What does the Corruption Perceptions Index tell us—and what does it leave out?

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Media coverage of the annual publication of the  Corruption Perceptions Index (CPI), an indicator produced by the nonprofit Transparency International, has tended to focus on whether a given country has improved or worsened its ranking. Indeed, the CPI appears to be a straightforward scale for measuring corruption around the world. Every year, the usual suspects—poorer countries with weaker institutions—are found at the bottom of the rankings. The top scorers have also become predictable. But a closer look at what CPI includes—and what it omits—reveals that this measure fails to paint a full picture of corruption.

A measure shaped by ‘experts and businesspeople’

Transparency International has successfully positioned the problem of corruption in the public discourse since publication of the first annual CPI in 1995, when it was still a fledgling organisation. Measuring perceptions of corruption in the public sector using various sources, the CPI derives its appeal from its transparent methodology and easy replicability. In 2017, an audit by the European Commission’s Joint Research Centre concluded that the CPI “may be more reliable than each source taken separately” and that it “reconciles different viewpoints on the issue of corruption.”

But while the measure has become a handy way to gauge perceptions of public-sector corruption across the world, it remains a composite indicator based on “surveys of experts and businesspeople” such as the World Economic Forum Executive Opinion Survey and the Economist Intelligence Unit Country Risk Ratings. This method does not capture ordinary citizens’ perceptions of corruption. The CPI also excludes issues such as tax fraud, illicit financial flows, money laundering, and private-sector corruption—more systemic symptoms that could point to the existence of grand instead of petty corruption.

Transparency International has acknowledged these gaps and has addressed them through complementary indicators. In 2003, it introduced the Global Corruption Barometer, which offers a perspective grounded on everyday people’s encounters with corruption. Meanwhile, the Bribe Payers Index, focusing on the perceived likelihood of companies from the world’s largest economies doling out bribes when doing business overseas, aimed to evaluate the supply side of bribery. Neither of these measures, however, has the clout of the CPI. The Bribe Payers Index was last published in 2011. Although the Global Corruption Barometer has fared better—it stands as the sole global public opinion poll on corruption—it has not achieved the same level of media attention that the CPI attracts. The disparity is largely due to Transparency International’s skill at packaging and publicising what has become the most convenient measure of corruption.

Bound by borders

By ranking countries and highlighting domestic graft, the CPI fails to reflect how corruption can be facilitated by networks operating beyond national borders and straddling both the public and private spheres. This more transnational perspective on corruption goes beyond bribery and focuses on professional intermediaries such as lawyers and accountants, who knowingly or unwittingly blur the lines between what is legal and what is not as they expedite large and often opaque transactions across borders. The CPI omits this aspect of corruption–which can be contrasted with the more clear-cut bribe-giving-and-taking dynamic that corruption rankings often depict as occurring predominantly in the developing world.

An example is the United Kingdom’s review of its Tier 1 investor visa programme, which found that a minority of those who gained unfettered access to the UK through the Tier 1 route were “potentially at high risk of having obtained wealth through corruption.” In February 2022, the so-called golden visa scheme was shut down over security concerns as it “failed to deliver for the UK people and gave opportunities for corrupt elites to access the UK.” Indeed, 10 of the investors who were sanctioned following Russia’s invasion of Ukraine were found to have entered the UK through a Tier 1 investor visa. The European Commission had earlier similarly strengthened its stance against investor residency and citizenship programmes by calling outright for member states to revoke the residence permits and passports given to Russian and Belarusian nationals who have either been sanctioned or have supported the invasion of Ukraine.

These programmes, according to the Commission, have become convenient conduits for corruption, as they aid money laundering and tax evasion—two areas, it is worth noting, that are absent from the CPI. They underscore the paradox of expanding state coffers by commodifying citizenship, which is sometimes gained through illicitly amassed wealth. They also demonstrate the complexity of corruption beyond the CPI’s focus on national borders and the public sector.

Beyond the confines of the CPI

The Economist displays a common bias in an article on the 2021 CPI report with the headline: “Corruption is getting worse in many poor countries.” Immediately below is a small-print subheading, “But rich countries have problems too.” Although it touches on the irony that countries whose companies facilitate corruption abroad by bribing foreign officials are the same ones that the CPI considers among the least corrupt, The Economist expresses optimism that accountability exists in these wealthier countries. Beyond implying that corruption is mainly a problem of poorer countries (which fare worse in rankings), this dichotomy oversimplifies the convoluted reality of corruption, including the enabling role of professional networks involving both the public and private sector.

Due to its clandestine nature, corruption is notoriously difficult to detect. But by considering only elite perceptions of bribery and other manifestations of public-sector corruption—such as diversion of public funds, excessive red tape, and nepotistic appointment—the CPI overlooks more insidious avenues for systemic-level corruption. These, which may be more elusive to observe, can be more harmful than bribery, as they can look legitimate.

Reassessing corruption measures should not merely be an academic exercise. It would be counterproductive to devise an indicator that incorporates all the shades of corruption but is too unwieldy to be used for public messaging. How corruption is measured, after all, influences policy and advocacy decisions. What matters most is that these measurements reflect reality.

The CPI has been an accessible yardstick of corruption for decades. But this flagship indicator has not kept up with Transparency International’s own extensive investigation of the many relevant issues outside its purview. More importantly, it does not fully align with the evolving nature of corruption itself, which transcends simplistic narratives and invisibly undermines institutions and citizens themselves—sometimes even through legal means, with the aid of industries run by elites in high-scoring wealthy countries. As corruption becomes more sophisticated, so too should our methods of measuring it.

 

Anna Patricia Valerio was a 2021-2022 Policy Leader Fellow at the School of Transnational Governance.