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Visualizing Corruption Around the World

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Visualizing Corruption Around the World

Visualizing Corruption Around the World

Growing levels of public sector corruption can stifle a country’s economic growth while also chipping away at political freedom.

Which parts of the world are perceived to be most corrupt – and further, how does this data differ between regions, and how has it trended over time?

The Corruption Perception Index (CPI)

Today’s chart pulls its numbers from the recent 2018 Corruption Perceptions Index report, which has been published by Transparency International annually since 1995. The report scores 180 countries, and is considered the world’s most widely-used barometer for corruption.

However, before we dive in to the data, it’s worth taking a quick look at the methodology behind the report:

Methodology:

  • The CPI attempts to measure perceptions about corruption in a country, rather than corruption itself
  • Specifically, it is focused on the public sector of countries, which includes governments and government-run institutions
  • The CPI is a composite index, using the results from 13 separate reports and surveys to calculate an overall score
  • Scores range from 0 (most corrupt) to 100 (most clean)

Finally, it’s also worth noting that in the chart, we’ve added in government types as rated by the Economist Intelligence Unit – they range from “Full Democracy” to “Autocratic Regime”.

The Most and Least Corrupt Places

What do experts and businesspeople see as the most and least corrupt global regions?

RegionAverage Score (CPI)
Western Europe & EU66
Americas44
Asia Pacific44
Middle East & North Africa39
Eastern Europe & Central Asia35
Sub-Saharan Africa32
Global43

Western Europe has the highest score on average, while Sub-Saharan Africa has the lowest (most corrupt) average score. The Americas ranks just above the global average score of 43, mainly because the average is skewed by the lower scores of many countries in Latin America (such as Venezuela) and the Caribbean (such as Haiti).

Now, let’s look at the top 10 countries overall:

RankCountryScore (CPI)Government typeRegion
#1Denmark88Full democracyWestern Europe & EU
#2New Zealand87Full democracyAsia Pacific
#3Finland85Full democracyWestern Europe & EU
#3Singapore85Flawed democracyAsia Pacific
#3Sweden85Full democracyWestern Europe & EU
#3Switzerland85Full democracyWestern Europe & EU
#7Norway84Full democracyWestern Europe & EU
#8Netherlands82Full democracyWestern Europe & EU
#9Canada81Full democracyAmericas
#9Luxembourg81Full democracyWestern Europe & EU

Here’s also a look at the world’s 20 most populous countries:

Most Populous Countries

As the report notes, the relation between democracy and corruption appears to be quite clear: the more democratic a regime is, the less corrupt it is perceived to be. Using the Economist Intelligence Unit rankings, there are no “Hybrid” or “Autocratic” regimes that come anywhere near the top 10.

The closest may be the U.A.E. – which is classified as an Autocratic Regime – which has a CPI score of 70, good for 23rd place globally.

Trends Over Time

Over the last seven years, the report notes that there were a few specific countries that have consistently trended in one direction or another.

Hungary: The country has seen a -9 point change to its CPI score since 2012, dropping to 46 points in total. That’s just a notch above the global average.

Turkey: Turkey’s rating has deteriorated from 49 to 41 over the 2012-2018 time period.

Argentina: The South American nation has seen its score rise by eight points over the 2012-2018 time period.

Guyana: Guyana has gained nine points – a significant improvement over its original score of 28 at the start of that time period.

What will be the next country to jump up (or down) the list – and what factors will lead to this change in perception?

Note: The color-coding on the map has been updated to better reflect CPI scores. Ukraine was incorrectly classified as an Autocratic Regime.

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5 Undeniable Long-Term Trends Shaping Society’s Future

We can’t predict the future, but we can prepare for it. Here’s a look at 5 long-term trends that are set to transform society as we know it.

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5 long-term forces changing society

We’re living in a world of rapid change, where disruption is the norm and innovation is the only way to stay relevant.

