Transparency and corruption: Measuring real transparency by a new index

Mungiu‐Pippidi, Alina Article — Published Version Transparency and corruption: Measuring real transparency by a new index Regulation & Governance Provided in Cooperation with: John Wiley & Sons Suggested Citation: Mungiu‐Pippidi, Alina (2022) : Transparency and corruption: Measuring real transparency by a new index, Regulation & Governance, ISSN 1748-5991, John Wiley & Sons Australia, Ltd, Melbourne, Vol. 17, Iss. 4, pp. 1094-1113, https://doi.org/10.1111/rego.12502 This Version is available at: https://hdl.handle.net/10419/288179 Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen. 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If the documents have been made available under an Open Content Licence (especially Creative Commons Licences), you may exercise further usage rights as specified in the indicated licence. http://creativecommons.org/licenses/by-nc-nd/4.0/ Transparency and corruption: Measuring real transparency by a new index Alina Mungiu-Pippidi Hertie School, The Governance University, Berlin, Germany Abstract Despite the salience of transparency in policy and democracy debates a global measurement of transparency has always been missing. In its absence, measuring the impact of transparency on accountability and corruption for a large number of countries has been difficult, with scholars using more or less adequate proxies. This paper introduces a new measurement of real transparency—the T-index—using 14 de facto components, based on direct observations of official websites in 129 countries and five de jure components, based on the transparency laws and conventions adopted. The resulting index is a measurement with very good internal and external validity and moderate precision. The paper argues that de facto transparency must be considered alongside de jure (legal) transparency if we are to judge the impact (or lack of) transparency against accountability and corruption, as a large implementation gap exists, in particular in poor countries, between legal commitments and real transparency. The T-index has significant impact on both perception and objective indicators of corruption, including perceived change in corruption over time as measured by the Global Corruption Barometer. An analysis of outliers shows that high transparency alone is not sufficient to achieve control of corruption, especially in countries with low human development and poor rule of law, although transparency is a robust predictor of corruption with GDP controls. The data with all sources is available for download as T-index 2022 dataset: DOI 10.5281/zenodo.7225627 and an interactive webpage developed for updates is available at www.corruptionrisk.org/transparency. Keywords: corruption, e-government, freedom of information, index, transparency. 1. Introduction Over recent decades, transparency has turned from a cause promoted by civil societies across the world into a universal benchmark of modern governance, formally endorsed by most of the world’s governments and promoted by intergovernmental organizations. According to Freedominfo.org (2022), 119 countries had adopted freedom of information (FOI) regulation. Transparency features prominently in the United Nations Convention against Corruption (UNCAC, 2003) and is mentioned explicitly in the “outcome targets”list of United Nations Sustainable Development Goal 16 as “developing effective, accountable and transparent institutions”; and “ensuring public access to information,”and is clearly implicit in its other targets. The UNCAC, ratified by over 190 party states by 2022, includes a clear requirement for international transparency under “preventive measures,”one of the five areas included in the treaty. The Convention’s Article 1 specifies an obligation on all state parties to govern on the basis of transparency, which it goes on to spell out as a key principle of public sector organization and function (Article 7, Section 1a), as well as of other crucial matters such as political finance (Article 3), conflict of interest prevention (Article 4), public procurement (Article 9, Section 1), public finance management (Article 9, Sections 2 and 3), and public reporting and proactive disclosure of information, including on policy formulation (Article 10). Transparency is expressed as crucial too in matters of ownership of private entities (Article 12, Section 2c) and any information enabling oversight and “the freedom to seek, receive, publish and disseminate information concerning corruption”(Article 13, Section 1d). At its creation in 1993 the first international NGO to assume the task of advocating against corruption received the title, “Transparency International,”further branding transparency in relation to anticorruption. In 2011, US President Obama Correspondence: Alina Mungiu-Pippidi, Hertie School, The Governance University, Berlin, Germany. Email: [email protected] Accepted for publication 1 October 2022. © 2022 The Author. Regulation & Governance published by John Wiley & Sons Australia, Ltd. This is an open access article under the terms of the Creative Commons Attribution-NonCommercial-NoDerivs License, which permits use and distribution in any medium, provided the original work is properly cited, the use is non-commercial and no modifications or adaptations are made. Regulation & Governance (2023) 17, 1094–1113 doi:10.1111/rego.12502 launched an Open Government Partnership to enhance transparency, accountability, and public participation in government. By 2022, 78 countries and 76 local jurisdictions had joined, alongside thousands of civil society organizations. Transparency has indeed long been credited with the power to improve virtuous