Governance Matters V

World Bank Institute

World Bank Institute, Bilateral Donor Agencies

Civil Society

Conflict

Corruption

Justice

Public Administration

This is the most widely quoted and used governance indicator source in media, academia and among international organisations. The Millennium Challenge Account (MCA) is using 5 of the Governance Matters measurements, along with other criteria, to determine MCA eligibility of low income countries.

This is the most widely quoted and used governance indicator source in media, academia and among international organisations. The Millennium Challenge Account (MCA) is using 5 of the Governance Matters measurements, along with other criteria, to determine MCA eligibility of low income countries.

The ‘Governance Matters’ indicators are based on 276 variables measuring perceptions of governance, drawn from 31 separate data sources constructed by 25 different organisations. Data sources include among others Freedom in the World, Economic Freedom Index, World Economic Forum, Latino and Afrobarometers, Bertelsmann Transformation Index, Gallup surveys, Business Enterprise Environment Survey, plus data from various commercial rating agencies, think tanks and multilateral organizations. The individual underlying data sources as well as the aggregate indicators are available on the web.

Global 213 countries.

First data: Collected in 1996.
Latest data: Collected in 2005.
Stated frequency: Yearly since 2002, every other year 1996-2002.

governancewbi@worldbank.org
World Bank Institute
1818 H Street, N.W.
Washington , DC 20433
United States
+ 1 202-473-0992 (Phone)
+ 1 202-522-1492 (Fax)

There are six aggregate governance indicators (voice and accountability, political stability and absence of violence, government effectiveness, regulatory quality, rule of law, and control of corruption), based on a large number of individual underlying data sources. The individual indicator sources are rescaled and assigned to one of the six aggregate indicators, and an unobserved components model is used to construct the aggregate indicators, together with margins of error explicitly indicating the unavoidable uncertainty associated with any cross-country measure of governance.

The ‘Governance Matters’ indicators use a scale from -2.5 to 2.5 (higher values indicate higher quality of governance). Results are also presented in terms of percentile
ranks.

This is the most comprehensive governance index and provides insight into how countries compare in the six areas of governance (in so far as the margins of error allow for comparison).

Due to the presence of margins of error of the country and data component scores, country rankings should be interpreted with care. This is especially true for borderline cases where the margin of error can determine if the country is a ‘good’ or ‘mediocre’ performer. The World Bank Institute explicitly recognizes concerns about data quality and encourages consideration of the margins of error associated with governance estimates. These substantial margins of error are not unique to this index, but are pervasive in all cross-country comparisons of governance. However the ‘Governance Matters’ index is unusual in that these margins of error are explicitly reported.

The underlying assumption of the ‘Governance Matters’ index is that all data sources in each governance dimension provide a signal of the underlying concept of governance to which they are assigned. This assumes, for example, that Freedom House, Amnesty International and Human Rights Watch all provide information relevant to “Voice and Accountability”. It is assumed that the individual data sources, which use different methodologies, i.e. scales, country coverage, and weighting, can be aggregated into one single quantitative measurement after appropriate transformations.