Corruption Perceptions Index

The Corruption Perceptions Index (CPI) is an index that scores and ranks countries by their perceived levels of public sector^[1] corruption, as assessed by experts and business executives.^[2] The CPI generally defines corruption as an "abuse of entrusted power for private gain".^[3]: 2 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]

The following paragraph describes the methodology for calculating the index, which has been used to calculate the index since 2012, when the methodology was modified to allow comparison over time. The index is calculated in four steps: selection of source data, rescaling source data, aggregating the rescaled data and then reporting a measure for uncertainty.^[3]: 7

The goal of the data selection is to capture expert and business leader assessments of various public sector corruption practices. This includes bribery, misuse of public funds, abuse of public office for personal gain, nepotism in civil service, and state capture. Since 2012 CPI takes into account 13 different surveys and assessments^[7] from 12 different institutions.^[3]: 1 The institutions are:

• African Development Bank (based in Côte d'Ivoire)
• Bertelsmann Foundation (based in Germany)
• Economist Intelligence Unit (based in the UK)
• Freedom House (based in the US)
• Global Insight (based in the US)
• International Institute for Management Development (based in Switzerland)
• Political and Economic Risk Consultancy (based in Hong Kong)
• The PRS Group, Inc. (based in the US)
• World Bank
• World Economic Forum
• World Justice Project (based in the US)

Countries need to be evaluated by at least three sources to appear in the CPI.^[3]: 7 The CPI measures perception of corruption due to the difficulty of measuring absolute levels of corruption.^[8] Transparency International commissioned the University of Passau's Johann Graf Lambsdorff to produce the CPI.^[9] Early CPIs used public opinion surveys.^[3]: 7

In order for all data to be aggregated into the CPI index, it is first necessary to carry out standardization during which all data points are converted to a scale of 0-100. Here, 0 represents the most corruption and 100 signifies the least. Indices originally measuring corruption inversely (higher values for higher corruption) are multiplied by -1 to align with the 0-100 scale.

In the next step, the mean and standard deviation for each data source based on data from the baseline year are calculated (the "impute" command of the STATA statistical software package is used to replace missing values). Subsequently, a standardized z score is calculated with an average centered around 0 and a standard deviation of 1 for each source from each country. Finally, these scores are converted back to a 0-100 scale with a mean of approximately 45 and a standard deviation of 20. Scores below 0 are set to 0, and scores exceeding 100 are capped at 100. This ensures consistent comparability across years since 2012.

The resulting CPI index for each country is calculated as a simple average of all its rescaled scores that are available for the given country, while at least three data sources must be available in order to calculate the index. The imputed data is used only for standardization and is not used as a score to calculate the index.

The CPI score is accompanied by a standard error and confidence interval. This reflects the variation present within the data sources used for a particular country or territory.

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 an overabundance of regulation.^[10]

All three metrics also had a highly significant correlation with the real gross domestic product per capita (RGDP/Cap); the Corruption Perceptions Index correlation with RGDP/Cap was the strongest, explaining over three-quarters of the variance.^[10] (Note that a lower rating on this scale reflects greater corruption so that countries with higher RGDPs generally had less corruption.)

Alex Cobham of the Center for Global Development reported in 2013 that "many of the staff and chapters" at Transparency International, the publisher of the Corruption Perceptions Index, "protest internally" over concerns about the index. The original creator of the index, Johann Graf Lambsdorff, withdrew from work on the index in 2009, stating "In 1995 I invented the Corruption Perceptions Index and have orchestrated it ever since, putting TI on the spotlight of international attention. In August 2009 I have informed Cobus de Swardt, managing director of TI, that I am no longer available for doing the Corruption Perceptions Index."^[11]

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.

The research article "The Investigation of the Relationship between Corruption Perception Index and GDP in the Case of the Balkans"^[14] from 2020 confirms the positive co-integration relationship in Balkan countries between CPI and GDP and calculates the affecting rate of CPI GDP as 0.34. Moreover, the direction of causality between CPI and GDP was identified from CPI to GDP and, according to this, the hypothesis that CPI is the cause of GDP was accepted.

The working paper Corruption and Economic Growth: New Empirical Evidence^[15] 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).

