The tents of the righteous

CRONYISM and sleaze are an ever-present danger in international organisations. Away from the scrutiny of elected lawmakers and voters, members' bad habits and the self-interest of officials compound each other. Another problem is the watering down of tough requirements and procedures as new members join. That has been the fate of many outfits formed with noble intentions, from the Council of Europe to numerous UN agencies. An exception may be the Organisation for Economic Co-operation and Development, founded in September 1961. Operating with unashamed nerdishness in a prosperous part of Paris, it is a wonks' delight, churning out fact-studded reports on government performance in everything from macroeconomics to education policy.

The main membership ticket is often seen as wealth. But the 34 rich countries that belong also have a more subtle dress code: “like-mindedness”, in OECD-speak. It is a place for people who believe that gathering and crunching data can lead to good policies backed by sound laws. It has moved in recent decades from pure think-tankery to what looks increasingly like police work, for example on corruption. But in a world where established democracies are losing clout, can the OECD remain both virtuous and relevant? If the large emerging economies of Brazil, Russia, India and China have something in common, besides their catchy BRIC acronym, it is that none is in the OECD. Nor are South Africa, Indonesia or Saudi Arabia, although they too are in the G20, which supposedly steers the world economy.

Almost all the big outside countries co-operate with the OECD at some level. The Financial Action Task Force (FATF), a tough-talking OECD-linked outfit that fights money laundering and terrorist financing, encompasses in some form just about every country, barring a handful of pariahs like Iran and North Korea. But so far only one big, awkward country, Russia, has formally applied to join the OECD.

In May it was cordially welcomed as a full participant in the OECD's highest-profile activity: a convention to outlaw bribery. Countries that sign up must pass laws making it an offence for their citizens or firms to pay, to offer or to promise money or any other reward in exchange for favours from officials in other countries. No less important, governments must be seen to enforce these laws; OECD bureaucrats and fellow members scrutinise each signatory to see how rigorously they investigate and punish foreign corrupt practices.

Cynics might find Russian support for a stringent anti-bribery regime akin to an inveterate alcoholic joining a campaign for total abstinence. But the OECD does not aim to deal with the ingrained traditions of favour-swapping and rent-seeking inside Russia. The convention excludes domestic corruption; in theory, a country riddled with sleaze at home could meet the rules by rigorously enjoining its citizens to stay clean in business dealings abroad. Russia is already a full member of FATF. When that body mentioned corruption as a problem in the Russian financial system, Moscow raised no objection (and is said to have toughened its rules since joining). Other countries have been thinner-skinned.

The bribery convention is a more formal instrument. It requires members to change their legal system and open law-enforcement systems to intense external scrutiny. Russia has already changed its bribery legislation to jump through OECD hoops, though the Duma has yet to ratify membership of the convention. Rhetorically at least, Russian politicians—and President Dmitry Medvedev, in particular—seem eager to get the club's certificate of good behaviour. And OECD officials insist that (in contrast with other clubs that Russia has joined, from the Council of Europe to the G8) there will be absolutely no bending of the rules to appease Kremlin sensitivities. Many see compliance with the anti-bribery convention as a big test of Russia's willingness to meet the still broader demands of full membership.

Even the most self-respecting older members find the anti-bribery rules tough, and are subject to public naming and shaming when they breach them. Britain's Bribery Act, passed last year, was the culmination of a decade of peer pressure (see article). At one point British officials had to give quarterly reports to their fellow OECD members to explain their country's lack of adequate legislation on sleaze. Even now, the government guidelines issued to British firms on how to apply the act are raising unhappy eyebrows at the OECD. Officials also fear that enforcement may slacken if the London-based Serious Fraud Office suffers a deep budget cut. Even the United States, which along with Germany is the keenest enforcer of the bribery accord, has had to undergo scrutiny at the hands of its peers and listen meekly to ideas for better enforcement. That contrasts sharply with the rejectionist American approach to many other forms of international legal scrutiny.

Perhaps the biggest consequence of the new rules is to change the way people talk. It is no longer possible in any big, respectable country to insist with a sophisticated shrug that doing deals in some parts of the world always means paying kickbacks. But even among the world's paragons of corporate virtue, reality and rhetoric diverge.

A study this year by Transparency International, a Berlin-based sleaze monitor, found that only seven countries “actively enforced” the OECD's anti-bribery convention and another nine (including France) “moderately enforced” it. Some 21 countries, including a usually virtuous G7 member, Canada, hardly enforced it at all. Such figures may suggest that the bribery accord's onward march has been halted. But among countries that do try to stop bribery, like the United States, law-enforcers have been growing more zealous—for example, by chasing companies which at some point in the past issued securities in American capital markets. Britain's generally good record of enforcing its own laws offers grounds for optimism too.

For countries that care about such things, being shamed by nerds is a useful exercise. But they are usually not the ones that need such treatment most.