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A Proper Measurement of the Countries’ Governance Climate with an Overall Composite Index

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  • Francesco Scalamonti

Abstract

This article validates a composite governance indicator for MEDA countries by comparing it with alternative methods for reconstructing indices. Building on the World Bank’s Worldwide Governance Indicators (WGIs), we benchmark our overall index against those obtained through principal component analysis (PCA), as well as the Mazziotta–Pareto Index (MPI) and the weighted MPI (WMPI). Covering 2010–2023—a period marked by two important shocks, the “Arab Springs†and the global pandemic, the analysis shows that PCA closely mirrors governance conditions, while MPI and WMPI are less effective. On the other hand, our composite index is SMART—Specific, Measurable, Achievable, Reliable, and Time-bound. It is easy to calculate and implement, theoretically correct, preserves cross-country governance trends, captures all three governance sub-dimensions, and adequately incorporates the six basic indicators. JEL Classification C18, C43, O10, P47

Suggested Citation

  • Francesco Scalamonti, 2026. "A Proper Measurement of the Countries’ Governance Climate with an Overall Composite Index," Global Journal of Emerging Market Economies, Emerging Markets Forum, vol. 18(2), pages 174-185, May.
    • Handle: RePEc:sae:emeeco:v:18:y:2026:i:2:p:174-185
    DOI: 10.1177/09749101251372560
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    JEL classification:

    • C18 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Methodolical Issues: General
    • C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • P47 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Performance and Prospects

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