Global Indicators for Assessing Governance:

1
Global Indicators for Assessing Governance
Click to edit Master title style

• Uses and limitations of global governance
  indicators for national policy-making
• by Ingvild Oia
• The presentation draws on UNDP A Users Guide
  (2007)
• and Arndt and Oman Uses and Abuses of Governance
  Indicators OECD (2008).

United Nations Development Programme Oslo
Governance Centre
2
The mushrooming industry of indicators
3
Cumulative number of governance indicator
initiatives
Based on governance indicator initiatives mapped
in A Users Guide
4
Click to edit Master title style
Why all the interest in governance?

• Spectacular increase in international investment
  in developing countries and emerging economies
• The end of the Cold War
• Failed development policy reforms in the 80s and
  90s
• New awareness of the importance of politics for
  economic development

Arndt and Oman Uses and Abuses of Governance
Indicators OECD (2008).
United Nations Development Programme Oslo
Governance Centre
5
Worldwide Governance IndicatorsWorld Bank
Institute

• Most widely quoted and used by media, academia
  and international organization
• Used in donor conditionalities (MCA)
• Played a leading role in putting governance on
  the agenda (Governance Matters)
• Data available since 1996, covers more than 200
  countries and uses the most comprehensive set of
  data sources
• Authors Daniel Kaufmann, Aart Kray and Pablo
  Zoido-Lobaton (KKZ)

6
Click to edit Master title style
Limitations of The Worldwide Governance
Indicators for national policy making

• Lack of transparency
• Correlation of errors
• Sample bias
• Lack of comparability over time
• Lack of action-oriented

United Nations Development Programme Oslo
Governance Centre
7
Lack of transparencyMissing normative
principles of the framework
Click to edit Master title style

• The process by which governments are selected,
  monitored and replaced
• Voice and accountability
• Political stability
• The capacity of the Government to effectively
  formulate and implement sound policies
• Government Effectiveness
• Regulatory Quality
• The respect of citizens and the state for the
  institutions that govern economic and social
  interactions among them
• Rule of Law
• Control of Corruption

United Nations Development Programme Oslo
Governance Centre
8
Lack of transparencyAggregation
Aggregated indicator
Weight of all sources are recalculated
Non-representative indicators give error variance
Representative indicators are weighted and
aggregated
Indicators assessed as representative
Indicators are averaged by source
Real world observations
9
Margins of errors
10
Click to edit Master title style
Correlation of error

• The assumption that sources errors are
  uncorrelated is unrealistic (herd effect)
• This matters because Correlation of error among
  sources means that each additional source used to
  produce a given composite indicator actually
  contributes less additional information than
  assumed, and the errors are greater than
  calculated

United Nations Development Programme Oslo
Governance Centre
11
Click to edit Master title style
Sample bias

• Expert assessments carry much more weight than
  population surveys
• Favours private sector surveys

United Nations Development Programme Oslo
Governance Centre
12
Lack of comparability over time

• The average value of the indicator across all
  countries worldwide is always zero, and its
  standard deviation is always one
• Using rule of thumb only 5-8 percent of
  countries experienced change from 1996-2004

Hurray, the whole world improved on governance
from last year !
Average is still set as zero
13
Lack of action-oriented
Your score on control of corruption is 1.2
How does this information help me to reduce
corruption in my country?