Transparency International published its prestigious Corruption Perception Index, one of the most widely used indicators of corruption globally. The organization’s 2021 report concludes that the countries of the Americas have ground to a halt in the fight against corruption. Despite extensive recent legislation and a regional commitment to fight this scourge, corruption in the Americas continues to undermine democracy and human rights.
While headlines about large citizen protests and convictions of prominent politicians and businessmen suggest that Latin America is mobilizing against the corruption that has historically affected the region, those who view this phenomenon with skepticism believe that weak institutions and a fragile rule of law in most of the region constitute an insuperable obstacle to the success of anti-corruption initiatives. But following ethics and compliance best practices around leading with values—especially when implementing rules and procedures—could help sustain anti-corruption efforts.
What is the Corruption Perception Index, and why does it matter?
The Corruption Perception Index (CPI) measures how corrupt each country’s public sector is perceived to be, according to experts and businesspeople. Launched in 1995, and with comparable data as far back to 2012, the CPI has been widely credited with putting the issue of corruption on the international policy agenda.
A country’s CPI score is the perceived level of public sector corruption on a scale of 0 to 100, where 0 means highly corrupt and 100 means very clean. Each country’s CPI score is a combination of at least three data sources drawn from 13 different corruption surveys and assessments, collected by a variety of institutions such as the World Bank and the World Economic Forum. These data sources cover the following manifestations of public sector corruption:
- Diversion of public funds
- Officials using their public office for private gain without facing consequences
- Ability of governments to contain corruption in the public sector
- Excessive red tape in the public sector which may increase opportunities for corruption
- Nepotistic appointments in the civil service
- Laws ensuring that public officials must disclose their finances and potential conflicts of interest
- Legal protection for people who report cases of bribery and corruption
- State capture by narrow vested interests
- Access to information on public affairs/government activities
CPI 2021 for the Latin American region
With an average CPI score of 43 out of 100 for the third consecutive year, the Americas region is paralyzed in the fight against corruption—especially countries within Latin America. Despite extensive anti-corruption laws and commitments, corruption in the region continues to weaken democracy and human rights.
- In 2021, the region witnessed serious attacks on freedoms of speech and press.
- Despite strong anti-corruption rhetoric from Mexico (CPI 31), major corruption cases in the country have gone unpunished. The lack of recovered assets and the growing number of scandals involving close associates of the president partly explain Mexico’s result.
- Venezuela (CPI 14) received one of the lowest scores globally. Widespread corruption has led to serious violations of social rights—including in access to education, healthcare, and food. The judicial system has become an instrument of repression against dissidents and critics. There has also been an increase in political prisoners, arbitrary arrests, and restrictions on fundamental freedoms.
- Governments in Brazil (CPI 38), Venezuela (CPI 14), El Salvador (CPI 34) and Guatemala (CPI 25) worked aggressively to discredit and silence critics by using intimidation, defamation, fake news, and direct attacks against civil society organizations, journalists, and activists—including those fighting corruption.
- Colombia (CPI 39) deployed excessive use of police force during mass demonstrations against tax reform, paralyzing both the country as well as violations of the rights to mobilization, participation and protest.
- Argentina (CPI 38) saw significant abuses of power during the pandemic: the discretionary vaccination scheme (VIP vaccination) for public officials and their cronies, non-transparent procurement and contracting, and unethical behavior by government officials.
Transparency International concludes in its report that Latin American governments must take decisive action to strengthen the transparency, integrity, and independence of their individual justice systems. They can do so by providing financial and technical resources and offering protection to prosecutors assigned to investigate cases of corruption and human rights abuses. Governments should also protect whistleblowers and include the perspectives of women and vulnerable groups in their anti-corruption strategies.
The risk of Latin American anti-corruption efforts becoming “dead letter”
Legislative efforts from a significant number of Latin American countries, inspired by the experience of the US and other countries succeeding in anti-corruption initiatives, constitute a powerful signal in the fight against corruption promoted by the international community. However, it is important to remember that new anti-corruption regulation does not generate concrete results by itself—something we know from our experience in corporate ethics and compliance.
