Introduction

The supply and use of governance assessments and indicators are

booming. The aim of this Advanced Academic Update (AAU) is to

discuss (1) purpose, assumptions and impact of the proliferation of

governance assessments and indicators on developing countries, (2)

the “benchmark model” behind the mainstream governance

assessments as well as missing elements, and (3) the new trend

towards “actionable indicators”. Participants will learn about the latest

developments in governance research and their applicability for work

in the field and constructive suggestions for future work will be

provided. The programme includes academic speakers and policy

makers. 

Historically, mostly commercial risk rating agencies provided governance ratings for investors to assess country risk. During the last decade, bilateral and multilateral donors - with a leading role of the World Bank - as well as non-profit organizations have become heavily involved in the provision and use of governance assessments and indicators. Purposes the indicators are supposed to serve range from enhancing country dialogue to influencing aid-allocation, fostering research to identifying areas of reform and monitoring progress over time.  Funding under the US Millennium Challenge Corporation and under the World Bank’s International Development Association, for example, heavily depends on a country’s performance on governance indicators.

The rise of governance assessments and indicators affects developing countries in several ways. First of all, access to resources depends increasingly on their governance ratings, as both international investors and bi-and multilateral donors increasingly take governance ratings into account for resource-allocation decisions. Second, within-country and international pressure can arise from coverage in the media on the government’s failure or success to change their governance ratings or their performance with respect to other countries. Third, the process of undertaking governance assessments can absorb much of the government’s time and resources, especially when multiple assessments take place at the same time.

The sessions on the first day give an overview of governance indicators and assessments; discuss the underlying assumptions, the purposes they serve and their impact on developing countries. The second day discusses experiences from developed countries with managing indicators and assessments and analyses the trend towards “actionable” indicators for developing countries. The AAU concludes with a stocktaking of emerging experiences, lessons learned and suggestions for future research and standards to improve the quality and relevance of governance indicators and assessments.