Summary: The Opacity Index was initially launched in 2000 by PricewaterhouseCoopers. The objective was to look beyond corruption alone, to examine other aspects of business practices that raised the costs of business and capital and inhibit economic growth.
Main Points: By the first quarter of 2001, the first opacity index — based upon survey responses of corporate leaders, banking executives, equity analysts, and in-country staff of PricewaterhouseCoopers — was compiled and released to the public.
To create a country-by-country ranking of opacity — the degree to which countries lack clear, accurate, easily discernable and widely accepted practices governing the relationships among businesses, investors, and governments — data was compiled from 70 different sources of which about 40 are directly comparable across 50 countries.
Main components of opacity – CLEAR factors:
· efficiency of the legal system,
· deleterious economic policy,
· inadequate accounting and governance practices,
· detrimental regulatory structures.
The final score is the simple average of the five above mentioned subindices.
The Opacity Index draws upon 65 objective variables from 41 sources including the World Bank, International Monetary Funds, International Secu- rities Services Association, International Country Risk Guide and individual country’s regulators. Considerable effort has been made to ensure that the data are directly comparable across the 48 countries we studied.
Access to database: http://www.pwc.fr/the_opacity_index.html
Source: Joel Kurtzman, Glenn Yago, Triphon Phumiwasana, The Opacity Index: Research Overview 2004
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