behavior. In 1932, US Judge Louis Brandeis summarized the chief reason succinctly: “sunlight is said to be the best of disinfectants; electric light the most efficient policeman”(Brandeis, 20 December 1913). However, there is very little scientific evidence for the long-presumed relationship between corruption and transparency. While transparency has spread around the world in the past three decades, corruption perception has not gone down. Transparency International (2021) reports an unchanged global average of corruption perception for the 10th year in a row, at just 43 out of a possible 100 points, with 131 countries having made no significant progress against corruption in the last decade and two-thirds of countries scoring below 50. Cases persist such as those of Mexico, India, Brazil, and Ukraine, countries which have resorted to unprecedented investment to make public all demographic, administrative, public procurement, judicial, and electoral data, but perceptions of corruption remain among their citizenries. Perhaps transparency is necessary, but not sufficient to curb corruption in general, or perhaps current levels of transparency are simply not yet sufficient to curb corruption? Or both? Are more transparent governments indeed better at controlling corruption? The chief obstacle to a convincing test of this relationship has been the absence so far of direct and fact-based measurements of both corruption and transparency, with most tests based on experiments with mixed results from which it is hard to generalize (Kosack & Fung, 2014; Porumbescu et al., 2021). Moreover, it is often difficult to evaluate the evidence across the literature due to different conceptualizations of transparency and the subsequent absence of sound and precise operationalizations, which make measurements difficult to execute or validate (Bauhr & Grimes, 2017). However, the rise of the Internet and the digitalization of government offer exciting new opportunities for direct measurement of transparency to enable more representative tests. This paper aims to introduce a new measurement of computer-mediated transparency based on direct observation of 129 countries and to test it in relation to measurements of corruption, in order to try to offer a clear answer to the question, “does more transparency lead to increased control of corruption?”In Section 2, we review both the theoretical and empirical literature on the link between transparency and corruption and introduce our concepts; in Section 3, we discuss the theoretical mechanisms by which transparency impacts control of corruption, therefore bridging models of control of corruption with models of transparency and explaining our research design. In Section 4, we operationalize our classifications of transparency as de jure and de facto transparency and present our new measurements, as well as their internal and external validation tests (in relation to other transparency measures). Section 5presents and discusses the results and further external validation tests in relation to corruption indicators. Section 6concludes. 2. Government transparency as a public integrity tool From the time of the Enlightenment, transparency has gradually risen to assume the status of a solid principle of governance. Sweden’s Freedom of the Press Act of 1766, which established the right to access public information and publish it, created a historic benchmark which today is emulated by over a hundred countries (“The World’s First Freedom of Information Act,”2006). In 1781, the French Finance Minister Jacques Necker (1781) published for the first time the Compte rendu au roi, thus initiating a new norm in the form of transparency of public expenditure. Around 1800, Jeremy Bentham was the first to theorize political transparency as a deterrent to corruption and stressed its crucial importance (Hood, 2010). The more recent career of transparency as an enabler of public integrity took off only after 1989 and the spread of democratization after the fall of Communism. One stream of contemporary literature, considering government transparency to reflect a society’s broad culture, emerged from the discussion of high trust-based societies versus low trust-based societies and Nordic exceptionalism. In their discussion on Italian regions, Putnam et al. (1993) found important differences in transparency between North and South. A school of thought, therefore, grew which examines transparency as a specifically cultural feature of societies: a norm, and a historically acquired practice. Nongovernment actors such as the Open Society Institute and Transparency International, which since 1989 have been responsible for pushing transparency to the forefront of the debate on the quality of © 2022 The Author. Regulation & Governance published by John Wiley & Sons Australia, Ltd. 1095 TRANSPARENCY AND CORRUPTION A. Mungiu-Pippidi government, draw on related, although quite distinct, anti-totalitarian literature. The French philosopher Henri Bergson (1935) had already described a historical continuum reaching from the primitive and collectivistic closed society to the individualistic, rational, and inclusive open society. Karl Popper (2020) developed further the concept of “open society”in the 20th century. This mainly normative literature places transparency in the same bracket as government openness and fairness, elevating it to the level of a human right. A third stream of literature has built on the economic institutionalist literature as part of the extended so called Washington consensus, which stresses the importance of “institutions,”defined as norms and practices constraining actors’actions (Djankov et al., 2003; Glaeser et al., 2004; Kaufmann & Bellver, 2005) and stresses