 I'm Salvatore Bogonas, and this week's global social problem of the week is corruption. Corruption is a global problem affecting countries at all levels of political and economic development. It is endemic and widespread, but it takes different forms in different contexts. While corruption may be open and obvious in illiberal, non-democratic countries, it is nonetheless hiding just below the surface in even the most well-regarded jurisdictions. How we perceive corruption is very much a function of how we define it and where we look for it. Transparency International's Global Corruption Perceptions Index rates more than two-thirds of the world's countries as seriously corrupt. All the countries you see here in this map in red and dark red are rated seriously corrupt on their index. Note the only countries in the world that are not considered seriously corrupt by Transparency International are those of North America, Western Europe, Australia, New Zealand, Japan, Korea, and a few odd cases like Botswana and Uruguay. For the most part, all of Latin America, Africa, the Middle East, Eurasia, and East Asia is considered seriously corrupt. These ratings are based on perceptions, and the perceptions are those of Western CEOs and business people. Western CEOs and business people are asked by Transparency International to rate countries on the extent to which they see them as being corrupt places to do business. So countries like Venezuela, which are very unpopular with Western business, are rated the most corrupt while neighboring countries like Colombia and Brazil, which are also known to be highly corrupt, Brazil right now in the middle of a corruption scandal that looks likely to bring down both the president and the previous president, are rated not quite as corrupt. Interestingly, China is not rated among the most corrupt countries of the world, even though China is notorious for its enormous levels of corruption, but it is a place that is friendly to Western businesses that want to do business and make money in China. That said, the Corruption Perceptions Index, broadly speaking, can be taken to be a relatively valid representation of where there is serious corruption and where there isn't. There's certainly much more bribery of government officials going on in Latin America, Africa, and East Asia than there is in North America, Western Europe, Australia, and New Zealand. That said, even in rich developed countries, there is a large amount of corruption, even business people recognize that. A survey done by the accounting firm, Ernst & Young, asking private equity firms where they perceive corruption, returned enormous levels of perceived corruption, especially in industries that have to do business with the government, infrastructure and real estate, metals and mining, aerospace and defense, and power and utilities. Listeners from Australia might recognize in these industries the sort of industries where corruption was found in the ongoing New South Wales corruption scandals where real estate deals and mining deals and energy deals resulted in bribes, kickbacks and corruption of all kinds. In the United States, which has a very large defense industry, there are routine corruption scandals involving defense procurement, especially for new airplanes and aerospace projects. And then there is the lobbying industry, which is only corrupt if you see it as such. The lobbying industry in Western developed democracies operates in the full light of day as a legal activity. But many people might reasonably suggest that lobbying exists solely for the purpose of engaging in legalized corruption. For example, Mary Shapiro was the chief executive of the National Association of Securities Dealers, the main industry trade group representing the brokerage industry in the United States. She earned a salary there of $3.3 million a year as the CEO. She was then appointed to head the Securities and Exchange Commission, the government body overseeing the securities industry, and her salary there was a paltry $163,500 a year. On taking up her new position in government service, she was given a $9 million severance package by her old employers at the National Association of Securities Dealers. Now there's nothing illegal in any of this, and all of these numbers were made publicly available and can be found on Wikipedia. However, the appointment of the head lobbyist of an industry organization to then become the director of the regulatory authority that oversees that association immediately raises questions, and the fact that her salary earned at the NASD was on the order of several million dollars a year with a multi-million dollar retirement bonus compared to the fact that while in government service she earned only a few hundred thousand dollars over her entire period of service, all of this suggests that if she's human, her loyalties may have been divided, and instead of regulating the industry as a critical investigative even-handed regulator might, it's possible that she regulated the industry with the interests of the NASD in mind. Even if she did nothing wrong whatsoever, merely the fact that she comes from the industry itself probably means that she is someone who has a different perspective on the regulatory needs of the industry, then if an independent lawyer or an independent researcher had been appointed to the same post. In a opposite direction scandal, US Representative Billy Townsend of Louisiana was a longtime congressman who proposed a bill in 2003 that provided massive subsidies to pharmaceutical companies paying for prescription drugs under the federal Medicare program. He then immediately resigned from Congress and took a two million dollar a year job as the chief Washington lobbyist for the Pharmaceutical Trade Organization. Again, there's nothing illegal in that, and the Pharmaceutical Trade Organization might very well want as its chief lobbyist someone who had decades of experience in the US Congress. But again, it raises questions about his ultimate loyalty. Was he making regulations during his time in Congress for the benefit of the people, or was he making regulations during his time in Congress with an eye toward eventual employment at a multiple of his previous government salary? Again, I don't mean to allege any wrongdoing, and I have no evidence of any wrongdoing, but as with the Shapiro case, the Townsend case simply raises obvious questions of where the money comes from that persuades people to have the viewpoints that they have. An interesting angle on Townsend is that he publicly endorsed a book on offshore tax havens of how to use offshore tax havens, the author which was later convicted of assisting people evade their taxes. How much bigger scandals than these have potential scandals than these have dominated US financial history of the last 20 years, including Treasury Secretaries who've gone back and forth between being Secretary of the Treasury of the United States and being Chief Executives or Chairman of Boards of Directors of Citigroup and Goldman Sachs, America's two largest banks and investment banks. Thank you for listening. You can find out more about me at SalvaturbaBonus.com, where you can also register for my newsletter on current global affairs.