Here's a list of widely recognized official composite indicators, ranked by relevance based on their

global usage, influence on policy-making, and comprehensive coverage of key socio-economic and
environmental dimensions:

1. Human Development Index (HDI) - UNDP

 Usage: Measures a country's average achievements in health, education, and income.

 Relevance: Highly influential in global development discourse, highlighting well-being
beyond GDP.
 Components: Life expectancy at birth, mean years of schooling, expected years of
schooling, and GNI per capita.

2. Global Competitiveness Index (GCI) - World Economic Forum

 Usage: Assesses the productivity and prosperity potential of economies worldwide.

 Relevance: Key for economic policy and investment decisions.
 Components: Institutions, infrastructure, ICT adoption, macroeconomic stability, health,
education, and innovation capability.

3. Corruption Perceptions Index (CPI) - Transparency International

 Usage: Ranks countries based on perceived levels of public sector corruption.

 Relevance: Widely cited in governance and investment risk analyses.
 Components: Expert assessments and business surveys from reputable institutions.

4. Environmental Performance Index (EPI) - Yale & Columbia Universities

 Usage: Evaluates environmental health and ecosystem vitality across nations.

 Relevance: Influential in shaping environmental policies and sustainability strategies.
 Components: Climate change, environmental health, biodiversity, and resource
management.

5. Gender Inequality Index (GII) - UNDP

 Usage: Measures gender disparities in reproductive health, empowerment, and economic

status.
 Relevance: Highlights gender-based challenges in development.
 Components: Maternal mortality, adolescent birth rates, parliamentary representation,
education, and labor force participation.

6. Global Innovation Index (GII) - WIPO, INSEAD, Cornell University

 Usage: Benchmarks countries' innovation capabilities and performance.

 Relevance: Key reference for policymakers, businesses, and investors.
 Components: Institutions, human capital, research, infrastructure, market sophistication,
and knowledge outputs.

7. Social Progress Index (SPI) - Social Progress Imperative

  Usage: Measures the extent to which countries provide for the social and environmental
needs of their citizens.
 Relevance: Offers a holistic view of societal well-being beyond economic indicators.
 Components: Basic human needs, foundations of well-being, and opportunity.

8. Global Peace Index (GPI) - Institute for Economics & Peace

 Usage: Assesses the level of peace in countries based on safety, conflict, and militarization.
 Relevance: Widely referenced in security and conflict studies.
 Components: Societal safety, internal and external conflicts, and degree of militarization.

9. Sustainable Development Goals Index (SDG Index) - SDSN, Bertelsmann

Stiftung

 Usage: Tracks countries’ progress towards achieving the 17 UN SDGs.

 Relevance: Central to global development agendas.
 Components: Indicators covering poverty, health, education, inequality, climate action, etc.

10. Doing Business Index (DBI) - World Bank (Discontinued in 2021)

 Usage: Evaluated business regulations and their impact on entrepreneurship across

economies.
 Relevance: Influenced regulatory reforms globally before discontinuation due to data
integrity issues.
 Components: Starting a business, dealing with construction permits, getting credit,
protecting investors, etc.

11. Better Life Index (BLI) - OECD

 Usage: Allows comparison of well-being across countries based on factors people care
about.
 Relevance: Popular for its interactive, user-driven approach to well-being.
 Components: Housing, income, jobs, community, education, environment, governance,
health, life satisfaction, safety, work-life balance.

12. Fragile States Index (FSI) - Fund for Peace

 Usage: Highlights risks and vulnerabilities within states.

 Relevance: Critical in humanitarian aid, conflict prevention, and security studies.
 Components: Social, economic, political, and cohesion indicators.

13. World Happiness Report - UN Sustainable Development Solutions Network

 Usage: Ranks countries by happiness levels based on survey data.

 Relevance: Brings subjective well-being into global policy discussions.
 Components: GDP per capita, social support, healthy life expectancy, freedom, generosity,
and perceptions of corruption.

14. Logistics Performance Index (LPI) - World Bank

  Usage: Assesses countries' logistics efficiency in international trade.
 Relevance: Important for understanding supply chain dynamics.
 Components: Customs, infrastructure, international shipments, logistics competence,
tracking, and timeliness.

15. Global Gender Gap Index (GGGI) - World Economic Forum

 Usage: Measures gender-based gaps in economic, political, education, and health metrics.
 Relevance: Widely cited in gender equality advocacy and policy development.
 Components: Economic participation, educational attainment, health, and political
empowerment.

Would you like more details on any specific index, or perhaps guidance on how to interpret or apply
them in a project?

