For years, economists have tried to measure the effects of corruption on society, especially poor people. Mexico, for example, could be losing 5 percent of its economy to the abuse of public power for private benefit, according to a new report by the nonprofit Mexican Institute for Competitiveness. This focus on vice is nice. But would it be better if economists instead focused on a country’s level of honesty?
A key problem in debating corruption is defining it. Despite that problem, a number of institutions try to measure it. The best known is Transparency International’s yearly Corruption Perceptions Index. The World Bank assesses countries through a “Control of Corruption” indicator. Indirect ways of tracking graft are also possible. The Economic Freedom Index measures “irregular” money flows by country.
These measures almost solely rank nations on scales of a particular sin. But what if research focused more on a country's degree of honesty?
One economist, David Hugh-Jones at the University of East Anglia in England, recently gave it a try in a study. His premise was that economic growth relies on the obvious fact that people doing business “trust each other to behave honestly.” He notes that 19th-century Chinese scholar Feng Guifen attributed Britain’s success in part to “the necessary accord of word with deed,” or moral integrity. If honesty varies across cultures and countries – and influences development – why not measure it as a way to promote it?
Dr. Jones conducted a simple experiment to test his theory. He asked hundreds of people in eight countries across the globe to flip a coin several times, with an incentive if the coin landed heads. It was clear from the results which people reported back the truth and which lied. (Britain ranked the most honest. China was the lowest.) He admits there is no “gold standard” way in testing degrees of honesty. But at least he may turn around the usual approach of researchers to focus on negative behavior.
This is important because the world has seen a wave of anti-corruption movements. Leaders in Guatemala and Romania recently fell because of public demands for accountable and transparent government. Three of the world’s largest countries – China, India, and Indonesia – have new leaders who are seen tackling corruption. With social media and disruptive economic changes, more people understand that honesty in government and business can improve incomes, attract investment, and build up equality and democracy.
Perhaps the most dramatic upheaval is in Brazil, where dozens of politicians face scrutiny over a scandal involving the state oil company, Petrobras. Many of the crusading prosecutors in Brazil were trained in the United States, which has the world’s toughest law against international corruption.
“Around the globe, and under a variety of circumstances, the momentum to expose and crush corruption appears to be building,” states Stratfor, a global analysis firm. “Even the most presumably immune members of the political elite in many countries have to watch their backs much more carefully than before.”
If it is said that honesty is the best policy, then perhaps that virtue deserves more attention. People in more countries demand it of their leaders. It deserves to be measured.