Can we use big data analytics as an anti-corruption tool

Using big data analytics as an anti-corruption tool

Public corruption has cost governments millions of dollars, and severely worsened the plight of those who are poor. The Panama Papers revealed how high-ranking officials, energy companies, foundations, and trusts colluded, especially in tax-free areas. Corruption has proven to be very difficult to solve and fighting it remains challenging. However, experts are turning to a new tool to fight corruption: big data analytics.

How does big data analytics work?

Governments and corporate records are often lengthy, complex documents that the average person cannot read easily. Indeed, it would take someone of immense discipline and technical knowledge to discover the intricate patterns that indicate mishandling of funds – a sign of corruption. However, with big data analytics, it’s possible to comb through the information to find intricate details that humans can miss. For example, the Panama Papers was written because journalists used big data to analyse to review over 11,000 documents.

Furthermore, big data analytics can assess several different information sources to discover trends that are otherwise easy to miss. For example, the European Commission and Transparency International used their own proprietary big data analytics software to compare data from private and public institutions, to find irregularities, conflicts of interest and other signs of corrupt behaviour. The ability to analyse and compare different sources of information is one of the biggest advantages of big data.

Big data analytics can employ data mining techniques to discover tax fraud and evasion. David Frankel, a New York finance commissioner, used data mining techniques to survey the tax records of businesses based in the city. Investigators used big data to find businesses that did not fit the normal tax payment pattern, a possible sign of tax evasion. The new information allowed investigators to identify businesses that were potentially using schemes to evade taxes. In other words, investigators could conduct a smarter, more efficient tax evasion investigation process.

The presence of big data analytics could deter corruption simply because it is so effective in identifying incidents of corruption. Recently, Timothy Persons, who was the Chief Scientist of the United States Government Accountability Office (GAO) in 2016, said that corruption is a cost-benefit analysis, those who commit to corruption do so because the benefits outweigh the costs.

Challenges of big data analytics

Despite the immense potential of big data in fighting corruption, and its use by major organisations like the European Commission, there are still some difficulties to overcome.

The need for open data

Most public institutions do not have a framework for sharing data. Therefore, it is very difficult for most people to find data connected to budgets for development projects, or policy decisions. Having a common framework for open data helps set a common standard. As a result, it will be much easier to read and interpret the information from different organisations. When it is easier to read data, investigators can ask more complex questions about how resources were spent, making it much easier to track down incidences of corruption.

Data and analytics tools must be reliable

There is no point in investing in data analytics platforms if the data is not accurate. The latest analytics platforms are intelligent with AI and machine learning capabilities. However, these platforms are still designed to process data and, if the information is not accurate, the results will not be accurate either. This highlights the importance of national institutions responsible for collecting the data that analytics platforms will use.

The analytics tools also require a strong team of data scientists to get the best out of the tools. However, finding qualified data scientists remains a huge challenge because data analysts are in high demand, and many of them are lured into the private sector via lucrative offers.

Key takeaways

Corruption has always plagued bureaucracy, costing governments millions of dollars. Fighting corruption has proven to be a challenge. However, big data analytics could change the situation. Data analytics can assess terabytes of information to find trends and identify cases deviating from the norm to improve investigations into corruption. However, despite the immense potential of analytics, there are still some challenges to overcome, like the need to standardise open data, make sure data is reliable and building a strong analytics team.

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