Building the Corruption Perceptions Index (CPI) Aligned with Official Composite
Indicator Criteria

The Corruption Perceptions Index (CPI) follows a rigorous methodology that aligns with the 10
official steps for constructing a composite indicator. Below is a revised version of the CPI
construction process structured according to these criteria:

Step 1: Theoretical Framework

Before constructing the CPI, it is essential to define the theoretical foundation:

 The CPI measures perceived public sector corruption, which includes bribery, misuse of
public power, and lack of transparency.
 It is based on the assumption that expert opinions and business perceptions provide a
reliable measure of corruption trends.
 The CPI does not measure actual corruption levels (which are difficult to quantify due to
hidden transactions).
 Transparency International (TI) justifies the index’s relevance by demonstrating its
correlation with governance, economic stability, and institutional trust.

✅ Why it matters: A clear theoretical foundation ensures the CPI aligns with real-world corruption
dynamics and serves as a policy tool.

Step 2: Data Selection

 Sources: The CPI aggregates data from 13 internationally recognized sources, including:
o World Bank (WGI), World Economic Forum (EOS), Economist Intelligence
Unit (EIU), and others.
  Selection criteria: Each source must:
✅ Be regularly updated.
✅ Use expert/business assessments rather than self-reported data.
✅ Allow cross-country comparisons.
 Country Inclusion: A country is included in the CPI if it has data from at least three
sources to ensure reliability.

✅ Why it matters: Selecting diverse and independent data sources increases the robustness of the
CPI and prevents bias.

Step 3: Imputation of Missing Data

 Policy on missing data: The CPI does not impute missing values—countries without at
least three data sources are excluded.
 Reasoning: Since corruption perception varies across sources, imputing missing data could
introduce bias or artificial stability.

✅ Why it matters: Excluding countries with insufficient data ensures statistical integrity and
prevents misleading rankings.

Step 4: Multivariate Analysis

 Statistical validation: CPI data is tested for internal consistency across sources.
 Key methods used:
o Principal Component Analysis (PCA): Ensures that data sources measure similar
corruption-related constructs.
o Correlation analysis: Checks whether different sources provide consistent
assessments of corruption.
o Factor analysis: Ensures that each data source contributes meaningfully to the
composite index.

✅ Why it matters: Verifying consistency across multiple sources strengthens the credibility of the
CPI score.

Step 5: Normalization
 Challenge: Each source reports corruption on different scales (e.g., 1–5, 0–10).
 Solution: Scores are rescaled to a 0–100 scale, where:
o 0 = Highly corrupt
o 100 = Very clean
 Normalization formula: X′=X−XminXmax−Xmin×100X' = \frac{X - X_{\text{min}}}
{X_{\text{max}} - X_{\text{min}}} \times 100 where XX is the original score, and
 XminX_{\text{min}} and XmaxX_{\text{max}} are the minimum and maximum values for
that source.

✅ Why it matters: Normalization ensures that all sources contribute proportionally and comparably
to the final CPI score.

Step 6: Weighting and Aggregation

 Weighting policy: All sources are equally weighted to prevent bias from any single
institution.
 Aggregation method: The CPI score for a country is the simple average of all its
normalized source scores.

Example:

Source Raw Score Normalized (0-100)

Source A 4.5/5 90
Source B 7/10 70
Source C 2/5 40
Final CPI Score (90+70+40)/3 = 67

✅ Why it matters: Equal weighting prevents undue influence from any single data source and
ensures comparability across years.

Step 7: Uncertainty and Sensitivity Analysis

 Uncertainty sources: Variations in expert opinions, business surveys, and geopolitical
events can influence CPI scores.
 Measures taken:
o Confidence intervals are assessed to check data variability.
o Year-to-year stability checks prevent artificial fluctuations.
o Sensitivity analysis tests whether removing any single source significantly alters
country rankings.

✅ Why it matters: Acknowledging uncertainty ensures that CPI rankings reflect real corruption
trends rather than statistical noise.

Step 8: Back to the Data

 Validation process: After computing scores, Transparency International re-examines the
raw data to check for:
o Sudden, unexplained shifts in rankings.
o Methodological inconsistencies in data sources.
 o Outliers that require further investigation.
 Cross-checking with qualitative reports: CPI scores are compared with case studies,
investigative journalism, and policy reports to ensure real-world accuracy.

✅ Why it matters: Revisiting the data before publishing prevents errors and ensures transparency in
corruption assessments.

Step 9: Links to Other Indicators

 CPI correlations with other governance indicators:
o Human Development Index (HDI) → Countries with low corruption tend to have
higher human development.
o Ease of Doing Business Index → Corrupt countries have lower investor confidence.
o Rule of Law Index → Strong legal systems correlate with low CPI corruption
scores.
 Use by international organizations:
o The World Bank, UN, and IMF use CPI scores to guide governance reforms and
policy decisions.

