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Assessing the Impact of Transparency International's Corruption Perceptions Index Omar Elemere Hawthorne Old Dominion University

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Assessing the Impact of Transparency International's Corruption Perceptions Index Omar Elemere Hawthorne Old Dominion University Old Dominion University ODU Digital Commons Graduate Program in International Studies Theses & Graduate Program in International Studies Dissertations Winter 2012 Do international Corruption Metrics Matter? Assessing the Impact of Transparency International's Corruption Perceptions Index Omar Elemere Hawthorne Old Dominion University Follow this and additional works at: https://digitalcommons.odu.edu/gpis_etds Part of the Economic Theory Commons, and the International Relations Commons Recommended Citation Hawthorne, Omar E.. "Do international Corruption Metrics Matter? Assessing the Impact of Transparency International's Corruption Perceptions Index" (2012). Doctor of Philosophy (PhD), dissertation, International Studies, Old Dominion University, DOI: 10.25777/qcn1-v437 https://digitalcommons.odu.edu/gpis_etds/50 This Dissertation is brought to you for free and open access by the Graduate Program in International Studies at ODU Digital Commons. It has been accepted for inclusion in Graduate Program in International Studies Theses & Dissertations by an authorized administrator of ODU Digital Commons. For more information, please contact [email protected]. DO INTERNATIONAL CORRUPTION METRICS MATTER? ASSESSDMG THE IMPACT OF TRANSPARENCY INTERNATIONAL'S CORRUPTION PERCEPTIONS INDEX by Omar Elemere Hawthorne B.A. July 2006, University of the West Indies, Mona M.Sc. July 2008, University of the West Indies, Mona A Dissertation Submitted to the Faculty of Old Dominion University in Partial Fulfillment of the Requirements for the Degree of DOCTOR OF PHILOSOPHY INTERNATIONAL STUDIES OLD DOMINION UNIVERSITY December 2012 avid Earnest (Director) Kurt'Taylor G^ubatz (Member) David Selover (Member) ABSTRACT DO INTERNATIONAL CORRUPTION METRICS MATTER? ASSESSING THE IMPACT OF TRANSPARENCY INTERNATIONAL'S CORRUPTION PERCEPTIONS INDEX Omar Elemere Hawthorne Old Dominion University, 2012 Director: Dr. David Earnest This dissertation examines the impact of Transparency International's (TI), Corruption Perceptions Index (CP1) and whether or not the CPI and hence TI matter. It examines the impact of TI's CPI on policymakers. It explores three areas: world's political and economic responses and Jamaica's policy responses to the CPI. Jamaica is selected for a case study due to TI's high corruption perceptions index rating for the country: a country that legally has strong anti-corruption laws but, nonetheless, sees its CPI ranking worsen almost yearly. This study comprises mixed methodologies, using both qualitative and quantitative measures to assess the impact of the CPI on development policies. Taking into consideration the importance scholars and policymakers both give to corruption's effect on development; the findings of this study indicate that the CPI, the most cited corruption index, does not change the world's political and economic policymakers' behavior. As in, when the index is published yearly, there is no measured change as it regards world's political and economic policymakers. Nonetheless, Jamaican policymakers pay significant attention to their performance on TI's CPI. Corruption is regarded as a key hindrance to development policies and TI's CPI is used as the authoritative tool to assess countries' corruption perceptions score by both international governments and several international agencies. The use and reference of TI's CPI does not translate as the main factor in regards to the increase and or decrease of aid flow. Surprisingly, there was no evidence that the CPI affected the credit rating and or investment flow into Jamaica. It indicated however, that TI's CPI is reflective of the global market perceptions of Jamaica's economy. But the research shows that the index does change policy responses in Jamaica as government officials across varying agencies pay attention to the index and the progress and or worsening of the country's score. V This dissertation is dedicated to my parents; neither college educated but both strong believers in the pursuit of academic excellence. Paulette Wilson, for being the most supportive mother one could ever want. To the memories of my late father, Walford Wilson, who bestowed endless love and sacrificed much from the day he came into my life. 1 could not have asked for better role models. vi ACKNOWLEDGMENTS First and foremost, I thank my dissertation committee. Dr. David Earnest, my Chair, for all his guidance, patience, encouragement, and constructive comments throughout this project. Dr. Kurt Gaubatz whose Research Methods Seminar in my first semester at ODU initially sparked my interest in corruption and Transparency International's Corruption Perceptions Index. He has provided me with detailed and insightful comments. 