How Can availability of Portable drinking water be used in Measuring Level of Corruption in Countries? Can anyone reading this suggest reasons why drinking water quality might be a strong indicator of the level of corruption in a country?

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I agree that a corrupt government will be less effective.  It would also show a mark of corruption if the wealthy or the government officals have clean water while the provinces and the less wealthy do not.  Often, we see corruption when a charity or relief aid from other countries does not reach the people who need it.  We see this when the government or the ruling group confiscates bottled water.  

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What an interesting idea!  Countries that do not have efficient governments are not going to have good infrastructure for things like drinking water, true.  Also, countries that have corrupt governments will not get as much aid money directly to the people.  Charities usually focus on drinking water, so if the charity's money is not getting where it is needed that is a sign of corruption.

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I agree with #2. You could argue that since most countries have their water service as an agency of the state, the extent to which the water agency does a good job or not could be seen as a reflection of the levels of corruption in the government. If it is a corrupt government, it will be a corrupt official in charge of the water agency who is more interested in lining his own pockets than doing a good job.

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Usually agencies of the state, i.e. public works, are responsible for a large-scale project like providing clean drinking water. The more corruption in a government the less efficient (usually) that government will be in providing services, and this would include clean drinking water. There is also the possibility that clean drinking water will be used as a political tool by corrupt governments, doled out to those who support the government or even sold to other countries or corporate interests for the profit of people in government. Here is a study that addresses precisely this issue:

http://corruptionresearchnetwork.org/resources/articles/quality-of-government-and-access-to-safe-water

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