The Corruption Perception Index

In simple definition “Corruption Perception Index” or CPI is a ranking of countries according to the extent to which corruption is believed to exist. This index was created by Transparency International in the year 1995 that annually ranked countries “by their perceived levels of corruption, as determined by expert assessments and opinion surveys.” The CPI currently ranks 200 countries on a scale from 100 (least corrupt) to 0 (highly corrupt).

What is Corruption?

The Index defines corruption as “”the misuse of public power for private benefit.” There are generally different forms of corruption that include bribery, extortion, nepotism, cronyism, patronage, graft, and embezzlement. This may also facilitate criminal enterprise and activities such as drug trafficking, money laundering, and human trafficking. Misuse of government power for other purposes, such as repression of political opponents and general police brutality, is also considered political corruption.

The birth of Transparency International

Corruption has always been a topic of debate and taboo. History shows that with the birth of modern politics, corruption in many countries has becoming one of the major reasons for economic and political downfall. In the 1990s for example, many companies regularly wrote off bribes as business expenses in their tax filings, the graft of some longstanding heads of state was legendary, and many international agencies were resigned to the fact that corruption would weaken funding from many development projects around the world.

There was no global convention aimed at curbing corruption, and no way to measure corruption at the global scale.

In the year 1993, after witnessing the impact of corruption during his work in East Africa, retired World Bank official Peter Eigen, together with nine associates, set up an organization to tackle the topic of corruption: Transparency International was established with a Secretariat in Berlin, the recently restored capital of a reunified Germany.

Public Sector corruption is threatening Economic growth:

Inadequately equipped schools, fake medicine and elections decided by money are just some of the consequences of public sector corruption. Bribes and backroom deals don’t just steal resources from the most vulnerable – they weaken justice and economic development, and destroy public trust in government and leaders.

Here is the corruption Index for 2014:

In the year 2007- 2008 a research was conducted on the CPI data and the results were the following:

The researchers found a correlation between a higher CPI and higher long-term economic growth, as well as an increase in GDP growth of 1.7% for every unit increase in a country’s CPI score. Also shown was a power-law dependence linking higher CPI score to higher rates of foreign investment in a country.

The data provided by the Corruption Perception Index and other international bodies clearly shows how nations are ranked and/or compared on a common index. It reveals not just the problems but also the percentage and the level of the problem in any country. Measuring corruption statistically is difficult to a certain extent due to the illicit nature of the transaction and imprecise definitions of corruption. However, it is not impossible to measure and compare these numbers and it is about time nations around the globe took notice of this index.

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