Looking for Incremental Progress in the International Fight Against Corruption

When you are involved with anticorruption,  international development or international investment you look for ways to indicate national, social and organizational change.  With billions of dollars spent each year on such programs, finding appropriate indicators of change is critically important. Without positive change, the flow of money changes.  Not only development money, but investment money.  Corruption and other indicators are a fundamental part of due diligence investigations for investors and tracking change.

Ordinarily, I am looking at different sorts of indicators and indices, but once a year Transparency International dominates the international discussion of corruption.  Transparency International just released the 2012 Corruption Perception Index.  When the scores are released, there is a flurry of worry, frustration and rationalization for many countries eager to show progress.  Despite being perhaps the most well known index of corruption in countries – on its face the index is not a useful as a technical tool.  But it is useful to spur conversation and inspire government change.

While news accounts and public allegations abound, it is, in actual fact, very difficult to assess the level of corruption in a country.  Because of its very nature, people do not discuss their illegal acts openly.  Transparency International  (“TI”) uses perceptions of corruption as part of the basis for its Corruption Perception Index (“CPI”).

In TI’s own words:

Over time, perceptions have proved to be a reliable estimate of corruption. Measuring scandals, investigations or prosecutions, while offering ‘non-perception’ data, reflect less on the prevalence of corruption in a country and more on other factors, such as freedom of the press or the efficiency of the judicial system. TI considers it of critical importance to measure both corruption and integrity, and to do so in the public and private sectors at global, national and local levels. The CPI is therefore one of many TI measurement tools that serve the fight against corruption.  Click here to read more from TI on this. 

The positive thing about the CPI is that it attempts to provide some numerical basis for measuring perceptions of corruption and change.  It strives to lift the issue beyond gossip, journalism and the general complaints people may have about their government.

The unfortunate thing about the CPI is that it is “not a tool that is suitable for trend analysis or for monitoring changes in the perceived levels of corruption over time for all countries.

This is because “year-to-year changes in a country/territory’s score can result from a change in the perceptions of a country’s performance, a change in the ranking provided by original sources or changes in the methodology resulting from TI’s efforts to improve the index.”  (Click here for the caveats.)

Despite this clear admonition from TI, it is virtually impossible to bypass the opportunity to compare the relative scores of countries over time.

Make no mistake, I am not slamming TI.  Like other organizations, they are trying to create a consistent method of identifying the problem with corruption so that countries feel some need to change.  There are many challenges that arise for TI when compiling data gathered across almost 200 countries each year.  Not the least of which is the lack of consistently gathered data in each country.

A country’s rank indicates its position relative to the other countries/territories included in the index. It is important to keep in mind that a country’s rank can change simply because new countries enter the index or others drop out.

What TI has done is create a global contest among countries that inspires them to improve.  My hats off to the people at TI that keep this contest going.

You can read more about it at: What is the Corruption Perception Index, Transparency International.

Brian Pinkowski

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