Similarly, countries that are relatively more isolated from the international community and engage less frequently in international trade and foreign investment will exhibit less incidences of bribery associated with tender deals.
Iraq-specific weaknesses of the CPI
A closer look at the sources used to calculate Iraq’s CPI score raises serious questions about the accuracy of the overall assessment.
There are only three sources that contribute to Iraq’s CPI score: the Bertelsmann Transformation Index (BTI), the Economist Intelligence Unit’s Country Risk Service and Country Forecast (EIU); and Global Insight’s Country Risk Ratings (GI). All three are based solely on assessments made by country experts. The views of local businesspeople are not included. Moreover, a detailed examination of these sources in relation to Iraq reveals that no resident country experts contributed to the 2009 assessments.
Only two questions from the BTI are relevant to corruption and are incorporated into the CPI score. They ask: To what extent are there legal or political penalties for stakeholders who abuse their positions?; and secondly, to what extent can the government successfully contain corruption?
The responses to both questions are scored out of 10 by non-resident experts. A score of ‘3’, for example, in question one corresponds to the response: “Corrupt officeholders are not prosecuted adequately under the law but occasionally attract adverse publicity”. An in-depth knowledge of the judicial procedures in Iraq would be required to make an accurate assessment. Given that the respondents are not even based in Iraq, their scores should be considered highly subjective.
The second source for the CPI calculation is the Economist Intelligence Unit’s Country Risk Service and Country Forecast 2009. The report consists of a series of 60 variables that assess sovereign, political and economic risk. But only one variable is relevant to measuring corruption. Here, country experts based in London, New York and Hong Kong assess the incidence of corruption by considering aspects such as the independence of the judiciary and the misappropriation of public funds by officials for private gain. The responses are rated from 0 to 4, with ‘0’ denoting a “very high” incidence and ‘4’ denoting a “very low” incidence of corruption. The scores are usually reviewed by an in-country expert, but in the case of Iraq, no such individual was available in 2009.
Finally, Global Insight's Country Risk Rating 2009 assesses the likelihood of encountering corrupt officials. Countries are scored between ‘1’, denoting that the country has an excellent business environment where corruption is virtually unknown, to ‘5’, denoting severe operational difficulties which makes business impossible and where corruption is so pervasive that it reaches the highest levels of government and includes kickbacks and bribes in return for awarding contracts.