Latin American countries continued to score poorly on Transparency International’s annual Corruption Perceptions Index (CPI), but the report presents a limited snapshot of corruption trends in the region.
In this year’s index, published on January 30, Transparency International singled out weak judicial systems as a key cause for Latin America’s lackluster performance.
“The lack of independence and transparency of the judiciary promotes corruption and the undue influence of political and economic elites,” the report noted. “This renders many justice systems across the region incapable of applying the law effectively.”
The CPI, a staple in corruption reporting, ranks countries between 0 and 100 based on perceived levels of public sector corruption, with 0 representing extreme corruption and 100 no corruption at all.
Perceptions of corruption remained stagnant overall, with Latin America’s average score decreasing from 41.6 to 41.3. Uruguay, the region’s consistent winner, topped the tables with a score of 73. Venezuela was the worst, sliding to an all-time low of 13.
Over the last decade, only two countries in Latin America, Guyana (40) and the Dominican Republic (35), have improved their scores.
Many low-scoring countries protested their rankings. In Honduras (23), the Department for Transparency rejected the findings and described the report as “irresponsible.” In Brazil (36), outgoing Minister of Justice Flavio Dino suggested that Brazil’s poor score was “political.”
“We got rid of the political show of fighting corruption,” he said. “Whoever uses fighting corruption as a political banner is just as corrupted as the corrupt.”
InSight Crime Analysis
While Transparency International correctly flagged judicial systems as a key contributor to corruption in Latin America, the CPI has limited value in describing overall corruption trends in the region.
In many countries, judicial systems are being actively undermined. A series of judicial scandals recently rocked Venezuela where low salaries push many of the sector’s workers to seek additional compensation in the form of bribes, or in some cases, food.
SEE ALSO: Back-to-Back Scandals Lift Lid on Venezuela’s Judicial Corruption
El Salvador’s score fell from 36 to 31 in three years. The country’s president, Nayib Bukele, has routinely weakened institutions that threaten to check his executive power. In 2021, Bukele’s ruling party removed the country’s attorney general, effectively scuppering several corruption investigations that targeted key government officials.
Meanwhile, in Guatemala (23), conservative activists aggressively used the country’s judicial system to launch a flurry of lawsuits attempting to prevent Bernardo Arévalo, the country’s democratically elected leader, from assuming office.
However, with its narrow focus on describing perceived levels of corruption in the public sector, the CPI obscures other important dynamics in the region.
Uruguay (73), which is consistently perceived to have low levels of corruption, is currently grappling with a sharp increase in illicit financial flows. In the last five years, money laundering cases linked to drug traffickers doubled, raising concerns that the country’s lax financial rules were facilitating crime and corruption in other countries.
What’s more, by creating individual country scores, the CPI ignores that corruption is often international in scope and can rarely be pinned to a single geographic location.
For example, in 2018, Miami prosecutors brought charges against a Uruguayan banker who was accused of laundering $1.2 billion in funds stolen by employees of Petróleos de Venezuela (PDVSA), the Venezuelan state-owned oil firm. The prosecutors alleged that the cash was then funneled through a Puerto Rican bank and used to purchase luxury property in Florida, though the charges were recently dropped.
Oliver Bullough, an author and corruption expert, told InSight Crime that kleptocracy was largely dependent on shifting stolen funds across international boundaries to obscure their providence and obstruct the efforts of law enforcement.
“Corruption, like any business, is globalized,” he said.
The CPI also consistently ranks some of Latin America’s most financially secretive jurisdictions highest. This year, just 10 countries in the region scored above 50, including St Lucia (55), St Vincent and the Grenadines (60) and The Bahamas (64).
In these countries, rules surrounding what individuals need to disclose before purchasing assets or creating shell companies are lax. The setup benefits wealthy elites and provides a source of income for small island economies, as illustrated by numerous journalistic investigations such as the Panama Papers, but risks facilitating large-scale corrupt activity in other countries by making it easier for kleptocrats to hide ill-gotten gains.
Bullough concluded that the CPI misrepresented corruption in the region. “If you don’t talk about the people who provide the corruption services that allow people to be corrupt, then you’re missing half of the story.”