The Worldwide Governance Indicators and Tautology: Causally Related Separable Concepts, Indicators of a Common Cause, or Both?

31 Pages Posted: 20 Apr 2016

See all articles by Laura Langbein

Laura Langbein

American University - Department of Economics; American University - School of Public Affairs

Stephen Knack

World Bank - Development Research Group (DECRG)

Date Written: July 1, 2008

Abstract

Aggregate indexes of the quality of governance, covering large samples of countries, are widely used in research and in aid policy. Few studies examine the validity of these indexes, however. This paper partially fills this gap by examining empirically the dimensionality of the Worldwide Governance Indicators. The six indexes purportedly measure distinct concepts of control of corruption, rule of law, government effectiveness, regulatory quality, political stability, and voice and accountability. Using standard statistical techniques for testing measurement validity, the analysis concludes that the six indexes do not discriminate usefully among different aspects of governance. Rather, each of the indexes merely reflects perceptions of the quality of governance more broadly. An implication of the findings is that the Worldwide Governance Indicator indexes are frequently misused in research and policy applications, where it is commonly assumed that the indexes provide distinct measures of different aspects of the quality of governance. A further implication is that Transparency International's even more widely-known aggregate index similarly reflects perceptions not only of corruption, as intended, but of the quality of governance more broadly.

Keywords: Governance Indicators, National Governance, Public Sector Corruption & Anticorruption Measures, Statistical & Mathematical Sciences, Information Security & Privacy

Suggested Citation

Langbein, Laura and Knack, Stephen, The Worldwide Governance Indicators and Tautology: Causally Related Separable Concepts, Indicators of a Common Cause, or Both? (July 1, 2008). World Bank Policy Research Working Paper No. 4669, Available at SSRN: https://ssrn.com/abstract=1233045

Laura Langbein

American University - Department of Economics ( email )

4400 Massachusetts Avenue, N.W.
Washington, DC 20016-8029
United States

American University - School of Public Affairs ( email )

Washington, DC 20016
United States

Stephen Knack (Contact Author)

World Bank - Development Research Group (DECRG) ( email )

1818 H. Street, N.W.
MSN3-311
Washington, DC 20433
United States
202-458-9712 (Phone)

HOME PAGE: http://econ.worldbank.org/staff/sknack

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