Lee Sang Hak (Transparency International Korea, Co-Chair)
Summary
Korea’s Corruption Perception Index in 2019 showed a two-point increase from last year, bringing the country up by six places in the international rankings. Over the past three years, Korea has improved its score by six points and has improved its ranking by 13 spots. This rapid improvement shows a clear turning point for Korea as it strives to become a country with more integrity.
Official data gathered on Korea’s corruption level show that the country is doing well in comparison to other nations. The integrity of the political sector, which had been stagnant until 2018, has finally been improving. This could be attributed to the Candlelight Demonstrations and the current government’s anti-corruption policies. Thus, these effective current policies should remain in place.
However, the level of corruption in the economic sector has not improved in recent years, and the data scores show that Korea is doing relatively worse in this field in comparison to other countries. Measures should be taken to improve integrity in the private sector. The score, based on comprehensive questions about the level of corruption in society, remains low in comparison with other countries. We must strengthen governmental and societal efforts to spread the anti-corruption culture. The importance of joint public-private partnerships should also be emphasized.
Though Korea’s ranking has risen to 39th, our 2019 Corruption Perception Index is still relatively low (considering the nation’s international status). In order to become a developed nation of integrity, we must further encourage anti-corruption activities.
Introduction
In the 2019 Corruption Perception Index (CPI) released by Transparency International, Korea had a score of 59 points. This was a two-point increase from the previous year, and the highest CPI score that Korea has ever received. The score brought Korea up to 39th in the rankings (out of 180 countries), a significant improvement from the 50s, where it sat last year. In the three years since 2016, Korea’s score improved by six points and its ranking improved by 13 places.
This is good news for the current administration, which has set “achieving a clean Korea through anti-corruption reform” to “reach the top 20 on the CPI rankings” as a key national agenda. The introduction of various anti-corruption systems and policies is likely a combined result of the Candlelight Demonstrations, the impeachment of President Park Geun-hye, and the inauguration of the new administration.
However, we cannot be completely satisfied with the results of the 2019 CPI. Considering Korea’s economic level and status as an Organization for Economic Cooperation and Development (OECD) country, 39th place is a considerably low ranking. Ninth place among Asia-Pacific countries, Korea ranked lower than New Zealand, Singapore, Australia, Hong Kong, Japan, Bhutan, Taiwan, and Brunei.
Below, we will analyse the results of the 2019 CPI from various angles, and examine its implications.
Current Status of Korea’s CPI
A. Outline
Korea’s CPI score has been improving rapidly since 2017. In 2018, a three-point increase brought us to 57 points; in 2019, a two-point increase brought us to 59 points. This is the highest score that the nation has ever received.
Korea’s CPI trend used to be characterised as decreasing and stagnant. After 2008, the trend had a fluctuating pattern (the country received 56 points in both 2008[1] and 2012), which became a declining one after 2012. [2] Now, the trend is an increasing one.[3] This shift in nature could signify that Korea is escaping the bottom of the rankings.
Korea’s overall ranking increased by six places (from 45th to 39th out of 180 countries) from 2018 to 2019, but its ranking remains low when considered against other OECD countries. In 2017, it ranked 29th out of 35 OECD countries; in 2018, it ranked 30th out of 36 OECD countries; in 2019, it ranked 27th among 36 OECD countries, a small improvement (though still a low ranking).
The country’s ranking showed a clear downward trend since 2010, falling below 50 for the first time after the 2016 CPI survey. 2017 brought an increase in ranking by only one place, leaving Korea at 51st. In 2018, Korea broke into the 40s, and in 2019, it brought itself up into the 30s.
[Table 1] Korea’s CPI and Ranking
[Figure 1] Changes in Korea’s CPI and Ranking
Figure 1 shows the change in the CPI scores (shown by blue trendline). Korea’s CPI score improved from 38 points in 1999 to 56 points in 2008, a rapid improvement. However, the graph shows fluctuations in the trendline, especially after 2008. Since 2012, there is a gradual decline in the trendline. In 2016, Korea’s CPI was 53 points (the lowest since 2008) in and began increasing each year to receive 54 points in 2017, 57 points in 2018, and 59 points in 2019.
