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Global Good Governance - Indicators

Promoting Global Good Governance is a key strategic requirement of the XXI Century. There is broad global agreement that governments should promote the growth of their citizens, the functioning of a harmonious, productive and prosperous society. In the words of a National Research Council study on Improving Democracy Assistance, good governance "assumes a government's ability to maintain social peace, guarantee law and order, promote or create conditions necessary for economic growth, and ensure a minimum level of social security." But there is not general agreement on just how to describe such governance in detail. It obviously must include a wide range of indicators, and so it is inevitable that there will be conflicts, a need to set priorities and tradeoffs, to balance one objective against another. And these conflicts will change with their cultural setting and the specific circumstances of a specific country at a specific time.

Ideally indicators should be universally accepted, but this is not easy to do. One concrete example is the Washington Consensus, an attempt to define standard economic policy prescriptions which would be criteria for assistance by the major international financial institutions. Although the ten specific criteria make much sense, it was clearly apparent that some nations, China and India in particular, were experiencing high growth despite ignoring many of them. In the end, the term "Washington Consensus" became a lightning rod for dissatisfaction among anti-globalization protestors, developing country politicians and officials, trade negotiators, and numerous others, partly because it became somewhat unfairly tied with neoliberal policies. What was clear is that there never was any consensus and that an effort to develop one led instead to bitter disputes. While this particular effort was focused on economic indicators, it well illustrates the difficulties of trying to develop universal standards.

The United States has developed its own indicators for good governance. The first really comprehensive effort was the Handbook of Democracy and Governance Program Indicators published by the US Agency for International Development in August 1998. This handbook addressed strategic objectives and contributing intermediate results and developed specific indicators in four general topic areas: rule of law; elections and political processes; civil society; and governance. An updated set of governance indicators, based on evaluations by independent third-party organizations, is now being used by the Millennium Challenge Corporation (MCC), a US government organization specifically tasked with reducing poverty through economic growth, providing US aid to countries which will make good use of it - countries with a commitment to accountable and democratic governance. MCC's broad set of governance evaluations looks at three general policy areas: governing justly, investing in people, and encouraging economic freedom. For each of these, there are about a half dozen specific indicators drawn from assessments made by organizations such as Freedom House; the World Bank Institute; and the United Nations Educational, Scientific and Cultural Organization (UNESCO). Some indicators, such as a Natural Resources Management Index and a Land Rights and Access Index, have been added recently to capture and encourage more environmentally sustainable practices. Overall, the MCC indicators provide a good basis, but they have several problems in terms of being used as universal governance indicators, including:

  • Although they are governance indicators, they are specifically selected by MCC to help evaluate a country's commitment to poverty reduction and economic growth, so that MCC can allocate resources to where they will be most effective.
  • They represent US values. The United States does place high confidence in such basic values as equality and individual freedom as being the "unalienable rights" of mankind and generally believes that the leadership in countries that do not acknowledge these rights has its own ulterior motivations. Nevertheless, not all the indicators have universal acceptance.
  • Specific numeric indicators do not necessarily capture real differences; countries can focus on improving specific indicators even if their unique political environment demands more immediate work on some different aspect of reform. So, for example, higher expenditures on health do not necessarily mean better health care. Unfettered elections in backward countries can promote fragmentation and lead to political gridlock. Specific indicators have to be judged in specific situations.
  • Even though many of these indicators address specific topics, they can still be aggregate estimates. So, for example, the Voice and Accountability indicator addresses the extent to which a country's citizens are able to participate in running their government, as well as freedom of expression, freedom of association, and a free media. Obviously no one number can capture all the nuances in these various specific subjects, but they give indications of sound political and economic governance and allow a comparative evaluation among different countries.

