Comparing Corruption

To move ahead with biotechnology projects and products, especially as the field grows increasingly global, a country needs to have a reputation as a fair and just business environment. In part, such a reputation depends on the level of perceived corruption in a country. As corruption increases, the nation’s business reputation sinks, while those with a low level of corruption and a just reputation are seen as good venues for biotechnology and other ventures. Unfortunately, measuring actual levels of corruption can be difficult.

Here, we explore corruption by way of the 2010 Corruption Perceptions Index from Transparency International. This index rates nations on a scale of 0 (“highly corrupt”) to 10 (“very clean”). The 2010 index includes 178 countries, nearly three quarters of which received a score below 5. Such poor scores can scare away potential business investments.

As the Global Corruption Report 2009 states: “Corruption is not a marginal issue but a central concern for business—in developing, emerging and industrialised countries alike. It affects multinationals in the United States and Europe. It touches manufacturing powerhouses in China, information technology service providers in India, farmers in Latin America and extractive industries in Africa, central Asia and the Middle East. It is an issue for large-scale conglomerates, family-owned businesses and individual entrepreneurs.”

Beyond the incredible breadth of corruption’s reach, this report adds: “In developing and transition countries alone, corrupt politicians and government officials receive bribes believed to total some US$20 to 40 billion annually—the equivalent of around 20 to 40 per cent of official development assistance. Moreover, the problem appears to be growing.”

To compare our analysis with this index, we’ve taken the countries included in our data, and—to make the index easier to understand—transformed it as follows: Perceived Corruption = 10 – (Corruption Perceptions Index score). With this numerical transformation, a higher score means that a country’s level of perceived corruption is considered more intense.

As the graph here shows, the countries ranked high in perceived corruption tend to rank lower on Scientific American Worldview’s overall innovation score. The correlation, though, is not perfect. For example, Russia’s perceived-corruption score is the highest of any of the countries on our list, but its innovation score surpassed some nations that received lower perceived-corruption scores. Likewise, the U.S. received the highest overall innovation score, but it did not get the lowest perceived-corruption score, which went to Denmark, New Zealand and Singapore.

The correlation between this perceived-corruption index and our overall innovation score, however, is not expected to be perfect. Both metrics depend on many features, which cover a broad range of elements related to biotechnology. Nonetheless, any country with a high perceived-corruption score might do better in international biotechnology and raise its overall ability to innovate by improving its fair-business practices.