The unregulated flow of money into the political process remains the biggest corruption threat facing a majority of countries, regardless of income levels, according to a new report released Wednesday.

The annual report, the fourth since 2004 prepared by Global Integrity, a Washington D.C.-based independent think-tank, tracked corruption trends around the world.

It rated 57 countries, including Canada, on anti-corruption mechanisms and government accountability.

Canada ranked 5th out of 57

Canada ranked fifth overall behind Poland, Bulgaria, Japan and Romania respectively. Somalia was last.

Overall, Canada moved up from eighth place on the list last year. However, it posted a slight "downward tick" based on secrecy surrounding political financing and gaps in government accountability, managing director Nathaniel Heller said in a teleconference with reporters Wednesday.

"Canada is a really interesting case," he said. While the country's overall positive rating is not surprising, there are "unique gaps in the system that are strange," he said.

For example, senators and judges are not required to disclose assets. Political financing loans to candidates are confidential.

That does not mean there is rampant corruption, but rather there is the potential for problems down the road, said Heller.

Loopholes undermine Canada's integrity

The Ottawa-based group Democracy Watch echoed those concerns in a press release Wednesday.

"Canada's federal government has significant loopholes in its government accountability system when compared to other countries and has a lot of work to do to become the world's leading democracy," said co-ordinator Duff Conacher.

"Government integrity continues to be undermined by loopholes that allow secret donations to some candidates, and allow for excessive government secrecy including secret, unethical lobbying, as well as by cabinet patronage appointments, lack of judicial and Senate accountability and weak government accountability lapdog agencies."

Eastern and central European countries ranked highly in the global report, despite widespread perceptions of weak anti-corruption mechanisms.

The gap between perception and the Global Integrity's positive assessment of these countries "may signal the presence of a dynamic civil society and media, which are capable of bringing issues of good governance into the public spotlight," the report said.

"A lack of scandals, on the other hand, would not necessarily be a positive sign and could reflect a more repressive environment in which watchdogs are pressured into avoiding sensitive investigations."

In another example, organized crime issues play a major (if not dominant) role in shaping perceptions of corruption in Bulgaria but are not reflected in the battery of indicators fielded by the report.

The group did not measure actual corruption.

"That would be impossible. How can you measure what you can't see," Heller said. Rather, the results point to how well countries are handling corruption issues, he added.

U.S. left out of report

The report measured each country on 320 indicators and also used qualitative data from reporters based in each country.

The United States was among the countries not included due to cost and resource constraints, said Heller.

Among the report's other key findings:

• The most significant anti-corruption performance lag in much of the Arab world is poor access to government information.
• A new grand corruption watch list for 2008 includes: Angola, Belarus, Cambodia, China, Georgia, Iraq, Montenegro, Morocco, Nicaragua, Serbia, Somalia, the West Bank, and Yemen — all countries at serious risk for high-level corruption.
• Several countries show improvements from previous years, including Bangladesh, Russia and Nigeria.
• Several countries show backsliding from previous years, including Kenya, Georgia and Ecuador.
• Corruption and transparency challenges appear to be worsening in the Horn of Africa, threatening to exacerbate tensions in an already fragile region.