CPI based on 13 external data sources: TI

Transparency International said on Monday that Corruption Perceptions Index (CPI) is compiled at the TI Secretariat in Berlin based on 13 external data sources.

This reply has been received from the TI on a couple of questions sent by this newspaper with respect to current controversy in Pakistan. Pakistan's CPI has declined from 33 to 32 after which the government announced it rejects the result of TI's CPI. The CPI scores and ranks countries/territories based on how corrupt a country's public sector is perceived to be by experts and business executives. It is a composite index, a combination of 13 surveys and assessments of corruption, collected by a variety of reputable institutions including the World Bank. The CPI is the most widely used indicator of corruption worldwide.

According to TI (Pakistan) the data used to evaluate CPI was for the outgoing fiscal year i.e. July 1, 2018 to June 30, 2019. The Imran Khan led coalition government was formed in August 2018, only a month and a half into the period under review. Eight data sources were used to construct the CPI of which change has been witnessed in five whereas it increased in three sources.

However, TI International did not comment on the questions posed by this newspaper namely is TI aware of the controversy on CPI report and has the government of Pakistan contacted TI for clarification?

TI (Berlin) states that CPI aggregates data from a number of different sources that provide perceptions by business people and country experts of the level of corruption in the public sector.

The following steps are followed to calculate the CPI: select data sources- each data source that is used to construct the CPI must fulfill the following criteria to qualify as a valid source: (i) quantifies perceptions of corruption in the public sector; (ii) be based on a reliable and valid methodology, which scores and ranks multiple countries on the same scale performed by a credible institution; (iii) allow for sufficient variation of scores to distinguish between countries; (iv) gives ratings to a substantial number of countries;(v) rating is given by a country expert or business person; and (vii) institution repeats their assessment at least every two years .

CPI 2019 is calculated using 13 different data sources from 12 different institutions that capture perceptions of corruption within the past two years which are as follow: (i) African Development Bank Country Policy and Institutional Assessment 2018 ; (ii) Bertelsmann Stiftung Sustainable Governance Indicators 2018; (iii) Bertelsmann Stiftung Transformation Index 2020; (iv) Economist Intelligence Unit Country Risk Service 2019; (v) Freedom House Nations in Transit 2018; (vi) Global Insight Country Risk Ratings 2018; (vii) IMD World Competitiveness Center World Competiti-veness Yearbook Executive Opinion Survey 2019; (viii) Political and Economic Risk Consultancy Asian Intelligence 2019; (ix) The PRS Group International Country Risk Guide 2019; (x) World Bank Country Policy and Institutional Assessment 2018; (xi) World Economic Forum Executive Opinion Survey 2019; (xii World Justice Project Rule of Law Index Expert Survey 2019; and (xiii) Varieties of Democracy (V-Dem) 2019.

In its written reply, TI states that standardise data sources to a scale of 0-100 where a 0 equals the highest level of perceived corruption and 100 equals the lowest level of perceived corruption. This standardisation is done by subtracting the mean of each source in the baseline year from each country score and then dividing by the standard deviation of that source in the baseline year. This subtraction and division using the baseline year parameters ensures that the CPI scores are comparable year on year since 2012. After this procedure, the standardised scores are transformed to the CPI scale by multiplying with the value of the CPI standard deviation in 2012 (20) and adding the mean of CPI in 2012 (45), so that the data set fits the CPI's 0-100 scale. For a country or territory to be included in the CPI, a minimum of three sources must assess that country. A country's CPI score is then calculated as the average of all standardised scores available for that country. Scores are rounded to whole numbers.

One of the representatives of TI (Pakistan) told Business Recorder that some media persons' observation about the data is totally unfounded adding that scores of several countries have increased and decreased. He said, ranking of Malaysia has improved six points after Dr. Mahathir took over power.