Addressing corruption as a driver of democratic decline

 An Article by Rueben L. Lifuka, Vice Chair of Transparency International, for Scheinwerfer Magazine Nr. 95

Democracy in decline or democratic recession[i] as Political scientist Larry Diamond calls it, has being a recurring theme for over two decades now. Stakeholders from influential think tanks, international organisations to local NGOs, have all joined the chorus to alert the world of this challenging prospect. Transparency International in its analysis of the 2018 Corruption Perceptions Index, noted that “over the past two decades, we have witnessed democratic backsliding across the world, including in what were promising new democracies such as Turkey, Hungary and Poland, and indeed in countries which were considered to be fully functioning democracies like the US.”[ii] Freedom House, in a statement released in December 2021 just before the Summit for Democracy, reaffirmed that for 15 consecutive years, authoritarianism has been on the rise while democracy has declined. During this period, more than twice as many countries (119) have experienced declines in political political rights and civil liberties as have earned improvements (55).[iii]  Further in the Freedom of the World report of 2021, Freedom House underscored the fact “Democracy was under siege” and consequently, the impact of the long-term democratic decline has become increasingly global in nature- “enough to be felt by those living under the cruelest dictatorships, as well as by citizens of long-standing democracies.”[iv]

There are many reasons that can be attributed to this democratic decline and Transparency International (TI) contends that corruption is one of the most prominent ones. In its policy paper entitled - “Addressing corruption as a driver of democratic decline Positions towards Summit for Democracy 2021”, TI affirms that corruption undermines democracy, destroys public trust in institutions, skews policymaking in the interest of the few and leads to the capture of accountability mechanisms. This was recognised by the international community almost two decades ago, and yet corrupt practices in countries around the world have continued to damage democracy, igniting a new rise in authoritarianism. Corruption erodes checks and balances that are largely designed to prevent and detect abuse of power for private gain. Whenever corruption seeps into a democratic system, it is the people who lose the power to govern, the freedom to express their views including challenging corruption and the right to hold duty bearers accountable. When corrupt actors prevent the people from exercising any of these rights and freedoms, democracy deteriorates. In recent times, we have also witnessed populist leaders who have come to power by capitalising on public disgust with corruption and these leaders, ironically now seek to undermine anti-corruption mechanisms and democratic institutions in order to prolong their stay in power.

Democracy is in decline or under siege even in the more established democracies in the global north, with corruption as a main driver. TI argues that the corruption problems that established democracies face at home diminish their ability to confront the rising authoritarianism around the world. What is worse, these countries contribute to global democratic decline by failing to curb the transnational corruption linked to their jurisdictions. Corrupt actors, networks, schemes and corruption proceeds cross borders with great ease, bypassing weak national oversight and enforcement systems. The established democracies continue to welcome dirty money, turning a blind eye to the embezzled funds and bribe payments laundered through their financial systems and the real estate sector. Most fail to deter and sanction the enablers of transnational corruption and the companies that resort to bribery to access foreign markets.

Authoritarian regimes also export corruption, including to democracies. And we see that the systemic weaknesses which allow for dirty money to flow across borders are exploited by authoritarian regimes to exert illicit influence on the affairs of democracies. The result is that the corrupt get away with undermining democracy not only at home, but also abroad.

The Summit for Democracy held on December 9-10 2021, was spurred by the challenges posed by the current interlinked global crises of democracy and corruption as well as human rights abuses. This first ever Summit convened by US President Joe Biden, was intended to be a place for dialogue and serve as a catalyst for concrete action toward global democratic renewal. The expectation from TI and other activities from around the world, was that this Summit would provide a true momentum for the future of democracy by creating conditions for meaningful civic participation during the coming year of action. The Heads of State and leaders from 100 governments who participated in the summit, announced a wide range of commitments and pledges intended to contribute to democratic renewal based on the Summit’s three themes of: (1) strengthening democracy and defending against authoritarianism; (2) fighting corruption; and (3) promoting respect for human rights.[v]

Transparency International (TI) participated in the processes leading up to the Summit for Democracy and produced statements to remind participants and particularly leaders that determined action by governments can have a tremendous impact to advance the fight against corruption worldwide. TI emphasised that the Summit for Democracy could not be another gathering where leaders make ambitious speeches but fail to fully commit or follow through on their promises. As TI, we participated in a session chaired by the US Secretary to the Treasury- Janet Yellen, which addressed how corruption erodes democracy, distorts markets and equitable access to services, widens inequality, creates insecurity and instability, and ultimately undermines faith in government. We provided information on how corruption serves as a driver of democratic decline and most significantly, we put forward a number of proposals on actions that the participants could consider in this quest for democratic renewal. It was our contention that a global pact with a clear plan of action was necessary and this should include implementation of commitments to collective and individual anti-corruption measures in the “year of action”.

TI emphasised that a key area where democracies can and should work together is in tackling cross-border corruption. Democracies need to update their enforcement and justice toolkits in order to fill the gaps in implementation and the “gaps and corruption challenges within the international anti-corruption framework”, as they committed to do in the June 2021 political declaration adopted by the UN General Assembly Special Session against Corruption. We have not thus far seen the same commitment to stemming the flow of the proceeds of corruption as we have seen in efforts to counter terrorist finance, for example – even though corruption too is an existential threat to democracy. Countries committed to combatting illicit financial flows should work together with civil society and other stakeholders to create roadmaps to guide country, regional and global action. The roadmaps should include specific steps to improve information-sharing, such as the exchange of financial data. This would go a long way towards preventing proceeds of corruption from easily entering the global financial system, including through greater transparency of beneficial ownership information.

