Latin America: Corruption complications

Outlook

Latin America is often seen as generally corrupt, but corruption perceptions vary widely across the region. In South America, Chile and Uruguay are jointly ranked by Transparency International as 21st out of 174 countries, while Venezuela lags at 161. The supposed ideology of the government has little to do with corruption perception rankings - and apparently only a limited influence on the way the World Bank defines 'ease of doing business'.

The effect of corruption on ordinary citizens is more palpable. It relates not only to bribe-paying to evade the law, but also to expedite legal but time-consuming bureaucratic practices. Only stronger institutions, and citizen willingness to refuse, might help to address this problem.

Impacts

• Top-ranked in the region for ease of doing business, Mexico lags far behind in corruption perceptions.
• Lack of citizen protection is at least as serious an effect as the impact on business sentiment.
• In some cases the ease of bribery may be seen as facilitating rather than damaging ease of doing business.