Ritchie really is just joyous at times

So, and for example, tax abuse by multinational companies is estimated to cost developing nations more than 10 times the sum that they receive in aid each year whilst exposure after exposure of high-level corruption within states by organisations such as Global Witness highlights the use of tax havens, offshore secrecy service providers, the use of front organisations and shell companies, and the capture of the legislature of some small states to provide apparently legal veils of secrecy that facilitate such crimes as the key components in the corruption that threatens to undermine the viability and durability of states, corporations, international trade, and the well-being of a great many within the world’s population.

The CPI goes nowhere near these issues. Indeed, it is perverse that the governments of Denmark, New Zealand, Singapore, Switzerland and the Netherlands, all of whom appear in the top 10 cleanest countries in the CPI, are widely considered to be purveyors of various forms of tax abuse mechanism used to facilitate illicit financial flows.

The inevitable conclusion is that the CPI is outdated, its methodology is no longer valid, its message is incomplete and confusing, and what it seeks to measure is no longer relevant. It is time to move on.

The Corruption Perceptions Index does what it says on the tin. Measures the perception of corruption in those countries where people are asked about it.

Because this doesn’t measure what Ritchie thinks is important therefore no one should measure this at all.

Ho hum.

6 comments on “Ritchie really is just joyous at times

  1. “So, and for example…..a great many within the world’s population.”

    All one sentence.

    Also over use of the anonymous passive (“are considered”- by who exactly.

    How much do you reckon the Rowntree foundation would pay me to be his editor?

  2. I thought corruption was stuff like bribes, election rigging, awarding contracts to your mates and all that sort of jazz, usually by the government or it’s employees?

    Last time I checked, the links between “tax abuse” and free and fair elections were unclear – is Richie playing Humpty Dumpty again?

    FWIW, I’d rather live in a country that facilitates tax abuse, but has fair elections, than a country with the best tax laws ever, but where I can’t get rid of the politicians…

  3. OTOH I don’t think it is even slightly coincidental that the least corrupt countries are where businesses choose to be based and funnel their funds.

    The countries Ritchie says are losing money through “tax abuse” – i.e. avoiding them – have much higher rates of effective taxation than nominal taxation. It’s just the money goes straight into the pockets of officials and their friends without touching the national accounts. Now that’s what I call tax abuse.

  4. Luke: However much they paid, it wouldn’t be worth it. Our Murph would see any attempt to get shorter sentences and more detail into his posts as a challenge to his inerrancy. You’d have to retire due to stress after a week.

  5. This happens to be an area I know a little about. The CPI is imperfect – there is a Control of Corruption measure that is produced by the World Bank that is statistically more robust. Its just that nobody has ever heard of it. The Transparency International bods who do the CPI are doing their best to measure perceived corruption and as it happens it is fairly well correlated with measures of bribes paid by businesses in the World Bank BEEPS surveys. Its raised corruption as an issue.

    We know that the CPI isnt measuring corruption links between government and business (Japan has a lot of corruption associated with public works, with the money going to politicians for campaigns – yet it is uncorrupt on the CPI), but no one measure is ever going to cover everything. Normal people when faced with this tend to say “we need alternate measures to complement what already exists”*. Not declare, in Olympian tones, “I deem it wrong, drop it”. The LHTD is complete whackjob.

    * Which TI is doing. The Bribe Payers Index looks at Bribes paid rather than perceived corruption.

  6. Dear Mr Worstall

    Mr Murphy seems to overlook the fact that there is more to life than paying taxes and in the corporate world more to business than paying taxes.

    It’s multinational businesses operating in poorer countries which are lifting people out of poverty, not the taxes paid nor aid received. The business benefit is at least an order of magnitude greater than the ‘tax abuse’ Mr Murphy finds wherever he looks.

    The real tax abuse is of course that practiced by governments upon their subject peoples, directly or via ‘corporation tax’.

    I don’t suppose praising the benefits of big business would get Mr Murphy the income he derives from slagging it off.

    It’s a funny old world.

    DP

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