The new government has its work cut out for it.
Iceland lost a little credibility in 2016. It has, in fact, become the most corrupt of the Nordic countries, according to the latest results from Transparency International’s Corruption Perceptions Index (CPI). A look at their methodology revealed a number of reasons for the shift.
The data shows Iceland is now ranked in 14th place, with their CPI score dipping from 79 in 2015 to 78 in 2016 (a score of 0 means “highly corrupt” while 100 means “very clean”). This is the lowest score Iceland has received since 2013, and makes it the most corrupt of the Nordic nations.
Surprisingly, the Panama Papers received no mention in the CPI. However, TI’s blog published a post shortly after the leak last April that did mention Iceland; notably, they actually praised Iceland for being “the only country that jailed top financial executives behind bars in the aftermath of the 2008 financial crisis,” adding that “[o]n the positive side, partly as a result of the banking collapse, Iceland has a robust and independent free media, which has reported vigilantly on the prime minister’s conduct and continued to question him on his undisclosed financial affairs.”
This naturally raises the question: how exactly does Transparency International measure levels of corruption perception?
In a short methodology note with the CPI, Transparency International says they measure corruption perception by “aggregat[ing] data from a number of different sources that provide perceptions of business people and country experts of the level of corruption in the public sector.” Taking a look at the XLSX file of their data set, it is possible to see exactly which business people and country experts expressed their perceptions about Iceland.
Most striking of all is the fact that Iceland’s lowest rank came from Sustainable Governance Indicators [SGI]. In their summary, SGI outline a number of areas where Iceland could stand to improve. These include, but are not limited to, the following:
“Public debt remains very high, with future prospects clouded by unfunded public-pension obligations. Financial troubles at key public institutions threaten fiscal sustainability further.”
“Income inequality dropped significantly in the financial crisis’ wake, but private-debt levels are high. Pensions and welfare benefits were cut in the crisis, increasing social-exclusion risk.”
“Media content is strongly influenced by owners’ agendas, and politicians have sought to interfere with public-media reporting. A proposed new constitution and voting system were supported by strong majorities in a non-binding public referendum in 2012, but parliament has refused to ratify the draft constitution.”
“The Prime Minister’s Office has relatively minimal sectoral expertise. Ministries have considerable autonomy in drafting policy. Long-term strategic planning is often vague, with inconsistent follow-through.”
“Despite a generally well-informed public, voter turnout has dropped significantly particularly among young people, in parallel with a decline in policy interest and trust in politicians. The media provides in-depth information on state policy, but reporting can be affected by owners’ financial interests.”
Perhaps most telling of all in this summary is the fact that these are problems Iceland has faced for years now. Neither protests nor successive right- or left-wing governments have made headway in tackling these problems. If Iceland hopes to get out of the rut it has been in since 2013, and earlier, our new ruling coalition will have to confront these issues. How, or even if, they will do so remains to be seen.