1 am also grateful to Dr. David Selover for serving as my outside reader. His comments and suggestions have been most helpful. Special thanks to Mr. Dirk Harrison, Senior Deputy Director, in the Office of the Director of Public Prosecutions for his assistance. I am also grateful to Ms. Deborah Hardoon, Senior Researcher at Transparency International for her assistance. I am also indebted to my family and friends for their support, especially James Parrent, Elaine Melbourne, Donna Scott-Mottley and Kerry-Ann Drummond. Finally, to my PhD cohorts Stephen Magu, Jody-Ann Jones, David Simmonds and Roopa Swaminathan whom I have had the privilege of sharing many late nights and weekends as we worked. Thank you all. vii ABBREVIATIONS ACB Anti-Corruption Branch CPI Corruption Perceptions Index DAC Development Assistance Committee DPP Director of Public Prosecutions FDI Foreign Direct Investments GCS Global Civil Society IFIs International Financial Institutions INCSR International Narcotics Control Strategy^ Report INGOs International Non-Governmental Organizations JCF Jamaica Constabulary Force JIS Jamaica Information Service JLP Jamaica Labour Party MOCA Major Organized Crime and Anti-Corruption Task Force OCED Organization for Economic Co-operation and Development OCG Office of the Contractor General PNP People's National Party TI Transparency International UNDP United Nations Development Program UNODC United Nations Office on Drugs and Crime USAID United States Agency for International Development. WD1 World Development Indicators viii TABLE OF CONTENTS Page LIST OF TABLES : x LIST OF FIGURES xi Chapter I. INTRODUCTION 1 Purpose of the Research ] 4 Relevance 16 Transparency International—Global Civil Society 18 Organization of the Dissertation 28 LI. THEORETICAL FRAMEWORK 29 Global Civil Society and its Role in Development Policies 29 Global Governance 39 Transnationalism 42 The Politics of Global Civil Society 51 III. RESEARCH, METHODOLOGY AND DATA 62 Methodology 65 Rationale for Jamaica as a Case Study 68 Hypothesis 75 Data Collection 80 IV. WORLD'S POLITICAL RESPONSES 85 Foreign Aid and Corruption 87 The United States Political Responses to TI's CPI 101 The European Union 109 The Chinese Government Ill V. WORLD'S ECONOMIC RESPONSES 123 Foreign Direct Investments 126 Credit Rating—Standard and Poor's 131 TI's CPI and Bond Spreads 137 TI's CPI and the Exchange Rate 143 VI. JAMAICA'S POLICY RESPONSES TO TI'S CPI 149 Jamaica Policymakers' Reactions to TI 158 The Office of the Contractor General (OCG) 168 The Jamaica Constabulary Force (JCF) 179 ix VII. CONCLUSIONS AND POLICY IMPLICATIONS 194 BIBLIOGRAPHY 217 APPENDIX 235 VITA 241 X LIST OF TABLES Table Page 3.1. TI's CPI Rank of Jamaica & other Caribbean States 69 3.2. No. of Countries & Indicators 1995-2011 81 4.1. DAC Aid flow into Jamaica from 1995-2010 and Jamaica's CPI 86 4.2. ODA from the US to Jamaica 1995-201 106 5.1. Correlations between CPI and FDI, net inflows (%of GDP) 127 5.2. CPI and FDI Standard Error 128 5.3. Jamaica's CPI Rank and S&P's Credit rating 2 weeks before & after CPI release.. 134 5.4. TI's CPI and S&P's Global Equity Indices (annual % change) 135 5.5. R square of CPI and Portfolio Investments, bonds 141 5.6. CPI score and Portfolio Investments, bonds 141 5.7. Jamaica's Exchange Rate and CPI Rank 145 6.1. Showing 2008—2011 Conviction Rate for Corruption 187 6.2. Arrests by ACB 188 xi LIST OF FIGURES Figure Page 5.1 Jamaica's CPI score and FDI, net inflows (% of GDP 1995-2011) 129 5.2 Trends between TI's CPI score and S&P's Global Equity Indices 136 5.3 CPI Rank and Portfolio Investments bonds 142 6.1 Showing Jamaica's GDP per capita 1995-2011 151 6.2 GDP per capita Jamaica and its Neighbors 152 6.3 Jamaica's CPI Rank from 1995-2011 153 6.4 CPI Rank for Jamaica, Barbados and Trinidad & Tobago 1995-201 154 1 CHAPTER 1 INTRODUCTION No country can ignore Transparency International (TI) —Economist, October 30, 1999 It is often said that civil society, locally and globally, ought to play a greater role in taming the beast of corruption. There is no doubt that corruption continues to plague countries in every region of the world. But, as Sandholtz and Koetzle state, "corruption, like the poor, will probably always be with us."1 Thus, the manner in which we as a society recognize and deal with the issue of corruption, its effects on development, growth, sustainability and well-being of others is intrinsic to the overall growth of society. Daniel Kaufmann, on the issue of corruption, reiterated quite convincingly that, "nobody disputes the ethical failings associated with corruption. Yet the ambiguities about corruption, its causes, its effects, and its cures cause many to wonder whether fighting it should be a true priority or merely a rhetorical one. Not in dispute is the fact that fighting corruption has become a rhetorical priority."2Thus the focus on holding governments accountable and demand for greater transparency might ultimately lead to some reduction in corruption, or at least the perception of a reduction. Corruption, according to Transparency International (TI), "is operationally defined as the abuse of entrusted power for private gain."3 The issue of corruption is not 'Wayne Sandholtz and William Koetzle, "Accounting for Corruption: Economic Structure, Democracy, and Trade," International Studies Quarterly, (2000): 31.
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