Corruption erodes economic freedom by introducing insecurity and uncertainty into economic relationships. The score for this component is derived primarily from Transparency International’s Corruption Perceptions Index (CPI) for 2011, which measures the level of corruption in 183 countries.
The CPI is based on a 10-point scale in which a score of 10 indicates very little corruption and a score of 0 indicates a very corrupt government. In scoring freedom from corruption, the Index converts the raw CPI data to a scale of 0 to 100 by multiplying the CPI score by 10. For example, if a country’s raw CPI data score is 5.5, its overall freedom from corruption score is 55.
For countries that are not covered in the CPI, the freedom from corruption score is determined by using the qualitative information from internationally recognized and reliable sources. This procedure considers the extent to which corruption prevails in a country. The higher the level of corruption, the lower the level of overall economic freedom and the lower a country’s score.
Sources. Unless otherwise noted, the Index relies on the following sources for information on informal market activities, in order of priority: Transparency International, Corruption Perceptions Index, 2011; U.S. Department of Commerce, Country Commercial Guide, 2009–2012; Economist Intelligence Unit, Country Commerce, 2009–2012; Office of the U.S. Trade Representative, 2012 National Trade Estimate Report on Foreign Trade Barriers; and official government publications of each country.