A Flawed Index

The Indian Express     25th February 2021     Save    
QEP Pocket Notes

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.

            QEP Pocket Notes