The World Bank came out with its latest report on corruption and governance, including a handy, Robert Parker-like one hundred point rating system of each country's governance on six factors: Voice and Accountability, Political Stability and Absence of Violence, Government Effectiveness, Regulatory Quality, Rule of Law, and Control of Corruption. Some of the interest in the quality of government in economic development is due to priorities of the last two corruption-obsessed bank presidents, Wolfowitz and Wolfensohn, and some of it, I suspect, is due to the increasing interest in development economists in the role of law in economic growth, including the LLSV hypothesis about the importance of independent courts.
I'm sold on the importance of the rule of law, but this worldwide study, like many of its ilk, pulls its punches. As the Times notes:
These sorts of results can only be obtained by holding different countries to different standards, and especially by not controlling for the availability of data in developed countries (such as where the press reports bad news, the police count crime, etc). And so Australia scored a 75 on Political Stability and Absence of Violence. As the Australian Age notes, "You'd think a developed country that's had three prime ministers in 24 years might do better on that score, especially as the incumbent leader has held power since March 1996."
It's not a great score. But it's better than the US, which gets a 58 - about the same as Ghana, which gets a 55. I've spent some time in Ghana, and I'm delighted that there hasn't been a coup there since the 1980s. But I think it serves few uses to assess its stability as comparable to that of the US - or its violence, however that is defined.
China, on the other hand, appears to being trying to up its scores (government effectiveness 55, regulatory quality, 46) by executing regulators in the wake of regulatory failures. Yikes. Talk about a personal sanction.
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1. Posted by Gordon Smith on July 12, 2007 @ 10:34 | Permalink
Very interesting, David. A lot of people are not sold on the connection between the rule of law (as defined by the WB) and economic development, and reports like this one suggest to me that the WB is just manipulating the numbers to nudge countries in the direction it would like them to go. That seem like a very dangerous thing to me.
2. Posted by David Zaring on July 12, 2007 @ 15:10 | Permalink
It does seem that way - and it's all done in a way that's supposed to be palatable to donee countries, by grading the donor countries in odd ways. I'm unconvinced that these rankings will be that helpful for empirical research.
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