Corruption and Inequality are the joint enemies of wealth

Transparency International published figures for the perceived level of corruption in the majority of the countries of the world. This data can be plotted against the average incomes of these countries[1] :

Corruption vs Income

As we would expect no country with high levels of corruption has become wealthy. The data is obviously "fuzzy". In particular the individual figures for corruption are not going to be at all precise. However the broad trend is indicated by the line; The upper right area is empty of points apart for a few stragglers close to the line.

We can also plot Inequality on a similar graph:

Inequality Vs Income

Here too the upper right area is empty apart from a few stragglers.

If we now add together the inequality and the corruption for each country and plot on the same axes we get a much clearer picture:

Corruption plu inequality vs income

The points are in a tighter band. Note that the line is the average of the lines in the previous diagrams which were adjusted so that this line has no points above it. This means that, for example, a particular country with corruption index above the line in the first graph has an equality index at least a corresponding distance below the line in the second graph.

The published data for corruption is on an arbitrary scale. For the purposes of these graphs I have imposed a scale factor and offset, adjusted to make it match the Gini scale. This means that 10 points on the corruption scale is as disadvantageous as 10 pint on the inequality scale.

The reading of this graph so far has been the limited observation that there are no points in the top - right area, meaning that no country has been able to get richer without having a low level of Corruption plus Inequality (C+I). We have observed that either a high C+I has prevented countries from getting rich or being rich has prevented countries from having a higher C+I. Either way an increase in the C+I is a bad thing.

The correlation in this graph is particularly clear, so that it is valid to discuss cause and effect. Does a high C+I cause counties to be poor and a low C+I cause a country to be not poor? Or, conversely, does poverty cause a higher C+I and riches and being rich cause C+I to be lower?

For a rich country, would tolerating an upward drift of C+I be the slippery slope towards poverty?

Corruption Vs Inequality.

Perhaps surprisingly there is not much correlation between these:

Corruption vs Inequality

[1] I have left out Luxembourg on the grounds that it is a very small tax haven.