Tool Created to Help Multinational Companies Assess Risk of Bribery When Doing Business in Foreign Countries
Nov 11, 2014
Corruption is a major problem that can inhibit global business investment, especially in emerging markets; however, businesses operating overseas have inadequate tools for assessing business bribery risk and their potential risk of violating various anti-corruption laws. This report introduces a new index, the TRACE Matrix, for business bribery risk assessment that we believe has advantages over existing alternatives.
The TRACE Matrix provides a quick and useful guide for businesses operating overseas that is based on a conceptual model of bribery risk and supported by data specific to firms. The objective of this index is to help firms assess the propensity for government bribery and its associated business risk and to provide data to inform compliance processes. We have developed a business bribery risk methodology using existing, publicly available cross-country data about risk factors, drawing on diverse data sources focused on business information. We have aggregated the data to provide a composite score for each country based on distinct categories of risk, much like a health index score that combines the key factors important to health (e.g., blood pressure, heart rate). Although countries are ranked by their composite scores, it is also possible to view the results for the different factors included in the composite score and identify the key drivers of that score. This allows firms to adjust their risk assessment and compliance practices to better suit country-specific conditions.
Development of the Business Bribery Risk Index
Outline of Domains, Subdomains, and Data Sources
Statistical Model Methodology
List of Reviewed Data Sources
Country TRACE Rankings