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On Measuring Governance: Framing Issues for Debate
Daniel Kaufmann & Aart Kraay
Source of the information:
Issues paper for January 11th, 2007 Roundtable on Measuring Governance hosted by the World Bank Institute and the Development Vice-Presidency of
The World Bank.
The report discusses how, in developing governance indicators, it has become clear that there are many difficulties that arise in efforts to measure governance, and in using governance indicators to inform policy decisions. This short issues paper offers three simple principles for producers and users of governance indicators that may both provide a useful summary framing these main difficulties, and at the same time suggest ways forward in improving governance indicators. The major theme is that since all governance indicators are limited in various ways, it is important to recognize and exploit the complementarities between alternative approaches to measuring governance.
The three principles are:
Measurement error is pervasive in all efforts to measure governance and investment climate.
There are no silver bullets in measuring governance, which goes against a pervasive expectation in some circles that there are, or soon will appearm, "silver bullet" governance indicators that supersede and vastly improve on the current set of available governance indicators.
The links from governance to development outcomes are complex.
The report concludes that to improve upon all efforts on governance indicators, the following seven points should be emphasized further:
paying particular attention to the existence, measurement, and also to the implications of margins of error in all efforts to construct governance indicators
full disclosure of margins of error and of sources and methodological details (including on data collection) in all indicators efforts, and in particular, emphasizing the key role of public access to the resulting indicators to ensure full transparency and credibility.
utilizing more effectively and intelligently (with an appropriate abundance of caution) the myriad of indicators already in existence, while continuing to strive to improve upon them, as well as generating new indicators
making progress in gathering data on a set of “action-worthy” indicators, which are not simply “actionable” or overly narrow in scope
given the difficulties in linking particular actions with governance results on the ground, to continue to utilize and improve upon outcome indicators as a key part of the governance diagnostic process
avoiding to the extent possible utilizing any one governance indicator alone for any major policy or aid decision-making – without applying checks and balances provided by other indicators
finally, tying the various specific threads: the importance of exploiting the complementarity among different types of indicators -- be they aggregate or individual, objective or subjective, action-worthy or outcome.