present for at least several years. It seems unlikely that an information lag for the EIU, WEF and other sources relative to the CPIA would persist for more than a few years at most.

Not all “expert” ratings are necessarily equal: some sources may have less accurate or up to date information than others on governance and public sector reform in ECA. One source that specializes in ECA countries (with the exception of Turkey) is the annual Freedom House “Nations in Transit” (NIT) report. This report provides detailed country narratives as well as quantitative indicators designed to be comparable over time. The NIT produces ratings on three indicators pertaining to questions 12 and 16 in the CPIA: “judicial framework and independence,” “corruption,” and “independent media.”<sup>15</sup> In its 2012 edition, closely corresponding to the 2011 CPIA in its timing, only 2 of the ratings were upgraded (for countries also included in the CPIA), and 10 were downgraded. In contrast, the region proposed 12 increases and 0 decreases for question 12 and 16 ratings. In its 2013 edition, the NIT upgraded 6 ratings on these questions but downgraded 13 others, for countries covered by the CPIA. The source of comparator indicators that is arguably the best informed about ECA thus appears to disagree markedly with Bank staff on the extent of improvements in governance and public sector institutions.

The ECA region is comprised of several distinct sub-regional groupings, ranging from new EU members to Central Asian republics. We therefore experimented with different sub-regional dummies, to determine which group or groups might be driving the positive ECA effect found in Table 6. The group with the largest positive bias (i.e. CPIA ratings higher than predicted by comparator indicators) turns out to be the EU accession (Croatia, entering in July 2013) and candidate (Macedonia, Montenegro, Serbia and Turkey) countries.

Accession and candidacy should be associated with improvements in governance, so this result may not appear surprising. Although the three ECA countries in the 2012 CPIA that joined the EU earlier (Poland, Bulgaria and Romania) exhibit less of a positive bias, it could be that sources of comparator indicators have had more time to learn about their governance improvements, and catch up with any information advantage temporarily possessed by Bank staff and reflected in their CPIA assessments. Conversely, the comparator indicators may be lagging, relative to the CPIA, with respect to information on improvements in the five accession and candidate countries.

However, the Freedom House NIT reports are the least likely of comparator indicators to contain lagging information, and arguably should be as accurate and up to date as the CPIA on the issues it covers. In the four accession and candidate countries covered by the NIT, it downgraded one rating (Macedonia on “judicial framework and independence”) and upgraded none in its 2013 report. In 2012, it upgraded one and downgraded one, and in 2011 it upgraded two and downgraded two. The NIT’s ratings are thus inconsistent with the view that governance in these accession and candidate countries is improving so rapidly that assessments by less specialized sources of comparator indicators are hopelessly lagging.

> 15 These NIT indicators are not used as components of the “guidepost indexes” for questions 12 and 16 used in Table 6, because the NIT does not cover countries in any of the other 5 regions.

21