Measuring & Monitoring Governance in Developing Countries Stephen Knack The World Bank 2 nd...
-
Upload
kristin-hoover -
Category
Documents
-
view
214 -
download
0
Transcript of Measuring & Monitoring Governance in Developing Countries Stephen Knack The World Bank 2 nd...
Measuring & Monitoring Governance in Developing Countries
Stephen KnackThe World Bank
2nd International RoundtableMarrakesh, Feb. 2004
Governance: World Bank definition
“Good Governance is epitomized by predictable, open and enlightened policy making (that is, transparent processes); a bureaucracy imbued with a professional ethos; an executive arm of government accountable for its actions; and a strong civil society participating in public affairs; and all behaving under the rule of law.”
Governance and the MDGs
Governance matters for:•Poverty reduction (via investment & growth)•Education & health outcomes (via higher incomes and quality of public service delivery)
Which governance indicator is “best” depends on the purpose
Performance v. process Comparison at point in time
across countries (e.g. for aid allocation)
Measuring progress over time within individual countries (PRSP)
Measuring progress over time for groups of countries (Global monitoring)
Measures used in early research
Freedom House•Civil liberties•Political freedoms
Political violence frequencies•Coups, attempted coups•Assassinations, civil wars•Riots, strikes
Trend in civil liberties (Freedom House)
YEAR
20022001200019991998199719961995
Va
lue
4.5
4.0
3.5
3.0
2.5
2.0
All developing
IDA
LICUS
Political risk ratings
•International Country Risk Guide
•Business International
•Business Environ. Risk Intelligence
ICRG: International Country Risk Guide Corruption in government Quality of bureaucracy Law & order tradition (rule of law) Risk of government repudiation of
contracts Risk of expropriation Democratic accountability Ethnic tensions
Growth & ICRG index (partial plot)
ICRG (residual)
151050-5-10-15
Gro
wth
(re
sid
ua
l).07
.05
.03
.01
-.01
-.03
-.05
Aggregating Governance Indicators
TI: Corruption Perceptions IndexWBI (Kaufmann/Kraay): Voice and accountability Political stability Government effectiveness Regulatory quality Rule of Law Control of corruption
CPIA: Country Policy & Institutional
Assessment Property Rights & Rule-based
governance Quality of budgetary & financial
management Efficiency of revenue mobilization Quality of public administration Transparency, accountability &
corruption in the public sector
Broad indicators of quality of governance
Demonstrate importance of governance for economic outcomes
Help in identifying political & social factors underlying governance problems
Indicate countries for which governance may be most severe obstacle to growth, effective service delivery
Need for more specific governance indicators
At country level: Identify areas where
reforms needed Monitor progress over timeResearch: Identify which institutional
arrangements are most important
what can be done
Importance of transparency and replicability of measurement
Country “ownership” often requires more transparently constructed and replicable indicators
Ownership is also influenced by specificity--governments may resist indicators that seem accusatory & do not suggest particular solutions
Surveys of businesses, public officials, households
administrative corruption vs. state capture (BEEPS/WBES)
corruption, employee morale, credibility of rules and policies, resource predictability across agencies (WB public officials surveys)
quality of service delivery (Bangalore Report Cards, Barometer surveys)
Assessment of budgeting systems in HIPCs
budget formulation: coverage, inclusion of donor funds, classification system, multiyear projections
budget execution: internal control, tracking reliability
budget reporting: regularity of reports, delays in final audited accounts
“Doing Business”
Number of procedures, fees, time required to start a new business
Number of procedures, time required to collect on a bad debt or to evict a non-paying tenant
Creditor rights Employment regulation Bankruptcy rules
Other “objective” performance measures
Tax revenue as share of GDP Trade tax revenue as share of
all revenue Budgetary volatility Revenue source volatility Survey responses:
bribes/revenues, frequency of power outages, teacher absences, doctor absences
Cross-National Data on Government Employment and Wages
Employment in civil service, health, education, and police in central and sub-national government
Central government wage bill, as share of government spending and GDP
Average central government wage, relative to per capita income and wages in manufacturing, financial services and private sector
Vertical compression ratio
Corruption & Civil service pay
Civil service pay/per capita GDP
121086420
KK
Z G
raft
ind
ex
3
2
1
0
-1
-2 Rsq = 0.0331
Database on Political Institutions (DPI)
• Coverage: 1975-present for 177 countries Content: 113 variables on elections & electoral
rules, party composition of opposition & governing coalitions, indexes of political stability & checks & balances
Applications: receptivity to economic reform, political roots of corruption, sources of the rule of law, management of ethnic divisions