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A Better Corruption Index
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The most well known index of corruption is Transparency International’s Corruption Perceptions Index. However, as I have frequently pointed out, it has a lot of problems. The biggest one lies in its very name – perceptions are not necessarily equal to reality, even – or especially – if they come from a narrow class of self-appointed political and economic “experts” whom Transparency International queries when compiling the CPI.

In an attempt to remedy this, back in 2011 I compiled the Corruption Realities Index 2010 on the basis of objective measures of corruption such as the percentage of people who said they had paid a bribe in the past year, the results of blind reviews of national laws and regulations on corruption, and measures of budget transparency. Some countries, such as Italy (more corrupt than Saudi Arabia according to the CPI) and Russia (more corrupt than Zimbabwe according to the CPI) considerably improved their standings in the CRI relative to the CPI.

Now along comes a new index of corruption, or more precisely, of “a society’s capacity to control corruption and ensure that public resources are spent without corrupt practices.”

The iPi is based on the following six factors:

  • Judicial Independence
  • Budget Transparency
  • Administrative Burden
  • Trade Openness
  • E-Citizenship
  • Freedom of the Press

The first two factors seem to be the two that have the most to do directly with corruption. The second two are more incidental, though it is true that fewer regulations c eteris paribus results in lower corruption. Although one can see how e-citizenship is an extension of deregulation, in practice the particular measures used for it – such as the number of Facebook users as a percentage of the population (!) – is actually of highly questionable value. What are you going to do, report corruption on Facebook? And what if you use Twitter or Vkontakte instead? Although in principle Freedom of the Press should be a powerful tool in the battle of corruption, ratings are drawn from Freedom House which is just as subjective as the CPI (i.e., completely) and even more politicized, which makes this particular subcomponent totally useless.

The need for a truly objective measure of corruption realities remains.

Here is how this Index of Public Integrity (iPi) tallies up versus the CPI as of 2015 in terms of country percentile rankings:

cpi-ipi-2016

That said, the iPi, unlike the CPI, is based on significantly more objective/data-based measures, and unsurprisingly, both Italy and Russia (as I intuited) are some of the biggest relative improvers. This goes to support my longstanding arguments that in terms of corruption although Russia is an underperformer within Europe it is also not particularly bad at a global level, being around the average for middle-income countries, transition countries, and fellow BRICS countries, and nowhere near the “Zaire with Snow” outlier it is frequently portrayed as in the Western media.

China does considerably worse here on the iPi than the CPI. As an authoritarian country with a lot of economic regulations and telephone justice that stands to reason, though one might think that having the death penalty on the books constitutes a considerably greater “capacity to control corruption” than the absence of Facebook. The incidence of bribery polls indicate that low-level corruption in China is now actually quite rare for a country at its developmental level.

 
• Category: Economics • Tags: Corruption, Russia 
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  1. 5371 says:

    Reminds me of finding the only part of Randolph Churchill that was not malignant and extracting it. They took a measure that no change could possibly make anything but better and made it worse.

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  2. I’d personally think Hungary was worse than Slovakia, though the two are close and so the difference could be noise.

    But is South Africa really better than both?

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    But is South Africa really better than both?
     
    Of course it is not. Apart from being a basket case economically and crime-ridden, it has a very deserved reputation for being one of the most corrupt places in the world. It is not getting better.
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  3. Andrei Martyanov [AKA "SmoothieX12"] says: • Website
    @reiner Tor
    I'd personally think Hungary was worse than Slovakia, though the two are close and so the difference could be noise.

    But is South Africa really better than both?

    But is South Africa really better than both?

    Of course it is not. Apart from being a basket case economically and crime-ridden, it has a very deserved reputation for being one of the most corrupt places in the world. It is not getting better.

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  4. Odd that Japan is missing from the iPi. And Australia. Also Taiwan, Singapore, and Hong Kong.

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  5. Ivy says:

    When elements of the press are part of the corruption, how does that get reflected in the index? The recent AP election eve story demonstrated that some of the Fourth Estate (e.g., NY Times, LA Times) are Fifth Columnists, as if that wasn’t already assumed by many. There is a role for the internet to continue the First Amendment and its analogues around the world.

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  6. Immigrant from former USSR [AKA "Florida Resident"] says:

    Attributing some or other deed to “corruption practice” depends on the set of laws.
    The laws that allow financial speculators to go essentially unpunished and bailed out,
    in a more primitive society would be considered as corruption-allowing.
    In US nobody calls that “corruption”.
    As a result, the corruption index of the USA is good.

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  7. JayMan says: • Website

    Excellent find!

    Though let me tell you how I read it:

    That said, the iPi, unlike the CPI, is based on significantly more objective/data-based measures

    Yes, but the correlation between the two is r = 0.92. That’s pretty damned good agreement. This means that simple perception of corruption is a great gauge of actual corruption.

    (Though a dearth of East Asian countries that would be interesting to compare)

    and unsurprisingly, both Italy and Russia (as I intuited) are some of the biggest relative improvers. This goes to support my longstanding arguments that in terms of corruption although Russia is an underperformer within Europe it is also not particularly bad at a global level

    Dude, Russia is in the lower-left quadrant of the plot. It’s horrendously corrupt no matter how you look at it.

    It’s too bad the East Asian nations are missing. Though I’m glad to have this confirmation of the CPI.

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