The dynamic nature of society makes it difficult to decipher. However, despite the world’s complexity, there are some long-term trends that have emerged among the chaos. These help us make sense of the world today, and can give us an idea of what to expect in years ahead.

Here’s a look at five long-term trends that are set to transform society as we know it.

The following article uses charts and data from our new book Signals (hardcover, ebook) which covers the 27 macro trends transforming the global economy and markets. In some cases, where appropriate, we’ve added in the most recent projections and data.

#1: Aging World

With every successive year, our global population is skewing older.

Since 1970, our worldwide median age has grown by almost a decade. By 2100, it’s projected to increase by another 10 years.

global median age chart in the signals book

Of course, not all countries are aging at the same rate.

Using data from the UN, the graph below covers the old-age dependency ratios (OADR) of different regions, showing the proportion of working-age citizens versus the percentage of older people, who are less likely to remain in the workforce.

old age dependency ratios chart from the signals book

What’s the economic impact of an aging population? Some potential risks include rising healthcare costs, a shrinking workforce, and even economic slowdowns.

To mitigate some of these risks, it’s crucial that countries build solid pension systems to support their aging citizens. Other potential solutions include increasing the age of retirement, enforcing mandatory retirement plans, and limiting early access to benefits.

Aging populations are also influencing the make-up of households in many countries. In the U.S., the share of multigenerational family households has been rising steadily since the 1970s.

multigenerational households in the us

At a societal level, people in the oldest age groups often play a different role in society than working age people. Many seniors engage in volunteerism and play a pivotal role in childcare for their families–activities that fall outside traditional measures of economic activity.

#2: Urban Evolution

Another macro trend that’s set to transform many regions of the world is rapid urbanization.

Currently, more than half of the global population lives in urban areas, and this influx of city-dwellers is expected to grow even more in the years ahead.

urban vs rural global population

While urbanization may seem like an long-established phenomenon, it’s actually a relatively new trend, historically speaking.

Throughout human history, populations have typically lived in small villages. All the way up to the early 1800s, close to 90% of the global population still lived in rural areas. Urbanization didn’t take off on a widespread scale until the 20th century.

But once urban migration started, it snowballed, and since then it’s shown no signs of slowing down. By 2050, over two-thirds of the global population is expected to live in urban settings.

The Rise of Megacities

Even in developing countries, urban life is becoming the norm – a shift that is causing a boom in megacity growth.

urban growth in developing countries

The median population size of the world’s top 100 cities has been growing steadily too – from eight million in 2000 to a projected 12 million in 2035.

Why is this happening? People tend to migrate to urban areas for socioeconomic reasons, and these economic pull-factors are particular strong in the developing world. Over time, this migration and increase in the standard of living is lifting millions of people out of poverty. This brings us to our third trend.

If you like this post, find hundreds of charts
like this in our new book “Signals”:


Signals: Book

#3: Rising Middle Class

While poverty is far from eradicated, the global middle class is growing, and fewer people are living in extreme poverty than ever before.

rising global middle class

As the above graph shows, there was an overall increase in daily income from 1971 to 1995. By 2019, income levels had increased even further.

According to Brookings, an average of five people are entering the global middle class per second, and by 2030, the worldwide middle class population is expected to reach 5.3 billion.

global population by wealth category

As the global middle class grows, so does the market for products and services around the world. And as the middle class has more disposable income to spend, these developing markets can create new opportunities for companies and investors alike.

In fact, according to MSCI, although global equity markets are dominated by North American companies (61.5%) in terms of market capitalization, the vast majority of revenues (70.1%) come from outside North America. As the rest of the developing world gets richer, this trend is likely to accelerate.

#4: Rising Wealth inequality

People in lower-income economies aren’t the only people generating more wealth—the richer are also increasing their net worth. By a lot.

