Cutting corruption would add more than 10 billion to Spain's GDP every year | Economy

The study presented this Friday and entitled "The economic costs of the institutional quality deficit and corruption in Spain" is based on five indicators of the World Bank, based in turn on the reports of dozens of public agencies, private entities and non-governmental organizations. The global note of institutional quality places Spain in the position 31 of the 154 countries analyzed, all with more than half a million inhabitants.

Is the position 31 suitable for Spain? In matters of corruption control and the quality of its institutions, Spain boxes below its economic weight. If the world is divided by percentiles, in productivity, Spain would be in 85 (out of 100 countries, only 15 would have a better position). Meanwhile, in institutional quality, it remains within the 80th percentile. Below Portugal, Ireland, France or Germany.

Cutting corruption would add more than 10 billion to Spain's GDP every year

Once that fixed photo was obtained, the authors calculate the economic impact that would have been achieved in 15 years, in Spain the institutional control equals productivity. They do not ask what would happen if corruption and deficiencies in institutions disappeared altogether, because they consider it impossible. But only with improving controls at the level appropriate to the economic weight, the economic benefit would be multi-million.

Between 8% and 30% more wealth

According to the study, the result of tackling corruption and improving institutional control would yield several scenarios in 15 years: it could add 8% to GDP in the most conservative estimate and 30% in the most optimistic. The "central scenario" contemplated by the professors of the University of Murcia, Francisco Alcalá, who is also a researcher of the IVIE, and Fernando Jiménez, is the one that indicates that it would advance by 16%, at a rate of just over one point a year, that It would add to the wealth.

Why do they make projections to 15 years? The improvements would require time to be implemented. It is an indicative term, they point. And the wealth would come indirectly: "The greater legal security, the reduction of corruption, the elimination of administrative obstacles, better regulation and greater competition would encourage domestic and foreign investment, would make easier and profitable entrepreneurship and innovation , and would improve the allocation of private and public resources towards the most productive activities, "says Alcalá, who is a professor of Fundamentals of Economic Analysis.

For the evaluation, the study uses five indicators of regulatory quality. In the one that most limps Spain is in the control of corruption, understood as "the degree to which public power is exercised for private benefit, as well as the capture of the State by the elites and private interests." Or put another way: "In the trust generated by politicians, officials, the judicial system and the tax collection system, as well as suspicions about the existence of irregular payments in the awarding of public contracts".

Worrying evolution

The country obtains better results in other indicators, such as the degree of political participation of citizens; the quality of public services; or the one that examines compliance with laws and contracts, which includes criminality and violence.

The report It contains a worrying data. Spain has lost one point in the global indicator of institutional quality (measured over 10 points): it goes down from 7.8 to 6.8 between 2003 and 2017. A period in which its institutions have been shaken by numerous cases of corruption, which, says Alcalá, "has affected the perception of the country." The researcher asks, however, observe the evolution with prudence: "When a case of corruption reaches the newspapers, televisions or courts, it has usually been a long time, maybe 10 years, since the events occurred. There is a time lag. "

The study cites the work of other researchers, who consider, for example, that Spain has also suffered a deterioration in democratic quality due to the "colonization of institutions" by parties, which began before 2003. And Alcalá believes that, without a doubt, in the decline of the score of Spain has influenced the crisis. "While the economy was going well, institutional failures were not considered as worrisome as in the lean times and cuts."

Worse than Portugal and better than Italy

The institutional quality classification is headed by Norway. They are followed by New Zealand, Finland and Switzerland. Spain is ranked 31, at a considerable distance from Germany (10), the United Kingdom (13), France (21) or Portugal (22).

But above other Mediterranean countries, such as Italy (39) and Greece (48). The Worldwide Governance Indicators of the World Bank are drawn from the specific indicators of 31 entities of diverse nature, including Freedom House, Gallup, Transparency International, Heritage Foundation, Economist Intelligence Unit, World Economic Forum, Political Risk Services, Institute for Management & Development and Reporters Without Borders. To these are added other indicators created from surveys with experts, managers of companies and heads of public institutions.

Cutting corruption would add more than 10 billion to Spain's GDP every year


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