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

Empirics of GovernanceMay 2, 2008

Nick ManningSector Manager

Public Sector and Governance

Using indicators: monitoring progress on governance outcomes

A LAC/MIC perspective

• 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

Broad governance outcome measures (WGI) used a lot in LAC

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

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

Implicit assumptions about what is “dialogue-enhancing”

Public presentation

WGI PEFA when published Doing Business/Enterprise Surveys

OECD Government at a Glance

Str

ongl

y no

rmat

ive

OECD DAC Procurement PEFA when not published

OECD Peer Reviews

Less norm

ative/more descriptive

Less public

The direction of indicator work for MICs

Public presentation

Str

ongl

y no

rmat

ive

Less norm

ative/more descriptive

Less public

T

empt

atio

n

Need

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

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.)