New Zealand has been knocked off its perch as the least corrupt country on earth, slipping to number two on the just-announced Transparency International Corruption Perception Index. So does this mean we're becoming more corrupt?

And, with so many corruption stories and allegations in the media and politics over the last year, shouldn't we have expected our ranking to drop further than just one place? Why hasn't Dirty Politics translated into an international 'telling off' for New Zealand?

Should New Zealand have fallen further?

The first thing to note about the New Zealand's drop in the corruption index is that the raw score for the country remains the same: 91 out of 100. By contrast Denmark has increased its score to 92, which explains the loss of the number one ranking. Therefore this is hardly bad news for New Zealand's reputation.

Should New Zealand have fallen further? With the explosion of political finance scandals and allegations of the last year, it might have been expected that New Zealand would plummet in the global rankings rather than just lose one place. Haven't the scandals around the National Government tarnished New Zealand's supposedly corruption-free status?

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Of course the Transparency International index is one of perception. It is impossible to actually measure real corruption - by its very nature corruption is somewhat hidden and intangible - and therefore other metrics are necessary as proxies.

Transparency International produces the Corruption Perception Index by aggregating a number of other surveys and investigations into integrity and governance around the world.

New Zealand's CPI score is based on reports coming out from twelve studies, including the World Justice Project Rule of Law Index 2014, the Bertelsmann Foundation Sustainable Governance Indicators 2014, and the World Bank - Country Policy and Institutional Assessment 2013.

If you look at these individual reports - unfortunately most of them are not public - you can get an idea of how New Zealand scores on some elements of what counts for integrity and protections against corruption. For example, the World Justice Project ranks New Zealand as six out of ninety-nine in the world.

But what's particularly important to note is that all of these individual reports were produced prior to July 2014. Therefore they clearly do not capture any of the potential impact of the big scandals of the year - particularly Nicky Hager's Dirty Politics book.

If such election-year scandals are to impact on New Zealand's corruption index, we will have to wait one more year until the next report. But even then, it is not certain that they will make a difference.

Other measurements of corruption levels in New Zealand

There is certainly something of a paradox in which New Zealand has a reputation as a politically clean country, but many of us experience something different. It could simply be that the international reports and investigations - which could be seen to have something of an elite-bias - do not capture the public experience. And in some respects they are blunt measures that cannot detect the more detailed dynamics of corruption and integrity in public life.

Perhaps for these reasons Transparency International also commissions other investigations and studies to provide complementary information on corruption. For example, last year's Global Corruption Barometre showed a very different picture of public life in New Zealand. Based on surveys of public opinion, it showed that there is a crisis of confidence in many public institutions.

The results for this country show that political parties in particular are perceived as being corrupt, along with institutions such as Parliament and the media. For example, according to the survey, 75% of New Zealanders believe that political parties are affected by corruption. 12% believe the parties are 'extremely corrupt'.

What's more, in this 2013 Transparency International report, corruption was seen as a growing problem by New Zealanders, with nearly two-thirds (64%) of New Zealanders stating that levels of corruption in New Zealand had increased in the previous two years. For more information, see my 2013 blog post, Corruption in New Zealand survey .

Also last year, Transparency International New Zealand released its in-depth and landmark report, Integrity Plus 2013 New Zealand National Integrity System Assessment. This gave a more nuanced and considered idea of where New Zealand public life has strength and weaknesses. It identified many areas where improvement is needed.

Why are allegations of corruption increasing?

A caution about the perceptions of increased corruption in New Zealand also needs to be made. Just because there are many more media stories and allegations of corruption made by politicians, this doesn't actually mean that New Zealand is becoming more corrupt.

There is no doubt that we are living in a more scandal-oriented time, when we hear much more about alleged corruption. But apart from a few significant examples, many of the allegations remain unproven or contentious. The publication of Nicky Hager's Dirty Politics, despite all of the vitally important issues it raised about democracy in New Zealand, did not necessarily prove that corruption is now running wild.

And we should take allegations about corruption from various politicians with even more caution. Such allegations are the new weapon of electioneering. In a period when policy is less important or divergent in New Zealand politics, it is now issues of integrity that have become the main battleground for the political parties. They can often score easy hits against opponents by impugning their reputations.

So, on the one hand we should celebrate that New Zealand remains near the top of the global rankings, but we need to continue to look out for the ways in which the integrity of politics and democracy might still be undermined.

Disclosure: Bryce Edwards is on the Board of Directors of Transparency International New Zealand. However these comments are made in his personal capacity and should not in any way be seen as the view of Transparency International New Zealand.

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