hands instead of a secret ballot, because the electoral college, comprising elected representatives in the Provincial Assemblies cannot be trusted to be honest due to the past record of large scale horse-trading in Senate elections involving political bribes of millions of Rupees.

There is also moral and intellectual corruption in public office, which does not count in TI’s PCI criteria. Political leaders have repeatedly made promises they have never fulfilled. They publicly claim to resign if they are proven wrong, but when events or evidence prove them so, they look the other way. Accepting an error of judgment or tendering resignation from public office for failure to perform or act responsibly is not part of the political culture of Pakistan. Many investigation reports are never made public.  The government reacts to public outrage against corruption not by strengthening existing institutions but by ordering judicial enquiries (such as the most recent Commission on Broadsheet) or establishing additional committees (such as the joint investigation committees).  In staying in a reactive mode all the time, the important lesson learning is lost in the details. Political leaders file counter cases in courts when challenged with allegations of corruption against them. These issues do not feature in the criteria of IT. Its annual data is based on assessments provided by a limited pool of business executives and experts, not exceeding a few hundred in each country.

There is a difference between the actual state of corruption on the ground and the perception of corruption reducing or getting worse. What reinforce such perceptions are statements of political leadership from both the government and the opposition and the views of businessmen, academics, civil society and media.  The PTI government has harmed its anti-corruption agenda by keeping the rhetoric of corruption high at every national and international forum. In his bilateral meetings with leaders of other states, including meetings at the UN and WEF, the Prime Minister has talked about his country’s past leaders being corrupt and dishonest. In most of his domestic speeches he has also attacked them repeatedly for stealing public money and keeping secret bank deposits and real estate assets overseas. This narrative has sent a wrong message to the world that the present Prime Minister may be an honest and upright gentleman, but his country is the land of the corrupt and crooks. With this message, when representatives of international institutions meet Pakistanis, they don’t hear a contradiction. When they speak to government functionaries or PTI supporters, they hear stories about the corruption of opposition leaders. When they speak to the opposition parties and their supporters, they hear stories of scandals and corruption in public office by government ministers and advisers, with the result that the image they came with in the country about corruption is amplified and reinforced.

A damaging impact of this unhealthy narrative is that it feeds the view that the anti corruption agenda of the government is nothing more than a political stunt to keep the opposition on the defensive. It is also a matter of who one talks to in the business community and civil society. The polarisation of he society is so stark that an opinion on reduction in corruption is cancelled by a counter-opinion against it.

It is about time that the Prime Ministers and his ministers and advisers change their narrative and stop witch hunting the opposition on corruption. They should instead speak about other important issues, which have to do with strengthening democracy and achieving real growth and development. Improvements in social safety networks, human rights, criminal justice system, the rule of law, independence of judiciary and freedom of media are ultimately going to be the winners for Pakistan in its fight against corruption without beating the drum loud. There is also no need to take TI’s 2020 CPI ranking seriously because it does not deserve the importance it should be given in all fairness because of the shortcomings in its data collection methodology and applying it realistically in framing the annual global index.

The author is a former Special Adviser, Political Affairs in the Commonwealth Secretariat, London, UK. He can be reached at sharaf.sharfuddin@gmail.com