that transparency is certainly instrumental in reaching goals such as effective government and control of corruption, or accountability. A fourth stream of academic literature analyzes transparency neutrally, examining its relationship with other dimensions of governance, from parallel or complementary to actually contrarian, creating trade-offs (Hood, 2010; Hood & Heald, 2006; Johnston, 2019). A review by Ball (2009) suggests that three different meanings underpin the streams of literature on government transparency: one has it as virtually indistinguishable from accountability, a public value embraced by society to counter corruption, second it is synonymous with open decision-making by governments and nonprofits (raising concerns for secrecy and privacy), and third, as a complex tool of good governance in programs, policies, organizations, and nations (the World Bank and the OECD approach). Kosack and Fung (2014) tried to map this complexity by creating a matrix to divide the principles of transparency, on one side between government and market actors and end users, and on the other between citizens and consumers. Fung (2013, p. 185) also introduced “democratic transparency”as a concept and the principles that should guide it. These are availability (the citizens need the information to protect their interests), proportionality (the need to disclose information to the public proportional to the potential threat), accessibility (the format should enable understanding), and actionability (the citizens and the organizations should be able to act upon the information). Building on the concept of government transparency as the disclosure of data which provides citizens and other public stakeholders with the information needed for judging the propriety and effectiveness of the conduct of the government (Bovens, 2007), this paper defines transparency as the availability and accessibility of the public information required to deter corruption and enable public accountability in a society. This definition acknowledges that to a great extent corruption is deterred not by oversight actions by the state necessarily, but by the capacity of every individual to defend himself from being abused and discriminated against, hence the “democratic”transparency. Corruption in a democracy often results in discrimination, as few states can dispose of such unlimited resources that favors granted to certain individuals or companies would not result in the deprivation of others equally deserving (Rothstein & Teorell, 2008; Warren, 2004). Government transparency should thus offer to the public reliable, relevant, and timely information about the activities of the government to enable it to defend itself from discrimination resulting from favoritism and abuse of power (either due to connections or monetary inducements). The most common legal instrument of government transparency is “freedom of information”which acknowledges the right of citizens to request information, and the obligation of governments to either provide that information or explain why they will not (Roberts, 2008). Government transparency is multifold, with different types applying to different parts of the policy cycle (Grimmelikhuijsen & Kasymova, 2015; Meijer, 2013). Finally, in the age of the Internet and e-government, transparency often becomes computer-mediated, as the wide availability of smartphones raises access to unprecedented levels (Lourenço, 2015; Margetts, 2011). Smartphones, broadband Internet, and e-government have together managed to remove at least some of the barriers preventing access to information (Buckland, 1991). Technology is thus credited with enabling transparency (Bertot et al., 2010; Elbahnasawy, 2014; Gurin, 2014; Starke et al., 2016; Sturges, 2004), although there remain problems of Internet access and Internet literacy, making their joint contribution heavily dependent on development. Kossow (2020) provides a review of the vast empirical literature on the Internet and e-government’s contributions to good governance: findings are generally positive. A separate stream of empirical literature has assessed the association of FOI (considering not only the existence of any particular legislation but its age and comprehensiveness) with progress on corruption. That literature shows certain initial optimistic findings (Islam, 2006), but the more FOI expands to more countries, the more its effects seem to dwindle, so much so that in some cases they might even be reversed (Costa, 2013; Vadlamannati & Cooray, 2017). FOI laws seem to be more effective when they operate © 2022 The Author. Regulation & Governance published by John Wiley & Sons Australia, Ltd.1096 A. Mungiu-Pippidi TRANSPARENCY AND CORRUPTION in a strong civil society environment (Kossow & Kukutschka, 2017; Mungiu-Pippidi & Dadaˇ sov, 2017). The performance of transparency seems to improve if instead of the existence of FOI regulation, the UN e-government index which measures online service provision (e-services) and openness (e-participation) is used as the proxy for transparency (Andersen, 2009; Elbahnasawy, 2014; Kim, 2018; Park & Kim, 2020; Starke et al., 2016). Press freedom seems to be another enabling factor for FOI besides the rule of law (Costa, 2013; Vadlamannati & Cooray, 2017). Other proxies alongside this widely used UN survey are experts scores, for instance, fiscal transparency (Chen & Neshkova, 2020; Montes & Luna, 2021; Mungiu-Pippidi & Dadaˇ sov, 2016), transparency of policymaking from the Global Competitiveness Survey (Lindstedt & Naurin, 2010), the Quality of Government Institute expert survey transparency measurement (Bauhr & Grimes, 2017), or sector measurements, for instance, transparency in publishing natural