Tag Archives: Corruption Perceptions Index

The Correlation Between Economic Freedom Indexes and Corruption Indexes Tells Us Nothing

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Anticorruption advocates often argue that the fight against corruption is not just about strengthening systems for detecting and punishing corrupt behavior, but about implementing broader systemic reforms to policies and institutions that create the conditions in which systemic corruption is more likely to take hold. That advice is sound as far as it goes—but the challenge then becomes identifying those policies and institutions that have this “corruptogenic” character. One prominent hypothesis in this vein is that corruption thrives in environments where there is a lack of “economic freedom”—where the government plays an outsize role in the economy, imposes lots of burdensome regulations on private enterprise, does not provide effective protection for private property and contract rights, and generally restricts economic activity. This idea (which is perhaps especially attractive to those who favor a limited government role in the economy for other reasons) is certainly plausible. But is it true?

Proponents of the idea that a lack of economic freedom leads to more extensive corruption can point to a substantial body of cross-country research that purports to find a strong negative correlation between economic freedom and corruption. Most of this research measures (perceived) corruption using one of the familiar international indexes, most commonly Transparency Internationals’ Corruption Perceptions Index (CPI). The research in this vein also measures “economic freedom” using indexes produced by NGOs—the most widely-used of which is the Heritage Foundation’s Index of Economic Freedom (IEF), which aggregates a number of variables thought to be related to economic freedom, grouped into four different categories (rule of law, limited government, regulatory efficiency, and open markets). Numerous studies have found a strong and statistically significant correlation between the IEF and the CPI, and treated this as strong evidence that a lack of economic freedom is at the very least associated with, and most likely causes, more widespread corruption (see here, here, here, here, here, and here).

Unfortunately, these results tell us precisely nothing. Put aside the standard admonition that we can’t infer causation from correlation. Put aside the concern that “economic freedom” may not be a coherent concept, and that the Heritage IEF aggregates a large number of disparate factors. And put aside worries about whether these studies control for potential additional variables that might influence both corruption and economic freedom. The fatal flaw in drawing any inferences at all from the correlation between the IEF and the CPI is in fact much more straightforward: Continue reading →

The Case for Including Sextortion Measures in TI’s CPI

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In a recent post, I called for the creation of an international index of sexual corruption. While I believe that such an index will have an effect standing alone, I also believe that such an index, once created, should be included as one of the sources used to construct composite indexes such as Transparency International’s Corruption Perceptions Index (CPI). As most GAB readers are likely aware, the CPI is does not reflect TI’s own independent assessment of corruption perception, but rather aggregates corruption perception measures from a range of other sources. These other sources, however, all measure perceptions of monetary corruption, such as bribery and embezzlement. But, as TI itself acknowledges, sexual corruption may not correlate well with other forms of corruption, meaning that an index like the CPI may give us an incomplete and misleading picture.

The exclusion of sexual corruption is not TI’s fault; there are currently no global comparative measures of perceptions of sexual corruption for TI to incorporate. Indeed, this gap is precisely why I advocate the creation of an international sexual corruption perceptions index. Of course, even if such an index is created, it would be a separate question whether the results ought to be included in the CPI. I believe it should be.

Continue reading →

Measurement Brings Action: The Need for a Global Sexual Corruption Index

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Sexual corruption is a scourge, to varying degrees, in almost every country–from immigration officials demanding sex for green cards, to U.N. soldiers using their power to force themselves on refugees or the local population they are supposed to be protecting, to police officers who demand sex in exchange for not arresting someone. The International Association of Women Judges has been trying to bring attention to this “sextortion” problem, with some limited success: Transparency International (TI) describes sextortion as a form of corruption, and last September’s International Anti-Corruption Conference devoted a high-profile session to discussing this issue.

