The United States is widely recognized as one of the most powerful nations in the world and is widely celebrated as a beacon of democracy, freedom and a flagship of the free world. As such, it comes as a surprise to many to learn that the United States has begun to slip in the latest global corruption ratings. Despite the US being home to the world’s most admired and powerful companies and government, a lack of transparency and accountability has seen the US drop to 23rd in the annual corruption ranking.
What Is Corruption?
Corruption is a wide-ranging and oftentimes inextricable term that describes a range of issues from bribery and fraud to patronage and collusion. Transparency International, which compiles the annual corruption index, defines corruption as the abuse of entrusted power for private gain. In essence, corruption is another form of dishonesty or law breaking by people in positions of trust, who use their official role to make money for or otherwise benefit themselves or someone else.
Corruption can take many forms, from ministers misusing public funds to those in power illegally misusing public resources for their own benefit. It can involve questionable practices in the construction business or policing, or public services that are used to reward customers or companies in exchange for favours. It is often used to obtain competitive advantages, such as exclusive contracts or low taxes, or to bypass important regulations that are not in a particular actor’s favour. In some countries, it can also involve the abuse of a position of privilege or wealth for personal gain.
The Consequence of Corruption
Corruption ultimately has a devastating effect on the health of any society. It undermines public trust, erodes social capital, leads to over-taxation, stifles economic growth and diverts resources away from crucial public services. According to the experience of Transparency International, large-scale bribery is almost always connected to money laundering, which is particularly damaging to economies because of its ability to facilitate tax evasion and capital flight.
The corrosive effects of corruption may be further compounded by full political capture that is induced by elites who involve themselves in process and policy manipulation in order to gain personal benefit. Furthermore, the high level of corruption can adversely impact the investment climate and have economic repercussions, harming economic growth and job creation.
At a time when the US economy is already struggling, the persistent problem of corruption in the country not only endangers public trust, but it can also stop businesses from investing their trust and their capital into the US. This can further contribute to the slowdown of the economy.
The US Has Lost Its Place Among The World’s Most Trusted Nations
The yearly Corruption Perceptions Index, recently released by Transparency International, shows that the US has dropped two places from last year’s ranking, with a score of 69 out of 100. This is despite the fact that the US is known for its strong system of government checks and balances, robust legal enforcement and the most powerful financial system in the world.
The US currently lags behind countries like Canada, the UK, Japan and Germany, all of which rank higher in terms of perceived transparency and accountability. This is largely due to the widespread perception that the US has been subject to growing levels of corruption at the federal level, which has been highlighted by prominent political scandals over the last few years.
The US has now dropped to the same level of perceived corruption as countries like Belize and El Salvador, which is obviously a cause for concern. The good news is that the US still fares better overall than countries like Bolivia, the Democratic Republic of Congo, Syria and Sudan, which are deemed to have “very high” levels of perceived corruption.
Taking Action to Combat Corruption
Despite the fact that the US has dropped in the global corruption rankings, it is important to note that there is still considerable work being done to push back against corruption in the US. In October 2020, for example, the House of Representatives introduced the Anti-Corruption and Public Integrity Act, which seeks to crack down on the “systemic corruption, conflicts of interest and pay-to-play politics” that plagues the US.
The legislation includes provisions to strengthen anti-corruption laws, increase transparency in political and electoral processes and limit the influence of special interest groups. It also seeks to increase public access to federal records, to promote public-sector accountability and to reform campaign finance laws.
Meanwhile, Transparency International has urged the US government to strengthen its anti-corruption policies, to boost transparency and to better enforce its laws. Ultimately, this will be necessary in order to restore public trust and confidence in the US government’s ability to combat corruption.
