According to a report released yesterday by the World Bank Institute, over $1 trillion in bribes are paid around the world each year. This bribery combines with other forms of corruption and poor governance to create a host of development problems -- including increased infant mortality, reduced incomes, and decreased aid effectiveness -- which tend to disproportionately burden the poor.
The report, "Governance Matters, 2007: Worldwide Governance Indicators 1996-2006," presents governance and corruption measures for 212 countries. The publication of these data represents a decade-long effort to quantify (and then publicize) good and bad governance and the concomitant impact they have on development. While this relationship is still under debate, the report's authors hope that this publication will support the continuing focus on governance within development policy circles and provide a starting point for further research into this complex issue.
Report Methods
This year's publication is the sixth installment of the Worldwide Governance Indicators (WGI) project and is based on the perceptions of governance and corruption provided by tens of thousands of survey respondents across the globe. These data, in turn, have been aggregated by the authors into six indicators of good governance, which are defined in the report's accompanying press release as follows:
- Voice and Accountability – measures the extent to which a country's citizens are able to participate in selecting their government, as well as freedom of expression, freedom of association, and a free media;
- Political Stability and Absence of Violence – measures perceptions of the likelihood that the government will be destabilized or overthrown by unconstitutional or violent means, including terrorism;
- Government Effectiveness – measures the quality of public services, the quality of the civil service and the degree of its independence from political pressures, the quality of policy formulation and implementation, and the credibility of the government's commitment to such policies;
- Regulatory Quality – measures the ability of the government to formulate and implement sound policies and regulations that permit and promote private sector development;
- Rule of Law – measures the extent to which agents have confidence in and abide by the rules of society, and in particular the quality of contract enforcement, the police, and the courts, as well as the likelihood of crime and violence; and
- Control of Corruption – measures the extent to which public power is exercised for private gain, including both petty and grand forms of corruption, as well as "capture" of the state by elites and private interests.
1996 Voice and Accountability Indicators
Source: World Bank, Governance Matters 2007
2006 Voice and Accountability Indicators
Source: World Bank, Governance Matters 2007
Report Findings
The report finds that high marks on the above indicators correlate with substantial positive impacts on societies, such as economic growth, increased literacy, reduced inequality, and higher income levels. Furthermore, the report claims that better governance is the cause, not the result of these improvements.
In Governance Matters, 2007, the World Bank has touted the efforts of a number of countries in Sub-Saharan Africa (including Liberia, Tanzania, Democratic Republic of Congo, Niger, Sierra Leone, Angola, and Rwanda), who have all made strides in one or more of the six governance indicator areas.
Unfortunately, despite these success stories, the global corruption situation remains mixed. Many nations have failed to make improvements in governance and some countries, such as Cote d'Ivoire, Zimbabwe, and Venezuela, have actually lost ground. As a result, most of the gains in Africa have been offset, and the quality of governance worldwide has seen little aggregate improvement.
Moving Forward
In addition to a compilation of data, the report is also a call for continued efforts to improve governance. The World Bank analysis notes that while difficult, a strong commitment to reform can lead to the creation of transparent and responsive public institutions. Furthermore, small improvements can be made relatively quickly and start to have major positive effects almost immediately. For example, Liberia, Kenya, Angola, Algeria, and Ukraine have all shown marked improvements on various indicators in just five years.
In the interest of transparency, the authors have posted their full report, methodologies and corresponding data sets on the internet, where it is freely available. It is their hope that a better public understanding of good government and its societal impacts will keep the issue of governance and its contribution to development in the spotlight.
Related Links:
Governance Matters 2007 Website
Transparency International – Global Coalition Against Corruption
EarthTrends
Population, Health, and Human Well-Being – Development Indicators
