FEB 14 — The release of the Corruption Perceptions Index (CPI) 2025 places Malaysia in an interesting position.
The score increased from 50 to 52, and the country’s global ranking improved to 54th.
In policy analysis, these figures should be read as a signal, not a verdict. The CPI measures how business actors and experts perceive public-sector corruption.
It is sensitive to the prosecution of major cases, regulatory changes, and the credibility of institutions. Malaysia’s challenge is to convert this short-term signal into long-term structure, from an integrity architecture resilient to political shocks.
A useful conceptual framework for understanding corruption combines the principal–agent model and collective action theory.
Malaysia’s experience after the 1MDB scandal shows how quickly public perceptions can shift when institutions are seen as weak. In the principal–agent approach, corruption occurs when agents (officials) deviate from the principal’s mandate (the public) due to information asymmetries and weak oversight.
In the collective action approach, corruption persists because it becomes the rules of the game. Everyone believes everyone else is corrupt, so the cost of staying honest feels higher than going with the flow.
Sustainable CPI improvements typically come from both channels, strengthening oversight and sanctions, while simultaneously shifting norms and public expectations toward integrity.
Malaysia’s experience after the 1MDB scandal shows how quickly public perceptions can shift when institutions are seen as weak. — Reuters pic
From the principal–agent perspective, law enforcement actions against high-profile cases create a deterrence effect. Consistent punishment of senior figures weakens the belief that office can buy impunity.
Deterrence matters, but it has limits, enforcement is reactive, often slow, and costly in terms of evidence and litigation. That is why countries that improve their scores sustainably usually strengthen prevention through institutional design, especially at vulnerable points such as public procurement, licensing, and the governance of state-linked entities.
Public procurement is a classic arena for discretion-based corruption. Contract values are large, technical information is complex, and the scope for collusion is high.
Hence, building a more standardised procurement framework, establishing review mechanisms for decisions, and providing administrative appeals channels are relevant steps.
But design alone is not enough, what ultimately matters is implementing regulations and data transparency. A credible procurement architecture requires at least three elements: (1) transparent contract data (winners, contract values, procurement methods, and justification), (2) strict limits on direct negotiations and exemptions, and (3) post-award performance audits that lead to swift administrative sanctions.
Another factor shaping corruption perceptions is information openness and audit capacity. When the public can access basic information about budgets, contracts, and corporate beneficial ownership, the cost of hiding corruption increases.
At this point, reforms such as stronger audits of state-linked entities and beneficial-ownership transparency are more than technical adjustments, they reshape incentives.
Shell companies and nominees, often used as vehicles for bribery, become harder to deploy when ownership disclosure and transaction reporting are tightened.
From the collective action standpoint, the greatest challenge is consistency. The public will move toward an integrity norm only if they believe rules apply equally to everyone.
If law enforcement appears selective — tough on one side, lenient on another— the corruption norm is reinforced because people assume the game remains the same, only the players change.
This is why reforms affecting prosecutorial independence, institutional accountability, and whistleblower protection have strategic value.
Whistleblowers are among the cheapest sensors for detecting corruption that auditors cannot easily see. Without real protection, critical information stays locked inside organizations.
Governance reputation is directly linked to the cost of capital and the quality of investment. Countries perceived as less corrupt tend to enjoy lower risk premia, making public and private project financing cheaper.
In this context, the National Anti-Corruption Strategy 2024–2028, the formation of a CPI monitoring task force, and legislative agendas such as freedom of information and a public-service ombudsman can function as commitment devices that reduce uncertainty.
Yet commitment only has meaning if paired with an implementation timetable, budget allocation, and an independent evaluation mechanism.
Globally, the CPI average remains relatively low, meaning competition to attract high-quality investment will increasingly be determined by institutional credibility.
If Malaysia aims to move into the top tier — say, approaching the world’s top 25 — it needs a substantial score increase.
In practice, that requires dismantling rent-seeking incentives in public contracting and enforcing strict oversight of state-linked entities.
This is not a one-ministry project; it demands coordination across fiscal policy, law enforcement, bureaucratic reform, and civil society engagement as legitimate oversight.
Malaysia should concentrate its energy on reforms that reduce discretion and increase verifiability.
A realistic target is not merely chasing annual score increments but building a set of integrity performance indicators such as the share of open tenders, average licensing processing times, the number of contracts audited for performance, the follow-up rate on whistleblower reports, and asset recovery accompanied by final court decisions.
Indicators like these allow anti-corruption commitments to be assessed, rather than endlessly debated.
Ultimately, CPI 2025 gives Malaysia a political opportunity. There is recognition that the policy direction is improving.
But this opportunity will last only if the country dares to complete the “boring” reforms that truly matter: open procurement data, strong audits, effective whistleblower protection, transparent political finance rules, and consistent prosecution.
If that structure is built, the CPI will rise as consequences, not as the goal.
* Dr Zuhairan Yunmi Yunan is a Senior Lecturer at the Department of Economics, Faculty of Business and Economics, University Malaya and may be reached at [email protected]
** This is the personal opinion of the writer or publication and does not necessarily represent the views of Malay Mail.
