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Governance indicators : where are we, where should we be going ?

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  • Kaufmann, Daniel
  • Kraay, Aart

Abstract

Scholars, policymakers, aid donors, and aid recipients acknowledge the importance of good governance for development. This understanding has spurred an intense interest in more refined, nuanced, and policy-relevant indicators of governance. In this paper we review progress to date in the area of measuring governance, using a simple framework of analysis focusing on two key questions: (i) what do we measure? and, (ii) whose views do we rely on? For the former question, we distinguish between indicators measuring formal laws or rules'on the books', and indicators that measure the practical application or outcomes of these rules'on the ground', calling attention to the strengths and weaknesses of both types of indicators as well as the complementarities between them. For the latter question, we distinguish between experts and survey respondents on whose views governance assessments are based, again highlighting their advantages, disadvantages, and complementarities. We also review the merits of aggregate as opposed to individual governance indicators. We conclude with some simple principles to guide the refinement of existing governance indicators and the development of future indicators. We emphasize the need to: transparently disclose and account for the margins of error in all indicators; draw from a diversity of indicators and exploit complementarities among them; submit all indicators to rigorous public and academic scrutiny; and, in light of the lessons of over a decade of existing indicators, to be realistic in the expectations of future indicators.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 4370.

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Date of creation: 01 Oct 2007
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Handle: RePEc:wbk:wbrwps:4370

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Keywords: Governance Indicators; National Governance; Public Sector Corruption&Anticorruption Measures; Economic Policy; Institutions and Governance; Banks&Banking Reform;

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References

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  1. Mireille Razafindrakoto & François Roubaud, 2006. "Are international databases on corruption reliable? A comparison of expert opinion surveys and household surveys in sub-Saharan Africa," Working Papers DT/2006/17, DIAL (Développement, Institutions et Mondialisation).
  2. Kaufmann, Daniel & Kraay, Aart & Zoido-Lobaton, Pablo, 1999. "Aggregating governance indicators," Policy Research Working Paper Series 2195, The World Bank.
  3. Omar Azfar & Peter Murrell, 2009. "Identifying Reticent Respondents: Assessing the Quality of Survey Data on Corruption and Values," Economic Development and Cultural Change, University of Chicago Press, vol. 57(2), pages 387-411, 01.
  4. Charles Oman & Christiane Arndt, 2006. "Governance Indicators for Development," OECD Development Centre Policy Insights 33, OECD Publishing.
  5. Jakob Svensson, 2005. "Eight Questions about Corruption," Journal of Economic Perspectives, American Economic Association, vol. 19(3), pages 19-42, Summer.
  6. Knack, Stephen, 2006. "Measuring corruption in Eastern Europe and Central Asia : a critique of the cross-country indicators," Policy Research Working Paper Series 3968, The World Bank.
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Citations

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Cited by:
  1. Gaoussou Diarra & Patrick Plane, 2011. "Assessing the World Bank's influence on the good governance paradigm," Working Papers halshs-00617576, HAL.
  2. Amavilah, Voxi Heinrich, 2008. "Domestic resources, governance, global links, and the economic performance of Sub-Saharan Africa," MPRA Paper 11193, University Library of Munich, Germany.
  3. Amavilah, Voxi Heinrich, 2009. "Globalization, governance, and the economic performance of Sub-Saharan Africa," MPRA Paper 15600, University Library of Munich, Germany.
  4. Gupta, Sanjeev & Kangur, Alvar & Papageorgiou, Chris & Wane, Abdoul, 2014. "Efficiency-Adjusted Public Capital and Growth," World Development, Elsevier, vol. 57(C), pages 164-178.
  5. Rubio, Gloria M., 2011. "Measuring governance and service delivery in safety net programs," Social Protection Discussion Papers 64633, The World Bank.
  6. Oehler-Sincai, Iulia Monica, 2008. "Strengths And Weaknesses Of The New Public Management (NPM)- Cross-Sectional And Longitudinal Analysis," MPRA Paper 11767, University Library of Munich, Germany.
  7. Razafindrakoto, Mireille & Roubaud, François, 2010. "Are International Databases on Corruption Reliable? A Comparison of Expert Opinion Surveys and Household Surveys in Sub-Saharan Africa," World Development, Elsevier, vol. 38(8), pages 1057-1069, August.
  8. Mary-Françoise Renard, 2011. "Working Paper 126 - China’s Trade and FDI in Africa," Working Paper Series 297, African Development Bank.
  9. Clist, Paul, 2011. "25Years of Aid Allocation Practice: Whither Selectivity?," World Development, Elsevier, vol. 39(10), pages 1724-1734.
  10. Bold, Tessa & Gauthier, Bernard & Svensson, Jakob & Wane, Waly, 2010. "Delivering service indicators in education and health in Africa : a proposal," Policy Research Working Paper Series 5327, The World Bank.
  11. Kaufmann, Daniel & Kraay, Aart & Mastruzzi, Massimo, 2008. "Governance matters VII : aggregate and individual governance indicators 1996-2007," Policy Research Working Paper Series 4654, The World Bank.
  12. World Bank, 2008. "Local Gains from Global Opportunities : Improving Central America's Investment Climate," World Bank Other Operational Studies 7959, The World Bank.
  13. Thai, Mai Thi Thanh & Turkina, Ekaterina, 2014. "Macro-level determinants of formal entrepreneurship versus informal entrepreneurship," Journal of Business Venturing, Elsevier, vol. 29(4), pages 490-510.

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