A Flawed Index

Context: While Transparency International’s (TI) first Corruption Perception Index (CPI) released in 1995 was a bold initiative; it falls short of nudging governments to undertake reforms.

Issues with Corruption Perception Index (CPI): released by Transparency International since 1995.

• Lack of representativeness: Since 2002, it uses only expert assessments and surveys of business people, excluding the public's surveys. This results in
  • Sample bias: in favour of business elite (often beneficiary of corruption).
  • Ignorance of interests of “unofficial businesses”: employing the majority of the poor population.
• Fails to capture cultural nuances: For instance, foreign businesspersons may regard Diwali gifts as acts of corruption customary for local businesspersons, without a corresponding quid pro quo.
• Narrowly defines corruption as bribe-taking: and does not distinguish between corrupt acts, such as nepotism, patronage, administrative and political corruption, or state capture by major private interests.
• Exclusion error: The CPI requires a minimum of three surveys per country, resulting in many countries' exclusion. Forex: in 2003, 58 United Nations member countries were not included.
• Irregularity (countries drop in and out): makes the ranking order irrelevant. For example, India ranked 35th (out of 44) in 1995 and 95th (out of 180) in 2011.
• Concerns with integrity score (out of 10): Fails to capture a country’s performance year-on-year basis as score also changes based on changes in samples and methodology.
• Perceptions often based on media reports rather than personal experiences: For instance, India’s scores on the CPI plummeted in 2011, the year of the unearthing of major corruption frauds.
• Measures perceptions and not actual incidences of corruption: In 2017 GCB, 41% of Indians thought that corruption had increased, whereas 63% actually paid a bribe in the preceding 12 months.

Conclusion: The CPI generates short-lived hype/hysteria but rarely prompts a Pygmalion effect and will be meaningful when understood in the national context and alongside other indices such as Global Corruption Barometer, Press Freedom Index, and Rule of Law Index etc.