July 10, 2007—Countries around the world, including some of the poorest in Africa, have made “significant progress” in improving governance and fighting corruption over the decade, the new “Worldwide Governance Indicators” (WGI) study by the World Bank Institute and World Bank Development Economics Vice-presidency shows.
Significant improvements in governance over the past decade occurred in countries as diverse as Indonesia, Tajikistan, Serbia, and Slovakia. And in Africa in particular, countries such as Niger, Sierra Leone, Angola, Democratic Republic of Congo, Liberia, Tanzania, and Rwanda showed significant improvements in some dimensions of governance since 1998. Even over the relatively short period since 2002, there have been big improvements in some aspects of governance in countries such as Liberia, Angola, Argentina, and Georgia.
The gains in countries straddling all six continents are “hopeful news,” according to study co-author Daniel Kaufmann, Director of Global Governance at the WBI. But he acknowledged: “On average, there is no evidence that governance in the world at large has improved markedly over the past decade. It is a very varied picture. The good news is that some countries, including some of the poorest ones in Africa, are deciding to move forward, and are showing to the world that it is possible to make substantial inroads in improving governance over a relatively short period of time – in less than a decade. However, others have stayed behind or even deteriorated.”
Over the same period there were significant declines in governance in countries such as Cote d'Ivoire, Zimbabwe, and Venezuela.
The study emphasizes that the indicators do not constitute a precise international ranking of countries. “Policy makers and academics agree that good governance matters for economic development,” says “A Decade of Measuring the Quality of Governance” a study accompanying the detailed annual volume of indicators. “[T]he ‘development dividend’ earned through good governance is very large. Based on the WGI, the researchers estimate that when governance is improved by one standard deviation, incomes rise about three-fold in the long run, and infant mortality declines by two-thirds.”
WBI says research has shown the importance of good governance for aid effectiveness in general, and for the success or failure of World Bank projects in particular.
The full WGI volume, called “Governance Matters VI,” shows how the six aggregate indicators are constructed. They are based on 33 individual data sources and hundreds of variables, capturing the views on governance of tens of thousands household and firm survey respondents, as well as hundreds of nongovernment organizations and public sector experts, and commercial business information providers worldwide.
The indicators measure Voice and Accountability, Political Stability and Absence of Major Violence and Terror, Government Effectiveness, Regulatory Quality Rule of Law, and Control of Corruption.
The new 2007 volume and study, as well as the revamped and interactive website, showcases the full WGI dataset, covering 212 countries and territories from 1996 to 2006.
The WGIs, which are the product of a decade-long research project, are not an official World Bank ranking and do nor necessarily reflect official views of the Bank, and are not used to allocate Bank resources across countries. "This is the job of the Country Policy and Institutional Assessments for IDA [International Development Association, a part of the World Bank] countries, as long mandated by the IDA deputies," said study co-author Aart Kraay.
Kaufmann, Kraay and a third co-author Massimo Mastruzzi, emphasizing the importance they give to transparency in their work, note that complete access to the individual indicators underlying the aggregates is provided on the newly redesigned WGI website. They also say the importance of avoiding superficial comparisons and "elevator economics" that stress small differences over time and across countries. They said users should recognize the clearly marked margins of error accompanying the scores for each country. This dataset attempts to set a standard for transparency, the authors say, noting they have submitted papers relating to the WGI to refereed publications and chapter publications in books.
The Worldwide Governance Indicators have provoked debate and discussions about their strengths as well as limitations for monitoring country governance, and for informing specific country reform strategies. The authors emphasize that the aggregate WGI data are just the starting point for identifying the country’s governance strengths, vulnerabilities and broad trends, and for thinking about governance in specific country contexts.
An important next step, they say, is to review the many individual data sources and variables on which the WGI are built, so to obtain a more disaggregated picture, as well as relying on complementary in-country measurement and assessment tools, such as the Governance and Anti-Corruption (GAC) country diagnostics, which have already been carried out in well over 20 countries together with domestic stakeholders and institutions.
Kaufmann said it’s not only developing countries that face governance challenges. He said the new WGI data shows that a number of emerging economies rate better in governance and control of corruption than some rich industrialized economies, and notes that research points to continuing bribery by many multinationals headquartered in OECD countries operating in emerging markets.
He also says that “even if the WGI only rates countries on governance, excluding international financial institutions, we have explicitly recognized that we need to ‘practice what we preach’, striving to attain exemplary governance standards within our own institution, promoting internal governance reforms and change”