What Is the Corruption Perceptions Index (CPI)?

The Corruption Perceptions Index (CPI) is an index that scores countries on how corrupt their governments are believed to be. The CPI is published by Transparency International, an organization that seeks to stop bribery and other forms of public corruption. A country's score can range from zero to 100, with zero indicating high levels of corruption and 100 indicating low levels. Transparency International launched the index in 1995, and today it scores 176 countries and territories. It is published annually.

Key Takeaways

  • The Correction Perceptions Index scores countries on levels of corruptness.
  • The methodology for measuring CPI is based on selecting source data, rescaling source data, aggregating the rescaled data, and a statistical measure indicating the level of certainty.
  • Low CPI ranking indicates a high level of corruption.

Understanding the Corruption Perceptions Index (CPI)

The Corruption Perceptions Index (CPI) has been measured with different methodologies from year to year, making yearly comparisons difficult. But in 2012, the methodology was modified again, this time to allow for comparisons across time.

According to Transparency International, the new methodology involves four basic steps, including the selection of source data, rescaling source data, aggregating the rescaled data, and a statistical measure indicating the level of certainty. A quality control mechanism is also incorporated into the process. This consists of independent data collection and calculations by two in-house researchers and two independent researchers from academia.

Corruption Perceptions Index Sources

Early in its history, public opinion surveys were used to form the CPI. In 2017, Transparency International used 16 assessments and surveys from 12 institutions as the basis for its country scores. Institutions surveyed and/or assessed included the:

  • African Development Bank
  • World Bank
  • World Economic Forum
  • Economist Intelligence Unit
  • Global Insight
  • Bertelsmann Foundation
  • International Institute for Management Development
  • The PRS Group, Inc.
  • World Justice Project
  • Political and Economic Risk Consultancy
  • Freedom House

In order to appear in the CPI, a country must be assessed by no less than three sources. Sources must document their data collection methods and measurement approach, and Transparency International assesses the quality and adequacy of these methodologies. If data is collected via a business survey, for example, Transparency International will assess whether the survey's sample size is large enough to be representative.

Economic Impact of Corruption

According to a publishing in 2002 in the Journal of Business Ethics, countries and territories that have low CPI rankings (and therefore high corruption) also have what the study authors called an overabundance of regulation and a thriving black market. Countries or territories with a high real gross domestic product per capita (RGDP/Cap) also had a high CPI ranking (and therefore low levels of corruption).

Studies published in 2007 and 2008 in The European Physical Journal found that countries and territories with higher CPI rankings were more likely to experience more long-term economic growth and that they experienced GDP increases of 1.7% for every point added to their CPI score. The higher a country or territory’s CPI ranking, the higher that state’s rates of foreign investment. Therefore, corruption has been found to have a negative impact on a nation or territory’s economy.

CPI Rankings

Countries with the lowest perceived rates of corruption include Denmark (88), New Zealand (87), and Finland (85). Countries with high perceived rates of corruption Somalia (10), South Sudan (10), and Syria (13). The United States scored 71 on the CPI in 2018.