Another approach proposed by TI was the creation of a joint fund to collectively support networks of journalists engaging in cross-border investigative work to expose corruption and activists driving systemic change. The support should include providing assistance where they face repression. There should be increased funding to support independent media and connect them with advocates who take the investigations and turn them into policy. Transparency International has been partnering with the Organized Crime and Corruption Reporting Project as part of the Global Anti-Corruption Consortium to do just that. This collaboration has had some remarkable successes. By financially supporting strategic and innovative initiatives such as this one, democracies can help advance the global fight against corruption

The conditions for meaningful engagement with civil society groups and for catalysing public support should be enhanced. Civil society organisations can contribute know-how as well as help monitor follow-up to commitments. Democracies should also do more to foster an enabling environment for civic action. For example, they should adopt measures to protect independent media, whistleblowers and activists against strategic lawsuits against public participation, also known as SLAPPs. We would also like to see new frameworks for public-interest organisations to bring collective compensation claims on behalf of victims of corruption.

Beneficial ownership transparency and specifically public, central registers of beneficial owners – would make it easier for all accountability actors to carry out detection and investigative functions. Procurement agencies would have a better overview of potential conflict of interest situations. Enforcement agencies, at home and abroad, could detect and investigate corrupt transactions and money laundering more easily. And, reinforcing those agencies, investigative journalists and civil society activists could make use of the registers to help expose corruption schemes. We take note of the progress made with the UK being the first country to establish a public, central beneficial ownership register. Most countries across the EU also have registers in place. The US is in the process of establishing a (private) register and other key economies like Canada have committed to do so. In Africa, Nigeria has also taken important steps to implement a beneficial ownership register. The main problem in those places remain the quality of the information, so ensuring that beneficial ownership information is independently verified is important.

In the aftermath of the Summit for Democracy, a right question to ask is did this Summit lay the groundwork for a global awakening in the fight against corruption and for democracy? There were a number of countries that made commitments during the Summit on entrenching democracy and dealing with corruption. However, several commentators have observed a variation in the type and specificity of the written commitments made by about 56 of the countries that participated in the Summit. The Brookings Institution notes that most of the countries offer some commitments on the domestic front, while the established democracies focus on the international arena. The commitments are in some instances very specific and while in others, governments make declaration of intentions.[vi]  The Institute for Democracy and Electoral Assistance (IDEA) in its assessment of the commitments made after the Summit, noted that among the efforts to strengthen democracy at home, corruption came out as a first priority for most governments (51 countries). The issues that were least prioritised were parliaments, access to justice, public service delivery and civil society.[vii]

President Biden and the US government, as host of the Summit, announced the establishment of the Presidential Initiative for Democratic Renewal which is a set of policy and foreign assistance initiatives which aim to expand the US Government efforts to defend, sustain and grow democratic resilience with likeminded governmental and non-governmental partners. The US Government plans to provide up to US$424.4 million towards this initiative and will focus on five areas of work namely-a) supporting free and independent media, b) fighting corruption, c) bolstering democratic reformers, d) advancing technology for democracy, and e) defending free and fair elections and political processes. The second area of work- fighting corruption, is of interest to TI and the US Government proposes among other measures to support and connect anti-corruption actors across civil society, media, academia and labour organisations and this will be achieved by USAID providing up to US$5 million to launch the Empowering Anti-Corruption Agents Program, which will promote protective measures for whistle-blowers, civil society activists, journalists and others at risk due to their anti-corruption work. Further support, amounting to US$6 million will be earmarked to support the work of the Global Anti-Corruption Consortium (GACC), to which TI is an integral part.

The conclusion that can be drawn is that the Summit for Democracy did provide a platform for the deliberations on the commonly shared challenges of democracy in decline and the role that corruption plays. The emphasis on democratic renewal however has not necessarily received the same levels of attention and some commitments lack ambition and narrowly focus on the domestic front. Established democracies should be doing more than make commitments without real follow up and while efforts of countries like the US are appreciated, the expectations are still high. There is also a concern that for most African countries that attended the Summit, their commitments on elections, human rights and constitutionalism, are not far reaching and in fact neglect in some instances, strengthening the work with non-state actors. The Summit committed to a Year of Action, however, given the seriousness of the issues at hand and the absence of a clearly defined global plan of action, it may be necessary for governments to commit to years of action.

[i] Diamond, L. 2015 Facing up to the Democratic Recession Journal of Democracy 26 (1)  National Endowment for Democracy and John Hopkins University Press.

[ii] Pring, C and J.Vrushi, 2019, Tackling the Crisis of Democracy in promoting Rule of law and fighting corruption- Transparency International https://www.transparency.org/en/news/tackling-crisis-of-democracy-promoting-rule-of-law-and-fighting-corruption; accessed on 10 May 2022

[iii] Freedom House – Press Release- December, 2 2021 “Summit for Democracy: New Scorecards highlight State of Freedom in participating countries https://freedomhouse.org/article/summit-democracy-new-scorecards-highlight-state-freedom-participating-countries

[iv] Repucci, S. and A.Slipowitz, Freedom in the World 2021-“Democracy under Siege” https://freedomhouse.org/report/freedom-world/2021/democracy-under-siege accessed on 9 May 2022

[v] https://www.whitehouse.gov/briefing-room/statements-releases/2021/12/23/summit-for-democracy-summary-of-proceedings/

[vi] Eisen, N., M.Picon, R.J.Lewis, R.Falla and L. Blumenthal, The Summit for Democracy Commitments are out -now what? https://www.brookings.edu/blog/fixgov/2022/02/23/the-summit-for-democracy-commitments-are-out-now-what/ accessed on 8 May 2021

[vii] Silva-Leander, A. Summit for Democracy 2021- taking stock one month later. https://www.idea.int/news-media/news/summit-democracy-2021-%E2%80%93-taking-stock-one-month-later accessed on 10 May 2022