International business groups looking at Rule of Law Index to assess corruption, other risks, think tank says

28 February 2019 00:00

An international measurement of corruption that business groups and investors use to make decisions has been improving in recent years, but corruption remains a problem in many countries, a leader of the World Justice Project said at the rollout of the 2019 Rule of Law Index.

The "absence of corruption" is one of nine factors the Project uses to compile its Index. Even though more countries saw a decline than an improvement overall in rule of law, the one factor that improved was corruption, said executive director Elizabeth Andersen.

In its report, the Project said 54 percent of the 126 countries surveyed saw improvements in the index's measurement of the absence of corruption. The Rule of Law Index is based on two surveys about perceptions and experiences with a legal system and environment in a country, including corruption. One is a general population survey and the other is a survey of legal experts, including business lawyers, the Project said.

"We have an increasingly strong global norm against corruption," Andersen said, adding that the norm is "firmly codified" in international legal documents such as the UN Convention Against Corruption, regional anti-corruption treaties and national laws.

"It is increasingly enforced by national governments, by international bodies, the World Bank debarment and sanctions efforts and the like," she said. "That enforcement is reinforced by a pretty powerful civil society and people power movement against corruption that is getting traction."

Andersen told MLex that the US Chamber of Commerce has approached her project for advice on developing a Business Rule of Law Index that would be published by the Chamber, and is working with the Bingham Centre for the Rule of Law in London.

She said businesses and investors are using the Rule of Law Index and its components when making their risk assessments about a country.

Hoyt Yee, a US State Department official who is a senior fellow at the US Institute of Peace, said "Governments often listen to businesses much more seriously, attentively, than they do to [other] governments, especially if it involves a question of whether the business is willing to invest or to continue operations in a country if there is a high degree of corruption."

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