Over the last few decades, the wealth of America’s top 10% has increased by billions of dollars, while the middle and bottom wealth groups have stayed relatively stagnant.

share of total wealth by wealth group

What’s driving this wealth inequality? One key factor is the different types of assets each wealth group owns. While the top 10% invest heavily in the stock market, other wealth groups rely on real estate as their main form of investment.

assets vs historical performance

Historically, equities have had higher returns than real estate—making the rich richer and leaving the bottom 90% behind.

#5: Environmental Pressures

So far, we’ve touched on four demographic shifts that are transforming society as we know it. But these changes in our global population size, wealth, and consumption habits have had far-reaching consequences. This last trend touches on one of those consequences—increased environmental pressure.

Since the year 1850, the global average temperature of land areas has risen twice as fast as the global average.

global surface temperatures

Various factors have contributed to increasing temperatures, but one major source stems from human-produced greenhouse gas emissions.

What human activities contribute to global emissions the most? The biggest culprit is industrial activity—32% of total emissions, while energy use in buildings comes in second at 17%.

Our Warmer World

Why is this significant? Rising temperatures pose a risk to our ecosystems and livelihood by changing weather patterns and putting the global food supply at risk.

climate change and extreme weather events

The past half-decade is likely to become the warmest five-year stretch in recorded history, underscoring the rapid pace of climate change. On a global scale, even a small increase in temperature can have a big impact on climate and our ecosystems.

For example, air can hold approximately 7% more moisture for every 1ºC increase, leading to an uptick in extreme rainfall events. These events can trigger landslides, increase the rate of soil erosion, and damage crops – just one example of how climate change can cause a chain reaction.

For the billions of people who live in “drylands”, climate change is serving up a completely different scenario of increased intensity and duration of drought. This is particularly worrisome as 90% of people in these arid or semiarid regions live in developing economies that are still very reliant on agriculture.

As a society, we will need to take a hard look at the way we consume in order to begin mitigating these risks. Will we rise to the challenge?

If you like this post, find hundreds of charts
like this in our new book “Signals”:


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Financing

The World’s Largest IPOs Adjusted For Inflation

Billion-dollar IPOs are always exciting, but how do modern raises compare to the world’s largest IPOs throughout history? We chart the top 25.

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The World’s Largest IPOs Adjusted For Inflation

Billion-dollar initial public offerings (IPOs) are always eyebrow-raising events, and many have already made headlines in 2020.

Following the recent trend of tech IPOs outnumbering and out-hyping the competition, software has led the way. Cloud storage company Snowflake raised $3.4 billion in the largest ever software IPO, while gaming software developer Unity completed an IPO above its target price for a total of $1.3 billion and big data firm Palantir opted for a direct listing for a valuation of $22 billion.

More big names are still on the horizon. Both Airbnb and DoorDash have filed for December IPOs that would see them valued at close to $30 billion. It’s a big recovery for an IPO market that in 2019 saw major IPOs from Uber and Lyft underperform estimates.

But it was the last-minute cancellation of Ant Group’s IPO in November that would have been the largest public offering ever. At $34.5 billion, it would have eclipsed the massive $25.9 billion raised by energy giant Saudi Aramco in 2019.

How would this have stacked up against the world’s largest IPOs in history? We took the 25 largest global IPOs by nominal offering size as tracked by research firm Renaissance Capital, and adjusted them for inflation to October 2020 dollars.

NTT Docomo Tops the (Adjusted) Chart

Unicorn IPOs might be the current flavor in 2020, but they pale in comparison to communication and resource giants.

When adjusted for inflation, the largest ever IPO was Japan’s major mobile phone carrier NTT Docomo. The company went public as NTT Mobile Communications Network for a then-record $18 billion in 1998, which is $28.7 billion when adjusted for inflation to 2020.

