Worldwide Governance Indicators

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2005 map of Worldwide Governance Indicators, which attempts to measure the extent to which agents have confidence in and abide by the rules of society
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90-100th percentile*
75-90th percentile
50-75th percentile
25-50th percentile
10-25th percentile
0-10th percentile
* Percentile rank indicates the percentage of countries worldwide that rate below the selected country. Maprl.png
2005 map of Worldwide Governance Indicators, which attempts to measure the extent to which agents have confidence in and abide by the rules of society
Legend:
  90–100th percentile*
  75–90th percentile
  50–75th percentile
  25–50th percentile
  10–25th percentile
  0–10th percentile
* Percentile rank indicates the percentage of countries worldwide that rate below the selected country.

Based on a long-standing research program of the World Bank, the Worldwide Governance Indicators capture six key dimensions of governance (Voice & Accountability, Political Stability and Lack of Violence, Government Effectiveness, Regulatory Quality, Rule of Law, and Control of Corruption) between 1996 and present. They measure the quality of governance in over 200 countries, based on close to 40 data sources produced by over 30 organizations worldwide and are updated annually since 2002.

Contents

The governance indicators contribute to the growing empirical research of governance which have provided activists and reformers worldwide with advocacy tools for policy reform and monitoring. The indicators, and the underlying data behind them, are part of the current research and opinions that have reinforced the experiences and observations of reform-minded individuals in government, civil society, and the private sector, that good governance is key for development. [1] Their growing recognition of the link between good governance and successful development, as empirical evidence suggests, [1] has stimulated demand for monitoring the quality of governance across countries and within individual countries over time. Virtually all of the individual data sources underlying the aggregate indicators are, along with the aggregate indicators themselves, publicly available.

The Worldwide Governance Indicators are a compilation of the perceptions of a very diverse group of respondents, collected in large number of surveys and other cross-country assessments of governance. Some of these instruments capture the views of firms, individuals, and public officials in the countries being assessed. Others reflect the views of NGOs and aid donors with considerable experience in the countries being assessed, while others are based on the assessments of commercial risk-rating agencies.

A complementary vision of the macro-level Worldwide Governance Indicators are the World Bank Governance Surveys, which are country level governance assessment tools developed by the World Bank Institute.

Criticisms

The Worldwide Governance Indicators offer a useful snapshot of some perceptions of a country’s quality of governance but researchers have pointed out significant problems in their construction. These critiques have been extensively rebutted by the WGI authors in several publications. [2] [3] [4]

These critics have claimed that users often fail to take into account or are not aware of their limitations. Criticisms include: [5] [6] [7]

Strengths

Despite the above noted limitations and concerns recent econometric research looking at how reliable some of these indicators are, vis-a-vis data collected from natural experiments and other observational surveys, have actually concluded that the Good Governance Indicators do in fact seem to be measuring, albeit imperfectly, levels of corruption and government effectiveness. [9] Concepts like corruption are inherently illicit and therefore difficult to measure. [10] [11] While including multiple sources can make these indicators confusing, it can also avoid the potential for bias or influence over any single source. [11] The weighting process for these indicators attempts to improve on issues of uncertainty present in other indices like the Corruption Perceptions Index. [11] These indicators are also well correlated with other indicators of good governance indicating that any issues present may be present in all governance indicators. [12] [13] [14]

These indicators also have credibility due to their wide use in academia, international development, and business. [14] [15] [16] They are used by a range of credit rating agencies such as Moody's, Standard & Poor's, and Fitch to determine sovereign bond ratings. [15] [17] [16] A number of bilateral foreign assistance agencies, such as the US Government's Millennium Challenge Corporation condition aid on a country's performance on these indicators. [18] [14] These uses are often justified by reference to the connection between these indicators and development outcomes such as growth and poverty reduction as well as technical features of this dataset such as the broad country coverage and consistent, annual updates. [19] [18] [14]

See also

Related Research Articles

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Political corruption is the use of powers by government officials or their network contacts for illegitimate private gain.

Good governance is the process of evaluating how well public institutions manage public resources, conduct public affairs, and ensure the realization of human rights in a way that is largely free from abuse and corruption and properly takes into account the rule of law. Governance refers to "the process of decision-making and the process by which decisions are implemented " . Governance in this context can apply to corporate, international, national, or local governance as well as the interactions between other sectors of society.

Governance is the overall complex system or framework of processes, functions, structures, rules, laws and norms born out of the relationships, interactions, power dynamics and communication within an organized group of individuals. It sets the boundaries of acceptable conduct and practices of different actors of the group and controls their decision-making processes through the creation and enforcement of rules and guidelines. Furthermore, it also manages, allocates and mobilizes relevant resources and capacities of different members and sets the overall direction of the group in order to effectively address its specific collective needs, problems and challenges.

