Corruption Perceptions Index
The Corruption Perceptions Index (CPI) is an index that ranks countries "by their perceived levels of public sector[1] corruption, as determined by expert assessments and opinion surveys."[2] The CPI generally defines corruption as an "abuse of entrusted power for private gain".[3] The index is published annually by the non-governmental organisation Transparency International since 1995.[4]
The 2023 CPI, published in January 2024, currently ranks 180 countries "on a scale from 100 (very clean) to 0 (highly corrupt)" based on the situation between 1 May 2022 and 30 April 2023. Denmark, Finland, New Zealand, Norway, Singapore, and Sweden are perceived as the least corrupt nations in the world, ranking consistently high among international financial transparency, while the most apparently corrupt are Syria, South Sudan, and Venezuela (scoring 13), as well as Somalia (scoring 11).[5]
Although the CPI is currently the most widely used indicator of corruption globally, it is worth emphasizing that there are some limitations. First, the CPI does not distinguish between individual types of corruption (some are not even included in the index) and people's perceptions do not necessarily correspond to the actual level of corruption. To get a more comprehensive picture, the CPI should be used alongside other assessments. Furthermore, the CPI is better suited for analyzing long-term trends, as perceptions tend to change slowly.[6]
Phenomena and Indices Related to the CPI[edit]
CPI and Economic Growth[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,[14] as well as an increase in GDP growth of 1.7% for every unit increase in a country's CPI score.[15] Also shown was a power-law dependence linking higher CPI score to higher rates of foreign investment in a country.
The research article The investigation of the relationship between corruption perception index and GDP in the cake of the Balkans[16] from 2020 confirms the positive co-integration relationship in Balkan countries between CPI and GDP and calculates the affecting rate of CDI GDP as 0.34. Moreover, the direction of causality between CDI and GDP was identified from CDI to GDP and, according to this, the hypothesis that CDI is the cause of GDP was accepted.
Working paper Corruption and economic growth: New empirical evidence[17] from 2019 emphasizes that many previous studies used the CPI for their analysis before 2012 (when the index was difficult to compare over time) and therefore may be biased. At the same time, it presents new empirical evidence based on data for 175 over the period 2012-2018. The results show that corruption is negatively associated with economic growth (Real per capita GDP decreased by around 17% in the long-run when the reversed CPI increased by one standard deviation).
CPI and Justice[edit]
As reported by Transparency International, there is a correlation between the absence of discrimination and a better CPI score. That indicates that in countries with high corruption, equal treatment before the law is not guaranteed and there is more space for discrimination against specific groups.[18]
It seems that the country's justice system is an important protector of the country against corruption, and conversely, a high level of corruption can undermine the effectiveness of the justice system.Furthermore, as noted by the United Nations Office on Drugs and Crime (UNODC), justice systems around the world are overburdened with large caseloads, chronically underfunded and in need of more financial and human resources to properly fulfill their mandates. This, in combination with increasing outside interference, pressures and efforts to undermine judicial independence, results in the inability of justice systems to control corruption. The latest edition of the World Justice Project's Rule of Law Index, which shows that in the past year, justice systems in most countries exhibited signs of deterioration, including increasing delays and lower levels of accessibility and affordability, also serves as evidence of the urgency of the situation. Conversely, because corruption implies disproportionate favoring of some groups or individuals over others, it prevents people from accessing justice. For example, a person may rely on personal contacts to change a statutory process.
As shown in the Corruption Perception Index 2023, there is also a positive relationship between corruption and impunity. Countries with higher levels of corruption are less likely to sanction public officials for failing to adhere to existing rules and fulfilled their responsibilities. A positive relationship was also shown between corruption and access to justice.[19]
CPI and Some Other Phenomena and Indices[edit]
Thesis The Relationship Between Corruption And Income Inequality: A Ccrossnational Study,[20] published in 2013, investigates the connection between corruption and income inequality on a global scale. The study's key finding is a robust positive association between income inequality (measured by the Gini coefficient) and corruption (measured by the CPI).