In addition to the indicators used by MCC, there are a number of other gross indicators which provide broader measures of a government's overall effectiveness. These include:

  • Life Expectancy is a basic measure of how well the nation protects the lives of its citizens. Obviously it is affected by the overall health and economic well being of a population, but is also affected by dozens of other contributing elements, such as workplace safety, traffic accidents, infant mortality, armed conflicts, crime levels, and disaster response capabilities. This is an unusual indicator in that none of the contributing factors have to be individually measured; the aggregate figure incorporates them all.
  • The Gini Coefficient is a measure of income inequality and so provides a relative measure of the economic opportunities in a society. It does evaluate only current income.
  • Wealth Distribution can have a very large impact on opportunities within a society, as well as providing some measure of economic stability. Wealth distribution in a society is generally much more resistant to change than current income levels. No matter how ill gotten, it is very difficult for governments to claw any of it back, even where a badly skewed distribution of wealth may be a central cause of instability. Unfortunately, there is no agreed measure of wealth distribution that is generally accepted and readily available. Perhaps the best measure is the percent of national wealth held by the top 10% of the nation. But this figure is only available for a couple dozen countries, most of them industrialized. These available figures vary from 39.3% in Japan to 71.3% in Switzerland.
  • The Environmental Performance Index is a joint initiative of the Yale Center for Environmental Law and Policy and the Center for International Earth Science Information Network of Columbia University, in collaboration with the World Economic Forum and the Joint Research Centre of the European Commission. It aggregates 25 performance indicators tracked across ten policy categories covering both environmental public health and ecosystem vitality. These indicators provide a gauge on a national government scale of how close a country is to established environmental policy goals.
  • The Global Competitiveness Index is calculated by the World Economic Forum and provides a measure of the economic competence of a government. It is based on more than 113 individual variables, of which approximately two thirds come from an Executive Opinion Survey, and one third comes from publicly available sources. Some of the individual groupings of variables are under control of governments (e.g., basic education), but others are generally private sector responsibilities (e.g., goods market efficiency). For still other groupings, the degree of government control varies from country to country (e.g., technological readiness). The overall index provides a measure of how effective the government is in organizing the country to compete in the global economy.
  • Incarceration rates provide a measure of the level of crime in a society and how a government works to control it. At a very basic level, it is an indicator of how well a government manages its human resources. The rates of incarceration per 100,000 population vary from a low of 28 in Nepal to 738 in the United States, which has by far the highest rate in the world.

Recent US efforts to promote good governance have focused mostly on democracy promotion. In the words of the 2006 National Security Strategy, "it is the policy of the United States to seek and support democratic movements and institutions in every nation and culture." But these efforts have often been ineffectual, particularly in the Middle East. When the initial justification for the invasion of Iraq (the need to eliminate a program for weapons of mass destruction) lost credibility, it morphed into a mission to bring democracy to Iraq. At the same time, the need for support from autocratic Muslim countries (Egypt, Pakistan, Saudi Arabia) forced the United States to essentially suspend prior prominent efforts to pressure these countries to implement more democratic policies.

These efforts had been based on the American belief that democracy is the ideal form of government. Democracies promote freedom and openness. They do not wage war with one another, or at least mature democracies have a good track record on this, as well demonstrated by West Europe where warfare, common for centuries, is now virtually unthinkable. Mature democracies accept compromises and have institutions which support this. Minority rights are respected and ethnic divisions are not cause for hostility, though both Canada and Belgium demonstrate that such divisions can be troublesome. But where democracy has shallower roots, the potential for conflict is certainly higher; Greece and Turkey have almost come to blows, Pakistan and India have large armies focused on each other. As Mansfield and Snyder have convincingly demonstrated, leaders in emerging democracies with weak political institutions often attempt to rally support by invoking external threats and resorting to belligerent, nationalist rhetoric. On the same lines, as Amy Chua has pointed out, the introduction of free markets and elections often leads not to stability or prosperity but to hate-mongering, discrimination and even genocidal violence. Hitler, after all, was democratically elected.

