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The worldwide governance indicators and tautology : causally related separable concepts, indicators of a common cause, or both ?

  • Langbein, Laura
  • Knack, Stephen

Aggregate indexes of the quality of governance, covering large samples of countries, are widely used in research and in aid policy. Few studies examine the validity of these indexes, however. This paper partially fills this gap by examining empirically the dimensionality of the Worldwide Governance Indicators. The six indexes purportedly measure distinct concepts of control of corruption, rule of law, government effectiveness, regulatory quality, political stability, and voice and accountability. Using standard statistical techniques for testing measurement validity, the analysis concludes that the six indexes do not discriminate usefully among different aspects of governance. Rather, each of the indexes merely reflects perceptions of the quality of governance more broadly. An implication of the findings is that the Worldwide Governance Indicator indexes are frequently misused in research and policy applications, where it is commonly assumed that the indexes provide distinct measures of different aspects of the quality of governance. A further implication is that Transparency International's even more widely-known aggregate index similarly reflects perceptions not only of corruption, as intended, but of the quality of governance more broadly.

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Paper provided by The World Bank in its series Policy Research Working Paper Series with number 4669.

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Date of creation: 01 Jul 2008
Date of revision:
Handle: RePEc:wbk:wbrwps:4669
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  1. Borrmann, Axel & Busse, Matthias & Neuhaus, Silke, 2006. "Institutional Quality and the Gains From Trade," HWWA Discussion Papers 341, Hamburg Institute of International Economics (HWWA).
  2. Kaufmann, Daniel & Kraay, Aart, 2002. "Growth without governance," Policy Research Working Paper Series 2928, The World Bank.
  3. Fahim Al-Marhubi, 2004. "The Determinants of Governance: A Cross-Country Analysis," Contemporary Economic Policy, Western Economic Association International, vol. 22(3), pages 394-406, 07.
  4. William Easterly & Jozef Ritzan & Michael Woolcock, 2006. "Social Cohesion, Institutions, and Growth," Working Papers 94, Center for Global Development.
  5. Per G. Fredriksson & Muthukumara Mani & Richard Damania, 2003. "The Persistence of Corruption and Regulatory Compliance Failures: Theory and Evidence," IMF Working Papers 03/172, International Monetary Fund.
  6. Broadman, Harry G. & Recanatini, Francesca, 2000. "Seeds of corruption - Do market institutions matter?," Policy Research Working Paper Series 2368, The World Bank.
  7. Johnson, Simon & Kaufmann, Daniel & Zoido-Lobaton, Pablo, 1998. "Regulatory Discretion and the Unofficial Economy," American Economic Review, American Economic Association, vol. 88(2), pages 387-92, May.
  8. Lederman, Daniel & Loayza, Norman & Reis Soares, Rodrigo, 2001. "Accountability and corruption : political institutions matter," Policy Research Working Paper Series 2708, The World Bank.
  9. Roumeen Islam, 2006. "Does More Transparency Go Along With Better Governance?," Economics and Politics, Wiley Blackwell, vol. 18(2), pages 121-167, 07.
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