In late January, Transparency International published the latest (2021) edition of its annual Corruption Perceptions Index. The index carries a disheartening, if hardly surprising, message for Australian integrity watchers. Compared with the previous year, Australia's score dropped four percentage points (from 77 to 73) and its world ranking fell from 11th to 18th.
How reliable is the TI index at assessing levels of corruption? Because corruption is notoriously hidden, the index explicitly aims to measure perceptions of corruption rather than actual corruption. The methodology involves combining results from separate surveys that estimate the extent of corruption in individual countries based on the opinions of business people or country experts. For 2021, sources were used from thirteen different organisations, including the Economist Intelligence Unit, Freedom House, the World Bank and other specialist risk assessment groups. Even though the evidence is indirect and often impressionistic, it is well-informed.
Admittedly, TI gives considerable weight to the views of the business sector, which itself is often engaged in corruption. But IT seeks the perspective of those wanting to do business with governments in accordance with transparent and impartial rules not through personal connections, lobbying, or bribery. Overall, the index does provide a reasonable basis for estimating general levels of corruption in countries like Australia.
Critics from developing countries object to what they see as a Western, liberal-democratic bias in TI and in the other organisations on which the TI index draws for its assessments. They accuse rich countries of ignoring cultural differences in non-Western societies. Aid donors, they argue, use measures such as the index as weapons of external control, making the giving of aid conditional on the adoption of unrealistic and inappropriate reforms. This debate is contested and involves vested interests on both sides. However, all sides agree on the index's relevance to liberal democracies such as Australia that have traditionally attracted the highest scores.
Like all quantitative scores and rankings achieved by aggregating a series of evaluative judgements, the index offers a spurious appearance of numerical precision. Little confidence can be placed in the difference between one or two percentage points on the anti-corruption scale or in the small shifts in the annual ranking scale that such slight differences produce. However, larger gaps are more significant. For example, in 2021 the highest score of 88 (achieved by Denmark, Finland and New Zealand) is 15 percent ahead of Australia's 73 (also reached by Belgium, Japan and Uruguay). In this context, Australia's annual decline of four points must be taken seriously, together with the long-term loss of 12 points since 2012.
Though the annual rankings tend to attract greater publicity, movement in the actual scores is of greater importance because it focuses on how a country is actually dealing with corruption. The ranking, on the other hand, may be also affected by the relative performance of other countries. What we want to judge is whether Australia's performance has improved or worsened in absolute terms. (In this respect, the TI index differs from, say, the various university rankings, where relative standing is everything.) In Australia's case, the evidence of general deterioration is incontrovertible.
Most successful countries have much stricter rules about the influence of money on politics, including not only tighter laws about donations and their disclosure but also caps on campaign expenditure.
How can the trend be reversed? TI Australia, an independent chapter of the parent organisation, gave its own assessment in a media release accompanying the publication of the index. Its chief executive, Serena Lillywhite, emphasised the need for a national integrity commission, a longstanding priority of TI Australia, as a matter of urgency. Other media reports made the same link between increasing corruption and the lack of a federal ICAC. However, as TI makes clear in its National Integrity System: the Blueprint for Action (2020), a joint publication with Griffith University, a federal ICAC, though important, is certainly no "silver bullet". Progress is needed on a large range of other fronts, including lobbying, party finances, campaign expenditure, ministerial and parliamentary standards and whistleblower protection.
After a decade of persistent campaigning by TI and others, the case for a strong federal ICAC is now broadly accepted. Only the Coalition is still holding out with its preferred weaker model designed to safeguard the reputations of ministers and public servants and to protect the jurisdictional turf of the Australian Commission for Law Enforcement Integrity. Even if the Coalition government is returned and proceeds to introduce an integrity commission as proposed, it may well be forced to concede on the details and implement something much more robust.
Given that the battle is effectively won, it is now time for integrity advocates to move decisively beyond their single-minded focus on a federal ICAC and to start pressing for other equally, if not more important, reforms. An unfortunate consequence of the successful pro-ICAC campaign has been to give the mistaken impression that a strong integrity commission will solve most, if not all, of the government's corruption problems. Unless additional issues are placed firmly on the integrity agenda, there is a risk of serious disillusionment.
In deciding priorities for integrity reform, what can Australia learn from countries that regularly feature at the top of the TI list? One cautionary lesson is the relative unimportance of wide-ranging anti-corruption agencies. For example, none of the Scandinavian countries, which are perennial high-achievers, has an institution equivalent to an ICAC. Neither does New Zealand, another top performer. (New Zealand's highly effective Serious Fraud Office exercises some anti-corruption functions, though within a much narrower and more focused mandate.)
On the positive side, most successful countries have much stricter rules about the influence of money on politics, including not only tighter laws about donations and their disclosure but also caps on campaign expenditure (a topic that rarely gets aired in Australia). They also have strong institutions of public bureaucracy which require administrative decisions to be implemented transparently and with minimum interference from elected politicians. Most of the cleanest countries have constitutions grounded in varieties of the Germanic rechtsttsaat system that gives particular prominence to laws and legal procedures in the making and implementation of government policies. Westminster-based constitutions, by contrast, tend to give more discretion to elected ministers, allowing more scope for political corruption.
The case of New Zealand, however, indicates that Westminster systems are not doomed to be weak on corruption. New Zealand, in spite of its smaller scale and its unitary, non-federal constitution, may have important lessons for Australia. The Thodey review into the Australian Public Service certainly thought so. Thodey was impressed with the clarity and transparency of New Zealand's public administration, much of which flowed from the clearly defined role of the state services commissioner, who appoints and employs all departments heads, in consultation with ministers, as well as advising on matters of departmental performance. The head of the department of the prime minister and cabinet, by contrast, is responsible only for managing the government's program. This division of functions at the top of the New Zealand public service institutionalises a distinction between the respective roles of ministers and public servants and discourages the abuse of process for political reasons.
Thodey was too realistic to suggest complete adoption of the New Zealand model. But the report did recommend strengthening the role of the public service commissioner as "head of people" with greater responsibility for advising on the appointment of secretaries. The response of the Secretaries Board, convened and chaired by the secretary of PM&C, was arrogantly dismissive of even a slight adjustment in roles. The status quo was working well with no need for change. End of argument.
Here, then, is another major issue for the integrity lobby to espouse: reform the leadership structure of the APS to encourage greater ethical independence. The unwillingness of public servants to resist improper demands from ministers and their advisers is a key factor in Australia's losing battle with corruption. Minor adjustments will not undo the effects of decades of creeping politicisation. Only significant reform of the general framework will suffice.
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