Corruption Perception Index - Explained
What is the Corruption Perception Index?
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Table of ContentsWhat is the Corruption Perceptions Index (CPI)?How is the Corruption Perceptions Index Used?How CPI is measured?MethodologyAcademic Research for Corruption Perception Index (CPI)
What is the Corruption Perceptions Index (CPI)?
The Corruption Perception Index (CPI) ranks countries annually according to the corruption levels as seen by risk analysts, entrepreneurs, and normal citizens. The CPI looks into the corruption at public sectors and describes it as misuse of public office for private gains. It goes ahead to refer to it as embezzlement of funds, payment of bribery and making irregular payments. Besides this, it puts into test the solidity and effectiveness of anti-corruption laws.
How is the Corruption Perceptions Index Used?
The Transparency International is a private organization that not only ranks corruption but also fights it both at national and international arena.
How CPI is measured?
The CPI arranges 180 nations based on their level of corruption as recognized to exist between politicians and public officers. This definition is however questioned due to the study that was used for the composition of CPI. Additionally, CPI is a poll research which measures corruption on the scale of 0(very corrupt) to 10(no corruption). This study is mostly conducted in the public sector.
To explain more about IPC 2008, the data from 13 surveys and 11 independent organizations are used to measure the level of corruption in both public and private fields in many countries. This information enables us to rank these countries. In addition to this, TI ensures that the participants meet the highest standards and does their work with much honesty and integrity.
Academic Research for Corruption Perception Index (CPI)
- International validation of the corruption perceptions index: Implications for business ethics and entrepreneurship education, Wilhelm, P. G. (2002). Journal of business Ethics, 35(3), 177-189. The research is concerned with approval of the corruption perception index. It finds a positive link in the three measures of corruption namely Black Market activity, unnecessary restriction of business activity and a CPI based perception. The validity of these 3 measures were derived by finding out a strong relationship with real gross domestic product per capita (RGDP/Cap). The CPI had the most correlation with RGDP accounting for the many distinctions. In conclusion, corruption hinders development and economic growth.
- Measurements and markets: deconstructing the corruption perception index, De Maria, W. (2008). International Journal of Public Sector Management, 21(7), 777-797. This paper is investigating how CPI has, by design manipulated the corruption level of Africa in order to serve Western geo-political interests. This biasness has been as a result of the post colonial impact where there is no good faith when dealing with African nations. To them, Africa should always be painted negatively which confirms how flawed the Corruption Price Index is.
- Corruption and foreign direct investment, Habib, M., &Zurawicki, L. (2002). Journal of international business studies, 33(2), 291-307. This article investigates the effects of corruption on Foreign Direct Investment by analyzing the corruption level in the host country and examination of the absolute distinction in the level of corruption between home nation and host nation. The results indicate how corruption can lead to operational inefficiencies.
- Neo-colonialism through measurement: a critique of the corruption perception index, De Maria, B. (2008). Critical perspectives on international business, 4(2/3), 184-202. The article focuses on the postcolonial framework to prove how Western economies paint Africa as very corrupt in order to satisfy their agenda and interests. It concludes that many findings of the Transparency International (TIs) CPI are normally biased to serve a particular purpose. For this reason, the author proposes a new approach to corruption around two concepts- that corruption cannot be subjected to empirical investigation nor can it be understood outside the experience. Lastly, the role of fighting corruption in Africa is anticipated.
- Measuring corruption: a comparison between the transparency international's corruption perceptions index and the World Bank's worldwide governance , Rohwer, A. (2009). CESifo DICE Report, 7(3), 42-52. This paper is measuring the corruption levels by comparing the transparency internationals corruption perceptions index and the World Banks global governance.
- What do corruption indices measure?, Donchev, D., &Ujhelyi, G. (2014). Economics & Politics, 26(2), 309-331. Some surveys were conducted to establish how corruption influences perception indices. The author finds out that perception indices are influenced by absolute corruption levels and not relative corruption level. Large countries tend not to be very sensitive to both absolute and relative corruption which shows that they are in a better position to understand the distinction amongst those countries with low corruption level compared to those with high levels. Besides this, individual characteristics like age, education or employment status also impact on corruption perception.
- The methodology of the corruption perceptions index 2007, Lambsdorff, J. G. (2007). Internet Center for Corruption Research, http://www. icgg. org/corruption. cpi_2006. html. Accessed, 12. This paper is talking about the methods used to create the perceptions of the corruption index
- How corruption influences foreign direct investment: A panel data study, Egger, P., & Winner, H. (2006). Economic Development and Cultural Change, 54(2), 459-486. The author here is concerned with how corruption affects Foreign Direct Investment. It analyses two concepts of corruption namely helping hand corruption and grabbing hand corruption with the latter having a negative influence of corruption on FDI unlike the former. The study finds out that corruption is a hindrance of FDI in rich countries and not in poor countries.
- The impact of economic freedom on corruption: different patterns for rich and poor countries, Graeff, P., &Mehlkop, G. (2003). European Journal of Political Economy, 19(3), 605-620. The author is concerned with how some elements of economic freedom contribute to corruption. He believes that some elements/regulations deter corruption while others encourage people to engage in corruption. In conclusion, the article summarizes by informing us of a strong correlation between corruption and economic freedom.
- Country-level investments and the effect of corruptionsome empirical evidence, Habib, M., &Zurawicki, L. (2001). International Business Review, 10(6), 687-700. This study was conducted in 111 countries between 1994-1998 to investigate the influence of corruption on both local and foreign investments. The results show that the impact of corruption on local investments is slightly lower compared to its effect on foreign investments. This may be true due to the host countrys policy on corruption and the high level of international openness. In addition to this, some host countries care so much about their reputation which they cannot compromise by allowing corruption to thrive.
- The effect of corruption on Japanese foreign direct investment, Voyer, P. A., & Beamish, P. W. (2004). Journal of Business Ethics, 50(3), 211-224. This paper evaluates the impact of perceived corruption on Japanese foreign direct investment. The results reveal that corruption greatly slows down Foreign Direct Investments in those countries with no proper measures to control corrupt activities. Managers should, therefore, understand the perceived level of corruption in various investment regions before they can take the risk of investing in these markets.