resources or public procurement. In meta-studies, Chen and Ganapati (2021) and Cucciniello et al. (2017) report that evidence exists of a weak impact on subjective, rather than objective indicators of corruption, especially for fiscal and e-transparency. However, reports exist too of manipulation of transparency resulting in negative effects (Johnston, 2019), or of transparency leading to a decline of trust in government, even when corruption is actually decreasing (Brusca et al., 2018). On top of such quantitative studies, there is rich evidence from experimental and case studies; their definitions of transparency and the sectors they survey vary, so their findings are equally diverse. Peisakhin and Pinto (2010), for instance, found in a field experiment in India that the new FOI law was almost as effective as bribery in helping the poor to secure access to a basic public service. Two frequently cited studies from Uganda (Björkman & Svensson, 2010; Reinikka & Svensson, 2011) reported the positive results of transparency on outcomes in public health and education services (by some integrity-enhancing mechanism). Many people have attempted to emulate those experiments, but their findings have been less promising (de Renzio & Wehner, 2017; Kosack & Fung, 2014; Porumbescu et al., 2021). Despite reports of many successful experiments over the years, Uganda’s national governance indicators have to date not improved, so it becomes apparent how difficult it is to generalize from controlled settings, and even from limited natural experiments (in one city or sector) and extrapolate to the macro level of an entire government and society. The poor specificity of measurements at the national level may be not only a technical matter but might hide a conceptual problem. As Stefan Voigt (2013) argues, to assess whether institutions matter, one needs a conceptual distinction between institutions and non-institutions, for otherwise proving the importance of institutions becomes impossible. The solution, proposed originally by Douglass North (1993:4), is to distinguish between organizations (such as an information Ombudsman) and institutions (such as formal and informal rules regarding transparency). Furthermore, Guillermo O’Donnell (1996, p. 42) highlighted that “In many countries of the global East and South, there is an old and deep split between the pays reel and the pays legal.”So, a real separation can exist between formal (de jure) laws and informal (de facto) rules of the game. Gutmann and Voigt (2020) reported this gap for rule of law (only a poor correlation exists between formal rules [constitutional arrangements] and informal norms [independence of the judiciary or lack of]). Mungiu-Pippidi and Dadaˇ sov (2017) also found an implementation gap when anticorruption was concerned (the most corrupt countries have the most comprehensive anticorruption legislation). Is it possible, then, that the situation concerning transparency may be similar and that the observed weak effect of FOI law in many countries can be explained by an implementation gap? To test the impact of transparency on corruption, two sets of measurements are therefore needed: one for de jure transparency and the other for de facto. 3. How does transparency impact corruption? Our research design Crime opportunity theorists argue that offenders make rational choices and thus commit crimes when the ratio between opportunity and penalty makes crime profitable (Becker, 1968). The situation with public corruption is broadly similar: countries vary in significant ways in the matter of opportunities for and constraints on corrupt behavior; in other words, institutional contexts vary enormously (Johnston, 2005; Shah & Huther, 1999). The factors informing such differences between national institutional contexts form the object of a vast literature (for comprehensive reviews, see Escresa & Picci, 2020; Treisman, 2007). They fall roughly into two categories, also mentioned by UNCAC: the enablers (opportunities or resources for corruption) versus disablers (constraints to corruption). The extent to which the latter balance the former determines if a society manages to constrain © 2022 The Author. Regulation & Governance published by John Wiley & Sons Australia, Ltd. 1097 TRANSPARENCY AND CORRUPTION A. Mungiu-Pippidi corrupt behavior and enforce public integrity as the norm or the opposite situation occurs, where the government systematically distributes public resources by favoritism (Mungiu-Pippidi, 2015, pp. 83–129). The factors creating opportunity are power asymmetry or discretion (Klitgaard, 1988) on the one hand, and on the other, material resources like proceeds from natural resources and public money that can be used discretionarily (Leite & Weidmann, 1999; Mauro, 1998). The capacity to deter corrupt behavior (the credible threat of a penalty) comes from both the horizontal accountability agencies (the judiciary and controllers)—assuming they are truly autonomous from both government and private interests—and free and plural media and civil society (Brunetti & Weder, 2003; Mungiu-Pippidi, 2015). Figure 1pictures the model of corruption as an equilibrium between enablers and disablers. How does transparency affect that model? Transparency is influential on both sides of the control of corruption equilibrium. Transparency automatically decreases resources for corruption, as it eliminates the monopoly of information that has inherent value for officials to exploit for rent, or which is conducive to other rents (Klitgaard, 1988; Stiglitz, 2003). One of the first major landmarks in actionable corruption measurements was the World Bank Public Expenditure Tracking Survey, which tracked money for education from central budget