In the 2019 CPI Issued by Transparency International, Korea Received an All-Time High Score Again in a Span of Just One Year, Breaking into the Global High 30s

- After the launch of the Moon administration, Korea’s CPI score and ranking have improved for the past three consecutive years -

- Compared to the previous year, Korea rose six notches higher from 45th to 39th, garnering two more points in the latest 2019 Corruption Perceptions Index (CPI) -

January 28, 2020

Anti-Corruption and Civil Rights Commission

The Republic of Korea

Korea came in 39th place out of 180 countries and territories with an all-time high of 59 points on a scale of 0 to 100 within a span of just one year in the latest 2019 Corruption Perceptions Index (CPI) released by the Transparency International (TI).

Compared with the previous year, Korea garnered two more points in its score, improving by six notches in its global ranking in the 2019 CPI. After the launch of the Moon Jae-in administration, Korea has improved by 13 positions in total for three consecutive years from 51st in 2017 to 45th in 2018 and to 39th in 2019, breaking into the global high 30s again nine years after it ranked 39th in 2010.

Designated as one of the three government innovation indices of the Moon administration, the Corruption Perceptions Index (CPI) published by the Transparency International is one of the most leading indices measuring the extent of corruption among public officials/politicians in countries around the world.

Recently, the international perceptions of corruption level in Korea have been steadily improving.

The international organizations, such as Political and Economic Risk Consultancy (PERC) based in Hong Kong and Bertelsmann Foundation (BF) in Germany, etc. whose assessments are used as sub-indices constructing the CPI, have made positive comments on the recent anti-corruption drive in Korea.

In the 2019 Index of Public Integrity (IPI) published by the European Research Center for Anti-Corruption and State-Building (ERCAS), Korea ranked 19th out of 117 countries, moving up by five positions compared to 2017 (biennial assessment) and 1st among Asian countries evaluated, while taking 23rd place in the list of 200 countries on TRACE Bribery Risk Matrix in 2019.

These positive changes in the international community’s perceptions of Korea, including the CPI results, seem to be driven by combined effect of the following factors: ▲government-wide anti-corruption policy implementation, including founding the president-presided Anti-Corruption Policy Consultative Council and establishing the Private-Public Consultative Council for Transparency Society; ▲fostering a culture of integrity and fairness, including reinforcing the protection of corruption and public interest reporters and uprooting corruption deeply related to people’s livelihoods such as hiring irregularities at public firms; ▲legislation of the Act on the Prohibition of False Claims for Public Funds and Recovery of Illicit Profits and reinforced public subsidy management regulations; ▲curbing hierarchical power abuse in the public and private sectors; and ▲the concerted anti-corruption reform drive by the government and the private sector through reforming anti-corruption laws and institutions, etc. including strengthening the recovery of corruption proceedings.

In order for these positive changes to continue, not only should the public sector make efforts, but also the private sector needs to work together, because the extent of corruption in the private sector has a gradually growing impact on the assessment carried out by international organizations and on the national competitiveness, etc.

Last year, the Korean private sector scored 6.16 points on a scale of 0 (highly corrupt) to 10 (very clean) in the assessment conducted by the National Research Council for Economics, Humanities and Social Sciences as a joint research to measure the transparency level of the private sector in Korea.

This result is similar to those of the assessments done by international organizations such as the International Institute for Management Development (IMD) and World Economic Forum (WEF), etc. regarding the level of business ethics in the industrial sector in Korea, which shows the need for more concerted efforts across the public and private sector.

※ On the IMD’s 2018 World Competitiveness Index, Korea scored 5.63 points out of 10 on the ‘Ethical Management’ component and on the WEF’s 2017 Global Competitiveness Index, scored 3.5 points out of 7 (5 points if transformed to be in range between 1 and 10) on the ‘Ethical Behavior of Firms’ component.

In the years ahead, the ACRC will focus its capacity more on accomplishing the following anti-corruption tasks to rank among the high 20s by 2022.

First, the existing ‘Anti-Corruption Policy Consultative Council’ will be expanded and overhauled into the one dedicated to a fair society, reflecting the public aspirations for a fairer Korean society, and will have an in-depth discussion on ways to improve fairness in people’s livelihood and the economic sector alongside the anti-corruption measures so that the public can actually feel the effect thereof.

Second, the provisions on the prevention of conflicts of interest in public office, which were excluded at the time of legislation of the Improper Solicitation and Graft Act, will be enacted as a separate Act to strengthen the standard for fair performance of public duty by public officials, including those at the highest level of power. In addition, the Act on the Prohibition of False Claims for Public Funds and the Recovery of Illicit Profits will be put in force without a hitch to impose sanctions on public subsidy frauds, thereby leaving no room for the national financial leakage.

Third, a culture of fairness and integrity will be spread across all sectors of the society by concentrating the policy capacity on addressing institutionalized unfair practices in the field of employment or college admission, expanding the integrity education for public officials and the future generation, and strengthening the protection for corruption and public interest reporters.

Fourth, the government will continue to put efforts into building a better national image abroad by more systemically promoting anti-corruption policy achievements to the international analysts and business people, etc. while proposing more effective policy measures to deal with issues people are interested in, such as fairness and justice, through the public-private consultative council for transparent society and People’s Idea Box, etc.

Last but not least, the government will take the International Anti-Corruption Conference (IACC) slated to be held in June this year in Korea as the opportunity to share outstanding anti-corruption policies and achievements with other countries around the world, thereby elevating the national transparency level and taking the lead in anti-corruption initiatives in the international community.

