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Governance

Good progress on African governance

Written by Adrie van der Luijt

Friday, 27 June 2008

The World Bank is optimistic about progress in Africa in governance and the fight against corruption.

This year’s updated version of the Worldwide Governance Indicators (WGI) compiled by World Bank researchers shows many developing country governments making important gains in control of corruption, and some of them matching rich country performance in overall governance measures.

Afro-optimism

Daniel Kaufmann, co-author of the report and director of governance at the World Bank Institute, says that some countries are making rapid progress in governance, including in Africa, showing that a measure of ‘Afro-optimism’ is called for.

He acknowledges, however, that the data also shows large variation in performance across countries, and even among neighbours within each continent.

“Progress reflects reforms in those countries where political leaders, policymakers, civil society and the private sector view good governance and corruption control as crucial for sustained and shared growth,” Kaufmann adds.

Good governance can be found at all income levels, with some emerging economies matching the performance of rich countries on key dimensions of governance.

Over a dozen emerging countries, including Slovenia, Chile, Botswana, Estonia, Uruguay, Czech Republic, Hungary, Latvia, Lithuania, Mauritius, and Costa Rica score higher on key dimensions of governance than industrialised countries such as Greece or Italy. In many cases these differences are statistically significant.

Overall quality has not improved much

Over 2002-2007, the Indicators show sharp improvements in governance, along with reversals.

Examples include strong improvements in voice and accountability in countries such as Ukraine and Haiti, improvements in political stability and absence of violence/terrorism in Argentina, and improvements in control of corruption in Georgia and Tanzania.

Despite governance gains in some countries, however, overall quality of governance around the world has not improved much over the past decade.

Coinciding with countries that have done well, a similar number have experienced deteriorations in several governance dimensions, including Zimbabwe, Cote D’Ivoire, Belarus, Eritrea and Venezuela. In many other countries, no significant change in either direction is yet apparent in recent years.

The Indicators suggest that where there is commitment to reform, improvements in governance can and do occur.

Over the past decade from 1998-2007, countries in all regions have shown substantial improvements in governance, even if at times starting from a very low level.

Examples include Ghana, Indonesia, Liberia and Peru in voice and accountability, and Rwanda, Algeria and Angola in political stability and absence of violence and terrorism.

Afghanistan, Serbia and Ethiopia score in government effectiveness, Georgia and the Democratic Republic of Congo in regulatory quality, Tajikistan in rule of law and Liberia and Serbia in control of corruption.

Limits of existing data

Aart Kraay, co-author of the WGI and lead economist in the Development Research Group of the World Bank, says that the WGI and other efforts to measure are useful in prompting public discussion of governance challenges and successes.

“At the same time, however, discussions of governance based on empirical measures need to be realistic about the limits of existing data. In this respect it is important that users take seriously the margins of error reported in the WGI, which reflect the inherent difficulties in measuring governance using any kind of data,” Kraay notes

This year’s study is the seventh update of the WGI, a decade-long effort by the researchers to build and update the most comprehensive cross-country set of governance indicators currently available.

The Indicators cover 212 countries and territories, drawing on 35 different data sources to capture the views of tens of thousands of survey respondents worldwide, as well as thousands of experts in the private, NGO, and public sectors.

The WGI are used by policymakers and civil society groups worldwide as a tool to assess governance challenges and monitor reforms, and by scholars researching the causes and consequences of good governance.

Better governance helps in the fight against poverty and improves living standards. Research over the past decade shows that improved governance raises development, and not the other way around.

Improvement within reach

When governance is improved by one standard deviation, infant mortality declines by two-thirds and incomes rise about three-fold in the long run.

Such an improvement in governance is within reach, since it is a fraction of the difference between the worst and best performers.

For example, in the dimension of rule of law, one standard deviation is all that separates the very low ratings of Somalia or Afghanistan from countries such as Kenya and Bolivia, what separates these countries from countries such as Ghana or Egypt or in turn what separates Ghana or Egypt from Portugal or Estonia or what separates these from the best performers such as Denmark or Switzerland.

Good governance has also been found to significantly enhance the effectiveness of development assistance in general and of World Bank-funded projects in particular.

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