<span class="mw-page-title-main">Corruption Perceptions Index</span> Country ranking by public sector corruption

The Corruption Perceptions Index (CPI) is an index that scores and ranks countries by their perceived levels of public sector corruption, as assessed by experts and business executives. The CPI generally defines corruption as an "abuse of entrusted power for private gain". The index is published annually by the non-governmental organisation Transparency International since 1995.

<span class="mw-page-title-main">Ease of doing business index</span> Economic indicator

The ease of doing business index was an index created jointly by Simeon Djankov, Michael Klein, and Caralee McLiesh, three leading economists at the World Bank Group, following the release of World Development Report 2002. The academic research for the report was done jointly with professors Edward Glaeser, Oliver Hart, and Andrei Shleifer. Though the first report was authored by Djankov, Klein, and McLiesh, and they continue to be listed as "founders" of the report, some sources attribute the genesis of the idea to Djankov and Gerhard Pohl. Higher rankings indicated better, usually simpler, regulations for businesses and stronger protections of property rights. Empirical research funded by the World Bank to justify their work show that the economic growth effect of improving these regulations is strong. Other researchers find that the distance-to-frontier measure introduced in 2016 after a decision of the World Bank board is not correlated with subsequent economic growth or investment.

The Governance and Anti-Corruption Country Diagnostics is a survey tool, which uses information gathered from in-depth, country-specific surveys of households, businesses, and public officials about institutional vulnerabilities. The tool is used by the World Bank and partner governments to measure and evaluate critical governance challenges within the public sector.

Global Integrity was an independent, nonprofit organization tracking governance and corruption trends around the world using local teams of researchers and journalists to monitor openness and accountability. Global Integrity's reporting has been cited by over 50 newspapers worldwide, and is used by the World Bank, USAID, Millennium Challenge Corporation and other donor agencies to evaluate aid priorities. Global Integrity's methodology for metrics of governance and corruption differed from the Corruption Perceptions Index or Bribe Payers Index) because GI drew from local experts and transparent source data, rather than surveys of perceptions. Unlike traditional charities, Global Integrity was a hybrid organization that seeks to generate earned revenue to support its public-interest mission.

Daniel Kaufmann is the president emeritus of the Natural Resource Governance Institute (NRGI), which resulted from the merger of the Revenue Watch Institute – Natural Resource Charter. He is also a nonresident senior fellow at the Brookings Institution, where he was previously a senior fellow, and until July 2019 served in the international board of the Extractive Industries Transparency Initiative and in a number of advisory boards on governance, anti-corruption and natural resources and has also been in high-level expert commissions such as at the Organisation for Economic Co-operation and Development, the Inter-American Development Bank and the Mo Ibrahim Foundation. Prior to that, he was a director at the World Bank Institute, leading work on governance and anti-corruption. He was also a senior manager and lead economist at the World Bank, writing and working on many countries around the world, and was a visiting scholar at Harvard University. He has also served in other boards and councils in the past, including at the World Economic Forum.

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<span class="mw-page-title-main">Ibrahim Index of African Governance</span> Annual assessment of African countries

The Ibrahim Index of African Governance (IIAG), established in 2007, provides an assessment of the quality of governance in African countries. The IIAG is compiled by 81 indicators and 265 variables from 54 data projects, coming from 47 independent African and international data sources. Published every two years, the IIAG is one of the world’s most comprehensive collections of data on African governance.

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The Business Environment and Enterprise Performance Survey (BEEPS) is an extensive economic survey undertaken as a joint initiative of the World Bank and the European Bank for Reconstruction and Development.

The Worldwide Governance Indicators (WGI) is a project that reports both aggregate and individual governance indicators for over 200 countries and territories covering the period from 1996 to 2021. It considers six dimensions of governance:

Government competitiveness is a state capacity concept created by Tobin Im, a scholar of public administration and a professor at the Graduate School of Public Administration at Seoul National University. Since 2011, Center for Government Competitiveness (CGC) at Seoul National University has developed the Government Competitiveness (GC) index which evaluates government achievements in the various fields and furthermore provides policy recommendations to increase competitiveness of government in the future.

<span class="mw-page-title-main">Joel Hellman</span> American political scientist

Joel S. Hellman is an American political scientist currently serving as dean and distinguished professor in the practice of development at the Edmund A. Walsh School of Foreign Service at Georgetown University. He was appointed in July 2015. Formerly, he was chief institutional economist at the World Bank.

The Human Capital Index (HCI) is an annual measurement prepared by the World Bank. HCI measures which countries are best in mobilizing their human capital, the economic and professional potential of their citizens. The index measures how much capital each country loses through lack of education and health. The index ranges between 0 and 1, with 1 meaning maximum potential is reached. HCI is used in country studies of employment and wages, for example in Ukraine after Russia's invasion.

The government effectiveness index is a ranking of state capacity developed by the World Bank Group. It measures the quality of public services, civil service, policy formulation and implementation, and the credibility of a government's commitment to improving or maintaining these aspects. The index includes 193 countries, each scored from -2.5 to 2.5. It is part of a broader set of government quality indicators.