Consider what happens when an organization seeks to implement a new policy or procedure. Issuing the concrete rule is only a starting point; it does not necessarily generate immediate behavior change from executives and employees to adhere to its stated guidelines and objectives. There are many examples of codes of conduct and internal policies that become a dead letter because they lacked proper follow-through. Moreover, the ineffectiveness or misinterpretation of a new rule can even generate damage to an organization. This is why the efforts that come after the creation of a rule—to promote and ensure its compliance—are crucial. The same is true with anti-corruption legislation; it needs effective enforcement.
Some of the new regulations enacted in the Latin American region have been well evaluated from a legislative technical perspective. But, as noted earlier, it is useless to have an extraordinary code of conduct or policy in a company if it is not widely known and understood in its content and scope by employees and senior management. How an organization communicates and trains about behavior expectations is key. Similarly, to ensure the effectiveness of an anti-corruption regulatory framework, it is necessary to educate public officials, the private sector, oversight bodies, persecutors, and the citizens themselves.
Anti-corruption efforts need dedicated resources and independent oversight
Even when the integrity agenda is driven by several (if not all) leaders of an organization, a particular business function must take the lead and coordinate efforts to create and sustain the organization’s ethical culture. This requires a wide range of training and communication tools to generate awareness around the spirit behind a rule, making it accessible to all and advancing the implementation of the integrity agenda.
Regardless of the name given to this function (Ethics, Compliance, Integrity, etc.), it must have sufficient autonomy and authority to carry out its task—including access to key information associated with the company's decision-making process. The same happens with countries and their regulators. Regardless of the body or agency, the success of any anti-corruption initiative depends largely on delegating the setting of standards and oversight to an entity with sufficient technical skills, powers, and independence.
Just as best practices suggest that a company should translate a policy or rule into specific behavioral expectations, the same is true of anti-corruption regulations. To achieve substantial progress, the bodies in charge of its implementation must clearly express the expectations of ethics and compliance programs in organizations. While specific guidelines need to be tailored to business environments and main local risks, authorities don’t have to reinvent the wheel. It is widely shared that the US Department of Justice guidelines have become global best standards.
The importance of organizational justice and freedom of expression
When it comes to enforcing Latin America’s anti-corruption regulations, it is essential they be applied without any arbitrary distinction. In other words, no one should be above the law. This is also critical in companies. Recent LRN research shows that companies with stronger senses of organizational justice—demanding the same standard of behavior from senior executives and top performers than for the rest of the organization—have better results.
Freedom of expression in each Latin American country also plays a crucial role in the success or failure of anti-corruption efforts. Without a free press and absence of retaliation against whistleblowers, it becomes nearly impossible for citizens to raise their voices when observing acts of corruption. Unfortunately, too often people prefer not to report or look to the sidelines rather than have complex conversations with their leaders. LRN research has found that the most common causes for not reporting misconduct include fear of retaliation, ignorance of reporting channels, and the perception that the organization will not do anything about it. But building a speak-up culture where people feel heard, respected, and comfortable reporting misconduct can be a significant step forward.
The key takeaway
It is not enough for Latin America to enact good anti-corruption regulation—it is only the first step. No matter how well-intentioned the initiative may be, it will not reach full effectiveness if no substantial and continued work is done on its implementation, awareness, and enforcement.
We hope that anti-corruption efforts in Latin America will not stop at the mere issuance of laws. Only with a deep cultural change; consistent action by political and business leaders; and dedicated, empowered, and independent institutions; the region will be able to make substantial progress on its Corruption Perception Index score and start to leave behind its long history of corruption. To learn more about anti-corruption policies and the greater E&C space in Latin America, check out these additional resources:
- How the US anti-corruption strategy impacts Latin America
- 2022 Ethics & Compliance Program Effectiveness Report
- How to encourage speaking up in today's age of whistleblowing
- Why organizational justice and reporting workplace misconduct matters
You can also learn about our E&C initiatives in Latin America by going to the LRN Latinoamérica section of our website.