Sensitivity of the Control of Corruption Indicator and its Sub-Sources to Discrete Corruption-Related Events Prepared for the Millennium Challenge Corporation By Katie Cary Constance Chucholowski Ryan Hohler Jiaqi Lu Malika Talbi

ROADMAP Background WGI Control of Corruption Indicator Methodology and Limitations Case Study Analysis Sub-source and General Findings Recommendations

BACKGROUND Millennium Challenge Corporation - Ex-post aid - CoC as “hard-hurdle” for Compact assistance

CORRUPTION Common definition: abuse of public power for private gain Corruption inhibits growth Source: corruptionsucks.blogspot

Control of Corruption Indicator & Sub-Sources GII GCB CCR Control of Corruption Indicator & Sub-Sources CoC FRH EIU BPS ADB AFR BTI PRS ASD CONSTANCE 22 sub-sources compiled using the Unobserved components model GCS IPD WMO GWP

RESEARCH QUESTION Do the Control of Corruption Indicator and its sub-sources show sensitivity to discrete corruption-related events (CREs)?

METHODOLOGY Purposive Sampling Needle-jump Ponzi scheme in Benin (2010) Sponsorship scandal in Canada (2003) Anti-corruption reforms in Georgia (2004) “Credible” signal reforms in Kenya (2003) Needle-jump Post liberalization reforms in Serbia (2000)

LIMITATIONS Lack of external validity Sampling biases Data inaccessibility Non-causal identification

SCANDAL IN BENIN Micro-lending bank discovered to be Ponzi scheme President Yayi involvement Approximately USD $327M Country, Scandal, Scandal Effects

BENIN – CONTROL OF CORRUPTION CHANGES

BENIN – CHANGES IN SUB-SOURCE DATA

SCANDAL IN CANADA Sponsorship Scandal Provided payoffs and kickbacks to party supporters Reflected in the data, but quick recovery

CANADA – CONTROL OF CORRUPTION CHANGES

CANADA – CHANGES IN SUB-SOURCE DATA

REFORMS IN GEORGIA 2003 Rose Revolution Overhaul of police system, drastic decrease in petty bribery Heralded as anti-corruption success Country Context, Reform, Effect

GEORGIA – CONTROL OF CORRUPTION CHANGES

GEORGIA – CHANGES IN SUB-SOURCE DATA

REFORMS IN KENYA Kibaki anti-corruption election platform Establishment of Kenyan Anti-Corruption Commission and appointment of Permanent Secretary for Governance and Ethics Business as usual

KENYA – CONTROL OF CORRUPTION CHANGES

KENYA – CHANGES IN SUB-SOURCE DATA

KENYA SUB-SOURCE DATA – PRS vs. GCS

REFORMS IN SERBIA Removal of Milosevic Economic liberalization and broad anti-corruption reforms Continued corruption

SERBIA – CONTROL OF CORRUPTION CHANGES

SERBIA – CHANGES IN SUB-SOURCE DATA CONSTANCE

CONTROL OF CORRUPTION TRENDS IN ALL CASE STUDY COUNTRIES

SUB-SOURCE FINDINGS AFRO Barombeter, EIU, WMO CONSTANCE

GENERAL FINDINGS Non-uniform responsiveness UCM weighting Bias toward long-term sustainable change Connection between CREs and other events too difficult to disaggregate

RECOMMENDATIONS Complete additional research Evaluate continued efficacy and construct validity of CoC to MCC objectives Further analysis on correlation of CoC to other governance indicators

QUESTIONS?

ADDITIONAL IMAGE CITATIONS “Georgia: The Rose Revolution Fades.” Georgia and World. August 15, 2012. Accessed on May 1, 2014. http://www.geworld.ge/View.php?ArtId=2103&lang=en Flag of Kenya. Wikipedia. Accessed on May 1, 2014. http://en.wikipedia.org/wiki/File:Flag_of_Kenya.svg “UK Fraud Office Halts Keyna Probe.” BBC News. February 5, 2009. Accessed on May 1, 2014. http://news.bbc.co.uk/2/hi/7871697.stm Flag of Canada. Wikipedia. Accessed on May 1, 2014. http://en.wikipedia.org/wiki/File:Flag_of_Canada.svg “The Ontario Young Liberals Blur the Line Between Satire and Genuineness.” James W.J. Bowden’s Blog. March 29, 2014. Accessed on May 1, 2014. http://parliamentum.org/ Flag of Benin. Wikipedia. Accessed on May 1, 2014. http://en.wikipedia.org/wiki/File:Flag_of_Benin.svg “Yayi Boni.” Afrique Media Vision. Accessed on May 1, 2014. http://gontran.blogspot.com/ Flag of Serbia. Wikipedia. Accessed on May 1, 2014. http://en.wikipedia.org/wiki/File:Flag_of_Serbia.svg “Croatian Show Documents Djinjic Murder.” B92. February 12, 2008. Accessed on May 1, 2014. http://www.b92.net/eng/news/region.php?yyyy=2008&mm=02&dd=12&nav_id=47647

ADDITIONAL IMAGE CITATIONS, ctd. Afrobarometer logo. Afrobarometer. Accessed on May 1, 2014. http://www.afrobarometer.org/ Freedom House logo. Freedom House. Accessed on May 1, 2014. http://www.freedomhouse.org/ Economist Intelligence Unit logo. Economist Intelligence Unit. Accessed on May 1, 2014. http://www.eiu.com/home.aspx Institutional Profiles Database logo. Institutional Profiles Database. Accessed on May 1, 2014. http://www.cepii.fr/IPD.asp