Transparency International has released their 2010 survey results rating the perceived level of corruption and general level of business and government ethics for each country. No big surprises, but just for kicks I thought I would lay the results out against the global average hourly wage levels.
There are some 154 countries with data in both categories, including all of the big ones. Here ya go:
If your eyes are as bad as mine you might want to click on the chart to make it bigger
You can draw your own conclusions. Seems pretty obvious that you can substitute the phrase "corrupt country" with the more commonly heard "low labor cost country" as it seems obvious there is a distinct correlation between the two.
I could find no cases in which people made a decent wage under a corrupt government , the closest being Greece and Italy who pay everyone a lot for doing very little while lagging the rest of the EU slightly in the corruption scale. Seems to me that the people doing all of the manufacturing are doing so for next to nothing because they live under corrupt governments. It also seems pretty unlikely that they will share in the fruits of that work so long as they live under corrupt regimes. The average worker in these countries is not going to benefit simply because western wealth is flowing into their country. They will only share in the western economic dream when the corruption level in their country drops down to western levels.
Seems to me that the basic lean principle of 'Respect for People' is unlikely to become a reality in corrupt countries in which people are kept in poverty in order to do the work that brings vast sums of western money into the coffers of corrupt leadership.
And it makes me more than a bit uneasy to see that vast sums of American, European and Australian wealth are being transferred to some of the most corrupt countries in the world.
And it makes everyone who rationalizes profiting from globalization and 'flat earth economics bedfellows with the some of the worlds most unethical leaders.
Mike says
Would it not follow, then, that the countries who allow (encourage even) the wealth to flow into the corrupt countries shoudl rank higher on the corruption scale? If the US allows and encourages this, then shouldn’t the US corruption number be higher?
Richard says
Bill – the thing that jumps out at me (and it may just be due to the data you’ve selected) is what’s different about the USA? All of the other countries (and this is easy to see but not describe) have a corruption score below their wage score except the USA. It seems to me that there is a link between higher wages and lower corruption but this relationship is not so strong for the USA as other countries – am I reading that right? Any thoughts?
Sudharak says
A country with 12000 registered lobbyists is one of the cleanest.
david foster says
I wonder if this analysis really captures the growing (but mostly legal) corruption in the US as business and government have become more intertwined, with the politicization of subsidies, bailout decisions, etc.
Bryan says
Sorry, Bill…I have a question. How are we supposed to read the wage ratings?
If the U.S. has the lowest wage rating on the chart, we are to conclude that they have the highest wages in comparison to, say…Vietnam, with a 108 rating? Is this the right way to read this? IF that is the case, than Richard’s assumption that the U.S. is unique in some special way is true in that the wage trends in the opposite direction of all other countries, western or not. Given that the UK is pretty close to being equal in ratings, then my guess is that the only other country, similar to the UK,(but probably even closer in similarity to the US) is Canada. I would guess that their wage ratings are opposite of all other countries as well.
Anyway, probably not important, except that it may be an indicator of something unique about the U.S.
Jim Fernandez says
Hey Bryan:
I think I’ve got it! It’s all about opportunity for the people living in these countries. The opportunity index number is calculated as follows. Corruption divided by wages, divided by corruption equals the opportunity index. Check out this calculation using the chart. When corruption is low and the wages are high, the index is higher and people have more opportunity.
Bryan Zeigler says
Curious, where did Japan fall in the chart?
Bill Waddell says
Bryan,
My primary point was the consistency of the correlation – corruption high-wages low, and vice versa.
The correlation applies to Japan as well. #26 in the wage rankings and #18 in the corruption ranking – low corruption and high wages.
Bill
Jamie Flinchbaugh says
Thanks Bill. I always enjoy looking at the corruption rankings of country – really fascinating. This is an interesting look at it.
I do think you have to be careful about correlation and causation. You are saying that corruption is the reason wages are low. Couldn’t it also be the other way around – lack of good and stable wages leads people to corruption? Corruption is a complex animal – I just think we need to be careful about assigning cause.
The thing that has bothered me for a long time is the ranking of the United States. While we still rank relatively high, I certainly think we should be in the top 5, giving Singapore and Denmark a run for their money. I don’t have a cause for it, but certainly am disappointed by it.
Tom Robinson says
Jamie has a very serious point here. Where is the cause, and what’s the evidence that corruption is the cause? Let’s not forget that most of the low wage countries are producing everyday items we buy in the United States.
So does a buyer in the United States support corruption, or low wage employement outsourced, or what?
Our world is complex, intertwined, and very unequal in terms of wages and income. What is the source? My guess is that there is no one source, but researching these relationships would be very helpful.