Charles Kenny's weekly Foreign Policy column on measuring corruption.
From the Article
Every year, with some fanfare, Transparency International releases its Corruption Perceptions Index (CPI). This is perhaps the best known of a range of measures of a country's level of sleaze. Such indicators and estimates have their uses -- they highlight a significant global problem, one that can have a particularly large impact on poor people. What they aren't terribly good at, paradoxically, is measuring how corrupt countries actually are -- and understanding why that's the case is important not only to solving developing countries' corruption problems, but the rest of their problems as well.
Take the case of Peru. In 2000, tapes of National Intelligence Service head Vladimiro Montesinos bribing legislators, judges, TV station operators, and others -- 1,600 people in all -- led to Montesinos's ouster and President Alberto Fujimori's impeachment. They also precipitated a significant drop toward unclean status in the country's ranking on the Corruption Perceptions Index. But the collapse in the CPI came after the tapes were released. There was no significant change in the index prior to the release of the tapes, when Peru was perceived as being cleaner than the Czech Republic, for example. Of course, before the tapes were released was when the actual corruption was going on. And the perceptions index kept on dropping even as survey evidence in Peru suggested the corruption clean-up was working.
It isn't just Transparency International, of course. Measures of perceived corruption, or poor governance, or weak rule of law are as common as they are cheap to make and easy to get publicity for. But that doesn't make them accurate. In fact, the Peru example demonstrates the big gap between perception and reality driven by our own expectations and biases. (And to be fair, Transparency International itself admits that you can't easily use changes in the CPI over time to measure changes in levels of corruption.)