Kaufmann, DanielKraay, Aart2012-06-082012-06-082007-10https://hdl.handle.net/10986/7588Scholars, policymakers, aid donors, and aid recipients acknowledge the importance of good governance for development. This understanding has spurred an intense interest in more refined, nuanced, and policy-relevant indicators of governance. In this paper we review progress to date in the area of measuring governance, using a simple framework of analysis focusing on two key questions: (i) what do we measure? and, (ii) whose views do we rely on? For the former question, we distinguish between indicators measuring formal laws or rules 'on the books', and indicators that measure the practical application or outcomes of these rules 'on the ground', calling attention to the strengths and weaknesses of both types of indicators as well as the complementarities between them. For the latter question, we distinguish between experts and survey respondents on whose views governance assessments are based, again highlighting their advantages, disadvantages, and complementarities. We also review the merits of aggregate as opposed to individual governance indicators. We conclude with some simple principles to guide the refinement of existing governance indicators and the development of future indicators. We emphasize the need to: transparently disclose and account for the margins of error in all indicators; draw from a diversity of indicators and exploit complementarities among them; submit all indicators to rigorous public and academic scrutiny; and, in light of the lessons of over a decade of existing indicators, to be realistic in the expectations of future indicators.CC BY 3.0 IGOABUSESACCESS TO INFORMATIONAGGREGATE GOVERNANCEAGGREGATE GOVERNANCE INDICATORSAGGREGATE INDICATORAGGREGATE INDICATORSAGGREGATING GOVERNANCE INDICATORSANTI-CORRUPTIONANTICORRUPTIONANTICORRUPTION AGENCYANTICORRUPTION COMMISSIONANTICORRUPTION COMMISSIONSANTICORRUPTION STRATEGYAUDITORSAUTHORITYAVERAGE RESPONSESBRIBEBRIBERYBRIBESBUREAUCRATIC CORRUPTIONBUSINESS COMMUNITYBUSINESS ENVIRONMENTCITIZENCITIZENSCIVIL SOCIETYCOMMERCIAL RISK RATING AGENCIESCOMPOSITE INDICATORSCONFIDENCECONSENSUSCONSTITUTIONAL ARRANGEMENTSCONSTITUTIONSCONTROL OF CORRUPTIONCORRUPTCORRUPTION CONTROLCORRUPTION DIAGNOSTICSCORRUPTION INDICATORCORRUPTION PERCEPTIONSCORRUPTION PERCEPTIONS INDEXCORRUPTION SURVEYSCOUNTRY COMPARABILITYCOUNTRY COMPARISONSCOUNTRY COVERAGECOUNTRY RANKINGSCOUNTRY RATINGSCPIDECISION-MAKERSDEFINITION OF GOVERNANCEDEGREE OF MEASUREMENT ERRORDEMOCRATIC ACCOUNTABILITYDIMENSION OF GOVERNANCEDIMENSIONS OF GOVERNANCEDISCLOSUREDOMESTIC FIRMSECONOMIC DEVELOPMENTECONOMIC PERFORMANCEETHICSEXCHANGE OF IDEASFAILURE OF GOVERNANCEFREEDOM OF INFORMATIONFREEDOM OF SPEECHFREEDOM OF THE PRESSGLOBAL GOVERNANCEGOOD GOVERNANCEGOVERNANCE DIMENSIONSGOVERNANCE ESTIMATESGOVERNANCE INDICATORGOVERNANCE INDICATORSGOVERNANCE MEASUREMENTGOVERNANCE OUTCOMESGOVERNANCE REFORMGOVERNANCE REFORMSGOVERNMENT EFFECTIVENESSGOVERNMENT STABILITYHUMAN RIGHTSINCOMEINEQUALITYINFANT MORTALITYINFLATIONINITIATIVEINSTITUTIONAL ENVIRONMENTINSTITUTIONAL PERFORMANCEINSTITUTIONAL QUALITYINTEGRITYINVESTMENT CLIMATEJUDICIAL CORRUPTIONJUSTICELAWSLAWYERSLEGAL FRAMEWORKLEGISLATIONMACROECONOMICSMEASURE OF GOVERNANCEMEASUREMENT CHALLENGESMEASUREMENT ERRORMEASUREMENT ERRORSMEASURING CORRUPTIONMEASURING GOVERNANCEMEDIAMINISTERMONEY LAUNDERINGMULTILATERAL ORGANIZATIONSNOTIONS OF GOVERNANCEOUTCOME INDICATORSPEER REVIEWPER CAPITA INCOMEPERCEPTIONS INDEXPERFORMANCE INDICATORSPETTY CORRUPTIONPOLICEPOLICY ACTIONPOLICY RESEARCHPOLITICAL ANALYSISPOLITICAL ECONOMYPOLITICAL INSTITUTIONSPOLITICAL INTERFERENCEPOLITICAL RISKPUBLIC AFFAIRSPUBLIC EXPENDITUREPUBLIC GOODSPUBLIC OFFICIALSPUBLIC POLICYPUBLIC PROCUREMENTPUBLIC PROCUREMENT CONTRACTSPUBLIC SECTORPUBLIC SECTOR ACCOUNTABILITYPUBLIC SECTOR GOVERNANCEPUBLIC SERVICESPUBLIC SPENDINGQUALITY OF PUBLICREFORM EFFORTSREGULATORY FRAMEWORKREGULATORY REGIMERULE OF LAWSERVICE DELIVERYSOCIAL INTERACTIONSSTATISTICAL METHODOLOGYSUB-SAHARAN AFRICASUBJECTIVE DATASUBJECTIVE INDICATORSSUBJECTIVE RATINGSTAXATIONTRANSPARENCYUNOBSERVED COMPONENTS MODELUNOBSERVED GOVERNANCEVOTINGWORLDWIDE GOVERNANCE INDICATORSWorld Bank10.1596/1813-9450-4370