✅ Why it matters: Linking the CPI with other global indicators strengthens its policy relevance and
analytical value.

Step 10: Visualization of the Results

Transparency International presents CPI data in multiple formats to enhance usability:

1. Global Corruption Map → Color-coded world map showing corruption levels.

2. Rankings Table → List of countries ranked from least to most corrupt.
3. Time Series Graphs → Tracking corruption trends over time.
4. Regional Comparisons → Comparing corruption across continents.

✅ Why it matters: Clear visual representation of the CPI helps policymakers, businesses, and the
public easily interpret corruption trends.

Final Summary: CPI Construction Process Using the 10

Official Steps
Step CPI Implementation
Defines corruption as public sector misuse and justifies a perception-
1. Theoretical Framework
based measure.
2. Data Selection Uses 13 expert/business-based data sources.
3. Imputation of Missing No imputation—countries with <3 sources are excluded.
 Step CPI Implementation
Data
4. Multivariate Analysis Ensures consistency across sources via PCA, correlation checks.
5. Normalization Converts all sources to a 0-100 scale.
6. Weighting and
Uses equal weighting and computes a simple average.
Aggregation
7. Uncertainty Conducts confidence interval analysis, sensitivity tests.
8. Back to the Data Validates scores through case studies and qualitative checks.
9. Links to Other
Correlates with HDI, Rule of Law, Ease of Doing Business.
Indicators
10. Visualization Presents data via maps, tables, graphs for accessibility.

Step 3: Imputation of Missing Data

 If a country lacks data for an explanatory factor, imputed values from similar countries
(based on regional and economic profiles) are used.
 The missing data is handled using statistical modeling techniques such as regression or
historical averages.

✅ Why it matters: Ensures full country coverage while minimizing bias.

Step 4: Multivariate Analysis

 Regression analysis is used to determine how much each of the six factors explains
happiness scores across countries.
 Principal Component Analysis (PCA) verifies that the factors are distinct but related
dimensions of well-being.
 Correlation checks ensure that no single factor dominates the index (e.g., GDP alone does
not define happiness).

✅ Why it matters: Validating relationships between variables strengthens the credibility of the
index.

Step 5: Normalization
 Since the explanatory factors use different scales (e.g., GDP is in dollars, life expectancy is
in years), they are normalized.
 Each factor is converted into a standardized z-score to allow comparability.

✅ Why it matters: Ensures that no single factor skews the overall happiness ranking.
Step 6: Weighting and Aggregation
 The happiness score is primarily based on the Cantril Ladder survey results (self-
reported life satisfaction).
 The six explanatory factors are used to statistically explain variations in life satisfaction
but do not directly contribute to the final score.
 This approach avoids subjective weighting while allowing policymakers to understand the
drivers of happiness.

✅ Why it matters: Using survey data as the primary measure ensures happiness is captured
directly from people’s perceptions.

Step 7: Uncertainty and Sensitivity Analysis

 Confidence intervals are reported for each country’s score to show statistical uncertainty.
 Year-over-year stability checks ensure results are consistent despite survey sample
variations.
 Alternative models are tested to ensure that using different weights or factors does not
dramatically change rankings.

✅ Why it matters: Quantifying uncertainty helps avoid misleading policy conclusions.

Step 8: Back to the Data

 Before publishing, data is cross-checked for anomalies (e.g., sudden jumps or declines in
happiness that seem unrealistic).
 Countries are allowed to review their data and provide clarifications if needed.
 Peer review by academic experts ensures robustness.

✅ Why it matters: Maintaining data integrity increases trust in the index.

Step 9: Links to Other Indicators

 The WHI is often compared with:
o GDP per capita (to analyze the economic-happiness relationship).
o Human Development Index (HDI) (to assess well-being beyond income).
o Gini Index (to explore the impact of inequality on happiness).
o Mental health surveys (to evaluate psychological well-being).
 Countries with high happiness scores tend to perform well in other quality-of-life
indicators.
✅ Why it matters: Connecting the WHI to other well-being measures strengthens its policy
relevance.

Step 10: Visualization of Results

 World Happiness Rankings → A table ranking countries from happiest to least happy.
 Happiness Heatmaps → Color-coded maps showing happiness levels by region.
 Factor Analysis Charts → Graphs showing which explanatory variables have the strongest
impact.
 Yearly Trends → Comparisons of happiness scores over time.

✅ Why it matters: Clear visualizations help policymakers and the public understand and engage
with the findings.