A Peek Under the Engine Hood: The Methodology of Subnational Economic Governance Indices

Hague Journal on the Rule of Law, 3, pp 186-219, 2011, doi:10.1017/S1876404511200034.

34 Pages Posted: 30 Sep 2013

See all articles by Nina Merchant-Vega

Nina Merchant-Vega

Asia Foundation

Edmund J. Malesky

Duke University, Political Science

Date Written: September 30, 2013

Abstract

In recent years, The Asia Foundation (The Foundation) has conducted a series of Economic Governance Indexes (EGIs) in countries throughout South and Southeast Asia including Bangladesh, Sri Lanka, Vietnam, Cambodia, and Indonesia. EGIs are country-specific diagnostic tools used to assess and rank sub-national units (provinces, states, districts, etc.) on various aspects of their regulatory environments.

This article reviews the basic theoretical and programmatic rationale for the EGI. The overall rationale for this tool stems from the idea that economic governance impacts private sector development – independent of structural endowments such as location, infrastructure, and human capital. Therefore, good economic governance practices explain why some sub-national units out-perform others in spite of having similar initial endowments. EGIs have become an important tool to provide relevant economic governance information to policy makers, business leaders and citizens. Examining the methodological principles underlying the index approach, this article also describes how the three primary EGI methodological elements anticipate potential pitfalls and how they have been addressed within the methodology

Keywords: subnational governance, index, business environment, rankings, methodology

JEL Classification: H7

Suggested Citation

Merchant-Vega, Nina and Malesky, Edmund J., A Peek Under the Engine Hood: The Methodology of Subnational Economic Governance Indices (September 30, 2013). Hague Journal on the Rule of Law, 3, pp 186-219, 2011, doi:10.1017/S1876404511200034. . Available at SSRN: https://ssrn.com/abstract=2333333

Nina Merchant-Vega

Asia Foundation ( email )

465 California St., 9th Floor

Edmund J. Malesky (Contact Author)

Duke University, Political Science ( email )

140 Science Drive (Gross Hall), 2nd floor
Duke University Mailcode: 90204
Durham, NC 27708-0204
United States

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