This paper from the World Bank presents the latest update of the Worldwide Governance Indicators (WGI) research project. It covers 212 countries and territories and measures six dimensions of governance between 1996 and 2006: Voice and Accountability, Political Stability and Absence of Violence, Government Effectiveness, Regulatory Quality, Rule of Law, and Control of Corruption. In less than a decade, a substantial number of countries have exhibited statistically significant improvements in at least one dimension of governance, while other countries have exhibited deterioration in some dimensions.
The WGI are based on several hundred individual variables measuring perceptions of governance, drawn from 33 separate data sources constructed by 30 different organisations. These individual measures of governance are assigned to categories and use an ‘Unobserved Components Model’ to construct six aggregate governance indicators. The data reflect the views on governance of public sector, private sector and NGO experts, as well as thousands of citizen and firm survey respondents worldwide. The report includes the margins of error accompanying each country estimates to reflect the inherent difficulties in measuring governance.
Nearly 30 per cent of countries experienced significant changes over the period 1996-2006 in at least one of the six indicators (roughly evenly divided between improvements and deteriorations). Thus governance can and does change even over relatively short periods such as a decade. This should provide encouragement to reformers seeking to improve governance and act as a warning against complacency in other cases as sharp deteriorations in governance are possible.
The WGI permit meaningful cross-country comparisons and allow for progress to be monitored over time:
- Individual indicators can be used to make comparisons of countries over time, as all the underlying sources use reasonably comparable methodologies from one year to the next.
- Aggregate estimates are informative about changes in individual countries’ relative positions over time.
- The provision of the underlying data will help users in identifying and acting upon more specific aspects of governance that may be problematic in a given country.
- Highly specific and disaggregated information about particular dimensions of governance can be used for monitoring and diagnostic purposes.
- Aggregate and individual indicators can be used in conjunction with more detailed and nuanced sources of country-level data on governance in formulating policy advice.
Notwithstanding, the WGI should be used with caution:
- Aggregate indicators can, in some circumstances, be a rather blunt tool for policy advice at the country level.
- Users should not compare directly the scores from different sources for a single country, as they are not directly comparable.
- Aggregate estimates convey no information about trends in global averages of governance.
- The aggregate indicators are useful for broad cross-country and over time comparisons of governance but all comparisons should take appropriate account of the margins of error associated with governance estimates.
