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How Do Countries Score on Governance?

Available in: العربية, русский, 中文, Français, Español

September 15, 2006—African nations such as Botswana, Ghana, Senegal, Sierra Leone, Mozambique and Liberia have been cited in new World Bank research as among countries which have made progress in improving governance and curbing corruption.

The research contained in a new report, Governance Matters 2006: Worldwide Governance Indicators, also shows more than about a dozen non-OECD countries including Slovenia, Chile and Estonia, score higher in the rule of law and control of corruption indicators than some industrialized countries such as Greece and Italy.

According to co-author and Director of Global Governance at the World Bank Institute, Daniel Kaufmann, the findings dispel a number of myths. One myth is about Africa.

“The indicators challenge Afro-pessimism,” Kaufmann says. “By looking at the data, on average, Africa has enormous challenges. But it’s a mistake just to look at the averages.

“Our report is very frank in suggesting that Africa, on average, faces enormous governance challenges. Many countries are not doing well in terms of governance and in terms of controlling corruption.

“But there are shining stars, which have been doing well and increasingly better over the past decade. And it shows in the case of Ghana, Botswana, Mozambique, Tanzania, Senegal and others.”

The second myth dispelled by the research is that strong performance on governance and curbing corruption is the preserve of the wealthy developed nations.

The research, covering well over 200 countries, also shows that more than 12 non-OECD countries, including Botswana and Estonia, score higher in the rule of law and in control of corruption than some industrialized countries like Greece and Italy.

And it shows that democratic accountability and clean government most often go hand in hand.

“We find in the evidence that countries that have a freer press also have more transparent government and more effective government and more control of corruption,” says Daniel Kaufmann, a co-author of this report with Aart Kraay and Massimo Mastruzzi.

The research cites countries such as Chile, Portugal and Canada as nations with vibrant democracies and very little corruption. It’s in contrast to countries with what the report calls “voice and accountability challenges such as China and the Russian Federation who tend to have more corruption.”

But it does find there are exceptions to the link between the extent of voice and democratic accountability a country exhibits and its success in controlling corruption.

Singapore, for example, is cited as having one of the best rankings in the world on control of corruption, but it ranks in the middle of the pack on voice and accountability – below much poorer countries such as Brazil and Botswana.

The indicators represent one of the largest available databases on governance. The research is based on responses from over 120,000 citizens, enterprises and experts worldwide, provided by 25 different organisations worldwide.  These in turn are used to  construct the worldwide governance indicators through a state-of-the-art methodology.

Overall, it paints a sobering picture of global trends in governance.

The report suggests over the past decade there is little evidence of a significant improvement, on average, among industrialized and developing countries. But it points out that in many specific countries, there have been significant improvements.

Kaufmann says even if these improvements are not universal, the minority of countries where improvements are already evident do suggest where there is leadership and reform, governance and corruption control can improve significantly in a relatively short period of time. 

At the same time, deterioration can also take place rapidly, as the evidence by these worldwide governance indicators also shows.

Among the reformers, the research highlights Ghana, Croatia and Peru as reformers in their improvements in the scores for voice and accountability.  In Eastern Europe, there have been important gains in a number of countries. Bulgaria and Romania, for example,   rate well in terms of improved government effectiveness, while Armenia and Lithuania score well in terms of regulatory quality, which measures the incidence of market unfriendly policies. Latvia scores well on improved control of corruption.

And in a sign that change in the shorter term is possible, the research shows a number of countries have made significant progress in the brief period since 2002. For example,  Ukraine, Serbia and Liberia rated well in voice and accountability, Georgia in political stability and control of corruption and the Slovak Republic in government effectiveness.

Kaufmann says good governance matters for development.

“We call it the 300 percent development dividend,” he says. “A country that improves in governance gets three times more income per capita in the long term – from $1,000 per capita per year to $3,000 or from $3,000 to $9,000 a year.”

There are, he says, similar results in terms of reductions of infant mortality, improved literacy and improved competitiveness.

The worldwide governance indicators measure six components of good governance. They are voice and accountability – measuring political, civil and human rights; political stability and absence of violence – measuring the likelihood of violent threats including terrorism; government effectiveness; regulatory quality; the rule of law and control of corruption.

The authors warn against any false sense of precision when utilizing these, or any other indicators, and so caution against precise rankings.

"Measuring governance is difficult, and no indicator is 100% reliable in the sense of giving completely accurate information" Kraay says. "A key feature of our governance indicators is that we make every effort to be transparent about the degree of imprecision, which is present in all other measures of governance but is rarely acknowledged. Because we aggregate information from many different data sources, our indicators are more informative than any individual data source.”

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