Transparency International, TRACE International
Release Corruption Risk Rankings
China and India Continue To Be Perceived as Locations of
Significant Corruption Risk
December 2014
Anti-Corruption
Data from two corruption assessment tools was published in November and December.
Transparency International released its 20th annual Corruption Perceptions Index on December
3, 2014, which ranks countries by their perceived levels of public-sector corruption. On
November 11, 2014, TRACE International introduced a new corruption assessment tool, ranking
countries based on business bribery risk. These two assessments are distinct tools for
understanding and responding to various aspects of corruption and bribery risk around the
world.
Transparency International Releases 2014 Corruption Perceptions
Index
On December 3, 2014, Transparency International (“TI”) released its 20th annual Corruption
Perceptions Index (“CPI”), which ranks countries by their perceived levels of public-sector
corruption. 1 The latest CPI figures show that China continues to be perceived as a jurisdiction
of significant corruption risk, with a score of 36 out of 100 (where 0 represents most corrupt and
100 represents least corrupt). This score represents a drop of 4 points since last year, despite
the Chinese government’s high-profile campaign against corrupt public officials.
China ranks in the bottom half of the 175 countries surveyed, with 99 countries perceived as
less corrupt. According to the CPI, China is perceived to be of comparable corruption risk as
Algeria and Suriname. India is perceived to be slightly less corrupt, with a score of 38. As
shown by the table below, other jurisdictions in Asia Pacific range from New Zealand (91),
Singapore (84), Australia (80), and Japan (76) to Indonesia (34), Vietnam (31), Bangladesh
(25), and Cambodia (21). Although some countries in the region have marginally higher or
lower CPI scores than in the previous year (most notable being China’s decline), the 2014
report does not reflect substantial changes in the Asia Pacific Area on the whole. An interactive
global map can be found here.
Most of the data and much of the language that appears in the following sections can be found on the
“Results” and “In Detail” web pages of Transparency International’s 2014 Corruption Perceptions Index
website.
1
www.cov.com
Anti-Corruption
CPI Methodology
The CPI scores and ranks countries based on expert opinions as to how corrupt their public
sectors are perceived to be. It is a composite index, constructed from a combination of 12
surveys and assessments of corruption that 11 independent institutions have collected over the
past year. In addition to TI itself, these institutions include the World Bank, the World Economic
Forum, the World Justice Project, the Economist Intelligence Unit, the African Development
Bank, the Bertelsmann Foundation, Political and Economic Risk Consultancy, Political Risk
Services International, Global Insight, and Freedom House. The China data is based on 8 and
the India data is based on 9 of these sources. All sources measure the overall extent of
corruption (frequency and/or size of bribes) in the public and political sectors, and all sources
provide a ranking of countries.
Notably, the CPI is based only on perceptions of corruption. Because corruption is almost
always illegal and thus hidden, it is difficult to measure the absolute level of corruption in a given
jurisdiction. Attempts to do so would be more likely to show how effective prosecutors, the
courts, or the media are in investigating or exposing corruption. Thus, capturing perceptions of
corruption of those in a position to offer assessments appears to be the most reliable method of
comparing relative corruption levels across countries.
In 2012, TI updated its CPI methodology to “better capture changes in perceptions of corruption
over time” in individual countries. The new methodology uses only the raw scores given to each
country, and then converts these raw scores to fit the CPI scale. As a consequence of this
update, it is possible to compare CPI scores from one year to the next, starting with the scores
in 2012.
Graphical Data
Comparison of CPI Scores by Country/Region
(selected jurisdictions)
Year
2006
2007
2008
2009
2010
2011
2012
2013
2014
2
China Hong
Kong
3.3
8.3
3.5
8.3
3.6
8.1
3.6
8.2
3.5
8.4
3.6
8.4
39
77
40
75
36
74
Macau
Taiwan
6.6
5.7
5.4
5.3
5.0
5.1
n/a 2
n/a
n/a
5.9
5.7
5.7
5.6
5.8
6.1
61
61
61
United
United
States Kingdom
7.3
8.6
7.2
8.4
7.3
7.7
7.5
7.7
7.1
7.6
7.1
7.8
73
74
73
76
74
78
India
Brazil
Russia
3.3
3.5
3.4
3.4
3.3
3.1
36
36
38
3.3
3.5
3.5
3.7
3.7
3.8
43
42
43
2.5
2.3
2.1
2.2
2.1
2.4
28
28
27
TI did not report CPI data for Macau in 2012, 2013, or 2014.
