To provide a fuller picture of how corruption affects the private sector, TI has used data from the 2008 Bribe Payers Survey to create two new rankings of industry sectors. The first ranks sectors according to the degree to which firms in each sector are likely to bribe public officials. The second ranks sectors according to the degree to which firms in each sector use contributions to politicians and political parties to achieve undue influence on government policies, laws or regulations, a phenomenon often referred to as ‘state capture’. These rankings, unlike the BPI, do not focus specifically on foreign bribery, but assess views of overall sector-specific corruption.

To tackle the supply-side of corruption, it is crucial to understand the vulnerabilities of different sectors to corruption risks. The sectoral indices show two of the significant ways that industries are seen to engage in corrupt practices. The first – the bribery of public officials – is a primary form of corrupt
transaction. In this case, certain sectors, namely public works contracts/construction, real estate and property development, oil and gas, and heavy manufacturing and mining, are believed to bribe officials in their business dealings more than others. The cleanest sectors, in terms of bribery of public officials, were identified as information technology, fisheries, and banking
and finance.

For the second sectoral ranking, TI sought to evaluate how certain sectors might exert undue influence on the policy process using financial or other means at their disposal. This practice is commonly referred to as state capture, a term coined by the World Bank and European Bank for Reconstruction and Development in their 2000 report on the Business Environment and Enterprise Performance Survey (BEEPS). In the report, state capture is defined as ‘the efforts of firms to shape and influence the underlying rules of the game (i.e. legislation, laws, rules and decrees) through private payments to public officials’. 14 These payments may be legal or illegal, but they create a distortion of both the legal framework and policy process, with a negative impact on the broader economy and society.

The practice of state capture is of particular concern because it extends beyond efforts to secure a particular deal or business opportunity. State capture implies that the very framework governing a sector, or even the economy, is guided by a particular interest, rather than by the public interest. This practice obscures policy decisions and undermines public accountability.

In the 2008 Bribe Payers Survey, senior business executives indicated that public works contracts/construction, oil and gas, mining, and real estate and property development were the sectors most likely to engage in practices of state capture. Banking and finance was seen to perform considerably worse in terms of state capture than in public sector bribery, meaning it exerts considerable influence on the rules of the game. At the other end of the spectrum, agriculture, fisheries and light manufacturing are believed to be the sectors least likely to engage in state capture.

A total of 19 sectors have been evaluated in the 2008 Bribe Payers Survey.15 For the rankings of both public sector bribery and state capture, respondents were asked their views on up to five sectors in which they had business relationships. As with the 2008 BPI, these sectoral rankings therefore draw on informed perceptions of senior business executives, each of whom evaluated an average of three sectors.