A similar pattern can be seen in Korea’s CPI ranking (seen through red trendline). After low scores of 50 in 1999 and 2003, Korea’s ranking appeared to be improving as it hit 39th in both 2009 and 2010. However, there was a decline following 2010, reaching a low of 52nd place in 2016. Since then, Korea ranked 51st in 2017, 45th in 2018, and 39th in 2019[4], a clear sign of improvement.
Compared with scores from other major countries in the region, Korea’s CPI score is still low. In the Asia-Pacific region, New Zealand has the highest score of 87, followed by Singapore with 85, Australia with 77, Hong Kong with 76, and Japan with 73. Taiwan, Bhutan, and Brunei, with 65, 68, and 60 points respectively, also place higher than Korea. Meanwhile, Korea still ranks above Malaysia, China, Indonesia, Thailand, Mongolia, Vietnam, the Philippines, and Cambodia.
Compared to other OECD countries, Korea’s CPI score is significantly lower. It ranks 27th among 36 member countries, with only 9 OECD countries with lower scores than Korea.
[Table 2] OECD CPI and Ranking
[Table 3] Recent Increases in CPI and Rankings
Looking at the rankings of countries whose scores have risen over the past two years (since 2017), Korea ranked 10th with an increase of five points. Among OECD countries, Malaysia is tied for 5th with an increase of six points, Spain is tied for 10th with an increase of five points.
B. Source Data Analysis
Overview
[Table 4] Source Data Used to Calculate Korea’s CPI
To fully understand the results of the CPI, it is necessary to analyse the original data used to calculate the index. Transparency International uses several the data sources when calculating CPI.
In 2019, 10 sources were used to calculate Korea’s CPI. This included institutions such as the Bertelsmann Foundation, the World Economic Forum, the Political Economic Risk Consultancy, and the Political Risk Services Group (see Table 4). The 10 sources differed in the survey aims and the survey items, but all served to identify the degree of corruption within a country. While some surveys focused on expert evaluations, others used survey experts and managers.
The timing of the data collection for calculating the 2019 CPI varied depending on the survey. As the time required for on-site surveys, expert evaluations, etc. varied, it is difficult to pinpoint an exact time that the 2019 survey results are most indicative of. Nonetheless, the 2019 CPI targeted the current government administration[5], and in that sense reflected the anti-corruption policy.
Trends in Source Data
[Figure 2] Annual Changes in Source Data (Scores)
[Table 5] Score Changes by Time Period
The World Bank, alongside other sources, recommends that the results of the CPI investigation be understood as a trend.[6] By looking at the trend of the changing 10 sources, we can notice a few key points:
- WEF, GI, V-DEM, and WJP had upward trending scores.[7]
- PERC had downward trending scores.[8]
- SGI, TI, and IMD scores changed to upward trending.
- EIU showed very little fluctuation in scores.
Overall, WEF, GI, V-DEM, WJP, had upward trending scores. SGI, TI, and IMD were shifting towards upward trending scores. PERC, on the other hand, still had a downward trendline. The EIU had little change.
The most notable data point for 019 is from the PRS. The PRS score, which remained stagnant since 2012, rose by 8.4% to jump from 50 points to 54.19.
Rate of Change
[Figure 3] Score Changes (%) since 2017
The recent score changes across the data sources show a clear improvement in Korea’s official practices. As shown in Figure 4, SGI’s and V-DEM’s scores improved greatly in 2018, and TI’s score improved greatly in 2019. Both WJP’s and PRS’s scores increased in 2019 as well, with PRS’s score rising by 8.4%.
However, the way that the data sources investigated corruption in Korea differs.
WEF and GI primarily measured corruption in corporate and individual economic activities. The WEF measured the extent to which companies make bribes or additional payments in areas such as importing/exporting, public services, taxes, court rulings, and contracts/licenses. Meanwhile, GI[9] measured bribery and corruption by individuals or businesses from contract orders to import/export permits. Both of these data sources showed a steady improvement trend in their scores since 2012 (See Figure 3 and Table 5), but their scores have remained stagnant over the last two years. Among the data sources, SGI, TI, WJP, and V-DEM mainly investigated systems in place that can control corruption.[10] SGI measured the degree to which civil servants can be prevented from abusing their status for private gain; TI measured the government’s ability to successfully control corruption; WJP measured the extent to which legislative, judicial, and administrative officials use public office for private gain. Meanwhile, PRS dealt with corruption in the political system, such as secret political funds, questionable relations between politics and business, and excessive patronage.[11]
[Figure 4] Score Changes (%) since 2017
Other data sources used include IMD and PERC. Both investigated corruption in management, asking questions such as “is there corruption and bribery?” and “how much of a problem does corruption pose in the country that you work in?”. Looking at the overall trend (Figure 1) from 2012-2019, these two sources show great fluctuation in their scores. However, both scores have recently been improving.
