The Corruption Perceptions Index (CPI): the Good, the Bad and the Ugly

The Good: first released in 1995 and published annually since then, Transparency International’s Corruption Perceptions Index (CPI) is rightly seen as an immensely important step in focusing global attention on the issue of corruption.  It provided the first systematic attempt to compare ‘perceived levels of corruption, as determined by expert assessments and opinion surveys’ across a range of countries.  The CPI identifies corruption as ‘the misuse of entrusted power for private gain’ and ranks countries on a scale from 0 (very corrupt) to 100 (very clean).  It has stimulated much important academic research on the issue, but more than that, it has also generated significant media attention and helped galvanise international anti-corruption initiatives across a host of national governments and international organisations.  Now covering some 177 countries, the CPI is the established go-to source for those wanting to know about levels of corruption across the world.

The Bad: despite its prominence, the CPI has become increasingly controversial in recent years.  As I have argued in an article with Staffan Andersson, the CPI is open to criticism on several grounds: definition problems, perception bias, false accuracy, a flawed statistical model, and a failure to capture long-term trends.  Notably, perceptions do not necessarily reflect reality: in fact, there is no shortage of evidence that, in relation to corruption at least, there is often a striking mismatch between perception and experience.  Moreover, the question of whose perceptions are being tracked really matters: in the case of the CPI, it is a composite index that draws on a range of other surveys (13 of them for the 2013 index).  Respondents to these surveys are overwhelmingly country ‘experts’ (usually based outside the country in question) and business executives; their view of corruption, unsurprisingly, tends to focus on bribery (and bribe-takers).  But corruption involves much more than just paying bribes, and the CPI struggles to distinguish not just between types of corruption, but also their impact and severity.

Another problem is that the CPI approach implicitly sees corruption as ‘one thing’, an indivisible property of political systems that can be summarized through a single number or score, applicable to the whole of a territory.  In practice, though, actual instances of corruption take place in concrete settings and specific places that do not easily map onto the nation state – either because there may be significant variance at local level when dealing with particular sectorial types of corruption, or because of corruption that involves trans-national or cross-border networks.  Every country has regions with a (deserved or undeserved) reputation for significantly higher levels of corruption than average for their country – just think of ‘Donnygate’, a shorthand reference to corruption in Doncaster Council during the 1990s, but hardly representative of local government across the UK.

Also of note is that the index has not changed in any meaningful way since it was first launched. My colleague Jonathan Rose and I recently analyzed this consistency across an eleven-year period, using 2001 scores as the independent variable to predict the 2012 scores.  As can be seen from the figure above, there is a strikingly high degree of consistency between the scores: so strong, in fact, that it hardly makes sense to treat individual years scores are separate evaluations.  This kind of evaluation of perceptions could be done on a five or ten year basis, rather than yearly, with very little loss in precision – leaving aside the question of what it actually tells us.

The Ugly: perhaps the most telling criticism of the CPI is that it not only acts as a poor guide to policy, but actively creates perverse incentives.  For many years, there has been a prevailing orthodoxy – only now being properly challenged – that the only way to combat corruption is to introduce ‘good governance’, defined in terms of a western model of liberal democracy.  But, although there is increasing understanding that governance is contextual, many international donors and aid agencies have used a country’s ranking in the CPI as a key performance indicator.  Indeed, there is evidence that falls in foreign direct investment in some very poor countries is directly linked to where they stand in the CPI.  As aid becomes increasingly conditional on the adoption of western-defined measures to combat corruption, so those countries with the least resources to implement ‘good governance’ stand to suffer most from the withdrawal of precisely the support they need to stand any realistic chance of tackling corruption.  Alongside a poverty trap, we may now be witnessing the emergence of a ‘corruption trap’ in which, once corruption becomes systemically embedded, it may be virtually impossible for countries to secure the kind of aid that could help them put in place policies to promote the very development that is supposed to provide the best protection against corruption.

Paul Heywood is Sir Francis Hill Professor of European Politics, Faculty of Social Sciences, University of Nottingham. He is also Programme Leader of the BA/DFID Anti-Corruption Evidence partnership.