Journal of Business Ethics

, Volume 35, Issue 3, pp 177–189 | Cite as

International Validation of the Corruption Perceptions Index: Implications for Business Ethics and Entrepreneurship Education

  • Paul G. Wilhelm


International government and corporate corruption is increasingly under siege. Although various groups of researchers have quantified and documented world-wide corruption, apparently no one has validated the measures. This study finds a very strong significant correlation of three measures of corruption with each other, thereby indicating validity. One measure was of Black Market activity, another was of overabundance of regulation or unnecessary restriction of business activity. The third measure was an index based on interview perceptions of corruption (Corruption Perceptions Index or CPI) in that nation. Validity of the three measures was further established by finding a highly significant correlation with real gross domestic product per capita (RGDP/Cap). The CPI had by far the strongest correlation with RGDP/Cap, explaining over three fourths of the variance.Corruption is increasingly argued to be a barrier to development and economic growth. Business students often do not see ethics courses as being as relevant as other value-free disciplines or core courses. The data in this study suggests otherwise. Sustainable economic development appears very dependent on a constant, virtuous cycle that includes corruption fighting, and the maintenance of trust and innovation, all reinforcing each other.


Economic Growth Economic Development Strong Correlation Business Ethic Domestic Product 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.


  1. Acemoglu, D. and T. Verdier: 2000, 'The Choice between Market Failures and Corruption', The American Economic Review 90(1), 194–211.Google Scholar
  2. Aggarwal, R.: 1997, 'Ethical Issues in Finance', in P. H. Werhane and E. R. Freeman (eds.), The Blackwell Encyclopedic Dictionary of Business Ethics (Blackwell, Malden, MA).Google Scholar
  3. Amba-Rao: 1993, 'Multinational Corporate Social Responsibility, Ethics, Interactions and Third World Governments: An Agenda for the 1990s', Journal of Business Ethics 12, 75–94.Google Scholar
  4. Amba-Rao: 1997, 'Business Ethics in Developing Countries', in P. H. Werhane and E. R. Freeman (eds.), The Blackwell Encyclopedic Dictionary of Business Ethics (Blackwell, Malden, MA).Google Scholar
  5. Ball, D. A. and W. H. McCulloch, Jr.: 1996, International Business: The Challenge of Global Competition (Irwin, Chicago, IL).Google Scholar
  6. Barney, J. B. and Hansen, M. H.: 1994, 'Trustworthiness as a Source of Competitive Advantage', Strategic Management Journal 15, 175–190.Google Scholar
  7. Barrier, M.: 1999, 'Doing the Right Thing', in F. H. Maidment (ed.), Annual Editions: Management, (Dushkin/McGraw-Hill, Guilford, CT).Google Scholar
  8. Barton, L.: 1995, Ethics: The Enemy in the Workplace (Southwestern College Publishing, Cincinnati, OH).Google Scholar
  9. Boulding, K. F.: 1969, 'Economics as a Moral Science', American Economic Review 59(4), 1–23.Google Scholar
  10. Burton, S., Johnston, M. W. and E. J. Wilson: 1991, 'An Experimental Assessment of Alternative Teaching Approaches for Introducing Business Ethics to Undergraduate Business Students', Journal of Business Ethics 10(7), 507–517.Google Scholar
  11. Coicaud, J-M. and D. Warner: 2001, 'Reflection on the Extent and Limits of Contemporary International Ethics', in J-M. Coicaud and D. Warner (eds.), Ethics and International Affairs: Extents and Limits (United Nations University Press, Tokyo, Japan).Google Scholar
  12. Coutinho de Arruda, M. C.: 1997, 'Business Ethics in South America', in P. H. Werhane and R. E. Freeman (eds.), The Blackwell Encyclopedic Dictionary of Business Ethics (Blackwell, Malden, MA).Google Scholar
  13. Crespo, R. F.: 1998, 'Controversy: Is Economics a Moral Science?', Journal of Markets and Morality 1(2), 201–211.Google Scholar
