My Tax Justice Network colleague John Christensen has covered the release of the 2006 edition of Transparency International's Corruption Perception Index.

As John says:

I have argued elsewhere that the perceptions index perpetuates a false impression of corruption. This matters because it impacts on country credit ratings and attractiveness for investors. So TI has an obligation to get these things right. The current index draws on the wrong perceptions from the wrong sources.

I do not dispute the pernicious impact of bribery on developing and developed countries, but I do dispute the narrowness of TI's definition of corruption. Far greater weighting needs to be attached to the role of financial intermediaries and other facilitators in aiding and abetting corrupt practices, and tax dodging should be rated as highly, if not higher, than bribery in terms of its impact on tackling poverty and undermining pro-growth development strategies.

Equally John does note that TI make recommendations that:

indicate that TI is moving away from its overweening pre-occupation with sinners in the public sector and is accepting that there might be systemic problems amongst private sector players, including financial intermediaries and their professional associations. These recommendations include:

Promotion and, where necessary, adoption of corruption-specific codes of conduct by professional associations for their members, for instance the International Bar Association, International Compliance Association, and professional associations for accountants,

Public education to ensure that honest intermediaries better understand their role;

Legal or professional sanctions for legal, financial and accounting professionals that enable corruption;

Greater scrutiny of the role of insufficiently transparent financial centres in facilitating corrupt transactions.

It's a start. But the CPI has a long way to go before it truly reflects what is really going on in the world of corruption, and the burden of responsibility is laid at all the right doors. That is not the case at present, and it's the world's poor who are still paying the price.

It will be curious to see whether Ernst & Young, the implausible sponsors of the CPI take up the cudgel for a Code of Conduct.

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