How Corrupt is the United States?

According to a recent study, the United States has more public sector corruption than do many other developed economies. More precisely, Transparency International reports that corruption perceptions are higher for the United States than for 21 other countries. Those nations perceived to be less-corrupt are:

  1. Australia, Canada, Ireland, New Zealand, and the United Kingdom;
  2. The Nordics: Denmark, Finland, Iceland, Norway, and Sweden;
  3. Austria, Germany, Luxembourg, Netherlands, and Switzerland;
  4. Hong Kong, Japan, and Singapore;
  5. Barbados and Chile; and
  6. Qatar.

A more positive spin would be that the United States is viewed as less corrupt than 155 other nations in the study. But many of those other nations are much poorer. For benchmarking purposes, it makes sense to compare the United States to other developed economies. The following chart thus shows the Transparency International measure (in which higher numbers represent less corruption) for all the members of the Organization for Economic Cooperation and Development:

The United States ties with Belgium as the 18th least corrupt member of the OECD.

These findings gibe with what several friends in the international investment community have told me. In their view the United States has slipped in its commitment to the rule of law. At the margin, that makes places like New Zealand, Australia, and the Nordics more attractive places to invest.

About the Transparency International numbers: TI creates its Corruption Perceptions Index by aggregating 13 corruption surveys performed by other organizations (e.g., the World Bank and the Economist Intelligence Unit). As The Economist notes, the TI methodology raises some questions. But it’s still an interesting snapshot of corruption perceptions in the world.

About Donald Marron 294 Articles

Donald Marron is an economist in the Washington, DC area. He currently speaks, writes, and consults about economic, budget, and financial issues.

From 2002 to early 2009, he served in various senior positions in the White House and Congress including: * Member of the President’s Council of Economic Advisers (CEA) * Acting Director of the Congressional Budget Office (CBO) * Executive Director of Congress’s Joint Economic Committee (JEC)

Before his government service, Donald had a varied career as a professor, consultant, and entrepreneur. In the mid-1990s, he taught economics and finance at the University of Chicago Graduate School of Business. He then spent about a year-and-a-half managing large antitrust cases (e.g., Pepsi vs. Coke) at Charles River Associates in Washington, DC. After that, he took the plunge into the world of new ventures, serving as Chief Financial Officer of a health care software start-up in Austin, TX. After that fascinating experience, he started his career in public service.

Donald received his Ph.D. in Economics from the Massachusetts Institute of Technology and his B.A. in Mathematics a couple miles down the road at Harvard.

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