Transparency International, an anti-corruption study group based in Berlin, says in its annual survey that corruption is perceived as a serious problem in three quarters of the 163 countries surveyed.

The organization says corruption is widespread throughout the world. It is at its worst in Africa and least prevalent in northern Europe. This year's rankings finds Haiti as the most corrupt country, followed by Iraq, Guinea and Burma. Last year Bangladesh and Chad tied for the dubious honor. Oil-rich but conflict-ridden Iraq dropped 23 places in the latest compilation.

"Many of the institutions and organizational structures in Iraq no longer function effectively as they should do. And the new [post-Saddam] institutions that people are seeking to establish are not yet fully functional," said Transparency International's chief executive, David Nussbaum.

Nussbaum says the ongoing violence has greatly hindered the Iraqi government's anti-corruption effort.

Speaking generally of all countries, Nussbaum says there is a clear link between high levels of corruption and poverty. The report blames intermediaries from rich countries who often help local elites launder money and profit from assets looted from the state. "Corruption is an extremely serious problem not just for the country but above all for the people who live there and whose daily lives are damaged and curtailed by the prevalence of corruption," he said.

Transparency International has been conducting annual corruption surveys for 11 years. Its report is compiled from numerous surveys of business people and country analysts who are asked for their perception of a country's corruption. Countries are scored on a scale of one to 10. The higher the number the less corrupt the country. Finland, Iceland, New Zealand and Denmark scored 9.5 or higher. A score below five indicates that corruption is a serious problem. Only two African countries, Mauritius and Botswana, had scores above five.

The United States slipped three notches and scored 7.3, the same as Chile and Belgium and two places behind France. Last year the United States ranked number 17 with a score of 7.6. Russia is ranked in the rampant corruption category with a score of 2.5, while China was in the middle, ranking 70th. Estonia has the best rank of any former Soviet republic with a score of 6.7 and a rank of 24.