  14. DeBow, M.: 1999, 'The End of the World as We Know It?: Some Thoughts on the Economics of Moral Decline', The Journal of Private Enterprise 14(2), 41–56.Google Scholar
  15. DeGeorge, R.: 1993, Competing with Integrity in International Business (Oxford University Press, New York).Google Scholar
  16. DeGeorge, R. T.: 1999, Business Ethics (Prentice Hall, Upper Saddle River, NJ).Google Scholar
  17. Dienhart, J. W.: 2000, Business, Institutions, and Ethics: A Text with Cases and Readings (Oxford University Press, New York).Google Scholar
  18. Etzioni, A.: 1993, The Spirit of Community: Rights, Responsibilities, and the Communitarian Agenda (Crown, New York).Google Scholar
  19. Friedman, M.: 1966, Essays in Positive Economics (Chicago Press).Google Scholar
  20. Garten, J. E.: 1999, 'Troubles Ahead in Emerging Markets', in F. Maidment (ed.), Annual Editions: International Business, 1999/2000 (Dushkin/ McGraw-Hill, Guilford, CT).Google Scholar
  21. Gatewood, R. D. and H. S. Field: 1998, Human Resource Selection (Dryden Press, Fort Worth, TX).Google Scholar
  22. Goldsmith, A. A.: 1995, 'Democracy, Property Rights and Economic Growth', Journal of Development Studies 32(2), 157–175.Google Scholar
  23. Griffin, R. W. and M. W. Pustay: 1999, International Business: A Managerial Perspective (Addison Wesley, Reading, MA).Google Scholar
  24. Harper, M.: 1991, 'Enterprise Development in Poorer Nations', Entrepreneurship Theory and Practice 15, 7–11.Google Scholar
  25. Jain, A. K.: 1998, 'Corruption: An Introduction', in A. K. Jain (ed.), Economics of Corruption (Kluwer Academic Publishers, Boston, MA).Google Scholar
  26. Johnson, B. T., K. R. Holmes and M. Kirkpatrick: 1998, Index of Economic Freedom (Heritage Foundation, Washington, DC).Google Scholar
  27. Johnston, J. P.: 1998, 'Value Added: A Communications Assignment that Develops Ethical Perception', Business Communications Quarterly 61(4), 121–123.Google Scholar
  28. Jones, T. M. (1995). Instrumental stakeholder theory: International Validation of the Corruption Perceptions Index 187 A Synthesis of Ethics and Economics', Academy of Management Review 20, 404–437.Google Scholar
  29. Kehoe, W. J.: 1999, 'GATT and WTO Facilitating Global Trade', in F. Maidment (ed.), Annual Edition: Management, 1999/2000 (Dushkin/ McGraw-Hill, Guilford, CT).Google Scholar
  30. Korsgaard, M., D. Schweiger and H. Sapienza: 1995, 'Building Commitment, Attachment, and Trust in Strategic Decision-making Teams: The Role of Procedural Justice', Academy of Management Journal 38, 60–84.Google Scholar
  31. Kurtenbach, E.: 1999, 'Rampant Corruption Wrecking Construction of Modern China', Associated Press. Anniston Star. January 4. 2D.Google Scholar
  32. Lane, H. W., J. J. DiStefano and Maznevski: 1997, International Management Behavior (Blackwell Publishers, Cambridge, MA).Google Scholar
  33. Lee, K.: 1998, 'Business Ethics in China: Confucianism, Socialist Market Economy and the Multinational Enterprises', in B. J. Kumar and H. Steinman (eds.), Ethics in International Management (de Gruyter, New York).Google Scholar
  34. Martin, D. W.: 1997, 'Business Ethics in Russia', in P. H. Werhane and R. E. Freeman (eds.), The Blackwell Encyclopedic Dictionary of Business Ethics (Blackwell, Malden, MA).Google Scholar
  35. Mauro, P.: 1995, 'Corruption and Growth', The Quarterly Journal of Economics 110(3), 681–712.Google Scholar
  36. Mayer. R. C., J. H. Davis and F. D. Schoorman: 1995, 'An Integrative Model of Organizational Trust', Academy of Management Review 20, 709–734.Google Scholar
  37. McAllister, D. J.: 1995, 'Affect-and Cognition-based Trust as Foundations for Interpersonal Cooperation in Organizations', Academy of Management Journal 38, 24–59.Google Scholar
  38. McCarthy, M. J.: 1999, 'An Ex-divinity Student Works on Searching the Corporate Soul', Wall Street Journal ( June 18), B1.Google Scholar
  39. McDonald, G.: 2000, 'Cross Cultural Methodological Issues in Ethical Research', Journal of Business Ethics 27(1/2), 89–104.Google Scholar