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.^[16]

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.^[17]

Thesis The Relationship Between Corruption And Income Inequality: A Crossnational Study,^[18] 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^[19] 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 of Corruption Perception Index and Some Other Indices in Nigeria"^[20] 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^[21] 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.^[22]

According to political scientist Dan Hough, three flaws in the Index include:^[23]

• Corruption is too complex a concept to be captured by a single score. For instance, the nature of corruption in rural Kansas will be different from that in the city administration of New York, yet the Index measures them in the same way.
• By measuring perceptions of corruption, as opposed to corruption itself, the Index may simply be reinforcing existing stereotypes and cliches.
• The Index only measures public sector corruption, ignoring the private sector. This, for instance, means the well-publicized Libor scandal, Odebrecht case and the VW emissions scandal are not counted as corrupt actions.

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".^[24]

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."^[25]

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.^[26]

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.^[27]

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.^[25]

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.^[28]

As stated by Transparency International in 2024,^[29] the level of corruption stagnates at the global level. Only 28 of the 180 countries measured by the CPI index have improved their corruption levels over the last twelve years, and 34 countries have significantly worsened. No significant change was recorded for 118 countries. Moreover, according to Transparency International, over 80 percent of the population lives in countries whose CPI index is lower than the global average of 43, and thus corruption remains a problem that affects the majority of people globally.

Among the states with the most significant decline in the CPI are authoritarian states such as Venezuela, as well as established democracies that have been rated high for a long time, such as Sweden (decrease of 7, the current score 82) or Great Britain (decrease 3, current score 71). Other countries experiencing sharp declines include Sri Lanka, Mongolia, Gabon, Guatemala, and Turkey. In contrast, the most significant improvements in the CPI score over the last twelve years were recorded by Uzbekistan, Tanzania, Ukraine, Côte d'Ivoire, the Dominican Republic and Kuwait.

Corruption Perceptions Index table:^[30]

