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WO RL D BA NK

SW15

G  O V E R N A N C E I  N D I C AT O R S

What Is It?

BENCHMARK

The World Bank Governance Indicators set includes six

For each country, increase the rankings

For

indexes or themes that relate to good governance: (1)

of the six World Bank governance

Control of Corruption, (2) Government Effectiveness,

indexes by 5% over next five years.

indexes

(3) Political Stability, (4) Rule of Law, (5) Regulatory

Quality, and (6) Voice and Accountability.

TA R G E T

Why Do We Measure It?

Why

For

For each country, increase the rankings

of the six indexes by 10% over next ten

These indicators are used to track governance at the

years.

years.

country level. The World Bank defines governance as

"the traditions and institutions by which authority in a

RED FL AG

country is exercised for the common good." Thus the

indicators help to capture (i) the process by which those

A decrease in one of the World Bank

in authority are selected, monitored and replaced, (ii)

governance indexes in any of the MAR

the capacity of the government to effectively manage

countries.

countries.

its resources and implement sound policies, and (iii)

the respect of citizens and the state for the institutions

that govern economic and social interactions between

· Regulatory Quality measures the ability of the

them 44,45.

government to formulate and implement sound

policies and regulations that permit and promote

The World Bank defines the six themes as follows:

private sector development.

· Control of Corruption measures the extent to

· Voice and Accountability measures the extent to

which public power is exercised for private gain,

which a country's citizens are able to participate

including petty and grand forms of corruption, as

in selecting their government, as well as freedom

well as "capture" of the state by elites and private

of expression, freedom of association, and a free

interests.

media.

· Government Effectiveness measures the quality

How Do We Measure It?

How

of public services, the quality of the civil service

and the degree of its independence from political

The World Bank dataset includes several hundred

pressures, the quality of policy formulation

parameters from 37 separate data sources. It covers

and implementation, and the credibility of the

209 countries and territories for five one-year time

government's commitment to such policies.

periods: 1996, 1998, 2000, 2002, and 2004. The

data, which are calculated and provided by the World

· Political  Stability  and  Absence  of  Violence

Bank, are accessible at www.worldbank.org/wbi/

measures the perceptions of the likelihood that

governance/index.html.

the government in power will be destabilized or

overthrown by possibly unconstitutional and/or

Usefulness

Usefulness

violent means, including domestic violence and

terrorism.

The World Bank governance indicators are very useful

in understanding the state of a country's governance

· Rule of Law measures the extent to which agents

and accountability. The effectiveness or stability of

have confidence in and abide by the rules of society,

a country's governance is helpful in understanding

in particular the quality of contract enforcement,

a country's potential for effectively managing its

the police and the courts, as well as the likelihood

natural resources. Measuring the effectiveness of

of crime and violence.

governance is difficult and data interpretation should

include a review of all data limitations stated by the

World Bank. In general, the higher the World Bank

governance indicator value, the better the governance,

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