The index is an average score calculated for each of the 199 countries surveyed on four indicators of potential areas of corruption risk for companies:
- Business interaction with the government;
- anti-corruption legislation and enforcement;
- transparency of government and public service activities;
- control by civil society.
Each indicator includes several assessed indicators. For example, the risk assessment of business-government relations analyzes such aspects as "contacts with the government", "expectations of bribe payment" and "regulatory burden", i.e. all possible areas of corruption risks when interacting with the public sector. The second indicator, anti-corruption legislation and law enforcement, examines the specifics of the country's de jure anti-corruption laws and regulations.
Unlike most indices that measure the level of corruption in countries around the world, the TRACE Matrix rating of a state is not based on the results of sociological surveys, but on the analysis of statistical data published by leading public and international organizations, such as the UN, the World Bank, and the World Economic Forum.
The final assessment of corruption risks in the country is calculated using the formula:
total risk assessment = indicator_1 x0.450 + indicator_2 x 0.079 + indicator_3 x 0.238 + indicator_4 x 0.238 + margin of error
Each country is assigned a score from 1 to 100, with 100 representing the highest level of corruption risk, and taking into account the margin of error in the final score allows a country with a high score on one of the indicators to be identified as more risky for business, even if the final scores of several countries are the same.
According to the TRACE Matrix 2016 report, compared to the previous survey, 32% of countries have reduced their corruption risks and 60% have increased them, while 71% of countries received scores between 50 and 100, indicating high and very high levels of corruption risks for business. The country with the lowest level of corruption risks was Sweden, while the most corruption-prone country was Nigeria.
The Global Corruption Risk Index has been released every two years since 2014 by TRACE International in partnership with the RAND Corporation as a tool for companies to assess the risk of encountering corruption while doing business in a particular country. The TRACE Matrix was developed as an alternative to the best-known survey measuring global corruption - the Corruption perceptions index published by Transparency International, a non-profit non-governmental organization - which focuses on the likelihood of encountering corruption.
The TRACE Matrix index can be used by companies to understand the overall level of corruption risks of doing business in a country and identify the area where such risks are most likely to occur (based on the indicators), to form an idea of the vulnerability of business to a particular risk area, and to compare countries by individual indicators. For example, if an organization frequently interacts with government agencies in the course of its activities, this indicator should be the first thing to pay attention to when assessing the riskiness of its business activities.