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Empirics of Governance May 2, 2008 Nick Manning Sector Manager Public Sector and Governance

Using indicators: monitoring progress on governance outcomes A LAC/MIC perspective. Empirics of Governance May 2, 2008 Nick Manning Sector Manager Public Sector and Governance. Broad governance outcome measures (WGI) used a lot in LAC. Limitations well known

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Empirics of Governance May 2, 2008 Nick Manning Sector Manager Public Sector and Governance

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  1. Using indicators: monitoring progress on governance outcomes A LAC/MIC perspective Empirics of Governance May 2, 2008 Nick Manning Sector Manager Public Sector and Governance

  2. Broad governance outcome measures (WGI) used a lot in LAC • Limitations well known • Silent on structures/arrangements • Broad/uncertain definition • Apparent precision • Modest risk evident in how they are used • Annexes to CPS’s • Nuances removed • But they certainly tell us something • Analysis of WGI for Central America • Conceptual confusion maybe overplayed

  3. Need to take extra care in the MICs • Catalyst to dissatisfied public or source of political resentment that closes down debate? • LAC reaction to WGI has occasionally been strong • We tend to use them to flatter the good performers • Naming/shaming reserved for the LICs • Taking care means • Ignore minor differences • Use to support, not prove, an argument • Position as a contribution to a debate • Accompany with disaggregated indicators (PEFA, OECD DAC, Doing Business) for policy recommendations

  4. The move towards disaggregated indicators has risks • For MICs, the challenge is how, not whether, to disaggregate • Normative assumptions must be treated with great care – MICs want comparative patterns • The conceptual problems might not be any less • PEFA highlights the benefits and risks • Great job in building consensus • But emphasis on publication creates problems • EC use of PEFA for conditionality is problematic • Result in LAC is rather unbalanced use of PEFA • OECD DAC procurement indicators less of a public issue • Disaggregating public administration indicators is going to be very tough

  5. Implicit assumptions about what is “dialogue-enhancing”

  6. The direction of indicator work for MICs

  7. Don’t forget gaming • Another reason for being wary of strongly normative indicators • Experience of performance-management regimes in OECD countries is very instructive • When a lot rests on the outcome, there will be gaming • Recent requests concerning MCC show some exploration of this

  8. In sum • Use governance outcome data with care anywhere • Using indicators in the dialogue in the MICs is seemingly different than the LICs: • LICs – can be normative and public, maybe ranking works • MICs – we don’t have the leverage or conceptual basis for naming/shaming • PEFA, OECD DAC Procurement indicators give us the clue about which way to go (move east, not north) • Use those lessons for the next generation of disaggregated indicators (public administration etc.)

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