The resulting Measuring Impact Framework is designed to help companies understand their contribution to society and use this understanding to inform their operational and long-term investment decisions and have better-informed conversations with stakeholders.
Summary: 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.
This paper conceptualizes governance and provides a framework for assessing governance quality in comparative perspective based upon governance outcomes. It surveys the composite indexes on quality of governance and provides an in depth review of the widely used Worldwide Governance Indicators (WGIs). This review concludes that WGIs use state of the art aggregation techniques but fail on most fundamental considerations. They lack a conceptual framework of governance and use flawed and biased primary indicators that mostly capture Western business perspectives on governance processes using one-size-fits-all norms about such processes. They almost completely neglect citizens’ evaluations of governance outcomes reflecting any impacts on the quality of life. These primary deficiencies and changing weights, respondents and criteria lead us to conclude that the use of such indicators in cross-country and time series comparisons could not be justified. Such use is already complicating the development policy dialogue and creating much controversy and acrimony. These findings, however, should not be a cause for despair as assessing governance quality is an important task and must be undertaken with care. To this end, this paper lays out a conceptual framework which stresses that governance quality for comparative purposes is most usefully assessed by focusing on key governance outcomes capturing the impact of governments on the quality of life enjoyed by its citizens. These assessments should preferably be based on citizens’ evaluations. Such evaluations are not only feasible but also would be more credible and conducive for meaningful and productive development policy dialogues on improving governance quality.
The Index of State Weakness in the Developing World was designed to provide policy-makers and researchers with a credible tool for analyzing and understanding the world's most vulnerable countries. Co-directed by Brookings Senior Fellow Susan Rice and Center for Global Development Research Fellow Stewart Patrick, the Index ranks and assesses 141 developing nations according to their relative performance in four critical spheres: economic, political, security and social welfare.
Conference participants agreed on the need for a compilation guide for securities statistics, because no international standard for compiling these statistics exists. The intention is to have a concise reference document that will address the key methodological issues identified at the conference. The guide, which will include some templates and a list of reference metadata, will focus initially on statistics on debt securities issued but will eventually be expanded to cover other securities and securities holdings. The manual will also include an assessment of costs and benefits of security-by-security databases.
Your warm and kind welcome to my governance blog is much appreciated. Your blog is very useful to us, in fact. One area of potential synergy between both blogs relates to PFM databases. In that context, it may be of interest to the PFM and broader governance community to have your recommended list of empirical databases on PFM issues that permit cross-country comparisons, as well as those datasets that monitor and assess in-depth a country over time. For instance, do you provide access to the IMF's 'ROSC' Fiscal Transparency database? To the World Bank's PEFA database? Also in this context check out the relevant Open Budget Index (www.openbudgetindex.org) constructed by the International Budget Initiative NGO. Your assessment of the pros and cons (and what each one is best suited for)in each one of these and other such PFM empirical assessment databases would be very valuable to many, as well as having access to references to review articles evaluating these data initiatives.
Q: Economists love to analyze markets for goods that are illegal (e.g., drugs, prostitution, etc.). One study showed that the own-price elasticity of the demand for powder cocaine (in absolute value) is 1.2, while the comparable elasticity for marijuana is 0.6. You have probably observed that the federal and state governments punish cocaine suppliers and dealers more severely than they punish marijuana dealers. Give TWO possible (if unlikely) explanations that relate back to demand analysis for this difference in policy.
