Satyam scam brings into focus quality of governance

REVELATIONS of major fraud at Indian software firm Satyam have put the spotlight on the quality of corporate governance and regulation across Asia.

Following are some estimates of the quality of the corporate governance environment in Asian countries.

The World Governance Indicators are a World Bank project offering an annual ranking of countries according to estimates of their quality of governance in six areas.

This table shows the latest country rankings, for 2007, on three areas of governance – regulatory quality, control of corruption and the rule of law. Countries are ranked, and rankings are adjusted to fit into a scale of 0 to 100. The higher the score, the better the governance.

Rankings for the United States and Germany are also shown, for comparison.

Regulation Corruption Rule of Law

Hong Kong 99.0 92.3 90.5

Singapore 98.5 96.1 95.2

Taiwan 79.6 70.0 70.5

South Korea 78.6 68.1 74.8

Malaysia 67.0 62.3 65.2

Thailand 56.3 44.0 52.9

Sri Lanka 51.5 57.5 55.7

Philippines 50.5 22.2 33.8

India 46.1 47.3 56.2

China 45.6 30.9 42.4

Indonesia 43.7 27.1 27.1

Vietnam 35.9 28.0 38.6

Cambodia 30.6 8.2 13.8

Papua New Guinea 30.1 9.2 21.0

Pakistan 28.6 21.3 19.5

Bangladesh 20.9 9.7 24.8

Laos 15.0 13.0 17.1

Myanmar 1.5 1.4 5.2

United States 90.8 91.3 91.9

Germany 92.7 93.2 94.3

EIU LEGAL AND REGULATORY RISK ESTIMATES

LEGAL CORRUPTION MEASUREMENTS

In a 2004 study, World Bank governance expert Daniel Kaufmann, who also created the World Governance Indicators, used data from the World Economic Forum’s 2004 executive opinion survey to create estimates of legal as well as illegal corruption.

The table shows each country’s Corporate Illegal Corruption Index (CICI), Corporate Legal Corruption Index (CLCI), and an average of the two which Kaufmann calls the Corporate Ethics Index (CEI).

It also shows Kaufmann’s estimate of the quality of corporate governance rules – the Corporate Governance Index (CGI). Scores are from 0 to 100, the higher the better.

CICI CLCI CEI CGI

Singapore 93.3 72.6 83.0 80.9

Hong Kong 90.8 59.1 75.0 69.2

Malaysia 66.8 47.1 59.9 66.7

China 43.6 49.4 46.5 35.3

Indonesia 38.2 42.4 40.3 44.7

India 39.4 29.8 34.6 55.4

South Korea 41.9 31.0 36.4 55.4

Vietnam 28.9 39.3 34.1 38.1

Thailand 45.8 11.6 28.7 49.7

Pakistan 22.1 23.5 22.8 31.3

Bangladesh 12.3 18.9 15.6 24.3