allocations down to the smallest school: once any such allocation is public (fiscal transparency) no more special surveys are needed, as it becomes far more difficult for embezzlers to make money disappear on the way to its intended recipient, as all parties along its course can monitor it (Sundet, 2008). Similar logic led to the establishment of a transparency system related to the extractive industry. The publication of government data, from basic demographic and property data to health or environment data, ends the monopoly over such information and enables citizens both to pursue their daily interests with reduced costs (and frees them from any need to actually solicit such information) and control their government. Transparency can thus reduce power asymmetries and opportunities for rent seeking and can improve access to public services. On the side of constraints, transparency enables collective action, facilitates mass protests, and empowers citizens (Hollyer et al., 2015). Transparency helps magistrates, auditors, journalists, and ordinary citizens to assemble information, at low cost, against potential abuse of public office; to diagnose questionable practices and run advocacy campaigns. If investigations of corruption and subsequent trials are held in public, it is more difficult to hush them up. Media reports of corruption scandals can prompt the judiciary to act even against less tangible officials in a state; and citizens and NGOs can themselves use public information to rally feeling and action against corrupt behavior, by bringing lawsuits or voting corrupt actors out of office. Figure 2sums up the model. The evidence shows that transparency works as a substitute for effective rule of law in countries where public integrity has not yet become the dominant norm (Peisakhin & Pinto, 2010 for FOI use in India; MungiuPippidi & Dadaˇ sov, 2017 for financial disclosures). If citizens cannot rely on the autonomy and fairness of law enforcement, judiciary, and the bureaucracy, they need to take action themselves as principals to control defective FIGURE 1 The causal framework of corruption. Source: Adapted after Mungiu-Pippidi (2015) © 2022 The Author. Regulation & Governance published by John Wiley & Sons Australia, Ltd.1098 A. Mungiu-Pippidi TRANSPARENCY AND CORRUPTION agents. Transparency enables both access to public services at grassroots level, and oversight of them. Similarly, by enabling citizens to help themselves and reduce gatekeeping of public services, government digitalization in corrupt countries has developed as a substitute for incomplete or failed reforms of the civil service or public administration (Kossow, 2020). Building on these theoretical and empirical models, this paper addresses the general question if transparency is in sufficient quantity, as well as a sufficient factor to deter corruption and these questions and research objectives: 1Given that the generalization of legal transparency has apparently not led to an improvement of the corruption perception globally (according to Transparency International, 2021) we hypothesize that the practice of democratic transparency may demand more than the simple ratification of treaties and adoption of laws. It may be that an “implementation gap”exists between the legal (de jure) and de facto computermediated government transparency (Hypothesis 1), which should become apparent if we measure the two dimensions. 2We further hypothesize that the different information resources that a government should share transparently to enable real transparency are both directly observable and conceptually related in a latent variable (Hypothesis 2). They could then be captured by a single index (the T-Index) following separate direct observations. We, thus, aim to measure de jure and de facto transparency and relate them to each another to achieve a measurement of real, not just legal transparency, and run internal and external validation tests of the new index (T-Index). 3We further hypothesize that “real”transparency and in particular the implementation gaps between laws and practices should be consistent with the level of development proxied in the Human Development Index (HDI), as computer-mediated government transparency needs an infrastructure requiring both material and human resources. 4Finally, with the obvious limitation that a new index, regardless how sound, cannot be used retrospectively, a measure of real transparency is the first step toward answering the more complex question if transparency is either a necessary or a sufficient factor to deter corruption. By mapping real transparency around the world, we can establish benchmarks and assess to what extent sufficient transparency exists to empower public integrity and how much is still missing. According to mainstream theory, high values on the resulting index should, therefore, be associated with less corruption across all possible corruption indicators (subjective and objective). 4. A measurement of both legal and real transparency 4.1. Current measurements So far, transparency at the national level has been measured mostly by proxies, with the E-government Survey and the FOI-based measures being the most used. Despite their differences, the two measures belong to the legal or de jure category (the existence of laws instituting FOI or the existence of specific obligations and provisions to that effect). The UN survey measures e-government (ITC government infrastructure, as well as the human FIGURE 2 How does transparency impact corruption? © 2022 The Author. Regulation & Governance published by John Wiley & Sons Australia, Ltd. 1099 TRANSPARENCY AND CORRUPTION A. Mungiu-Pippidi capital), and “e-participation”(e-information sharing, e-consultation and e-decision making) consists of selfreports by governments through the METEP questionnaire (United Nations 2014) which is based on regulation and organization (laws and decisions). The attempts to measure real transparency have come mostly by sector, for instance in the form of statistical data available to the World Bank by Hollyer et al. (2014), or based on data from the pharmaceutical sector, party finance, and public procurement. Such measurements have the advantage of specificity and actionability. The European Commission’s Public Procurement Scoreboard (European Commission, n.d.), for instance, publishes permanently the transparency of bidding processes for each EU member state, thus offering both benchmarks and policy warnings. 