Yet despite this increasing recognition that this sort of sexual corruption is indeed corruption–the abuse of public power for private gain–the major international indexes used to measure corruption, such as TI’s corruption perception index (CPI) (and the underlying studies used to generate the CPI), focus overwhelmingly on material corruption–principally monetary bribery and embezzlement–not the abuse of public power to extort sexual favors from victims. This is a problem: As we have seen over and over again (both in the corruption context, and in other contexts such as the Millennium Development Goals (MDGs)), for better or worse, national-level country ratings drive action. Right now, a country that wishes to improve its global standing on corruption currently has little incentive to tackle sexual corruption. And there is no separate, easy-to-understand metric that calls attention to how well (or poorly) countries are doing, relative to one another, in addressing that problem.

It is time for that to change. It is time to create a Global Sexual Corruption Index. Continue reading →

The 2015 CPI and Year-to-Year Changes: A Definite Improvement, But Problems Remain

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As most people who follow this blog are likely aware, Transparency International released the 2015 Corruption Perceptions Index (CPI) last week. There is, of course, a lot to talk about here, and I’m sure many commentators and scholars will spend a lot of time poring over the new data and debating its significance. Given my previous criticisms of the CPI’s suggestion that scores for the same country can be compared across time (see here, here, here, and here), that was naturally the first thing I focused on. I was hoping that TI might take up some version of my suggestion to report statistical confidence intervals in an easy-to-see place in the main data table, or, even better, test for statistically significant changes in scores across years. Alas, TI didn’t do either of those things. (The confidence intervals are still available, but you have to download the data to find them.) TI did, however, report that since 2012, some countries had improved, while others had deteriorated. In particular, TI noted three countries (Greece, Senegal, and the UK) had improved their CPI scores since 2012, while five countries (Australia, Brazil, Libya, Spain, and Turkey) had seen a notable worsening.

Because of last year’s fiasco with China (where TI emphasized a decline in China’s CPI score that turned out to be bogus), I was initially skeptical. So, I went ahead and implemented the procedure that I outlined in my post from a few months ago to see whether, for these eight countries, there really was a genuine, statistically meaningful change in the CPI score. I was pleasantly surprised to discover that in all eight of the countries that TI identified, the change in the CPI score between 2012 and 2015 was indeed statistically significant at conventional levels, and do not seem to have been driven by the addition or subtraction of sources in the later year, or by a large anomalous jump in a single source. (Though it’s perhaps worth noting that in the case of Brazil – which TI particularly emphasizes in its press release – the change is just barely significant at conventional levels, and of the seven sources used to construct the score, although four indicate moderate to large declines, two show no change and one actually rates Brazil as improving slightly from 2012 to 2015.) So, while I still have a number of criticisms (about which more below), I’ll gladly give credit where credit is due: In this year’s publicity materials, TI has indeed identified countries where there is statistically significant change in CPI scores, generally driven by changes in several of the underlying data sources. I hope that in future years, TI will go further (and save me some time) by simply including in the main data table not only the confidence interval for the current year, but also a simple three-category indicator (up, down, null) for whether there has been a statistically significant change in the CPI in the past three years. (This is important because of the way the CPI is covered by mainstream journalists: Though researchers might dig into the data tables, most journalists or casual readers just look for year-to-year changes.)

Now, I did say I still had some concerns, so in the interest of continued constructive engagement, let me lay out why I still don’t think we should treat within-country year-to-year changes in CPI scores as terribly meaningful: Continue reading →

Political Finance Regulation and Perceived Corruption: Some Preliminary Exploration

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Corruption is closely linked to problems associated with money in politics. Indeed, some have argued that an excessive/inappropriate influence of money on elections is corruption (even if it’s not necessarily illegal or currently viewed as unethical). Even for those who (like me) prefer a more restrictive definition of “corruption,” it is widely believed that these issues are related. Many hypothesize that countries with weak or ineffective systems of political finance regulation may experience higher levels of corruption—though at the same time excessively onerous, unrealistic regulations on political spending may also induce corruption in order to circumvent the official rules. Perhaps surprisingly, though, we do not have (or at least I have not yet seen) very much quantitative, comparative research on the relationship between the quality of countries’ laws on the regulation of political finance, on the one hand, and the extent of their corruption problems, on the other.