  40. Melloan, G.: 1999, 'Examining the Engine of Economic Growth', The Wall Street Journal ( January 12), A23.Google Scholar
  41. Nair, S. R.: 1998, 'Doing Business in China: It's Far from Easy', in F. Maidment (ed.), Annual Editions: International Business (Dushkin/McGraw-Hill, Guilford, CT).Google Scholar
  42. Oddo, A. R.: 1997, 'A Framework for Teaching Business Ethics', Journal of Business Ethics 16(3), 293–297.Google Scholar
  43. Parfit, M.: 1996, 'Mexico City: Pushing the Limits', National Geographic 190(2), 24–43.Google Scholar
  44. Phillips, M. M.: 1999, 'World Bank Says it Failed to Confront Indonesian Corruption, Financial Ills', Wall Street Journal (February 12), A15.Google Scholar
  45. Roepke, W.: 1996, The Moral Foundations of Civil Society, translated by C. S. Fox (Transaction Publishers, New Brunswick, NJ).Google Scholar
  46. Rousseau, D., S. Sitkin, R. Burt and C. Camerer: 1998, 'Not so Different after All: A Cross-discipline View of Trust', Academy of Management Review 23, 393–404.Google Scholar
  47. Shellenbarger, S.: 1999, 'Companies Declare Lofty Employee Values, Then Forget to Act', Wall Street Journal ( June 16), B1.Google Scholar
  48. Society for Human Resource Management: 1998, 'International Attention Turns to Corruption', Workplace Visions (July/August), 4–5.Google Scholar
  49. Solberg, J., K. C. Strong and C. McGuirre, Jr.: 1995, 'Living (not Learning) Ethics', Journal of Business Ethics 14(1), 71–81.Google Scholar
  50. Solomon, C. M.: 1998, 'Put Your Ethics to a Global Test', in F. Maidment (ed.), Annual Editions: International Business, 1998/99 (Dushkin/McGraw-Hill, Guilford, CT).Google Scholar
  51. Solomon, R. C.: 1998, 'The Moral Psychology of Business: Care and Compassion in the Corporation', Business Ethics Quarterly 8(3), 515–533.Google Scholar
  52. Thomas, C. W.: 1998, 'What's so Special about International Fraud?', Today's CPA 25(3), 10.Google Scholar
  53. Torstensson, J.: 1994, 'Property Rights and Economic Growth: An Empirical Study', Kyklos 47, 231–247.Google Scholar
  54. Transparency International: 1998, TI Press Release: 1998 Corruption Perceptions Index. www. releases/1998/ 1998.09.22.cpi.html.Google Scholar
  55. Transparency International: 1997a, TI Press Release: 1997 Corruption Perceptions Index. www. transparency. de/documents/press releases/1997/1997. 31.7.cpi.html.Google Scholar
  56. Transparency International: 1997b, Corruption Perceptions Index Sources. documents/cpi/cpi-sources.html.Google Scholar
  57. Tsui, J. and C. Windsor: 2001, 'Some Cross-cultural Evidence on Ethical Reasoning', Journal of Business Ethics 31(2), 143–150.Google Scholar
  58. United Nations Development Programme: 1996, Human Development Report (Oxford University Press, New York, NY).Google Scholar
  59. Wartick, S. L. and D. J. Wood: 1998, International Business and Society(Blackwell, Malden).Google Scholar
  60. Werhane, P. H. and R. E. Freeman: 1999, 'Business Ethics: The State of the Art', International Journal of Management Reviews 1(1), 1–16. 188 Paul G. Wilhelm Google Scholar
  61. Werhane, P. H. and R. E. Freeman: 1998, 'Moral Imagination and the Search for Ethical Decisionmaking in Management', Business Ethics Quarterly 8 (Special Issue No. 1), 75–98.Google Scholar
  62. Wicks, A. C., S. L. Berman and T. M. Jones: 1999, 'The Structure of Optimal Trust: Moral and Strategic Implications', Academy of Management Review 24(1), 99–116.Google Scholar
  63. Wiehen, M. H.: 1998, 'Corruption in International Business Relations', in B.N. Kumar and H. Steinman (eds.), Ethics in International Management. (de Gruyter, New York).Google Scholar
  64. World Bank: 1999, World Development Report (Oxford, New York, NY).Google Scholar

Copyright information

© Kluwer Academic Publishers 2002

Authors and Affiliations

  • Paul G. Wilhelm
    • 1
  1. 1.School of BusinessUniversity of Texas of the Permian BasinOdessaU.S.A.

Personalised recommendations