CompanyIPO DateIndustryDeal Size ($B)Inflation Adjusted ($B)
NTT MobileOct 1998Communication Services18.128.7
Saudi AramcoDec 2019Energy25.625.9
ENEL SpANov 1999Utilities16.525.5
Alibaba (U.S.)Sep 2014Technology21.823.9
SoftBank CorpDec 2018Communication Services21.322.1
VisaMar 2008Technology17.921.8
Deutsche TelekomNov 1996Communication Services1321.3
AIA GroupOct 2010Financials17.821.2
General MotorsNov 2010Consumer Discretionary15.818.8
FacebookMay 2012Technology1618.1
ICBCOct 2006Financials1418.1
Japan Tobacco Inc.Oct 1994Consumer Staples9.616.7
AT&T Wireless GroupApr 2000Communication Services10.616.1
Rosneft Oil CompanyJul 2006Energy10.413.3
Dai-ichi LifeMar 2010Financials1113.2
Kraft FoodsJun 2001Consumer Staples8.712.7
Agricultural Bank (H.K.)Jul 2010Financials10.412.4
Bank of ChinaMay 2006Financials9.211.8
France TelecomOct 1997Communication Services7.311.7
GlencoreMay 2011Materials1011.5
Alibaba (H.K.)Nov 2019Technology11.211.3
Electricite De FranceNov 2005Utilities8.311
Agricultural Bank (China)Jul 2010Financials8.910.6
Hengshi MiningNov 2013Materials9.310.4
Japan AirlinesSep 2012Industrials8.59.5

Despite the recent flurry of IPO activity, only two of the largest 10 inflation-adjusted IPOs occurred in the last two years, with second place Saudi Aramco and Japan’s communications and tech conglomerate SoftBank.

Including NTT Docomo, three of the top 10 occurred in the 1990’s. Italy’s energy giant ENEL SpA raised the equivalent of $25.9 billion in 1999, and German communications company Deutsche Telekom raised the equivalent of $21.3 billion in 1996.

Communications services accounted for five of the top 25 IPOs, and four of the top 10. Only the financials were more prominent with six of the top 25.

Final IPO Numbers can Outperform (and Underperform)

One important consideration to make is that the final amount raised by an IPO can vary from the original deal size.

Though they are underwritten by a large financial institution for a set amount at a specific price range, companies often grant underwriters the “greenshoe option” to sell more shares than the original issue amount, usually up to 15% more.

This over-allotment option lets an underwriter capitalize on a strong market by offering more shares at a surging share price (which they cover at the original price). In the opposite case of falling share prices, the underwriter can buy back shares at market rate to stabilize the price and cover their short position.

Many of the largest ever IPOs have managed to capitalize on their much-hyped debuts. Saudi Aramco ended up raising $29.4 billion, almost $4 billion more than its original offering. In similar fashion, Chinese e-commerce giant Alibaba raised $25 billion on an offering of $21.8 billion, and Visa raised $19.7 billion on an offering of $17.9 billion.

Additionally, large corporations can take advantage of market sentiment by going public in multiple equity markets. Alibaba’s $25 billion debut on the New York Stock Exchange in 2014 was followed by a secondary offering on the Hong Kong Stock Exchange in 2019 for $11.2 billion. Likewise, the Agricultural Bank of China listed on both the Hong Kong and Shanghai Stock Exchanges in 2010 for a combined $22.1 billion haul.

More IPOS on the Docket for 2021

With excitement around IPOs bubbling once again, more companies are lining up to become the next big breakthrough on public markets.

2021’s list of IPO candidates include shopping app Wish (which has already filed for an offering), gaming companies Epic Games and Roblox, payment processing firm Stripe and even dating app Bumble.

And Ant Group’s massive potential IPO shadow looms over all, though regulatory overhauls in China might push it back to 2022 and lower the size of the offering.

For now, the list of the world’s largest IPOs looks to be relatively stable. But with social media giant Facebook cracking the Top 10 list in 2012, and SoftBank’s massive IPO in 2018, the next +$10 billion dollar IPO is always around the corner.

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