Measuring governance

Page contents

About this guide
Types and sources of indicators
Selecting and using indicators
Conceptual and methodological challenges
The politics of measuring governance
Global comparative assessments

About this guide

Over recent years the international development community has increasingly acknowledged the importance of 'good governance' for development. In this context, estimates and anecdotes are inadequate to capture the effectiveness of governance mechanisms. But how can the quality of governance be assessed? What consitutes a reliable and objective indicator of ‘good governance’? What operational and methodological challenges are involved in measuring governance? Measuring governance is important for:

Assessing governance capacity and performance at country and local level with a view to identifying how to improve the quality of governance in support of poverty reduction goals
Understanding the determinants and impacts of good governance and its relationship with development
Tracking changes in governance over time, both within and between countries
Facilitating domestic debate as citizens of developing countries demand better, more transparent and accountable governance
Identifying priority areas for aid allocations, providing evidence for performance-based aid allocation, and monitoring and evaluating the progress of development programmes and strategies.

Increasing emphasis on the need to measure ‘good governance’ and how it relates to poverty reduction has marked a proliferation of worldwide data sets, guidelines and frameworks for assessment. Nevertheless, the development community faces significant challenges in using the available data effectively to inform policies and programmes. There is considerable debate about the validity of different methodological approaches to measurement, and increasing recognition that measuring governance is itself a political process.

Sources of indicators

Indicators are the quantitative or qualitative measures of progress in development. Because governance is a multi-dimensional concept, a broad range of indicators are used in practice to assess the quality of governance.

UNDP, 2006, 'Bibliography of Governance and Democracy Indicators', United Nations Development Programme, Oslo
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Landman, T. and Häusermann, J., 2003, 'Map Making and Analysis of the Main International Initiatives on Developing Indicators on Democracy and Good Governance', University of Essex, Human Rights Centre, Report for the Statistical Office of the Commission of the European Communities (EUROSTAT).
Democracy, human rights and good governance can be measured in many different ways, and this is reflected in the wide variety of initiatives that have developed such indicators. This project for the Statistical Office of the European Commission collates and evaluates existing initiatives. It also makes recommendations for the development of more efficient measurement tools. Data for indicators is collected at the national or international level by civil society, donors, international non-governmental organisations or inter-governmental agencies. Much of this data is freely available online.
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UNDP, 2004, ‘Sources for Democratic Governance Indicators’, United Nations Development Programme, Oslo
Mapping by the United Nations Development Programme (UNDP) Oslo Governance Resource Centre in 2003 identified a wide range of governance indicators that have been developed and used by organisations. This guide brings some of them together to offer readers a user-friendly overview of indicators that are accessible on the internet.
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DataGob is a governance indicators database compiled by the Inter-American Development Bank (IADB) containing most of the publicly available data on governance indicators. Users can produce tables and graphs comparing indicators in different countries and over time.

Selecting and using indicators

Measuring governance involves selecting appropriate indicators, collecting the necessary data and analysing it accurately.

UNDP, 2007, ‘Governance Indicators: A Users Guide’, 2nd Edition, United Nations Development Programme, Oslo
Demand for ways to measure different aspects of democracy, human rights and governance is increasing. This has led to a rapid growth in the number of indicators to assess government performance, the quality of institutions and people’s perceptions. This guide, put together by the United Nations Development Programme and the European Commission, offers advice on where to find and how to use governance indicators.
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OECD DAC, 2008, ‘Survey of Donor Approaches to Governance Assessment’, Organisation for Economic Cooperation and Development - Development Assistance Committee, Paris
Many development agencies are engaged in assessing governance. What are their approaches and how can these be more effectively harmonised? This study from the Organisation for Economic Cooperation and Development surveys donors' use of general and thematic governance assessments. Most approaches are driven by policy dialogue, detailed planning of governance enhancement activities and strategic decisions regarding aid to specific countries. Linkage to a donor's programme, demand from the field and removal of institutional disincentives are important in determining how governance assessments are used.
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There is a notable trend from a narrow focus on conventional governance indicators (such as rule of law or anti-corruption) to a broader and more disaggregated assessment of politics, power, human rights and gender relations. The use of disaggregated data is vital in order to assess hitherto hidden aspects of governance, such as gender relations or child rights.

Scott, C. and Wilde, A., 2006, 'Measuring Democratic Governance: A Framework for Selecting Pro-poor and Gender Sensitive Indicators', United Nations Development Programme, Oslo
How should we measure democratic governance? Most indicators are developed by external stakeholders to compare nation states and are not designed to help countries undertake governance reforms. This UNDP guide presents a framework for generating pro-poor gender sensitive indicators to help policy makers monitor and evaluate democratic governance at the country level. It argues that indicator selection is itself a governance process.
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Conceptual and methodological challenges

Governance is a complex and multi-dimensional concept. Can it be captured through indicators? Can indicators really measure what they claim to measure? It is often argued that there is considerable room for error in measuring governance, largely due to the questionable accuracy and reliability of indicators. Central areas of debate include whether or not data should be subjective or objective, or whether aggregate or individual indicators are more reliable.