Well functioning democracies tend to do well on indicators discussed above, though this is somewhat tautological, as the indicators measure how well functioning a society is. Few, if any, countries which rate poorly on the indicators could be characterized as mature democracies. Generally, it seems that improving indicators lead to improving democracy and not vice versa. Introducing democracy from the top down is very difficult, though US experience with both Japan and Germany shows this can be done. In those cases it took years of peaceful occupation and a systematic inculcation of democratic principles to achieve this objective. The current situation in Iraq provides a different example. For a significant proportion of the population, ethnic or religious identities are more important than democratic principles which, in fact, are specifically rejected by many. One seasoned Middle East observer succinctly identified the challenge, “Free elections are the last step in a democracy. Before that, you have to have a democratic society that accepts the values of democracy. In Iraq we see religious conflicts, sectarian conflicts. These are elections without democratic values.” The outcome remains indeterminate. The situation is not an uncommon one. Even in homogeneous societies, elections can lead to political paralysis, which in turn often leads to military coups or even the kind of anarchy we now see in Somalia.

The most comprehensive evaluation of democracy assistance was done by the National Research Council in 2008. This assessment made clear that there is no agreed concept of what constitutes democracy, but it is certainly a multi-dimensional concept. Various definitions invariably include electoral competition for national office. Many other social and cultural indicators associated with democracy are not really unique to democracies - they are indicators of good governance and a well run kingdom or even a benevolent dictatorship would incorporate many of them. A central point of issue is whether good governance is an essential component of real democracy or even a result of democracy. It is not even clear that improving individual political and socio-economic indicators would lead to democracy, but introducing a minimal democracy (elections) does not necessarily lead to good governance, as Amy Chua comments and Iraq demonstrates.

So developing good governance is more important for peaceful development than developing democracy per se; although good governance seems to be a prerequisite for developing a mature, well functioning democracy. At earlier stages of economic development, strong governments are critical and may need at least some measure of autocracy. The post-war government in South Korea, first with the autocratic President Syngman Rhee, followed by a military dictatorship under General Park Chung-hee brought severe political repression but also significant development of the Korean economy and social organization. South Korea is now rated as highly by Freedom House as Italy and Japan. Similarly, the first Prime Minister of independent Singapore, Lee Kuan Yew, tightly controlled the government from 1959 to 1990, but he also led his nation's transformation from a relatively underdeveloped colonial outpost with no natural resources into a "First World" Asian Tiger, yet it is still rated as only Partly Free. These leaders, though domineering, clearly worked hard to develop their own nations.

Unfortunately, they are pretty much the exception. Although autocratic leaders invariably stress that they are acting in the best interests of their nation, the claim is often questionable. It is not unusual for them to enrich themselves and their supporters at the expense of the country. Autocratic leaders seem universally reluctant to relinquish control, though they also require at least a minimal amount of popular support. The challenge is not how to rapidly move such countries to democracy, but rather how to encourage, entice, or pressure leaders to develop their own nations. A wide range of governance indicators is critical to this effort. They are much more important than any sheen of democracy as they provide measures of the real competence of a government.

Overall, good governance is a complex issue reflecting dozens of indicators. For some of them, specific values may be available; others depend on subjective ratings by knowledgeable specialists. Any of them can become controversial and none of them are exact. Nor can they easily be combined into some sort of aggregate score. Even the MCC, which groups indicators into three broad policy areas, does not try to develop aggregate indexes. So the available indicators can only provide a general sense of how well a nation is being governed. For any individual country, the most important arbiter of government effectiveness is the country's own citizens. But with electoral manipulations common, as well as strong emotional appeals to often ill-informed electorates, such internal evaluation is often flawed. On the other hand, external evaluations are also subject to manipulation as well as insensitivity to the nuances of individual indicators in a specific cultural and political setting.

In summary, the indicators used by MCC, supplemented with other indicators of national performance, provide a basis for relative evaluations of the general level of governance in individual countries and trends in specific areas.

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