#	Nation or Territory	2023[5]		2022[31]		2021[32]		2020[33]
		Score	Δ[i]	Score	Δ[i]	Score	Δ[i]	Score	Δ[i]
1	Denmark	90		90		88		88
2	Finland	87		87	1	88	2	85
3	New Zealand	85	1	87	1	88		88
4	Norway	84		84		85	3	84
5	Singapore	83		83	1	85	1	85	1
6	Sweden	82	1	83	1	85	1	85	1
6	Switzerland	82	1	82		84	4	85	1
8	Netherlands	79		80		82		82
9	Germany	78		79	1	80	1	80
10	Luxembourg	78	1	77	1	81		80
11	Ireland	77	1	77	3	74	7	72	2
12	Canada	76	2	74	1	75	2	77	1
13	Estonia	76	2	74	1	74	4	75	1
14	Australia	75	1	75	5	73	7	77	1
15	Hong Kong	75	2	76		76	1	77	5
16	Belgium	73	2	73		73	3	76	2
17	Japan	73	2	73		73	1	74	1
18	Uruguay	73	2	74	4	73	3	71
19	Iceland	72	5	74	1	74	4	75	6
20	Austria	71	2	71	9	74	2	76	3
21	France	71	1	72	1	71	1	69
22	Seychelles	71	3	70		70	4	66
23	United Kingdom	71	2	73	7	78		77	1
24	Barbados	69	5	65		65		64	1
25	United States	69		69	3	67	2	67	2
26	Bhutan	68	1	68		68	1	68	1
27	United Arab Emirates	68	1	67	3	69	3	71
28	Taiwan	67	3	68		68	3	65
29	Chile	66	2	67		67	2	67	1
30	Bahamas	64		64		64		63	1
30	Cape Verde	64	5	60	4	58	2	58
32	South Korea	63	1	63	1	62	1	61	6
33	Israel	62	2	63	5	59	1	60
34	Lithuania	61	1	62	1	61	1	60
34	Portugal	61	1	62	1	62	1	61	3
36	Latvia	60	3	59	3	59	6	57	2
36	Saint Vincent and the Grenadines	60	1	60	1	59	4	59	1
36	Spain	60	1	60	1	61	2	62	2
—	Brunei Darussalam	—		—		—		60
39	Botswana	59	4	60	10	55	10	60	1
40	Qatar	58		58	9	63	1	63
41	Czechia	57		56	8	54		54	5
42	Dominica	56		55		55	3	55
42	Italy	56	1	56	1	56	10	53	1
42	Slovenia	56	1	56		57	6	60
45	Costa Rica	55	3	54	9	58	3	57	2
45	Saint Lucia	55		55	3	56	3	56	3
47	Poland	54	2	55	3	56	3	56	4
47	Slovakia	54	2	53	7	52	4	49	1
49	Cyprus	53	2	52	1	53	10	57	1
49	Georgia	53	8	56	4	55		56	1
49	Grenada	53	2	52	1	53		53	1
49	Rwanda	53	5	51	2	53	3	54	2
53	Fiji	52	4	53	4	55	10	—
53	Saudi Arabia	52	1	51	2	53		53	1
55	Malta	51	1	51	5	54	3	53	2
55	Mauritius	51	2	50	8	54	3	53	4
57	Croatia	50		50	6	47		47
57	Malaysia	50	4	47	1	48	5	51	6
59	Greece	49	8	52	7	49	1	50	1
59	Namibia	49		49	1	49	1	51	1
61	Vanuatu	48	1	48	6	45	9	43	11
62	Armenia	47	1	46	5	49	2	49	17
63	Kuwait	46	14	42	4	43	5	42	7
63	Jordan	46	2	47	3	49	2	49
63	Montenegro	46	2	45	1	46	3	45	1
63	Romania	46		46	3	45	3	44	1
67	Bulgaria	45	5	43	6	42	9	44	5
67	São Tomé and Príncipe	45	2	45	1	45	3	47	1
69	Jamaica	44		44	1	44	1	44	5
70	Ghana	43	2	43	1	43	2	43	5
70	Benin	43	2	43	6	42	5	41	3
70	Oman	43	1	44	13	52	7	54	7
70	Senegal	43	2	43	1	43	6	45	1
70	Solomon Islands	43	7	42	4	43	5	42	1
70	Timor-Leste	43	7	42	5	41	4	40	7
76	Bahrain	42	7	44	9	42		42	1
76	China	42	11	45	1	45	12	42	2
76	Cuba	42	11	45	1	46	1	47	3
76	Hungary	42	1	42	4	43	4	44	1
76	Moldova	42	15	39	14	36	10	34	5
76	North Macedonia	42	9	40	2	39	24	35	5
76	Trinidad and Tobago	42	1	42	5	41	4	40	1
83	Burkina Faso	41	6	42	1	42	8	40	1
83	Kosovo	41	1	41	3	39	17	36	3
83	South Africa	41	11	43	2	44	1	44	1
83	Vietnam[34]	41	6	42	10	39	17	36	8
87	Colombia	40	4	39	4	39	5	39	4
87	Guyana	40	2	40	2	39	4	41	2
87	Ivory Coast	40	12	37	6	36	1	36	2
87	Suriname	40	2	40	2	39	7	38	24
87	Tanzania	40	7	38	7	39	7	38	2
87	Tunisia	40	2	40	15	44	1	44	5
93	Kazakhstan	39	8	36	1	37	8	38	19
93	India	39	8	40		40	1	40	6
93	Lesotho	39	6	37	3	38	13	41	2
93	Maldives	39	8	40		40	10	43	55
97	Morocco	38	3	38	7	39	1	40	6
98	Argentina	37	4	38	2	38	18	42	12
98	Albania	37	3	36	9	35	6	36	2
98	Belarus	37	7	39	9	41	19	47	3
98	Ethiopia	37	4	38	7	39	7	38	2
98	Gambia	37	12	34	8	37		37	6
98	Zambia	37	18	33	1	33		33	4
104	Algeria	36	12	33	1	33	13	36	2
104	Brazil	36	10	38	2	38	2	38	12
104	Serbia	36	3	36	5	38	2	38	3
104	Ukraine	36	12	33	6	32	5	33	9
108	Bosnia and Herzegovina	35	2	34		35	1	35	10
108	Dominican Republic	35	15	32	5	30	9	28
108	Egypt	35	22	30	13	33		33	11
108	Nepal	35	2	34	7	33		33	4
108	Panama	35	7	36	4	36	6	35	10
108	Sierra Leone	35	2	34	5	34	2	33	2
108	Thailand	35	7	36	9	35	6	36	3
115	Ecuador	34	14	36	4	36	13	39	1
115	Indonesia	34	5	34	14	38	6	37	17
115	Malawi	34	5	34		35	19	30	6
115	Philippines