2
Anti-Corruption
Asia Area 2014 CPI Scores
New Zealand
Singapore
Australia
Hong Kong
Japan
Taiwan
South Korea
Malaysia
Mongolia
Thailand
Sri Lanka
India
Philippines
Mainland China
91
84
80
74
76
61
55
52
39
38
38
38
38
36
Indonesia
Vietnam
Nepal
Pakistan
Kazakhstan
Kyrgyzstan
Laos
Bangladesh
Tajikistan
Myanmar
Cambodia
Uzbekistan
Turkmenistan
Average
34
31
29
29
29
27
25
25
23
21
21
18
17
41.8
China’s Corruption Perceptions Index Scores in Recent Years
Year
China’s China’s
CPI
CPI
Score
Ranking
2006
3.3
70
2007
3.5
72
2008
3.6
72
2009
3.6
79
2010
3.5
78
Total
Countries with CPI Score
Countries Comparable to China (+/Ranked
0.1 on old scale, +/- 1 on
new scale)
163
Croatia, Brazil, Egypt,
Ghana, India, Mexico, Peru,
Saudi Arabia, Senegal
179
Senegal, Brazil, India,
Mexico, Morocco, Peru,
Suriname, Georgia,
Grenada, Saudi Arabia,
Serbia, Trinidad & Tobago
180
Bulgaria, Macedonia,
Mexico, Peru, Suriname,
Swaziland, Trinidad &
Tobago, Brazil, Burkina
Faso, Morocco, Saudi
Arabia, Thailand
180
Brazil, Colombia, Peru,
Trinidad & Tobago, Serbia
178
Bulgaria, El Salvador,
Panama, Trinidad & Tobago,
Colombia, Greece, Lesotho,
Peru, Serbia, Thailand
TopRanking
(Least
Corrupt)
Finland
(9.6)
BottomRanking
(Most
Corrupt)
Haiti (1.8)
Denmark,
Finland,
New
Zealand
(9.4)
Denmark,
New
Zealand,
Sweden
(9.3)
Somalia (1.4)
New
Zealand
(9.4)
Denmark,
New
Zealand,
Singapore
(9.3)
Somalia (1.1)
Somalia (1.0)
Somalia (1.1)
3
Anti-Corruption
Year
China’s China’s
CPI
CPI
Score
Ranking
Total
Countries with CPI Score
Countries Comparable to China (+/Ranked
0.1 on old scale, +/- 1 on
new scale)
182
Romania, Gambia, Lesotho,
Vanuatu
2011
3.6
75
2012
39
80
176
Sri Lanka, Serbia, Trinidad
and Tobago, Burkina Faso,
El Salvador, Jamaica,
Panama, Peru
2013
40
80
177
Bulgaria, Senegal, Tunisia,
Greece, Swaziland
2014
36
100
175
Algeria, Suriname, Armenia,
Colombia, Egypt, Gabon,
Liberia, Panama, Bolivia,
Mexico, Moldova, Niger
TopRanking
(Least
Corrupt)
New
Zealand
(9.5)
Denmark,
Finland,
New
Zealand
(90)
Denmark,
New
Zealand
(91)
Denmark
(92)
BottomRanking
(Most
Corrupt)
Somalia (1.0)
Somalia (8)
Afghanistan,
North Korea,
Somalia (8)
North Korea,
Somalia (8)
Data sources for all tables and graphs: Transparency International; comparison tables and graphs compiled by Covington & Burling
LLP
TRACE International Launches New Bribery Risk Matrix
On November 11, 2014, TRACE International (“TRACE”) launched a new bribery risk matrix,
developed in collaboration with the RAND Corporation. 3 The TRACE Matrix ranks countries by
business bribery risk and assigns each country a composite score based on an assessment of
four major risk domains -- business interactions with government, anti-bribery laws and
enforcement, government and civil service transparency, and the capacity for civil society
oversight -- and nine subdomains. This breakdown is intended to help companies tailor their
compliance programs to address specific geography-based risks.
Like the CPI, the TRACE Matrix assesses China as presenting a high degree of bribery risk,
with a composite score of 66 out of 100 (with 100 representing the highest overall business
bribery risk and 0 representing the lowest). While China has good legal infrastructure related to
combatting bribery and corruption, and presents businesses with only a moderate risk of
intensive government interactions, it ranked as number 137 out of the 197 countries surveyed.
China’s high degree of business bribery risk is based on a relatively low quality of government
administration and transparency, as well as a low capacity for civil society oversight. According
to the TRACE Matrix, China poses a similar degree of business bribery risk as Russia, Benin,
Suriname, Lebanon, Mozambique, and Azerbaijan.
