# **TABLE A8:  Country Policy and Institutional Assessments (CPIA)**

## **A8: Country Policy & Institutional Assessment (CPIA)**

http://www.worldbank.org The Country Policy and Institutional Assessment (CPIA) annually assesses the quality of World Bank borrowers’ policy and institutional performance in areas relevant to economic growth and poverty reduction. Country assessments began in the World Bank in the late 1970s to help guide the allocation of lending resources. The methodology has evolved over time, reflecting lessons learned and mirroring the evolution of the development paradigm. While in earlier years assessments focused mainly on macroeconomic policies, they now include other factors relevant to poverty reduction, such as social inclusion, equity and governance.

The CPIA consists of equally weighted criteria representing the policy dimensions of an effective poverty reduction and growth strategy. The criteria are grouped in four clusters. Cluster A, Economic Management, covers economic policies. Cluster B, Structural Policies, covers a broad range of structural policies: trade policies, financial depth, market competition, and environmental sustainability. Cluster C, Policies for Social Inclusion and Equity, focuses on social equity and broad-based growth, and aims to capture the extent to which a country's policies and institutions ensure that the benefits of growth are widespread, contribute to the accumulation of social capital, and direct public programs to poor people and reduce their vulnerability to various kinds of shocks. Cluster D, Public Sector Management and Institutions, aims to capture key aspects of good governance, a vital For each of the criteria, countries are assessed on a scale of 1 (low) to 6 (high). The ratings are prepared by the World Bank's country economists and focus on the quality of the country's current policies and institutions, which are the main determinants of the present prospects for aid effectiveness. The rating assigned for each criterion reflects a variety of indicators, observations, and judgments: ratings are based on country knowledge obtained from country dialogue and the Country Assistance Strategy (CAS) process, the available body of economic and sector work (ESW), project preparation and supervision, and project and CAS monitoring and evaluation.

In the table below we list the variables included in each of the governance indicators. We use data for 1996, 1998, 2000, and 2002-2005.

|**Table A8: Country Policy & Institutional Assessme**|2005<br>**nt(136 dev**|2004<br>**elopin**|2003<br>**g co**|2002<br>**untrie**|2000<br>**s)**|1998|1996|
|---|---|---|---|---|---|---|---|
|**Voice and Accountability**||||||||
|NA|..|..|..|..|..|..|..|
|**Political Stability and Lack of Violence**||||||||
|NA|..|..|..|..|..|..|..|
|**Government Effectiveness**||||||||
|Management of external debt|X|X|X|X|X|X|X|
|Management of development programs|..|..|X|X|X|X|..|
|Quality public Administration / Public expenditure management|X|X|X|X|X|X|X|
|Budget Management|X|X|X|X|X|X|X|
|Efficiency of Public Expenditures|X|X|X|X|X|X|X|
|**Regulatory Quality**||||||||
|Competitive environment|X|X|X|X|X|X|X|
|Factor and products markets|..|..|X|X|X|X|X|
|Trade policy|X|X|X|X|X|X|X|
|**Rule of Law**||||||||
|Property rights|X|X|X|X|X|X|..|
|**Control of Corruption**||||||||
|Transparency, accountability and corruption in public sector|X|X|X|X|X|X|..|

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