Sweden's score of 88 put it behind Denmark, Finland, and New Zealand, which all tied for first place with a score of 90 out of 100 in Transparency International's 2012 Corruption Perception Index (CPI).
"The continued high ranking doesn't mean that Sweden is free of corruption," Ann Wilkens, chair of Transparency International Sweden, said in a statement.
"Municipalities and county councils have proven to be especially vulnerable – among other things, there are shortcomings in how the rules for public procurement are followed."
The organization also singled out Sweden's lack of transparency in political party financing as a vulnerability when it comes to keeping corruption in check.
Despite recent steps toward making party financing in Sweden more open, Transparency argues the current voluntary agreement among all but one political party to disclose budgets is insufficient, as details of donors are not included.
"This shields influential donors from the public eye, meaning that citizens are unable to judge who could be influencing their national politics," the organization wrote.
Other concerns included a lack of scrutiny when it comes to Swedish companies' business deals abroad.
Singapore rounded out the top five, while the United States ranked 19th, just behind Japan and the UK, which tied for 17th place.
Meanwhile, Somalia, North Korea, and Afghanistan all found themselves at the bottom of the list with scores of eight, meaning they are seen as the most corrupt countries in the world.
The Corruption Perceptions Index, produced annnually by Transparency International since 1995, uses the opinions of experts to measure the perceived levels of public sector corruption in countries worldwide.
Story continues below…
In the 2012 ranking, two thirds of the 176 countries ranked failed to score above 50, a result which the organization believes is an indication that public institutions must be more transparent.