Anti-Corruption Day 2025: corruption’s grip in the age of big risk

We live in an era of exponential risk, where geopolitical tensions, financial instability, supply chain disruptions, and physical risks converge and amplify one another. 

A significant driver of these crises is corruption, which can systemically deepen instability.

Transparency International defines corruption as “the abuse of entrusted power for private gain.” It can take many forms: from bribes at the highest levels of power to facilitate a major project to front-line public workers demanding “tea money” to provide basic services. It’s likely that no country is completely free of the risk of corruption. 

In recent decades, attitudes toward corruption have shifted. Once seen by some as a way to “grease the wheels” of bureaucracy, it is now recognized as a driver of risk as it undermines trust, weakens institutions, and destabilizes economies. Yet fighting the effects of corruption can be difficult. The global flow of illicit finance, underpinned by complex legal, accounting, and financial tools, has seemingly made it easier to hide dirty money sources and shield corrupt benefactors from scrutiny.
 

The global scale of corruption

Transparency International’s Corruption Perceptions Index scores 180 countries on a scale of 1 (most corrupt) to 100 (least corrupt). The average score is 43, and over two-thirds of all countries score below 50.

Transparency International’s most recent Global Corruption Barometer —a survey of over 160,000 people worldwide—found that globally almost 1 in 4 people had paid a bribe to access a public service. The United Nations estimates that bribes and stolen funds account for $3.6 trillion in losses, with money laundering adding up to an estimated $2 trillion more. Together, these losses of roughly $5.6 trillion represent 5% of the global GDP. These eye-opening statistics underscore the pervasive impact of corruption, even in an era of widespread anti-bribery and anti-corruption laws.
 

The impacts of corruption

Just going by the numbers, corruption can seem abstract or victimless. At a fundamental level, it can deprive or restrict access for millions of people to essential public services like health care, education, and housing. Corruption in security services may lead to indignities like citizens being shaken down for a bribe or even forcible repression. Far from liking corruption, citizens in highly corrupt countries often must learn to navigate the system to sustain their livelihoods—and the cycle of corruption continues.

In our interdependent globalized economy, corruption can further drive global risk in areas like income inequality, domestic conflict, unregulated arms trade, regional destabilization, and climate. 

Income inequality and domestic conflict

When political leaders, military officers, or civil servants divert public resources for private gain, they often concentrate wealth and opportunities in the hands of the few. This fuels economic inequality, which can allow the rich to thrive and the poor to suffer.

As those entrusted to serve the public good enable corruption, they weaken the state’s capacity to deliver public services. This can erode trust in the government and sow fertile ground for resentment from the many toward governing bodies and individuals. This can lead to protests, uprisings, and even insurgencies. The cause of the Arab Spring uprisings in the early 2010s, for example, was heavily attributed to anti-corruption protests.

Where the concentration of wealth follows ethnic, religious, regional, or other group identity lines, resentment may deepen. In 2025, the world witnessed so-called “Gen-Z” protests in Southeast Asia, Africa, and Latin America, reportedly driven by youth grievances that include with corruption.

Misconduct in the international arms trade

The global arms trade can be vulnerable to corruption due to its close involvement with government leaders, strict regulation, secrecy, and high value—global military spending rose year over year for the last decade.

Corruption in the defense industry can include unauthorized transfers, bypassing procurement due diligence processes, and overlooking or enabling irregular payments. Such corruption may place sensitive military technology, equipment, and services in the hands of adversaries, while the diversion of funds can cause gaps in national security by leaving military forces underequipped and vulnerable.

Regional destabilization through borders

Corruption can enable cross-border criminal enterprises like smuggling and trafficking. Non-state actors, such as terrorist groups and organized crime syndicates, may bribe officials to move people, illicit goods, and funds across borders. These goods may include weapons used to repress local populations or set off acts of terrorism and illicitly traded goods like precious metals, timber, counterfeit goods, narcotics, wildlife, and even people.

Integrity Initiatives International estimates 12 million people annually are victims of human trafficking, generating a $150 billion underground economy. To entrap, move, and hide victims in plain sight, traffickers may bribe border and immigration agents, workplace inspection officials, police, and judges.

Climate

Corruption can act as a climate risk multiplier. For example, when funds intended for renewable projects or conservation are siphoned off through procurement fraud—in the form of falsified qualifications, inflated contracts, ghost projects, or misrepresented results—communities remain exposed to negative impacts. Moreover, environmental crimes like illegal logging, mining, fishing, or the clearing of protected or vulnerable areas can go unchecked due to bribery. These activities can disrupt the balance of ecosystems and may introduce vulnerabilities like increased land and water pollution and greenhouse gas emissions. 
 

A core facilitator of global corruption: illicit financial flows

A core enabler of these issues is global illicit financial flows, which can mask the flow of illegitimately gained money from financial regulators.

As an example, the 1MDB scandal in Malaysia saw billions in taxpayer money embezzled from a government-owned investment fund under the guise of promoting economic development in Malaysia. The stolen money was reportedly funneled through a web of offshore shell companies to benefit senior officials in Malaysia, businessmen, and foreign intermediaries.

Large-scale corruption schemes often rely on a chain of actors’ willingness, or “willful blindness,” to break rules and skirt oversight. For example, public officials may take bribes to overlook red flag alerts from know-your-customer checks, allowing insiders at financial institutions to facilitate criminal activities. Illicit financial flows and corruption reinforce each other, eroding the safety, security, and prosperity of nations.

An optimistic outlook on dismantling corruption

As we mark Anti‑Corruption Day 2025, the challenge is clear: How can governments, businesses, and citizens work together to dismantle corruption’s grip on our global systems? The era of exponential risk has introduced new contexts of uncertainty—especially with income inequality, domestic conflict, unregulated arms trade, regional destabilization, and climate. But there are clear actions we can take. By working to track complex illicit financial flows, strengthen transparency, and enforce compliance, governments and corporations can help reduce corruption-fueled risk.

Moody’s works with hundreds of government agencies, corporations, and institutions globally by providing data, analytics, and tools that can help customers identify and mitigate corruption risks.