This may be starting to change, thanks in part to initiatives like the Money, Politics and Transparency (MPT) forum (a collaborative venture of the Sunlight Foundation, Global Integrity, and the Electoral Integrity Project). A few weeks back Rick posted a highly critical assessment of MPT’s volume Checkbook Elections, a collection of qualitative case studies. I haven’t yet read that report, but here I wanted to focus on another aspect of MPT’s work: a quantitative index that purports to measure how well 54 different democratic countries regulate political finance, based on responses to 50 survey questions in five different categories (public funding of elections, contribution and expenditure restrictions, reporting and disclosure, regulation of third-party actors, and monitoring/enforcement). The surveys include questions about both law and practice in all five categories; moreover, in addition to a composite index score, MPT also provides separate scores for the quality of electoral regulation both “in law” and “in practice.” (A detailed description of the methodology is available here.) All the usual caveats and concerns regarding these sorts of composite indexes of course apply here, but at first pass this seems like a useful resource, and potentially helpful in teasing out the relationships between political finance regulation and corruption more generally.

Real progress on this will front require careful research design, more extensive data, and the application of rigorous empirical methods—an enterprise for which I lack both the time and the talent. But just for fun, I played around a bit to see how the MPT index (and each sub-index) correlates with the 2014 Transparency International Corruption Perceptions Index (CPI). Are countries with better regulation of political finance (in law, in practice, or overall) perceived as more corrupt? Less corrupt? I’ll tell you what I found after the break, but just for fun take a guess now, before you know the answer!

OK, here’s what I found: Continue reading →

A Quick (Partial) Fix for the CPI

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A regular readers of this blog know, I’ve been quite critical of the idea that one can measure changes in corruption (or even the perception of corruption) using within-country year-to-year variation in the Transparency International Corruption Perceptions Index (CPI). To be clear, I’m not one of those people who like to trash the CPI across the board – I actually think it can be quite useful. But given the way the index is calculated, there are big problems with looking at an individual country’s CPI score this year, comparing it to previous years, and drawing conclusions as to whether (perceived) corruption is getting worse or better. Among the many problems with making these sort of year-to-year comparisons is the fact the sources used to calculate any individual country’s CPI score may change from year to year, and the fact that a big, idiosyncratic movement in an individual source can have an outsized influence on the change in the composite score. (For more discussion of these points, see here, here, and here.) Also, while TI does provide 90% confidence intervals for its yearly estimates, the fact that confidence intervals overlap does not necessarily mean that there’s no statistically significant difference between the scores (an important point I’ll confess to sometimes neglecting in my own prior discussions of these issues).

Although there are lots of other problems with the CPI, and in particular with making over-time CPI comparisons, I think there’s a fairly simple procedure that TI (or anybody working with the TI data) could implement to address the problems just discussed. Since TI will be releasing the 2015 CPI within the next month, I thought this might be a good time to lay out what I think one ought to do to evaluate whether there have been statistically significant within-country changes in the CPI from one year to another. (I should say up front that I’m not an expert in statistical analysis, so it’s entirely possible I’ve screwed this up in some way. But I think I’ve got the important parts basically right.) Here goes: Continue reading →

How I Learned To Stop Worrying and Love SDG 16

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A few weeks back, I posted a skeptical commentary about the integration of anticorruption into the new Sustainable Development Goals and associated targets, in particular Target 16.5 (“substantially reduce corruption and bribery in all their forms”). Rick was even harsher. The premise of most of my criticism (and Rick’s) was that progress on Target 16.5 was likely to be measured using changes in countries’ scores on Transparency International’s Corruption Perceptions Index (CPI). It turns that this premise was (probably) incorrect.