1 Several case studies from countries draw on the numbers of FOI requests in each and an analysis of how their governments handled them. But comprehensive measurements of real (de facto) transparency are not easy to come by in a comparative format at the national level. The existence of any such measurement would bring important advantages for public policy and good governance and would allow the establishment of benchmarks of transparency to be established, thus creating incentives for countries to progress. Finally, it would allow policy-relevant research, as the resulting measurement can be tested both in relation to legal (de jure) transparency and to the curbing of corruption. 4.2. The selection of components A legal transparency measurement is uncomplicated: it can build on national transparency legislation as well as on international commitments. For instance, the website europam.eu from the European Research Centre for Anti-Corruption and State-Building. (n.d.) assesses the comprehensiveness of transparency legislation, giving a score which allows both ranking of the country and institutional specificity—in other words, what is included in or omitted from a law. Unfortunately, that is possible for only 35 of Europe’s countries and does not present a straightforward correlation between more comprehensive legislation and a better outcome (more transparency). Is the existence of an Ombudsman for Information, for instance, a guarantee that a country is more transparent? The most transparent countries in the world, for example the Scandinavian ones, the United States, or Canada have no such Ombudsman, although more recent FOI acts have included an Ombudsman organization as a guarantee of better FOI implementation. Besides FOI, other relevant rules and conventions with key transparency provisions are international: for instance, the UNCAC (includes a chapter) or the Anti-Money Laundering Convention. Countries pledge transparency when joining the intergovernmental Open Government Partnership or when signing various regional trade treaties or initiatives. National regulation and international commitments can be built into a scale of de jure (legal) transparency. The measurement of de facto transparency at the national level is, of course, more difficult. The only way to assess de facto transparency is to directly observe the existence of such public data, its accessibility and coverage: in other words, the practice of transparency rather than just the legal provision of it. But what specific information should be monitored, given that the universe of unclassified corruption-relevant information that governments should share is practically infinite? The answer has already been given in the main by the UNCAC and the SDG 16, which list the basic requirements for both control of corruption and transparency (Mugellini et al., 2021). In line with the theoretical institutional framework, a measurement should capture both de jure and de facto aspects, the formal and the informal institution of transparency, and all rules and practices. Table 1shows the list of essential indicators to prevent corruption and abuse of office for both categories. 2 All the elements required by UNCAC are captured in the de facto index, apart from nonuniversal categories, which might decrease country coverage too much if they were included (e.g. websites which disclose party finances, important only for democracies). Although that list covers the essentials of the data that a government can share to enable public participation in anticorruption, the list could grow endlessly, as transparency is not a finite concept. Environment data, food safety data, health and education data, and various kinds of archival data might all prove important to preventing corruption in one situation or another, even if UNCAC does not make explicit reference to them. However, assessing financial and public procurement transparency ensures coverage of the highest-risk areas while preserving the feasibility of a large country coverage. The de facto T-Index thus has 14 dimensions, which cover the main administrative, judicial and anticorruption areas. 3 Coverage is limited to the countries covered by the most comparable indicators needed for the validation and analysis of this measurement: originally there were 130 cases, of which Afghanistan was dropped after the change of regime in the fall of 2021. The documentation © 2022 The Author. Regulation & Governance published by John Wiley & Sons Australia, Ltd.1100 A. Mungiu-Pippidi TRANSPARENCY AND CORRUPTION and review of the 14 de facto (1820 data points) and five de jure items took 18 months, so a directly observed measurement does not come cheap. The reference link to each observed website can be published as a hyperlink on the public webpage of the index, so that any error or change can be corrected by feedback from the general public as well as from officials, thereby avoiding the kind of problems that the World Bank experienced with the Doing Business indicator in 2021. 