An incomplete corruption measure

The manner in which the TI constructs its CPI remains problematic.

Transparency International (TI) released its Corruption Perceptions Index (CPI) for 2013 earlier this week. While corruption remains a worldwide phenomenon, it is no surprise to see misgoverned, poor and so-called ‘developing countries’ such as Afghanistan, North Korea and Somalia being ranked as the world’s most corrupt countries on this latest index. Pakistan’s ranking has, however, improved significantly in the current year’s TI corruption ranking.

Pakistan’s move up by 12 places to rank 127 out of the 177 countries in the list is being hailed as an indication of improved transparency and accountability of our new provincial and federal governments. While any positive news concerning Pakistan is welcomed at the moment, personal aspirations must be put aside while assessing the relevance of the TI’s annual corruption assessment.

TI is a Berlin-based non-profit group, with country-based chapters in over a 100 countries, including Pakistan. TI has been producing a corruption perception index since 1995, which has become widely used as an indicator of corruption amongst international think tanks and development agencies.

Because of the update in its methodology last year, CPI assessments before 2012 are not comparable over time. Yet, TI has done much to persistently highlight the problem of corruption and has acknowledged it as a major cause for the poor in developing countries remaining stuck in a poverty trap. Preventing corruption is indeed vital to improve governance and economic performance and to also help overcome widespread economic disparities between the haves and have-nots.

TI points out that identifying corruption is a problem, given that it is illegal and often takes place secretively, which poses problems in terms of meaningfully measuring it on a global scale. However, the manner in which the TI constructs its CPI, however, remains problematic.

TI justifies the use of the CPI which is primarily an index ranking perceptions of corruption rather than its actual prevalence. The CPI is thus based on a collation of views of a narrow range of experts and it relies on data sources provided by a limited number of institutions. Typically, the institutions and experts consulted by the TI have corporate backgrounds and business climate assessment expertise. Also, the CPI primarily focuses on perceptions concerning public sector corruption within different state institutions including political parties, the police, justice systems and civil services. The CPI does not, however, take account of the activities of the private sector local and international businesses.

The rather myopic approach of the CPI, thus, does little to demonstrate the complicated inter-linkages which in effect sustain widespread corruption across the world. TI possesses the means for widening its analysis beyond the CPI given that the entity has also formulated other products such as the ‘Bribe Payers Index’ which focuses on the supply side of corruption based on surveys of business executives concerning their views of the business practices of foreign firms within their countries.

TI needs to combine its varied products to develop a more holistic index which can draw correlations between malpractices within the public sector, and its interaction with private and foreign capital, in order to provide a fairer and more legitimate measure concerning the global problem of corruption.

Published in The Express Tribune, December 6^th, 2013.

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