I had based my assumption on the lengthy report released last June by the Sustainable Development Solutions Network (SDSN)—a report which had been commissioned by the UN’s Inter-Agency Expert Group on SDG Indicators (IAEG-SDG). But as Transparency International Senior Policy Coordinator Craig Fagan helpfully pointed out in his comment on Rick’s post, the more recent official information released by IAEG-SDG in September 2015 does not indicate that the CPI will be used as the principal measure for Target 16.5. Rather, the IAEG-SDG document lists as the proposed indicator the “percentage of persons who had at least one contact with a public official, who paid a bribe to a public official, or were asked for a bribe by these public officials, during the last 12 months.” (The relevant material is on page 225.) This still isn’t finalized, but it certainly appears that the IAEG is poised to endorse an experience/survey-based measure for Target 16.5, rather than the CPI-style perception index.

Is this perfect? No, certainly not. But it’s a lot better than what I’d feared. A few further thoughts on this: Continue reading →

Sustainable Development Goal 16: Am I the Only One Who Thinks It Is a Major Setback in the Fight Against Corruption?

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Last week Matthew asked if he were the only one who wasn’t excited about Sustainable Development Goal 16.   At first glance it is hard to understand why he would ask such a question.  One of 17 goals approved September 25 by the United Nations General Assembly to end poverty by 2030, SDG 16 establishes an ambitious agenda for improving the way the nations of the world govern their citizens by, among other measures, requiring concerted global action to “substantially reduce corruption and bribery in all their forms.”  How could anyone, particularly one who works on corruption issues, not be ecstatic that the 193 member-states of the United Nations unanimously endorsed this objective? And indeed numerous anticorruption advocates have already celebrated its approval (click here for Transparency International’s enthusiastic endorsement).

Although the opening of Matthew’s post was low-key (am I the only one not excited?), readers quickly learned that he was in fact severely critical of SDG 16’s corruption and bribery target because of the way progress towards realizing it is to be measured: by changes in a nation’s score on Transparency International’s Corruption Perceptions Index.  Matthew nicely summarized why this is insane on technical grounds.  Here I explain why using the CPI to measure progress is not only insane but represents a major setback in the fight against corruption. Continue reading →

Am I the Only One Who’s Not So Excited About SDG 16?

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This Friday, over 190 world leaders are scheduled to gather at the UN headquarters in New York City for the UN Sustainable Development Summit to endorse a new set of “Sustainable Development Goals” (SDGs) to be achieved over the next 15 years. The SDGs are a follow-up to the Millennium Development Goals (MDGs), but the SDGs are much more expansive and cover a wider range of topics. Most relevant to the anticorruption community is Goal 16 (“Promote Peaceful and Inclusive Societies for Sustainable Development, Provide Access to Justice for All and Build Effective, Accountable and Inclusive Institutions at all Levels”), and in particular SDG “Target” 16.5 (“substantially reduce corruption and bribery in all their forms”).

There seems to be a lot of excitement among anticorruption activists and reformers about Goal 16 and Target 16.5 (see here, here, and here)—but to be honest, I’m not sure why. Indeed, I tend to think that the formal endorsement of anticorruption as part of the SDGs will do little good, and the inclusion of Target 16.5 might, if anything, be counterproductive. Continue reading →

More Flagrant Abuse of CPI Numbers by People and Outlets that Should Know Better

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As regular readers of this blog know, I’ve been (figuratively) pounding my fists on the table for a while now about various misuses and misinterpretations of Transparency International’s Corruption Perceptions Index (CPI), particularly in the context of misleading year-to-year comparisons (see here, here, here, here, here, and here). Perhaps I’m overemphasizing a relatively small issue, but it seems that the problem just won’t go away.

Case in point: A piece in last Friday’s New York Times by Carol Giacomo – a member of the New York Times’ editorial board – on recent developments in Indonesia. Most of the piece is a perfectly fine discussion of recent troubling events involving conflict between the Indonesian anticorruption agency (the KPK) and the Indonesian police.  But near the end, in discussing the broader implications of recent events for anticorruption efforts in Indonesia, Ms. Giacomo writes:

Transparency International, which annually rates countries on corruption in their public sectors, says Indonesia has improved its performance on the organization’s “corruption perception index” from 1.9 in 2003 to 34 in 2014[.]

Almost everything about that statement is flawed. Continue reading →