4 4.3. Aggregation and validation Once the indicators relevant to corruption are identified for both those dimensions, they can be aggregated into a meaningful composite indicator under a fitness-for-purpose principle (OECD, 2008). How should they be weighted to create the composite indicator, and by what criteria? The total repertory represents the basic transparency menu for preventing corruption, with each category having its separate theoretical importance which cannot be statistically tested against the whole. Equal weighting is the most common scheme used in the development of composite indicators (Bandura, 2008; OECD, 2008). We assign equal weights to aggregate components into an index of qualitative variation IQV (Agresti & Agresti, 1978). The availability of the 14 resources in full is considered the de facto target for our concept of transparency, and each component adds up equally to fulfill it to 100%, which is the equivalent of the maximum score of 14 points. The same logic is applied to the de jure and the total T-Index scores. A country’s T-Index score represents the percentage to which the target (19 items) is fulfilled. The resulting index is then a combination of a rule-based and an outcome-based measurement, designed to eliminate the reported problem of an implementation gap (Kaufmann & Kraay, 2008, pp. 5–8). The pairwise correlation between the de facto and de jure indicators returns a Pearson coefficient of 0.66, showing a strong and statistically significant correlation (at the 95% confidence level), with the difference indicating the presumed implementation gap. The general pattern displayed by the transparency gap metric sheds further light on which side of the scale the imbalance lies: de jure transparency outperforms de facto transparency by a mean value of roughly 26 points on the 100-point scale. Indeed, fulfillment in the de jure dimension is higher than in the de facto dimension for 124 out of the 129 countries for which the T-Index was computed. As Figure 3shows, the differences across regions are highly significant. Sub-Saharan Africa and MENA have the lowest real transparency in the world (33 to 32 degree of fulfillment), although SSA has far a larger implementation gap (28 to 38, respectively). Europe & Central Asia has the smallest gap (74 for de jure and 59 for de facto), with TABLE 1 Components of T-Index de jure and de facto dimensions De jure transparency (laws and treaties) UNCAC ratification Membership to Open Government Partnership (OGP) FOI act present in national legislation Adhesion to region or scope limited conventions or initiatives including transparency provisions Part of the Financial Action Task Force against Money Laundering or other anti-money laundering initiative. De facto transparency (open, free and comprehensive data) Online information about Supreme Courts’hearing schedules and agenda, enabling participation in public sessions Online Supreme Courts’decisions with motivations in sentencing (including abuse of service or corruption sentences) Online searchable database of legislation (official gazette or legal repository) Online detailed publication of past expenditure (from the previous fiscal year) Online detailed publication of current public expenditure (budget tracker) Online public procurement portal including tender announcements and award notices Online disclosure of international aid (ODA) allocation (either as recipient or donor, or both) Online disclosure of existing mining concessions Online disclosure of building permits at least for the country’s capital city Online searchable land register with ownership information for all properties Online searchable register of commerce with public shareholder information Online disclosure of financial declarations for public officials Online disclosure of conflict-of-interest declarations for public officials Online reports of the Supreme Audit Institution (at least an annual report) offering detailed information on audit results © 2022 The Author. Regulation & Governance published by John Wiley & Sons Australia, Ltd. 1101 TRANSPARENCY AND CORRUPTION A. Mungiu-Pippidi moderate precision. This index can be transparently published with every component linked to a public webpage to enable feedback and updating through crowdsourcing, thus promoting the practices of transparent governance indicators. Third, the paper theorizes the mechanism by which transparency deters corruption and shows that transparency is significantly and robustly associated with both subjective and objective indicators of corruption, but that transparency is insufficient on two counts. First, because those countries most in need of it simply do not yet enjoy enough transparency, and second, because a sizable minority of cases exist that despite recent high levels of transparency have not so far achieved good control of corruption. However, with only one outlier, transparency is associated with good control of corruption, indicating that transparency is necessary but not sufficient to lead to better control of corruption. The new T-Index captures the state of digital government transparency for the purpose of accountability and anticorruption as of December 2021. Although its existence enables more tests in the future, this indicator’sfirst limitation is its novelty—it cannot be used in a panel analysis. Ideally, ongoing efforts in the meantime to generate objective corruption measurements sensitive to change will also generate better dependent variables for analyzing corruption over time. 6 While this paper reaches its conclusions largely by a qualitative path, the endogeneity of transparency to corruption indicators and the imprecise and lagging