Worldwide Governance Indicators - Criticisms

Criticisms

The Worldwide Governance Indicators offer a useful snapshot of some perceptions of a country’s quality of governance but researchers have pointed out significant problems in their construction. These critiques have been extensively rebutted by the WGI authors in several publications.

These critics have claimed that users often fail to take into account or are not aware of their limitations. Criticisms include:

• Not reproducible: Many of the indicators underlying each source’s ratings, are not published.
• Too complex: The WGI “Control of Corruption” uses 23 combinations of sources just for East Europe and Central Asia. The sheer number and diversity of indicators, produced by others, in a single WGI make it very difficult to understand.
• Arbitrary: For example, WGI use the indicator “Environmental regulations hurt competitiveness” from the World Economic Forum’s Executive Opinion Survey, but ignore that Survey’s several questions that give high ratings to countries with a high standard of environmental protection.
• Absence of an underlying theory of "good" governance: no normative concept or unifying single theory to distinguish between good or bad governance. When are taxes, labour or environmental regulatory protection desirable and when are they excessive?
• Hidden biases: Low weight given to household surveys relative to the weights of expert assessments and firm surveys. For example, Gallup’s World Poll that asks citizens about their exposure to crime gets zero weight for "Rule of Law", but Global Insight Business Risk and Conditions, a U.S. commercial business information provider that measures the crime risk to businesses, gets the third highest weight.
• Lack of comparability over time and space: For example, the WGI “Control of Corruption” for Eastern Europe and Central Asia has 23 different combinations of sources, but only four pair of countries ratings are based on a common set of sources.
• Lack of actionability: WGI offers little guidance to concrete actions to improve the quality of governance. For example, an indicator for Rule of Law "how secure business people feel about their property" not why they feel that way.
• Over-selling: The World Bank Institute advertises its WGIs as "reliable measurements of governance", but for example gives the misleading impression that the views of ordinary citizens are well represented, making the indicators particularly attractive to donor agencies concerned about the poor. WBI heavily stressed inclusion of the Gallup World Poll, a cross-country household survey available for a large number of countries, but Gallup’s World Poll gets zero weight on two WGIs, marginal weight on two other WGIs and provides no data for the remaining two.
• Lack of conceptual clarity: “he six governance indicators measure a broad underlying concept of ‘effective governance’ … they appear to say the same thing, with different words … the six indexes do not discriminate usefully among different aspects of governance. Rather, each of the indexes – whatever its label – merely reflects perceptions of the quality of governance more broadly. An implication is that they may have limited use as guides for policymakers, and for academic studies of the causes and consequences of ‘good governance’ as well… their availability may well have crowded out efforts at measuring the impact of institutions as they really exist in a particular place on real outcomes."