TRACE International positions the index as a tool that provides a multi-level view of corruption risks for commercial organizations in 200 countries around the world. The information obtained can be used by companies to develop more targeted compliance programs when doing business in a particular country.
As before, the index is calculated based on an analysis of indicators in four key areas of corruption risk for companies:
- the degree and nature of interaction between business and the state;
- the existence of anti-corruption legislation and enforcement;
- transparency of government and public service activities;
- civil society oversight of corruption.
Based on the scores obtained for each area, the country's average score is calculated on a scale of 1 to 100, where 1 means the lowest probability of organizations encountering corruption risks when doing business in that country, and 100 means the highest.
The main innovation in the 2019 index was the introduction of the Bribery Risk Typology. The countries surveyed are now also grouped based on factors that have a significant impact on the conditions that determine corruption risks at the national level. These include: state stability, resource availability, law enforcement characteristics, and the degree of economic development.
According to the President of TRACE, the Bribery Risk Typology is a practice-oriented tool that allows companies to take additional context into account when interpreting the results of the TRACE Matrix. For example, it can be used to see that the problems of doing business in unstable states with authoritarian regimes are significantly different from those in stable and economically developed democracies. Thus, the Typology allows TRACE Matrix users to draw more in-depth conclusions when studying the final indicators for countries.
In addition, TRACE International has improved the methodology for calculating the index for small countries and has provided previously missing data for most of them. As a result, some countries have seen significant changes in their assessment results compared to last year's study.
According to this year's TRACE Matrix data, the highest corruption risks for business among the 200 countries surveyed are in Somalia (94 points out of a possible 100), South Sudan (92 points), North Korea (86 out of 100), Yemen (85 out of 100), and Venezuela (85 out of 100). The countries with the lowest corruption risks for business were New Zealand (4 points out of a possible 100), Norway (7 points), Denmark (7 out of 100), Sweden (8 out of 100), and Finland (9 out of 100). Overall, compared to the previous period, the results of the assessment of corruption risks in doing business for most countries remained virtually unchanged in 2019.
The Russian Federation fell from 108th to 110th place, landing between Mongolia and Sri Lanka, with a score of 55 out of 100, which is 1 point higher than last year. According to the Corruption Risk Typology, Russia is characterized as an authoritarian state with strong territorial control, characterized by a stable authoritarian regime and a lack of effective mechanisms to protect business from corruption.
*The TRACE Matrix Index was developed by TRACE International in collaboration with the American think tank RAND Corporation and was first published in 2014. It was conceived as a tool to provide organizations with more reliable information than other existing indicators about the existence of corruption risks for doing business in different countries.
According to TRACE International representatives, most other studies, such as Transparency International's Corruption Perceptions Index
, assess the level of corruption across all areas of society. Therefore, it was necessary to create a separate methodology to identify corruption risks specifically for doing business in a country. It is also worth noting that, unlike most existing indices, the TRACE Matrix is based on an analysis of statistical data published by leading international organizations, rather than on sociological surveys.