character of corruption expert scores could hardly have offered a solid quantitative alternative even at the cross-sectional level. Further limitations of the T-Index arise from the lack of refinement of its scale and its restriction to only the original UNCAC notion of transparency for accountability. Nevertheless, a trade-off exists between coverage and sustainability to be considered for the further refinement of the T-Index. As it is, the index captures both the main areas of government transparency and the private sector indirectly, as it includes information on mining concessions, registers of commerce, land properties, and public procurement. Besides its academic contribution, the T-Index can serve an actionable purpose. It creates clear benchmarks in the field of government transparency, giving visibility to best practices and exposing implementation gaps. More importantly, by capturing real—instead of merely legal—transparency, this novel T-Index with its disaggregated components offers a roadmap to practitioners and activists in the field of government transparency, and to their international donors. The T-Index points the finger to where advocacy efforts should be targeted, and infrastructure built to enable real transparency. Acknowledgments The T-Index was supported by the grants from the National Endowment for Democracy (NED), the International Centre for Private Enterprise (CIPE), by the ANR and the French government under the “Investissements d’Avenir”program LABEX LIEPP (ANR-11-LABX-0091, ANR-11-IDEX-0005-02) and the IdEx Université Paris Cité (ANR-18-IDEX-0001). The T-Index was possible due to the work of over one hundred country experts, reviewers, Hertie students, and invited external experts who offered input in two dedicated seminars. Lucia Cizmaiova, Bianca Vaz Del Mondo, Christoph Abels, Alvaro Lopez, Roberto Martinez Kukutschka, Belen Cruz, Julian Brummer, Debora Ferreira, Francesco Bono, Ingrida Kalinauskienė, Laviana Zorzi, and Nedim Hogic deserve special recognition. Alexandru Popescu developed the webpage www.corruptionrisk.org/transparency which displays the T-Index with all the references links to primary sources. Open Access funding enabled and organized by Projekt DEAL. Data availability statement The data that support the findings of this study are openly available at T-index 2022 dataset: DOI 10.5281/ zenodo.7225627 Endnotes 1 https://single-market-scoreboard.ec.europa.eu/policy_areas/public-procurement_en. 2 This item draws on a few treaties and initiatives which are either regionally or sector limited, such as OECD Convention on Combating Bribery of Foreign Public Officials in International Business (1999) Transactions; World Trade Organization © 2022 The Author. Regulation & Governance published by John Wiley & Sons Australia, Ltd.1108 A. Mungiu-Pippidi TRANSPARENCY AND CORRUPTION Agreement on Government Procurement (GPA); Comprehensive and Progressive Agreement for Trans-Pacific Partnership CPATPP; Membership to Extractive Industry Transparency Initiative (EITI). Other trade treaties, which do not have provisions for extensive transparency are not included. The adhesion to of these conventions and treaties grants the maximum 1 point score; a score of 0 is granted in the country does not participate in any of these initiatives. 3 We code our observations of de facto transparency in a trichotomous way as follows: the resource is publicly and freely accessible with all essential information—criteria satisfied in full (1 point); the resource exists, but information is either partial (in content or coverage) or access is restricted in some way (e.g., payment required, only certain categories of users can access)—criteria satisfied in part (0.5 point); the resource does not exist or is clearly insufficient in substance to enable citizens in any meaningful way (e.g., available data is too general or outdated)—criteria not fulfilled (0 points). 4 For the integrity of Doing Business indicators, see https://www.washingtonpost.com/politics/2021/09/20/theres-deeperstory-behind-world-banks-ratings-scandal/. 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Mungiu-Pippidi TRANSPARENCY AND CORRUPTION Corruption perception index (0 least–100 most) Control of corruption (1 least–10 most) Index of public integrity (1 least– 10 most) V-DEM (0 most–1 least) (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) Transparency index total (0 least–19 most) 0.885*** 0.0968*** 0.256*** 0.0196*** (0.275) (0.0335) (0.0227) (0.00548) Transparency index de facto (0 least–14 most) 1.009*** 0.107** 0.305*** 0.0224*** (0.344) (0.0418) (0.0287) (0.00685) Transparency index de jure (0 least–5 most) 2.638*** 0.311*** 0.599*** 0.0580*** (0.941) (0.114) (0.0960) (0.0188) GDP–PPP 0.000657*** 0.000665*** 0.000683*** 7.52e05*** 7.62e05*** 7.75e05*** 3.95e05*** 4.11e05*** 4.93e05*** 8.37e06*** 8.54e06*** 8.94e06*** (4.96e-05) (4.97e-05) (4.77e-05) (6.03e-06) (6.03e-06) (5.75e-06) (3.86e-06) (3.94e-06) (4.64e-06) (9.87e-07) (9.88e-07) (9.50e-07) Constant 21.11*** 23.53*** 20.27*** 2.203*** 2.486*** 2.029*** 2.405*** 3.030*** 2.788*** 0.856*** 0.803*** 0.873*** (3.005) (2.512) (3.645) (0.365) (0.305) (0.440) (0.251) (0.213) (0.377) (0.0597) (0.0500) (0.0727) Observations 125 125 125 125 125 125 112 112 112 125 125 125 R-squared 0.699 0.695 0.694 0.671 0.666 0.669 0.801 0.788 0.683 0.538 0.531 0.527 Legend : Standard errors in parentheses. *p< 0.1; ** p< 0.05; *** p< 0.01. Source: World Bank 2021; Transparency International 2021; T-index 2022 dataset. Appendix 1. Transparency as a predictor of corruption with control for income © 2022 The Author. Regulation & Governance published by John Wiley & Sons Australia, Ltd. 1113 TRANSPARENCY AND CORRUPTION A. Mungiu-Pippidi