Kauffmann, D., and Kray, A., 2007, ‘On Measuring Governance: Framing Issues for Debate’, Issues paper for the Roundtable on Measuring Governance, January, World Bank Institute, Washington D.C.
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Measuring governance is often complicated by the absence of necessary or reliable data to provide a cohesive overall assessment.

Court, J., Hyden, G. and Mease, K., 2002, 'Assessing Governance: Methodological Challenges', World Governance Discussion paper 2, United Nations University, Tokyo, Japan
How can governance be assessed? What are the methodological challenges? Who is best placed to provide insights as to the quality of governance in a particular country? Without advances being made on these critical issues, it will not be possible to assess how governance varies across the world or what role governance plays in development. This discussion paper, produced by the United Nations University, contributes to the wider discussion on ways to address such challenges.
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Measuring governance sometimes involves the use of proxy measures. This requires hypothesising that a particular data set can act as an indicator of something less explicity measurable. Some question the validity of proxy indicators.

Thomas, M.A., 2006, ‘What Do the Worldwide Governance Indicators Measure?’, The Paul H. Nitze School of Advanced International Studies, The Johns Hopkins University, Baltimore
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Aid agencies have also been accused of selection bias in using indicators.

OECD, 2006, ‘Uses and Abuses of Governance Indicators’, Organisation for Economic Cooperation and development, Paris
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Aggregate indicators that provide a snapshot of governance for the purposes of global comparisons cannot indicate exactly where and how change is necessary for better governance and poverty reduction. For this reason, measurements of governance for the purpose of cross-country comparison may be unhelpful to developing country governments. ‘Second generation indicators’ are designed to be more transparent, specific and accurate.

Knack, S., Kugler, M. and Manning, N., 2002, 'Second Generation Resources', International Review of Administrative Sciences, vol. 69, no. 3, pp 345-364
How can governance be measured to promote constructive change? This article from the World Bank summarises progress made in its initiative to test and develop policy-relevant, politically acceptable, quantitative indicators of governance. It suggests that if consensus is key to developing governance indicators that promote institutional change, then sensitivity to the often-justified concerns of governments is key to that consensus.
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The politics of measuring governance

Measuring governance has largely been viewed as dominated by top-down, ‘blueprint’ methods of assessment. Yet there is an increasing trend towards participatory processes and emphasis on the need to consider unique local contexts. Some are exploring a move away from conducting country governance assessments with the primary purpose of guiding donors’ aid-allocations, towards increased stakeholder ownership of the assessment.

Arndt C., 2008, 'The Politics of Governance Ratings', Maastricht Graduate School of Governance, Maastricht
What explains the popularity and misuse of the prominent governance indicators produced by the World Bank and others? This paper from the Maastricht Graduate School of Governance argues that producing and using a range of more targeted, transparent indicators will benefit all stakeholders. Among hundreds of existing governance indicators, the most popular are perception-based composite indicators, primarily of use to international organisations. These indicators summarise vast amounts of data that exists for a large number of countries, but the drawbacks of relying heavily on them are significant.
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Hyden, G., Court, J. and Mease, K., 2003, 'Making Sense of Governance: The Need for Involving Local Stakeholders', ODI Discussion Paper, Oversead Development Institut
that the quality of governance matters to development. But what does governance really mean? When, why and how does governance make a difference to the way a country develops? This research by the Overseas Development Institute suggests that governance is too important an issue to be left only to international donor agencies to define and determine. Local stakeholders must be brought in to provide a complementary and contrasting perspective.
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Kapoor, I., 2004, 'Donor Participatory Governance Evaluation: Initial Trends, Implications, Opportunities, Constraints', Journal of International Development, 16 (2), 157-170
What are current trends in participatory approaches to governance evaluation (GE)? How do political, institutional and methodological issues impact? Which questions have donors failed to address? This article, from the Faculty of Environmental Studies at York University, Canada, appears in the Journal of International Development and is an updated version of the 1999 article, “Evaluating Governance Programs”. In order for participatory governance assessment to be meaningful, the relationship between conventional and participatory assessments and issues of power and representation need to be considered.
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Global comparative assessments

A number of worldwide data sets aim to enable comparisons over time and across countries and regions. The World Bank produces an annual comparative report measuring country performance against 6 aggregate indicators: voice and accountability; political stability and absence of violence; government effectiveness; regulatory quality; rule of law; and control of corruption.

Kaufmann, D., Kraay, A. and Mastruzzi, M., 2008, 'Governance Matters VII: Aggregate and Individual Governance Indicators, 1996-2007', World Bank Policy Research Working Paper No. 4654, Workd Bank, Washington D.C.
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The aggregate indicators and data are available online

Hyden, G. et al., 2008, 'Governance Assessments for Local Stakeholders: What the World Governance Assessment Offers', Overseas Development Institute, London
How can governance assessments enhance governance as an analytical tool and a civic activation mechanism? The World Governance Assessment (WGA) is based on principles of national ownership and local consultation, and the need to strengthen monitoring institutions and diagnostic tools. This Overseas Development Institute (ODI) paper publishes findings from the WGA second round, arguing that it is uniquely placed to serve both donor and local interests. The WGA builds capacity of local researchers, provides a sense of ownership, captures local context, and allows for cross-country comparison.
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