Corruption Perceptions Index

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Overview of the index of perception of corruption, 2012.
     90–100      60–69      30–39      0-9
     80–89      50–59      20–29      No information
     70–79      40–49      10–19

Since 1995, Transparency International (TI) publishes the Corruption Perceptions Index (CPI) annually ranking countries "by their perceived levels of corruption, as determined by expert assessments and opinion surveys."[1] The CPI generally defines corruption as "the misuse of public power for private benefit."[2]

As of 2012, the CPI ranks 176 countries "on a scale from 100 (very clean) to 0 (highly corrupt)."[3] In prior years, the scale ran from 10 to 0.

Contents

Methods [edit]

Political corruption
World Map Index of perception of corruption.svg
Concepts
Corruption by country

Transparency International commissioned Johann Graf Lambsdorff of the University of Passau to produce the Corruption Perceptions Index (CPI).[4] The 2012 CPI draws on 13 different surveys and assessments from 12 different institutions.[5] The institutions are the African Development Bank, the Bertelsmann Foundation, the Economist Intelligence Unit, Freedom House, Global Insight, International Institute for Management Development, Political and Economic Risk Consultancy, Political Risk Services, the World Economic Forum, the World Bank and the World Justice Project.[6] Many of these private organizations have strong ties to particular governments or nations, such as the World Bank which is funded by certain countries.

The 13 surveys/assessments are either business people opinion surveys or performance assessments from a group of analysts.[2] Early CPIs used public opinion surveys. Countries must be assessed by at least three sources to appear in the CPI.[7]

The CPI measures perception of corruption due to the difficulty of measuring absolute levels of corruption.[8]

Validity [edit]

A study published in 2002 found a "very strong significant correlation" between the Corruption Perceptions Index and two other proxies for corruption: Black Market activity and overabundance of regulation. All three metrics also had a highly significant correlation with real gross domestic product per capita (RGDP/Cap). The Corruption Perceptions Index correlation with RGDP/Cap was the strongest.[9]

Year-to-year comparisons [edit]

Since the set of sources changes, comparing corruption scores and ranking over time is inappropriate. Furthermore, the methodology of this index changed in 2012. However, with the new methodology, it will be possible to make year-to-year comparison after 2013.[10]

2012 Report [edit]

For the 2012 report, the countries that were ranked as having the lowest perceived levels of corruption were: Denmark, Finland, New Zealand, Sweden, Singapore, Switzerland, Australia, Norway, Canada, Netherlands, Iceland and Luxembourg.[11]

Relation to GDP growth and foreign investment [edit]

Research papers published in 2007 and 2008 examined the economic consequences of corruption perception, as defined by the CPI. The researchers found a correlation between a higher CPI and higher long-term economic growth,[12] as well as an increase in GDP growth of 1.7% for every unit increase in a country's CPI score.[13] Also shown was a power-law dependence linking higher CPI score to higher rates of foreign investment in a country.

Criticism [edit]

Because corruption is wilfully hidden, it is impossible to measure directly; instead proxies for corruption are used.

Media outlets frequently use the raw numbers as a yardstick for government performance, without clarifying what the numbers mean. The local Transparency International chapter in Bangladesh disowned the index results after a change in methodology caused the country's scores to increase; media reported it as an "improvement".[14] Other critics point out that definitional problems with the term "corruption" makes the tool problematic for social science.

Many lawyers advise international businesses to consult the CPI when attempting to measure the risk of Foreign Corrupt Practices Act violations in different nations.[15] This practice has been criticized, since the CPI may be subject to perceptual biases[16] and therefore should not be considered by lawyers to be a measure of actual national corruption risk.[15]

References [edit]

Notes

  1. ^ Transparency International (2011). "Corruption Perceptions Index". Transparency International. Transparency International. Retrieved 1 December 2011. 
  2. ^ a b CPI 2010: Long methodological brief, p. 2
  3. ^ Transparency International (2012). "Corruption Perceptions Index 2012: In detail". Transparency International. Transparency International. Retrieved 24 August 2011. 
  4. ^ "Frequently Asked Questions: TI Corruption Perceptions Index (CPI 2005)". Retrieved 2005-11-22. 
  5. ^ CPI 2010: Long methodological brief, p. 1
  6. ^ Transparency International (2010). Corruption Perceptions Index 2010: Sources of information (Report). Transparency International. http://www.transparency.org/content/download/55815/891318/CPI2010_sources_EN.pdf. Retrieved 24 Aug 2011.
  7. ^ CPI 2010: Long methodological brief, p. 7
  8. ^ Transparency International (2010). "Frequently asked questions (FAQs)". Corruption Perceptions Index 2010. Transparency International. Retrieved 24 August 2011. 
  9. ^ Wilhelm, Paul G. (2002). "International Validation of the Corruption Perceptions Index: Implications for Business Ethics and Entrepreneurship Education". Journal of Business Ethics (Springer Netherlands) 35 (3): 177–89. doi:10.1023/A:1013882225402. 
  10. ^ http://www.financialexpress.com/news/india-ranked-94th-in-corruption-perception-index-ratings-says-transparency-international/1040857
  11. ^ Corruption Perceptions Index 2012. Full table and rankings. Transparency International. Retrieved: 4 February 2013.
  12. ^ http://www.springerlink.com/content/v3t11731814287q5/
  13. ^ http://www.springerlink.com/content/f7708580327662g8/
  14. ^ "TI's Index: Local Chapter Not Having It". Global Integrity. 
  15. ^ a b Campbell, Stuart Vincent "Perception is Not Reality: The FCPA, Brazil, and the Mismeasurement of Corruption" 22 Minnesota Journal of International Law 1, p. 247 (2013). Available at SSRN: http://ssrn.com/abstract=2210019.
  16. ^ Campbell, Stuart Vincent "How the CPI Distorts and Shapes Reality" FCPA Blog (2013). Available at http://www.fcpablog.com/blog/2013/2/5/how-the-cpi-distorts-and-shapes-reality.html

Bibliography

External links [edit]
Freedom
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