Explanation:
As governance indicators have proliferated in recent years, so has their use and the controversy that surrounds them. As more and more voices are pointing out, existing indicators – many of them developed and launched in the 1990s – have a number of flaws. This is particularly disquieting at a time when governance is at the very top of the development agenda.
Many questions of crucial importance to the development community – such as issues around the relationship between governance and (inclusive) growth, or about the effectiveness of aid in different contexts – are impossible to answer with confidence as long as we do not have good enough indicators, and hence data, on governance.
The litany of problems concerning existing governance indicators has been growing:
Indicators produced by certain NGOs (e.g. the Heritage Foundation), but also by commercial risk rating agencies (such as the PRS Group), are biased towards particular types of policies, and consequently, the assessment of governance becomes mingled with the assessment of policy choices;
Many indicators rely on surveys of business people (e.g. the World Economic Forum's Executive Opinion Survey). While they have important insights into governance challenges given their interaction with government bureaucracies, the views of other stakeholders are also important and remain underrepresented, as are concerns about governance of less relevance to the business community (e.g. civil and human rights);
The other main methodology used are indicators produced by individuals or small groups of external experts – for example, the World Bank’s Country Policy and Institutional Assessment (CPIA), Bertelsmann’s Transformation Index, and the French Development Agency’s Institutional Profiles. This entails the risk that different experts ‘feed’ on each other’s ratings; and the depth to which external raters are able to explore the dimensions they are rating can vary.