Another source is EIU. EIU focused mainly on the use of public funds, and a factor that affected their score was checks and balances in the administration. [12] For example, the existence of an independent judicial body that can judge the abuse of a public official’s status. EIU’s score has remained almost unchanged since 2012.
The changes in each source data over the last two years can be summarised as follows:
- Korea’s capacity to prevent civil servants from abusing their posts is noticeably improving.
- The degree of corruption in the economic activities of the public sector remains stagnant.
- Based on comprehensive data, Korea’s handling of corruption is getting better.
- Corruption in the political sector is finally reducing.
Korea in Comparison to Other Major Countries
To understand Korea’s position in each source data used to calculate the CPI, we can compare it to OECD countries, other Asia-Pacific countries, and Japan. Through these comparisons, we can view the level of corruption in Korea from an international perspective.
Figure 5 compares the average score obtained from each source of data between Korea and OECD countries.
The biggest difference in score comes from PERC, PRS, and EIU, with score differences being 17.67, 13.91, and 12.62 points respectively. When examined closely, it was also noticed that the PRS’s index score for Korea’s level of political corruption was significantly lower than that of other OECD countries.
However, some surveys (TI, V-DEM, WJP) showed that Korea scored higher than the OECD average. TI had a 4.32 point difference, V-DEM had a 2.25 point difference, and WJP had a 1.96 point difference. As TI, V-DEM, and WJP are surveys focused on corruption in the public office, it is encouraging to see that Korea relatively well.
[Figure 5] Comparison of OECD’s Average Score with Korea’s Average Score
[Figure 6] Comparison of Asia-Pacific’s Average Score with Korea’s Average Score
In Figure 6, the major Asian-Pacific countries assessed included Korea, Japan, Taiwan, Hong Kong, Singapore, Malaysia, New Zealand, and Australia.
Compared to major Asian-Pacific countries, Korea received significantly lower scores from WEF (22.93 point difference), GI (21.1 point difference), PERC (19.03 point difference), IMD (18.61 point difference), PRS (14.7 point difference), and EIU (13.37 point difference). Three sources showed smaller differences, including V-DEM (0.09 points), WJP (2.49 points), and TI (4.99 points).
Similar to the comparison with the OECD, surveys on corruption in the public office (by SGI, TI, WJP, and V-DEM) showed relatively small differences.
Comparing data scores between Korea and Japan shows a similar pattern to the comparisons with OECD countries and major Asia-Pacific countries. Korea’s scores from SGI, WJP, and V-DEM were higher than Japan’s, but its score from WEF and PERC were lower by 37.35 and 33.18 points respectively.
[Figure 7] Comparison of Japan’s Average Score with Korea’s Average Score
To summarise the comparisons drawn between Korea and OECD countries, major Asia-Pacific countries, and Japan:
- Korea received relatively high marks regarding corruption in the public office.
- Korea received significantly lower scores regarding corruption in business activities and society as a whole.
C. Evaluating the Recent Score Trends
The results of the 2019 CPI carry great significance and show the results of our efforts to expel corruption and create a cleaner Korea.
First, the CPI improving greatly over the past few years shows that the Republic of Korea is on the right path towards becoming a country of integrity. Our country rose from 53 points in 2016 to 59 points in 2019, and our rank rose 13 notches from 52nd to 39th in the same period. This rapid improvement in score and rank shows a clear turning point for Korea.
Second, the data sources used to calculate the CPI clearly show that Korea is improving its efforts against corruption in the public office. It can be said that the Candlelight Movement and the current government’s anti-corruption policy are working. Moreover, the integrity of the political sector, which was previously stagnant until 2018, is now following a positive trend. Therefore, efforts should be made to continue with policies that are currently being pursued.
