1. Worldwide Governance Indicators (WGI) www.govindicators.org
Aart Kraay,
Development Research Group
World Bank Youth Summit Workshop
October 7, 2014
The WGI are a research dataset. The indicators do not reflect the official views of the World Bank, its Executive Directors, or the Countries they represent.

2. Overview Aggregate indicators of six broad dimensions of governance
Voice and Accountability
Political Stability and Absence of Violence/Terrorism
Government Effectiveness
Regulatory Quality
Rule of Law
Control of Corruption
Covering 215 countries/territories,

3. WGI Are Aggregate Indicators
Synthesizing information from from 30 different existing data sources
Two main types:
Surveys of households and firms, e.g. Gallup World Poll, World Economic Forum enterprise surveys
Expert Assessments by (i) commercial rating agencies such as EIU, Global Insight; (ii) NGOs such as Freedom House, Global Integrity; (iii) public sector agencies such as US State Dept Trafficking in Persons, World Bank CPIA

4. WGI Rely on Subjective Perceptions of Governance
Perceptions matter: people act based on their view of how much they trust government, believe in elections, feel police can help them, etc.
Perceptions complement “de jure” data: especially when rules on paper are not well-enforced in practice
Perceptions are sometimes the only alternative: especially when measuring things that are formally illegal such as corruption

5. Aggregation At Work
Many different indicators of broader concepts of governance, e.g.
Trust in police -> RULE OF LAW
Satisfaction with public services -> GOVERNMENT EFFECTIVENESS
Trust in elections -> VOICE AND ACCOUNTABILITY
Personal experience with bribery -> CONTROL OF CORRUPTION
Assign several hundred such variables to six broad dimensions of governance

6. Benefits of Aggregation
WGI are a (somewhat sophisticated) average of the many different questions within each of six broad topics
Average gives sense of extent to which sources agree with each other, but…
Standard errors give sense of extent to which sources disagree with each other
Latter as important as former for interpretation of governance data!

7. Illustration: WGI Rule of Law
Length of bar shows rank among all countries (higher is better)

8. Illustration: WGI Rule of Law
Black lines are “margins of error” – 90% chance that “true” value lies somewhere in this range

9. Illustration: WGI Rule of Law
Who’s better in 2008?

10. Illustration: WGI Rule of Law
Is Uganda improving?

11. Not All Bad News
Many “statistically significant” comparisons are possible – both over time and across countries
However is very important to take margins of error into account when comparing governance across countries
Measuring governance is inherently imprecise undertaking – uncertainty is present in all governance indicators even if it is not noted/acknowledged explicitly

12. Aggregate Indicators

13. Underlying Source Data

15. Case Study: WGI Control of Corruption and MCC Eligibility
US Millennium Challenge Corporation gives grant aid based on set of indicator-based eligibility criteria
Ruling Justly (6 indicators)
Investing in People (6 indicators)
Economic Freedom (8 indicators)
“hard hurdle” on corruption: country must be in top half of eligible countries in order to receive MCC aid

16. FY15 Potentially-Eligible LICs

17. FY15 Potentially-Eligible LICs
Median = -0.73

18. Questions to Think About
How would countries like Benin and Burkina Faso fare relative to this criterion?
How should threshold criteria be interpreted?
How might countries be misclassified using a criteria like this?
How should “borderline” countries be treated?
What would you do differently?

19. Basic Data: Control of Corruption 2013

20. Margins of Error Are Important

21. Margins of Error Are Important

22. Classify by Probability?

23. Classify by Probability?

24. Classify by Probability?

25. Classify by Probability?
Burkina Faso
Benin

26. Thank you
For more information and to access WGI data, visit