Abstract
This paper proposes a new index of governance based on the Alkire-Foster methodology and compares it with the Mo Ibrahim Index of African Governance. The proposed new index improves on existing measures of governance in two ways. First, it is able to incorporate both cardinal and ordinal variables without having to assign cardinal meaning to ordinal variables. The cardinalization of ordinal variables can lead to ambiguous rankings depending on the choice of the cardinal scale. Second, by borrowing the mechanism of cutoffs found in poverty measurement literature, the index can focus attention on nations deprived in terms of governance. The index is computed for the 48 countries of the Mo Ibrahim Foundation’s data. The groups of best-performing and worst-performing nations identified by each of the two methods are largely similar. However, there are some differences among the middle order governance nations. An additional advantage of the proposed methodology is that it involves counting each country’s achievements in the dimensions of governance, which can be presented in a report card of governance.
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Notes
The details on the data sources and the methodology can be found in the Mo Ibrahim Foundation report which is released with the IAG index ranking.
IAG refers to the indicators as sub-sub categories. However to avoid confusion, we simply use the term “indicators”.
Note that 2/3 is the weight of the sub-category and since all indicators are weighted equally, it implies a weight of 1/6 for each indicator within the sub-category.
However, this is not free of problems either. In the case of dichotomous variables M 1 implies that the gap will be 1 which will result in implicitly more weight on these variables (more on this later).
Two other sets of cutoffs were also used to test the robustness of the results presented here. The results using these alternative cutoffs are very similar to the ones presented here. The alternative cutoffs and results are available from the author on request.
All indicators are expressed in such a way that higher values imply better outcomes. For example, one of the indicators of human development is the percentage of poor people (people living with less than 1.25 dollars a day). This indicator was altered to represent the percentage of non-poor. In other cases, such as Maternal Mortality Ratio the indicator was dichotomized reversing the sign of the indicator function, such that the country is deprived if more than 50 deaths occurred for every 100,000 live births.
Clearly, the classification requires cutoffs, and here we have chosen a set (12 and 36). Using other cutoffs also gives similar results.
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Acknowledgment
I would like to thank Sabina Alkire, James E. Foster, Jose Manuel Roche, and Maria Emma Santos whose comments greatly improved the paper. I express my gratitude to seminar participants at the OPHI workshop, June 2009 for helpful suggestions. I would also like to thank Anirban Mitra and Tamara Trafton for reading multiple drafts and giving their suggestions. Of course all remaining errors are solely mine.
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Mitra, S. Towards a Multidimensional Measure of Governance. Soc Indic Res 112, 477–496 (2013). https://doi.org/10.1007/s11205-013-0256-4
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DOI: https://doi.org/10.1007/s11205-013-0256-4