Table 2.5 ICRG corruption score (2011

Table 2.5 ICRG corruption score (2011) Some selected countries

Country Year/2011

Australia 5.00 New Zealand 5.50 China 2.00 Korea DPR 1.00 Malaysia 2.50 Japan 4.50 Myanmar 1.50 Singapore 4.50 Bangladesh 3.00 India 2.00 Pakistan 2.00 Sri Lanka 2.50

N.B.: ICRG values range between 0 and 6; Higher values represent low potential risk of corruption. Source: The PRS Group Inc., 2011, ‘International Country Risk Guide’, Available from <http:// www.prsgroup.com/icrg.aspx> [16 May 2011].

system serves its businesses and investors in terms of solving disputes and providing protection. The level of economic risks a country faces, including influence of organized crime and bureaucratic barriers, is determined by a number of sources such as the World Bank Doing Business Database and the Global Competitiveness Report (Kurtzman et al., 2004).

To calculate the opacity score (1) a sub-index is calculated for each of the five CLEAR categories using simple averages and (2) the simple average of the five sub-indices is taken to determine the final score. It is then possible to assign each final score with an opacity risk premium/discount expressed as an interest rate equivalent. This interest rate equivalent is calculated by taking the difference between the opacity of the subject country and the United States and multiplying it by 0.2213. If, for example, France had an interest rate equivalent of 3.53 then a US investor wanting to invest in French assets would need to receive a return 3.53% higher than he would receive in the US to offset the risk (Kurtzman et al., 2004).