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Corruption and economic success can cohabit

By Chris Lewis - posted Monday, 14 February 2011


For decades, Western leadership (led by the US) has played a major role in terms of encouraging freer trade to promote economic prosperity for a growing proportion of the world population.

With certain nations prepared to take on substantial trade deficits (and debt levels) to help fuel international trade, such policies have provided greater export opportunities for more nations.

To free trade supporters, it did not matter if Western nations lost global share of GDP market, as long as a bigger overall cake provided participating nations with opportunities to enhance national economic levels.  

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But support for freer trade should not mean that we merely stick our heads in the sand and simply hope for the best. The public should be informed of both positive and negative trends associated with freer trade.

The following table, indicating national GDP (nominal terms) and corruption ratings of 52 of the largest national economies, suggests that all is not well.  While one would hope that Western nations would retain some advantage by promoting and adhering to greater transparency and less corruption, the evidence indicates otherwise.

The table indicates that poorly ranked nations in terms of corruption have benefited most from world trade since 2000, at least in terms of national GDP growth terms.

World and National GDP (IMF) 2000 and 2010 (US millions of dollars) & Transparency International (TI) Corruption Perceptions Index 2000 and 2010

 

2000

Percentage

2000 TI

2010

Percentage

2010 TI

World

31,567,260

 

 

61,963,429

 

 

US

9,762,100

30.92

7.8

14,624,184

23.60

7.1

China

1,252,298

3.96

3.1

5,745,133

9.27

3.5

Japan

4,763,833

15.09

6.4

5,390,897

8.70

7.8

Germany

1,870,276

5.92

7.6

3,305,898

5.33

7.9

France

1,437,995

4.55

6.7

2,555,439

4.12

6.8

UK

1,308,399

4.14

8.7

2,258,565

3.64

7.6

Italy

1,074,763

3.40

4.6

2,036,687

3.28

3.9

Brazil

601,732

1.90

3.9

2,023,528

3.26

3.7

Canada

706,647

2.23

9.2

1,563,664

2.52

8.9

Russia

259,709

0.82

2.1

1,476,912

2.38

2.1

India

457,377

1.44

2.8

1,430,020

2.30

3.3

Spain

561,377

1.77

7.0

1,374,779

2.21

6.1

Australia

388,043

1.22

8.3

1,219,722

1.96

8.7

Mexico

581,326

1.84

3.3

1,004,042

1.62

3.1

S.Korea

511,928

1.62

4.0

986,256

1.59

5.4

Netherlands

370,922

1.17

8.9

770,312

1.24

8.8

Turkey

199,267

0.63

3.8

729,051

1.17

4.4

Indonesia

150,196

0.47

1.7

695,059

1.12

2.8

Switzerland

240,123

0.76

8.6

522,435

0.84

8.7

Belgium

227,998

0.72

6.1

461,331

0.74

7.1

Sweden

239,763

0.75

9.4

444,585

0.71

9.2

Poland

166,549

0.52

4.1

438,884

0.70

5.3

Taiwan

321,374

1.01

5.5

426,984

0.68

5.8

Norway

166,905

0.52

9.1

413,511

0.66

8.6

Austria

190,748

0.60

7.7

366,259

0.59

7.9

S.Africa

128,023

0.40

5.0

354,414

0.57

4.5

Argentina

284,204

0.90

3.5

351,015

0.56

2.9

Thailand

122,739

0.38

3.2

312,605

0.50

3.5

Greece

112,058

0.35

4.9

305,005

0.49

3.5

Denmark

158,452

0.50

9.8

304,555

0.49

9.3

Venezuela

121,258

0.38

2.7

285,214

0.46

2.0

Colombia

81,719

0.25

3.2

283,109

0.45

3.5

Finland

119,987

0.38

10.0

231,982

0.37

9.2

Portugal

106,455

0.33

6.4

223,700

0.36

6.0

Malaysia

90,161

0.28

4.8

218,950

0.35

4.4

Singapore

91,476

0.28

9.1

217,377

0.35

9.3

Egypt

99,428

0.31

3.1

216,830

0.34

3.1

Nigeria

42,078

0.13

1.2

206,664

0.33

2.4

Ireland

94,813

0.30

7.2

204,144

0.32

8.0

Israel

114,817

0.36

6.6

201,254

0.32

6.1

Chile

75,515

0.23

7.4

199,183

0.32

7.2

Czech Rep

51,434

0.16

4.3

195,232

0.31

4.6

Philippines

75,913

0.24

2.8

189,061

0.30

2.4

Romania

37,053

0.11

2.9

158,393

0.25

3.7

Peru

53,044

0.16

4.4

153,549

0.24

3.5

NZ

51,690

0.16

9.4

138,003

0.22

9.3

Ukraine

31,262

0.09

1.5

136,561

0.22

2.4

Hungary

46,681

0.14

5.2

132,276

0.21

4.7

Kazakhstan

18,292

0.05

3.0

129,757

0.20

2.9

Vietnam

31,173

0.09

2.5

101,987

0.16

2.7

Morocco

33,334

0.10

4.7

91,702

0.14

3.4

Slovakia

20,218

0.06

3.5

86,262

0.13

4.3

World

31,567,260

 

 

61,963,429

 

 

China, which increased its share of global GDP from 4 to 9.3 per cent, barely improved its corruption perception score from 3.1 to 3.5 (10 being perfect). Brazil’s global GDP share rose from 1.9 to 3.3 per cent, yet its corruption score remained similar (3.9 and 3.7). India’s global GDP share rose from 1.4 to 2.3 per cent, and its corruption score improved from 2.8 to 3.3. Russia’s share of world GDP rose from 0.8 to 2.4 per cent, but its corruption score stayed the same at 2.1.

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In fact with 28 nations cited having corruption scores of 5.0 or less in 2000, 24 of them gained global market share. As of 2010, only two of the same 28 nations (Poland and South Korea) had improved their corruption scores to over 5.0 from 2000 levels.

In contrast, only 12 of the 24 nations with corruption scores of over 5.0 in 2000 improved their share of global GDP. This included Australia, New Zealand, Canada and Norway.

Of the 14 nations that had corruption scores of 7.5 or better in 2000, just seven improved their share of global GDP by 2010. Of the seven that lost global GDP share, the US suffered most (30.9 to 23.6 per cent).

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About the Author

Chris Lewis has an interest in all economic, social and environmental issues, but believes that the struggle for the ‘right’ policy mix remains an elusive goal in such a complex and competitive world.

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Creative Commons LicenseThis work is licensed under a Creative Commons License.

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