WPS4280

# **Governance Matters VI: Aggregate and Individual Governance Indicators 1996–2006**

Daniel Kaufmann Aart Kraay Massimo Mastruzzi The World Bank

**Abstract:** This paper reports on the latest update of the Worldwide Governance Indicators (WGI) research project, covering 212 countries and territories and measuring six dimensions of governance between 1996 and 2006:  Voice and Accountability, Political Stability and Absence of Violence, Government Effectiveness, Regulatory Quality, Rule of Law, and Control of Corruption.  This latest set of aggregate indicators, are based on hundreds of specific and disaggregated individual variables measuring various dimensions of governance, taken from 33 data sources provided by 30 different organizations.  The data reflect the views on governance of public sector, private sector and NGO experts, as well as thousands of citizen and firm survey respondents worldwide. We also explicitly report the margins of error accompanying each country estimate. These reflect the inherent difficulties in measuring governance using any kind of data.  We find that even after taking margins of error into account, the WGI permit meaningful cross-country comparisons as well as monitoring progress over time.  In less than a decade, a substantial number of countries exhibit statistically significant improvements in at least one dimension of governance, while other countries exhibit deterioration in some dimensions. The decade-long aggregate indicators, together with the disaggregated individual indicators, are available on a newly-redesigned website at <u>www.govindicators.org.</u>

## World Bank Policy Research Working Paper 4280, July 2007

_The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the view of the World Bank, its Executive Directors, or the countries they represent. Policy Research Working Papers are available online at http://econ.worldbank.org._ ________________________________________ 1818 H Street NW, Washington, DC 20433, USA, dkaufmann@worldbank.org, akraay@worldbank.org, mmastruzzi@worldbank.org. The views expressed here are the authors' and do not necessarily reflect those of the World Bank, its Executive Directors, or the countries they represent. The Worldwide Governance Indicators are not used by the World Bank for resource allocation or for any other official purpose. We would like to B. Parks, M. Camerer, M. Carballo, R. Fullenbaum, B. Muskovitz, F. Marzo, C. Walker, S. Sarkis, J. Langston, L. Abruzzese, P. Wongwan, S. Hatipoglu, D. Cingranelli, D. Richards, J. Zveglich, M. Lagos, A. Lopes-Claros, R. Coutinho, S. Mannan, and D. Cieslikowsky for providing data and answering our numerous questions, and Luis Servén for helpful comments. The support and collaboration of the World Economic Forum, the U.S. State Department, and the Netherlands Government is appreciated.