1. Worldwide Governance Indicators Daniel Kaufmann, Brookings Institution Aart Kraay, World Bank Development Research Group Massimo Mastruzzi, World Bank Institute Daniel Kaufmann Aart Kraay Massimo Mastruzzi MERVE KARABULUT

2. INTRODUCTION What is meant by Governance?What is meant by Governance? Dimensions of governance measured by the Worldwide Governance IndicatorsDimensions of governance measured by the Worldwide Governance Indicators Underlying sources for the Worldwide Governance IndicatorsUnderlying sources for the Worldwide Governance Indicators How can the WGI data be used?

3. What is meant by Governance? Governance can be broadly defined as the set of traditions and institutions by which authority in a country is exercised. This includes; (1) the process by which governments are selected, monitored and replaced, (2) the capacity of the government to effectively formulate and implement sound policies, and (3) the respect of citizens and the state for the institutions that govern economic and social interactions among them.

4. Dimensions of governance measured by the Worldwide Governance Indicators Voice and Accountability Political Stability and Absence of Violence Government Effectiveness Regulatory Quality Rule of Law Control of Corruption

5. Voice and Accountability : – capturing perceptions of the extent to which a country's citizens are able to participate in selecting their government, as well as freedom of expression, freedom of association, and a free media. CountrySourcesYearPercentile RankGovernance ScoreStandard Error (0-100)(-2.5 to +2.5) AZERBAIJAN 14 201111.7-1.310.13 BULGARIA 14 201161.5+0.470.13 GERMANY 12 201192.5+1.310.14 GREECE 11 201171.4+0.820.13 IRAN, ISLAMIC REP. 11 201106.6-1.550.12 ITALY 13 201174.6+0.940.12 SWITZERLAND 10 2011100.0+1.630.15 TURKEY 15 201143.7-0.170.11 VENEZUELA, RB 17 201124.4-0.920.11

6. CountrySourcesYearPercentile RankGovernance ScoreStandard Error (0-100)(-2.5 to +2.5) AZERBAIJAN 7 201127.8-0.570.24 BULGARIA 8 201158.5+0.300.24 GERMANY 8 201172.6+0.860.24 GREECE 8 201144.8-0.060.24 IRAN, ISLAMIC REP. 7 201107.5-1.450.24 ITALY 8 201165.6+0.590.24 SWITZERLAND 8 201192.9+1.290.24 TURKEY 8 201117.9-0.930.24 VENEZUELA, RB 8 201110.4-1.300.24 Political Stability and Absence of Violence: – capturing perceptions of the likelihood that the government will be destabilized or overthrown by unconstitutional or violent means, including politically-motivated violence and terrorism.

7. CountrySourcesYearPercentile RankGovernance ScoreStandard Error (0-100)(-2.5 to +2.5) AZERBAIJAN 10 201123.2-0.790.19 BULGARIA 10 201156.4+0.010.19 GERMANY 7 201191.9+1.530.21 GREECE 7 201166.8+0.480.21 IRAN, ISLAMIC REP. 7 201138.9-0.460.21 ITALY 7 201166.4+0.450.21 SWITZERLAND 7 201197.6+1.890.21 TURKEY 11 201165.4+0.410.18 VENEZUELA, RB 11 201113.3-1.100.18 Government Effectiveness: – capturing perceptions of the quality of public services, the quality of the civil service and the degree of its independence from political pressures, the quality of policy formulation and implementation, and the credibility of the government's commitment to such policies.

8. CountrySourcesYearPercentile RankGovernance ScoreStandard Error (0-100)(-2.5 to +2.5) AZERBAIJAN 11 201137.9-0.400.16 BULGARIA 11 201170.6+0.560.16 GERMANY 7 201192.9+1.510.23 GREECE 7 201169.7+0.510.23 IRAN, ISLAMIC REP. 7 201102.8-1.680.21 ITALY 7 201175.4+0.750.23 SWITZERLAND 7 201194.8+1.640.23 TURKEY 12 201165.4+0.420.15 VENEZUELA, RB 10 201106.2-1.490.17 Regulatory Quality: – capturing perceptions of the ability of the government to formulate and implement sound policies and regulations that permit and promote private sector development.

9. CountrySourcesYearPercentile RankGovernance ScoreStandard Error (0-100)(-2.5 to +2.5) AZERBAIJAN 15 201121.6-0.870.12 BULGARIA 15 201151.6-0.090.12 GERMANY 11 201191.5+1.610.15 GREECE 11 201166.7+0.570.14 IRAN, ISLAMIC REP. 11 201120.2-0.900.15 ITALY 12 201163.4+0.410.14 SWITZERLAND 10 201195.3+1.760.15 TURKEY 16 201157.7+0.080.13 VENEZUELA, RB 17 201101.4-1.630.13 Rule of Law: capturing perceptions of the extent to which agents have confidence in and abide by the rules of society, and in particular the quality of contract enforcement, property rights, the police, and the courts, as well as the likelihood of crime and violence.

10. CountrySourcesYearPercentile RankGovernance ScoreStandard Error (0-100)(-2.5 to +2.5) AZERBAIJAN 13 201110.0-1.130.13 BULGARIA 13 201155.5-0.170.13 GERMANY 9 201192.9+1.680.18 GREECE 9 201155.9-0.150.18 IRAN, ISLAMIC REP. 8 201118.5-0.910.18 ITALY 10 201157.3-0.010.18 SWITZERLAND 8 201195.7+2.020.18 TURKEY 14 201161.1+0.100.15 VENEZUELA, RB 15 201107.6-1.220.16 Control of Corruption: capturing perceptions of the extent to which public power is exercised for private gain, including both petty and grand forms of corruption, as well as "capture" of the state by elites and private interests.

11. Underlying sources for the Worldwide Governance Indicators The WGI are based on a large number of different data sources, capturing the views and experiences of survey respondents and experts in the public and private sectors, as well as various non-governmental organizations. These data sources include: (a) surveys of households and firms, (b) Non-governmental organizations (e.g. Global Integrity, Freedom House, Reporters Without Borders), (c) commercial business information providers (e.g. Economist Intelligence Unit, Global Insight, Political Risk Services), and (d) public sector organizations (e.g. CPIA assessments of World Bank and regional development banks, the EBRD Transition Report, French Ministry of Finance Institutional Profiles Database).

12. How can the WGI data be used? The six composite WGI measures are useful as a first tool for broad cross- country comparisons and for evaluating broad trends over time. However, they are often too blunt a tool to be useful in formulating specific governance reforms in particular country contexts. Such reforms, and evaluation of their progress, need to be informed by much more detailed and country-specific diagnostic data that can identify the relevant constraints on governance in particular country circumstances. We therefore view the WGI as complementary to a large number of other efforts to construct more detailed measures of governance, often just for a single country. We also encourage users to consult the disaggregated individual indicators underlying the composite WGI scores to gain more insights into the particular areas of strengths and weaknesses identified by the data.