Recently, the European Centre for Anti-Corruption and State Building and the Center for International Private Enterprise released a “new free corruption analysis tool” called the Corruption Risk Forecast (CRF) which uses a term “Index for Public Integrity” (IPI) to rank certain countries.
According to this post, “the CRF relies on 30 fact-based indicators directly linked to observed sources instead of subjective coding of non-numerical data, which varies from year to year. The data used in the CRF is granular and comprehensive, spanning from the accessibility of land or business ownership information to the online disclosure of government mining concessions.”
That sounds pretty sophisticated.
However, my response to the CRF is similar to my response to other supposed measures or perceptions of corruption: does anyone really care and does one really need a formula or indicators to tell you things you probably already know?
For starters, some things are worth measuring or quantifying and can reasonably be measured or quantified.
Yet, there seems to be an obsession in some circles about measuring all things even if the issue sought to be measured or quantified is nearly impossible to do so.
To its credit, the CRF recognizes this as it is noted:
“We cannot easily measure either corruption or public integrity directly in ways comparable across countries (except by very expensive surveys), and the measurement tells us little about which the factors are enabling corruption and discouraging public integrity. Thus, we resort to measuring the different elements of context which interact to create the capability (or lack of) a society to control corruption.”
In my mind, end of story.
Yet, some persist using sophisticated language.
“The Index of Public Integrity (IPI) identified proximate measures for factors identified in research as impacting corruption risk for 114 countries for which data is available and not controversial (after removing China, Saudi Arabia and Azerbaijan). It is a composite index consisting of six components. They are:
- administrative burden, trade openness and budget transparency (2015, 2017 and 2019 editions)
- judicial independence, e-citizenship and freedom of the press.
Starting from the 2021 edition, administrative burden and trade openness have been replaced by administrative transparency and online services, due to unavailable alternative data to the original components (based on the World Bank Doing Business project, which closed).”
As to how the different components were constructed:
“In the current version, five of the components (budget transparency, administrative transparency, online services, judicial independence, freedom of the press) each rely on a single data source. Those components’ scales were standardized by constructing the so-called z-score of the variable, in order to equalize their mean values and standard deviations. For budget transparency, the mean score for the individual items considered was extracted and then standardized; administrative transparency in turn consists of the sum of four individual components from the Transparency Index, which was then similarly standardized into z-scores. The final component, e-citizenship, is the only one based on different data sources. Its individual sub-components were standardized separately and then averaged.
Every final component score was then normalized to range between 1 and 10 using a min-max-transformation with higher values representing better performance in this issue area. The overall IPI was finally derived by the equally weighted average of all components.”
The end result of this sophisticated talk is likely telling you something you already knew.
For instance, Denmark (#1 in the IPI with a score of 9.62) is better than Mexico (#54 in the IPI with a score of 6.45) and Mexico is better than Yemen (#113 in the IPI with a score of 2.43).
Even though the CRF touts itself as being different and better than other measures of actual or perceived corruption, does it really tell a different story?
No, not in any meaningful way.
For instance, Denmark is #1 in the IPI and #1 in Transparency International’s Corruption Perception Index (see this prior post for why compliance professionals should also take the CPI with a grain of salt).
Likewise, Switzerland is #7 in the IPI and #7 in the CPI.
Japan is #18 in the IPI and #18 in the CPI.
Because the IPI measures 114 countries and the CPI measures 180 countries, there are some numerical differences in the middle and bottom of the respective measures, but then again who really cares.
For instance, Yemen is the second “worst” country in the IPI and the 5th “worst” country in the CPI even though in the IPI it is #113 and in the #174 in the CPI.