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A Sentiment-Enhanced Corruption Perception Index
Author:
Yongquan Cao
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Ms. Yingjie Fan
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Sandile Hlatshwayonull

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Monica Petrescu
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Zaijin Zhan
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Series:
IMF Working Papers
Volume/Issue:
Volume 2021: Issue 192
Language:
English
Publication Date:
23 Jul 2021
DOI:
https://doi.org/10.5089/9781513588889.001
ISBN:
9781513588889
ISSN:
1018-5941
Pages:
27
Keywords:
sentiment analysis method; perception index; statistic department; articles' sentiment; summary statistics; Corruption; Emerging and frontier financial markets; Business environment; Global
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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Direct measurement of corruption is difficult due to its hidden nature, and measuring the perceptions of corruption via survey-based methods is often used as an alternative. This paper constructs a new non-survey based perceptions index for 111 countries by applying sentiment analysis to Financial Times articles over 2005–18. This sentiment-enhanced corruption perception index (SECPI) captures not only the frequncy of corruption related articles, but also the articles’ sentiment towards corruption. This index, while correlated with existing corruption perception indexes, offers some distinct advantages, including heightened sensitivity to current events (e.g., corruption investigations and elections), availability at a higher frequency, and lower costs to update. The SECPI is negatively correlated with business environment and institutional quality. Increases in the perceived incidence or scope of corruption influences economic agents’ behaviors, and thus economic dynamics. We found that when the SECPI is at least one standard deviation above the mean, the growth per capita falls by 0.65 percentage point on average, with more pronounced impacts for emerging market and low income countries.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund
Volume 2021: Issue 192