Corruption Perception Indices: A Comparative Analysis

The empirical literature on corruption has used data on corruption from three different sources: (i) investigative reports, (ii) newspapers, and (iii) surveys or questionnaire-based data. Some studies on corruption are based on case studies and newspaper reports. Studies by Wedeman (1997); Wade (1982) and Alam (1996) fall in this category. While these studies have presented an in-depth analysis of corruption, they do not examine a large sample of countries. Moreover, the investigative reports require detective work and sometimes connections with people in high echelons in order to expose corruption. Unlike investigative reports, access to survey data on corruption enables researchers to study corruption for a large sample of countries, but at the same time, raises questions about their subjectivity.1 However, the subjectivity of these indices is often justified on the ground that corruption is illegal in nature, and hard to measure directly. Empirical studies on the causes of corruption after the mid-1990s have used several corruption indices from Business International, International Country Risk Guide, Peter Neumann and his collaborators at Impulse, Transparency International, and World Competitiveness Report. More than one corruption index has been used in most of these empirical studies. For example, Ades and Di Tella (1997) used corruption indices from WCR and Peter Neumann and his collaborators at Impulse (1994). Treisman (2000) recently utilised four corruption indices: three from Transparency International (1996 to 1998) and one from Business International. While empirical literature on the causes of corruption using these indices continues to surge, it is imperative carefully to examine what exactly these indices portray.