On 31 January 2023, Transparency International ("TI") published the Corruption Perceptions Index 2022 ("CPI"). The CPI is the most widely used indicator of corruption worldwide and covers 180 countries. It scores and ranks countries/territories based on how corrupt a country's public sector is perceived to be by experts and business executives.
A country/territory's score indicates the perceived level of public sector corruption on a scale of 0-100, where 0 means that a country is perceived as highly corrupt and 100 means that a country is perceived as very clean. A country's rank indicates its position relative to the other countries/territories included in the index. It is a composite index, combining 13 data sources from 12 independent institutions, based on data published in the previous two years. For a country/territory to be included in the ranking, it must be included in a minimum of three of the CPI's data sources.
Best and worst performers
In the 2022 rankings, more than two-thirds of countries (68 percent) scored below 50 and the average global score remains unchanged from 2021, at 43. There are stagnant corruption levels in 124 countries (90 percent), 25 countries have improved, and 31 countries have declined. The 'cleanest' countries this year were Denmark, Finland and New Zealand, with scores of 90, 87 and 87 respectively.
The worst performers were Syria, South Sudan and Somalia, which ranked lowest with scores of 13, 13 and 12 respectively. Sub-Saharan Africa (with an average score of 32) was followed by Eastern Europe and Central Asia (with an average score 35) as the worst performing regions for 2022.
The UK was ranked 18th 'cleanest' country this year, with a five-point decline since 2021 to a score of 73. Public trust in government is low after a string of cronyism and public spending scandals. For example, individuals with political connections were appointed to senior public-sector roles during the COVID-19 pandemic and there was systematic bias in the awarding of PPE contracts to those with political connections, via the government's "VIP lane". However, TI found that a new code of conduct for parliamentarians and the appointment of a new ethics advisor should usher improvement.
Other regional results
On average, Eastern Europe and Central Asia ("EECA"), the Middle East and North Africa ("MENA"), Sub-Saharan Africa and the Americas (excluding North America) scored poorly in the CPI. Notably, Russia was ranked 137th out of 180 and the Ukraine 116th. MENA, EECA and Sub-Saharan Africa received regional average scores of 38, 35 and 32 respectively. The Americas received a regional average score of 43, with Haiti, Nicaragua and Venezuela being ranked lowest in the region.
Implications for businesses
The CPI source data captures a number of manifestations of public sector corruption including bribery, diversion of public funds, access to information on public affairs/government activities, and the ability of governments to contain corruption in the public sector. While there is no indicator which measures objective national levels of corruption directly and exhaustively, the CPI contains the informed views of relevant stakeholders, which generally correlate highly with objective indicators. Therefore, many companies use the CPI as part of their risk scoring matrix. Those scores should be rechecked annually to ensure they align with the most recent version of the CPI.
Many UK-based companies operate in high-risk jurisdictions which score poorly on the CPI. For example, within the EU, Romania, Bulgaria and Hungary score 46, 43 and 43 respectively. Regulators and enforcement authorities (such as the UK Serious Fraud Office) actively investigate and prosecute corporate criminal conduct, primarily in high-risk jurisdictions. Companies should therefore ensure that they carry out a country-by-country risk assessment, with the jurisdiction and its CPI score influencing the level and nature of their anti-bribery and corruption controls.
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