A study from 2001[21] shows that the more affected by corruption, the worse a country's environmental performance. Measuring national environmental performance according to 67 variables, the closest match is with the 2000 TI Corruption Perceptions Index, which revealed a 0.75 correlation with the ranking of environmental performance.
A 2022 study titled "Statistical Analyses on the Correlation Perception Index and Some Other Indices in Nigeria"[22] investigated the relationship between the Corruption Perception Index in Nigeria and other relevant indices. These other indices included the Human Development Index (HDI), Global Peace Index (GPI), and Global Hunger Index (GHI). The result from the analysis carried out on the standardized data set shows that a positive linear relationship exists among all the variable considered except for CPI and GPI holding HDI and GHI constant which indicates a negative linear relationship between them.
A study investigating the relationship between public governance and the Corruption Perception Index[23] found that aspects of public administration like voice and accountability, political stability, and rule of law significantly influence how corrupt a country is perceived to be. This suggests that strong governance practices can be effective in reducing corruption.
The Index’s methodology was criticized in the past.[24]
According to political scientist Dan Hough, three flaws in the Index include:[25]
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".[26]
In a 2013 article in Foreign Policy, Alex Cobham suggested that CPI should be dropped for the good of Transparency International. It argues that the CPI embeds a powerful and misleading elite bias in popular perceptions of corruption, potentially contributing to a vicious cycle and at the same time incentivizing inappropriate policy responses. Cobham writes, "the index corrupts perceptions to the extent that it's hard to see a justification for its continuing publication."[27]
Recent econometric analyses that have exploited the existence of natural experiments on the level of corruption and compared the CPI with other subjective indicators have found that, while not perfect, the CPI is argued to be broadly consistent with one-dimensional measures of corruption.[28]
In the United States, many lawyers advise international businesses to consult the CPI when attempting to measure the risk of Foreign Corrupt Practices Act violations in different nations. This practice has been criticized by the Minnesota Journal of International Law, which wrote that since the CPI may be subject to perceptual biases it therefore should not be considered by lawyers to be a measure of actual national corruption risk.[29]
Transparency International also publishes the Global Corruption Barometer, which ranks countries by corruption levels using direct surveys instead of perceived expert opinions, which has been under criticism for substantial bias from the powerful elite.[27]
Transparency International has warned that a country with a clean CPI score may still be linked to corruption internationally. For example, while Sweden had the 3rd best CPI score in 2015, one of its state-owned companies, TeliaSonera, was facing allegations of bribery in Uzbekistan.[30]
Transnational Corruption in States with High CPI Scores[edit]
The advanced economies of Northern and Western Europe, North America, and Asia and the Pacific tend to top the rankings over the long term. This means that these countries are perceived as having a low level of corruption in the public sector. These nations also generally have well-functioning judicial systems, a strong rule of law, and political stability – all factors that contribute to perceptions of clean governance. However, while these top-ranked countries have strong domestic institutions, their commitment to fighting corruption appears to be weak when it comes to their own financial systems and regulations affecting the international environment.[61] The CPI doesn't capture transnational corruption, so corrupt foreign business practices by companies from these countries don't affect their CPI scores. The example of the Netherlands highlights this issue. Despite a high CPI score, the Netherlands has a poor record of prosecuting companies that bribe foreign officials to win contracts, as seen in the Nigerian oil bribery case.[62]
The report Exporting Corruption 2022,[63] which assesses foreign bribery enforcement in 43 of the 44 signatories to the OECD Anti-Bribery Convention, as well as China, ZAO Hong Kong, India and Singapore, reinforces this concern. It found a significant decline in foreign bribery enforcement, only two out of 47 countries are now in active enforcement category. Other key findings were that no country is exempt from bribery by its nationals and related money laundering. Moreover, according to the report weaknesses remain in legal frameworks and enforcement systems are not adequately disclosed by most countries information on enforcement, victim compensation is rare and international cooperation is increasing still faces significant obstacles. This calls for a more comprehensive approach to tackling corruption, addressing both domestic and international aspects.