Wednesday, July 1, 2009

World Bank's Governance Indicators: China's a Mixed Bag Over the Past Decade

The World Bank just released their latest report on World Governance Indicators. The "six dimensions of governance" are Voice and Accountability, Political Stability and Absence of Violence, Government Effectiveness, Regulatory Quality, Rule of Law, and Control of Corruption. Those links will take you to a more precise definition, as well as the sources that the World Bank used in compiling the raw scores. The World Bank also took each country's raw score and converted it into a percentile providing comparison with the other 212 countries that were a part of the study. Here's a look at how China's governance indicators have fared over the past 10 years, from 1998-2008.

One quick note: the results for the earlier years all have much higher standard deviations much likely due to fewer sources being used to compile the raw scores, and possibly due to a lower amount of available information.

Voice and Accountability
"Voice and accountability measures 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."

Any guesses as to how China fared in this category last year? China ranked in the bottom 5.8%, as opposed to the bottom 9.6% in 1998 and 12.5% in 2000. At the very extremes, the standard deviations can make the raw scores overlap, but the raw scores can still reflect a real change towards less voice and accountability.

Factors that probably weigh against voice and accountability in 2008 as opposed to 2000 include the crackdown on expression and association in the lead up to the Beijing Olympics, restrictions on information out of the Himalayas, and the retracted promises as to the freedom of foreign media in China during the Olympics. Factors that seem like they should have helped China in 2008 in this category include the freedom of press during the earthquake (do you see any rebar in any of the collapsed bridges?) and the general factor of the growth of the internet.

The political rights of China's citizens remain little changed since 1998, so the freedom of expression is probably drove this raw score down.

Political Stability and Absence of Violence
"Political stability and absence of violence measures the perceptions of the likelihood that the government will be destabilized or overthrown by unconstitutional or violent means, including domestic violence and terrorism."

In 2008, China ranked at the 33.5 percentile, as opposed to the 43.3 percentile in 1998. The raw scores are quite spread, and the 2008 raw score is within one standard deviation from the 1998 score. For comparison, Honduras is ranked at the 32.5 percentile.

I don't think there's much in the way of error here. There are plenty of valid reports of the tens of thousands of demonstrations that occur annually in China, but these get little to no play in the US. The world's media was covering China in 2008 like it never had before, and plenty of Chinese people were thoroughly pissed about some high profile events. The two biggest were the melamine in baby's milk and the deaths of 70,000 in the Sichuan earthquake. Local and State government officials have been charged with or implicated in complicity with both of these which may have helped to decrease the stability standing. But Wen Jiabao was widely credited with distancing the central government from the more horrific of the two.

Government Effectiveness
"Government effectiveness measures 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."

China does well here ranking at the 63.5 percentile in 2008 as opposed to the 46th percentile a decade ago. Though they're still not as highly ranked as in 1996 when they were in the 64.5 percentile.

2008 gave China plenty of opportunities to demonstrate government effectiveness on an international stage, and this may have helped them reach their highest ranking in 10 years. 2008 saw quick government responses to a harsh winter and a devastating earthquake. And the Games went off without too many flaws (except a stabbing, and the Russians or Georgians apparently trying to steal the spotlight or at least operate in the shadows of a worldwide event).

Regulatory Quality
"Regulatory quality measures the ability of the government to formulate and implement sound policies and regulations that permit and promote private sector development."

China moved from the 40th percentile in 1998 to the 46.4 percentile in 2008. This seems like a big shift, but the raw scores just barely budged.

After two consecutive years of melamine scandals it is amazing that China is ranked so high. Also, after reading Yasheng Huang, it is questionable as to whether we're actually witnessing real private sector development in China's domestic business.

Rule of Law
"Rule of law measures the extent to which agents have confidence in and abide by the rules of society, in particular the quality of contract enforcement, the police, and the courts, as well as the likelihood of crime and violence."

Though China has improved to the 45th percentile from the 41.4 percentile, the raw scores remain largely unchanged.

Disturbing lack of development, and 2007's figures are even worse so we can't conveniently pin this on the Labor Contract Law. Anybody know what percentage of contract disputes are actually decided in court as opposed to arbitration? Is this just because of a poor perception of the courts? Is the quality of the coastal courts substantially outweighed by the quality of the inland courts?

Control of Corruption
"Control of corruption measures the extent to which public power is exercised for private gain,
including petty and grand forms of corruption, as well as “capture” of the state by elites and private interests."

China has fallen from the 45.1 to the 41.1 percentile, and has substantially dropped in raw score.

Though the numbers aren't as bad as 2004-2007 when there were a lot of high profile arrests, there probably was not less corruption in 1998 than 2008. What we're probably seeing in the 2008 figures is a reflection of the memory of the rests, another look at the corruption through trials stemming from those arrests, and the allegations of corruption in the melamine scandal and the aftermath of the Sichuan Earthquake.

2 comments:

twofish said...

I'm extremely skeptical about these ratings since they always seem to indicate that things are getting worse, and I always ask myself when was this "golden age" in which Chinese governance was less bad than it is now.

One problem with these rankings is that they all seem to be weighted toward news reports of high profile events. On the one hand, these reports may not reflect the experiences of people on the ground.

On the other hand, one really has to ask whether some of the things that look like bad things are really good things. Is there really more corruption and political instability, or is there really the same amount of less, but it's being better reported? Is the fact that people are demonstrating more a sign that things are more unstable or is it a sign that people are less afraid to demonstrate?

Personally, I think it's more the latter than the former. I should point out that in the 1960's, no one talked about corruption, repression, or demonstrations in China, and a lot of people in the West concluded that China was a worker's paradise. There were some pretty massive demonstrations in China in the mid-1990's, but no one heard of them.

I should point out that I find that these rankings tell much, much more about the World Bank than about China. One thing that I'd love to see is someone official in China do a ranking of countries in the world. I'm sure it would be very different from the World Bank's, but I'd be interested to see *how* it's different. You can also extend this to individuals. If I ask you to take all the countries in the world and rank them on governance, I can really find out a lot about you.

Something else that would be interesting is to try to correlate these rankings with other bits of information. For example, do countries that have low rankings on political instability tend to have more revolutions?

Will Lewis said...

twofish,

I agree with all of your insightful comments. I think it would be fun to take a look at what metrics the Chinese government might most value and apply them to the US. I'll put it in a post.