3
Most of the data and much of the language that appears in the following sections can be found on the TRACE
Matrix website and in TRACE International’s press release announcing the launch of the Matrix.
4
Anti-Corruption
India was rated as posing a slightly higher business bribery risk, with a score of 80; India’s
highest risk domain was business interactions with government. As shown by the table below,
other jurisdictions in Asia Pacific range from New Zealand (23), Hong Kong (23), Singapore
(26), Japan (26), and Australia (39) to the Philippines (70), Bangladesh (76), Laos (76), Vietnam
(82), and Cambodia (89).
TRACE Methodology
The TRACE Matrix is a business-driven index that measures the likelihood that a company will
be extorted or solicited for bribes. In addition to providing a composite risk score, the index
identifies the specific risk factors that make up that score and provides a sub-score in each of
those areas. These specific factors include a total of four domains and nine subdomains:

Under Domain 1, business interactions with government, the TRACE Matrix examines
touches with government, the likelihood of a bribe transaction arising through those
interactions, and the overall regulatory burden.

Under Domain 2, legal infrastructure related to combatting bribery and corruption, the
TRACE Matrix includes a de jure measure of anti-bribery laws as well as an assessment
of anti-bribery law enforcement.

Under Domain 3, overall quality of government administration, the TRACE Matrix
assesses government budget transparency and the quality and supervision of
government workers.

Under Domain 4, the role played by extra-governmental actors in monitoring and
controlling corruption, the TRACE Matrix assesses the role of the media and the
capacity of a country’s population.
TRACE drew its data from 64 indicators, including published literature, stakeholder interviews,
and discussions with governance and corruption experts. 4 For inclusion in the Matrix, TRACE
looked for data focused on business bribery.
The TRACE Matrix weights a country’s Domain 1 score most heavily, and weights the Domain 2
score lowest due to the unreliability of enforcement data. Domains 3 and 4 are weighted
equally.
4
TRACE has published a list of the specific sources of data for each domain and subdomain.
5
Anti-Corruption
Graphical Data
Comparison of TRACE Matrix Scores by Country/Region
(selected jurisdictions)
Domain
China Hong Macau United
United
India Brazil Russia
Kong
States Kingdom
1
55
4
60
35
27
92
77
73
2
21
51
49
23
47
43
54
27
3
62
27
58
1
33
37
52
39
4
76
30
35
7
25
56
42
43
Composite
66
23
57
27
32
80
69
65
Score
Ranking
#137
#4
#99
#10
#19
#185 #149
#134
Comparison of TRACE Matrix Scores: High and Low Composite Scores
(selected jurisdictions)
Domain
Ireland
Canada
1
2
3
4
Composite
Score
Ranking
15
24
30
4
20
25
22
20
9
22
#1
#2
New
Angola Yemen
Zealand
13
93
88
48
61
100
23
99
91
18
73
100
23
94
94
#3
#195
#196
Nigeria
99
25
97
57
97
#197
Comparison of TRACE Matrix Scores: High and Low Domain Scores
(selected jurisdictions)
Domain
Singapore Uzbekistan South United Yemen Vietnam Germany
Korea States
1
1
100
38
35
88
61
28
2
54
51
1
23
100
31
31
3
37
72
7
1
91
100
33
4
35
63
15
7
100
82
1
Composite
26
92
31
27
94
82
27
Score
Ranking
#7
#194
#17
#10
#196
#188
#9
6
Anti-Corruption
Asia Area 2014 TRACE Matrix Composite Scores
New Zealand
Hong Kong
Singapore
Japan
South Korea
Australia
Thailand
Malaysia
Indonesia
Turkmenistan
Mainland China
Kazakhstan
Sri Lanka
23
23
26
26
31
39
45
50
51
60
66
68
69
Philippines
Mongolia
Kyrgyzstan
Nepal
Pakistan
Bangladesh
Laos
Tajikistan
India
Vietnam
Cambodia
Uzbekistan
Average
70
72
73
74
76
76
76
79
80
82
89
92
66.4
Data sources for all tables and graphs: TRACE International; comparison tables and graphs compiled by Covington & Burling LLP
*
*
*
If you have any questions concerning the material discussed in this client alert, please contact
the following China-based members of our Global Anti-Corruption practice group:
Eric Carlson
Hui Xu
Victor Hao Wu
Chaohui Liang
Ashley Nyquist
+86 10 5910 0503
+86 21 6036 2508
+86 10 5910 0507
+86 10 5910 0510
+1 202 662 5893
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
This information is not intended as legal advice. Readers should seek specific legal advice before acting with regard to the subjects
mentioned herein.
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