The Chairperson Pak Un Jong of the ACRC said, “The improvement in the CPI for the third straight year can be attributed to the combined efforts from the private and public sector for the anti-corruption reform after the launch of the Moon administration. In light of Korea’s global positioning, I think that there still remains room for improvement. The ACRC, as an anti-corruption control tower, will do its best to spread the culture of integrity and fairness across the whole society in cooperation with relevant ministries and the public to continue this upward momentum.”

□ Korea ranked 39th out of 180 countries and territories, scoring 59 points (equivalent to the top 21%)

○ Korea rose six notches higher to break into the CPI’s top 30 countries with an all-time high score (’95~) of 59 points, up two points from last year.

 It is noteworthy that Korea recorded the highest-ever score of 59 points in a span of just one year since 2018 when it hit its then all-time high score, ranking in the high 30s again nine years after it ranked 39th on the CPI in 2010.

※ Korea ranked 27th out of 36 OECD member countries, up three notches from last year, followed by Poland, Czech Republic, Italy, and Greece, etc. (OECD average: 67.8 points)

< Korea’s CPI Scores and Rankings (2008-2019) >

※ The TI established the new scale of 0-100 in 2012 as an update to its methodology.

○ (Overview) 10 data from 9 sources were used to compile the CPI for Korea

※ The Transparency International compiles the CPI based on the 13 data among which 10 data are used for the CPI for Korea, 9 for Japan and the U.S., and 8 for the U.K, and Germany.

○ (Improvement) 6 raw data from sources including IMD (world competitiveness index) and PERC (Asian Corruption Survey)

○ (Deterioration) 1 raw datum from WEF (Global Competitiveness Index)

○ (Stagnant) 3 raw data from sources including BF (Sustainable Governance Index) and IHS Markit (Country Risk Analysis)

○ The results of expert assessments were relatively more favorable than the survey results by the business executives, the same as last year.

<Current Status of Scores on Indicators Reflected into the 2019 CPI for Korea>

(10 raw data provided by 9 sources)

□ In the 2019 Index of Public Integrity, Korea ranked 19th out of 117 countries assessed with a score of 8.34 points (on a scale of 1 to 10 implying the least corrupt), topping the list in Asia.

※ (2015) 23rd (8.04 points)/109 ⇒ (2017) 24th (8.02 points)/109 ⇒ (2019) 19th (8.34 points)/117

□ The components on which Korea marked the highest and lowest score were E-Citizenship (10 points) and Judicial Independence (5.62 points)

<IPI Scores and Rankings for Korea from 2015 to 2019>

□ The 2019 Bribery Risk Matrix showed that Korea ranked 23rd out of 200 jurisdictions with a score of 24 (on a scale of 1 to 100 with 1 being the lowest risk and 100 implying the highest risk), while coming in the 3rd place following Hong Kong (10th) and Singapore (12th) in Asia.

※ (2017) 33rd (29 points) ⇒ (2018) 25th (24 points) ⇒ (2019) 23rd (24 points) /200 jurisdictions

□ According to the matrix, Korea belongs to the low risk group in terms of the bribery risk level

※ Very low (21 countries) / Low (31) / Medium (85) / High (50) / Very high (13)

□ Among the four specific domains, Korea fared the best in the domain of Government and Civil Service Transparency (scored 20) and the worst in the domain of Anti-Bribery Deterrence and Enforcement (scored 27).

< BRM Scores and Rankings for Korea by Assessment Domain>

□ Overview of the 2019 Index of Private Sector Integrity (IPSI, tentative name)

○ The Index of Private Sector Integrity was first launched as a joint research project of the National Research Council for Economics, Humanities and Social Sciences to measure the extent of corruption in the private sector in Korea.

- The measurement model developed in 2018 by the ACRC as part of the policy research contracted out to outside research institutes has been supplemented and utilized as a base model for this index.

※ The Index of Private Sector Integrity (2019)

- The lead research institute: Korean Institute of Criminology, the head researcher: senior researcher Hwang Ji-tae

○ To measure the extent of corruption in major industries classified according to the Standard Industrial Classification of Statistics Korea, the integrity index scores (the IPSI consists of two sub-indices, namely the corruption incidents index and the corruption prevention index) are calculated for each major industry on a scale of 0 (highly corrupt) to 10 (very clean).

- A survey was conducted on 3,000 people currently engaging or having engaged in the assessed industries for at least a year (300 people per industry)

※ From October to November 2019, Nielsen Company Korea carried out online/mobile surveys of mobile panels

□ The 2019 Result

○ The composite score resulting from the aggregation of scores derived for each industry stood at 6.16.

- The score of corruption incidents index (6.74 points) assessing the status of corruption incidents currently occurring was relatively better than that of corruption prevention index (5.26 points) measuring the level of corruption control, including the establishment of preventive or responsive system and anti-corruption efforts within companies.

※ The result above is similar to the assessment outcomes on the business ethics of Korean companies released by the international organizations, including the IMD and WEF.

• On the ‘Ethical Management’ component of the IMD’s 2018 World Competitiveness Index, Korea scored 5.63 points out of 10

• On the ‘Ethical Behavior of Firms’ component of the WEF’s 2017 Global Competitiveness Index, Korea scored 3.5 points out of 7 (5 points if transformed to be in range between 1 and 10).

○ To break it down by assessment area, “corruption in management activities”, a sub-indicator of the corruption incident index, and “corporate disclosure and accounting transparency”, a sub-indicator of the corruption prevention index, received relatively better scores, whereas “abuse of superior positions” and “corruption preventive activities” received relatively poorer ratings.

<Scores by Assessment Area>