Can Disaggregated Indicators Identify Governance Reform Priorities?
Many highly-disaggregated cross-country indicators of institutional quality and the business environment have been developed in recent years. The promise of these indicators is that they can be used to identify specific reform priorities that polic...
| Main Authors: | , |
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| Format: | Policy Research Working Paper |
| Language: | English |
| Published: |
2012
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| Subjects: | |
| Online Access: | http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20100331142656 http://hdl.handle.net/10986/3746 |
| Summary: | Many highly-disaggregated cross-country
indicators of institutional quality and the business
environment have been developed in recent years. The promise
of these indicators is that they can be used to identify
specific reform priorities that policymakers and aid donors
can target in their efforts to improve institutional and
regulatory quality outcomes. Doing so however requires
evidence on the partial effects of these many very detailed
variables on outcomes of interest, for example, investor
perceptions of corruption or the quality of the regulatory
environment. In this paper we use Bayesian Model Averaging
(BMA) to systematically document the partial correlations
between disaggregated indicators and several closely-related
outcome variables of interest using two leading datasets:
the Global Integrity Index and the Doing Business
indicators. We find major instability across outcomes and
across levels of disaggregation in the set of indicators
identified by BMA as important determinants of outcomes.
Disaggregated indicators that are important determinants of
one outcome are on average not important determinants of
other very similar outcomes. And for a given outcome
variable, indicators that are important at one level of
disaggregation are on average not important at other levels
of disaggregation. These findings illustrate the
difficulties in using highly-disaggregated indicators to
identify reform priorities. |
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