<span class="mw-page-title-main">Bertelsmann Transformation Index</span> Benchmark for democracy and market economy

The Bertelsmann Transformation Index (BTI) is a measure of the development status and governance of political and economic transformation processes in developing and transition countries around the world. The BTI has been published biennially by the Bertelsmann Stiftung since 2005, most recently in 2022 on 137 countries. The index measures and compares the quality of government action in a ranking list based on self-recorded data and analyzes successes and setbacks on the path to constitutional democracy and a market economy accompanied by sociopolitical support. For this purpose, the "Status Index" is calculated on the general level of development with regard to democratic and market-economy characteristics and the "Management Index" on the political management of decision-makers.

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References

  1. 1 2 Kaufmann, Daniel and Kraay, Aart, "Growth Without Governance" (November 2002). World Bank Policy Research Working Paper No. 2928.
  2. Kaufmann, Daniel, Aart Kraay and Massimo Mastruzzi (2007). "The Worldwide Governance Indicators: Answering the Critics". World Bank Policy Research Working Paper No 4149.
  3. Kaufmann, Daniel, Aart Kraay and Massimo Mastruzzi (2010). "Response to: What Do the Worldwide Governance Indicators Measure". European Journal of Development Research.
  4. Kaufmann, Daniel, Aart Kraay and Massimo Mastruzzi (2010). "Response to Knack-Langbein".
  5. Arndt, C.; Oman, C. (2008). "The Politics of Governance Ratings" (PDF). Working Paper MGSoG/2008/WP003.
  6. Thomas, M. (2009). "What Do the Worldwide Governance Indicators Measure?". European Journal of Development Research. 22 (1): 31–54. CiteSeerX   10.1.1.590.3190 . doi:10.1057/ejdr.2009.32. S2CID   17500256.
  7. Langbein, L.; Knack, S. (2010). "The Worldwide Governance Indicators: Six, One, or None?". Journal of Development Studies . 46 (2): 350–370. doi:10.1080/00220380902952399. S2CID   153596987.
  8. "Documentation | Worldwide Governance Indicators". World Bank. Retrieved 23 November 2024.
  9. Hamilton, Alexander (2017). "Can We Measure the Power of the Grabbing Hand? A Comparative Analysis of Different Indicators of Corruption" (PDF). World Bank Policy Research Working Paper Series.
  10. Malito, D. (2014). Measuring corruption indicators and indices. Robert Schuman Centre for Advanced Studies Research Paper, 13.
  11. 1 2 3 Rohwer, Anja (2009) : Measuring Corruption: A Comparison between theTransparency International's Corruption Perceptions Index and the World Bank's WorldwideGovernance Indicators, CESifo DICE R eport, ISSN 1613-6373, ifo Institut für Wirtschaftsforschung an der Universität München, München, Vol. 07, Iss. 3, pp. 42-52
  12. Kaufmann, D., Kraay, A., & Mastruzzi, M. (2010). The worldwide governance indicators: Methodology and analytical issues. World Bank policy research working paper, (5430).https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1682130
  13. Kaufmann, Daniel, Aart Kraay and Massimo Mastruzzi (2007c). “Governance Matters VI: Aggregate and Individual Governance Indicators for 1996‐2006”. World Bank Policy Research Working Paper No. 4280. Washington, D.C.
  14. 1 2 3 4 Fletcher, Terry; Rosenberg, Talia (20 November 2024). "Is Governance Associated with Poverty Reduction Independent of Economic Growth?". Millennium Challenge Corporation .
  15. 1 2 Panizza, U. (2017). The use of corruption indicators in sovereign ratings. Interamerican Development Bank. https://publications.iadb.org/en/handle/11319/8562
  16. 1 2 Haspolat, Fatih Bahadir (1 January 2015). "Analysis of Moody's Sovereign Credit Ratings: Criticisms Towards Rating Agencies Are Still Valid?". Procedia Economics and Finance. IISES 3rd and 4th Economics and Finance Conference. 30: 283–293. doi: 10.1016/S2212-5671(15)01296-4 . ISSN   2212-5671.
  17. Enciso, L. F., Silva, W. V., Cruz, J. A. W., Piccoli, P. G. R., & Da Veiga, C. P. (2016). Influence of world governance indicators on the determination of sovereign ratings in Latin American countries. WSEAS Transaction son Business and Economics, 13, 216-228. https://www.academia.edu/download/104958091/a405807-415.pdf
  18. 1 2 "Guide to the MCC Scorecard Indicators for Fiscal Year 2025". Millennium Challenge Corporation. Retrieved 23 November 2024.
  19. Fletcher, Terry; Hayes-Birchler, Andria (January 2023). "Is remote measurement a better assessment of internet censorship than expert analysis? Analyzing tradeoffs for international donors and advocacy organizations of current data and methodologies". Data & Policy. 5: e9. doi: 10.1017/dap.2023.5 . ISSN   2632-3249.