Composite index for measuring corruption risk for the Italian municipalities

The present research project aims to calculate a corruption risk index in Italian municipalities for the year 2019. Corruption is globally recognized as a scourge and a disease for humanity, and there have been many attempts to combat, suppress, and reduce it. To achieve this goal, the first step is undoubtedly to understand it, a task among the most complex given its subtle and underground nature in the socio-political and economic fabric. After discussing corruption from its history to its various scientific and humanistic aspects in literature and in the agendas of all global institutions, we aim to illustrate the procedure used to calculate the corruption risk index for each Italian municipality. We will discuss existing techniques in scientific literature, outlining their pros and cons (PCA and FA versus other kind of aggregation), and describe why the choice was made to use a non-linear index construction method, based on a non-compensatory approach: all indicators are selected in relation to the connections between the phenomenon and possible causes, by reviewing well-established studies in the literature of the field. The synthesis procedure consists of an arithmetic mean adjusted by a function of variability (MPI) that penalizes the geographical areas with an unbalanced distribution of the indicators: indicators are measured with different units and balanced through their variability, therefore this method panders to the nature of the data itself and not to objective and decontextualized criteria about weithning or discarding indicators. If the index has a high value, all the individual indicators must assume high values, starting from assumption that the variables themselves have equal importance. The results obtained are consistent with those presented at the national level with ISTAT's BES (Benessere Equo Sostenibile) or the Quality-of-Life index (Sole 24 Ore), where there has been a longstanding gap between the North, Central, and Southern regions, with a tendency towards better living conditions in the northern regions compared to the rest of the country. However, the possibility of analyzing the index value at such a small territorial unit as the municipality is the real novelty of this work. The results allow for navigation throughout the Italian territory, indicating affinities and coherence, and enabling important deductions starting from a single value of a municipality. Insights for improvement can arise especially from the most surprising and data in constrast with expected outcomes; results can be subjtected to a verification process through the matching of facts that have happened or other data sources making the procedure more robust using the use of additional sources and studies on the phenomenon.