Third, the corruption level of daily economic activities has not improved significantly in recent years. The original data scores show that we are doing worse than several other countries. Measures should be taken to promote integrity in the private sector, especially in enterprises.
Fourth, the overall scores from the source data have not improved significantly, and we have been receiving low marks in comparison with other countries. Efforts must be made by the government and society as a whole to spread the anti-corruption mission and its policies. The spread of anti-corruption culture through joint public-private campaigns should be particularly emphasized.
Fifth, Korea’s CPI has improved greatly, but it is still low considering the nation’s status. To move toward an advanced country that holds integrity at its core, we must encourage integrity and further spur anti-corruption activities.
Conclusion
Transparency International’s annual Corruption Perceptions Index is a global survey of 180 countries. It is the most authoritative and widely cited corruption metric in the world and is accepted as a key indicator of the level of corruption in each country. It receives much attention from governments, including the Korean government.
However, the CPI does have its limitations as it quantifies the results of various surveys. It is difficult to accurately measure reality, especially corruption (which is done secretly). The method of investigating the number of corruption cases has more limitations than the perception survey when it comes to being an accurate representation of reality.
Though this may be true, Transparency International’s CPI is based on surveys conducted by 13 global organisations. Over the past 20 years of investigations, it has been understood that the global community accepts the reliability of the data used for the CPI.
The 2019 CPI shows a positive signal for Korea to overcome corruption and move towards a clean Korea. Since the inauguration of the current administration in 2017, the nation’s CPI has risen by six points its rank has jumped 13 ranks.
The source data shows that corruption in the public office has improved over the past few years, and corruption in the political sphere has also improved. Corruption in corporate economic activities has largely stayed stagnant and has not been improving significantly.
Overall, Korea’s CPI has been improving rapidly. We must continue the ongoing anti-corruption policy, as there is still a long way to go to achieve a clean and advanced country. We must make more efforts to spread anti-corruption culture across officials and society.
[1] CPI before 2008 was calculated out of 10 (and not 100), but for comparison, the score has been converted.
[2] Note that there may have been changes in the types of source data used in CPI calculations. However, there has recently been no significant change in the original data used to calculate Korea’s CPI.
[3] I believe that the consistent improvement in results from 2018 to 2019 shows an increasing trend.
[4] Note that the total number of countries in the rankings (number subject to indexation) changes.
[5] The source data assessed 2019 (during the Moon Jae-in administration).
[6] The World Bank World Governance Indicators portal recommends focusing on trends over longer periods rather than short-run year-to-year changes. Also, the annual comparison needs to consider the margin of error, thus we must be wary of overinterpreting the data. See http://info.worldbank.org/governance/wgi/index.aspx#doc-sources
[7] Although the PRS score rose in 2019, there is no evidence of a continuous upward trend
[8] The PERC data could be interpreted to show signs of turning upward or downward (due to fluctuations)
[9] The risk that individuals/companies will face bribery or other corrupt practices to carry out business, from securing major contracts to being allowed to import/export a small product or obtain everyday paperwork. This threatens a company’s ability to operate in a country, or opens it up to legal or regulatory penalties and reputational damage.
[10] It is difficult to categorise the surveys into groups due to the different investigation questions used.
[11] PRS is an assessment of corruption within the political system. The most common form of corruption met directly by businesses is financial corruption in the form of demands for special payments and bribes connected with import and export licenses, exchange controls, tax assessments, police protection, or loans. The measure is most concerned with actual or potential corruption in the form of excessive patronage, nepotism, job reservations, exchange of favours, secret party funding and suspiciously close ties between politics and business
[12] EIU survey questions:
- Are there clear procedures and accountability governing the allocation and use of public funds?
- Are public funds misappropriated by ministers/public officials for private or party political purposes?
- Are there special funds for which there is no accountability?
- Are there general abuses of public resources?
- Is there a professional civil service or are large numbers of officials directly appointed by the government?
- Is there an independent body auditing the management of public finances?
- Is there an independent judiciary with the power to try ministers/public officials for abuses?
- Is there a tradition of payment of bribes to secure contracts and gain favours?
Translated by: Lynn Lee