New Delhi: The World Bank has announced six reforms to address concerns about the Worldwide Governance Indicators (WGI) based on recommendations of an external review panel.
The panel, commissioned in early 2023, submitted its report in September 2024. As a result, the WGI will now be recognised as a World Bank product, subject to the similar replication and review processes as other official bank products.
It will also shift to the DEC Global Indicators Group (DECIG) in the coming year, aligning it with other key bank initiatives, according to the statement issued by the World Bank earlier this month.
The WGI compiles data from over 30 organisations, including think-tanks, international bodies, non-governmental organisations and private firms on six governance dimensions-voice and accountability, political stability and absence of violence/terrorism, government effectiveness, regulatory quality, rule of law, and control of corruption. It is widely used by credit rating agencies and researchers among others. Second reform focuses on incorporating new datasets, particularly from the global south. The World Bank Enterprise Surveys, for example, has been included in the 2024 WGI update, offering rotating three-year coverage of firms from the global south. Economists and academicians have previously raised concerns about potential biases in WGI methodology.
Last year, V Anantha Nageswaran, chief economic advisor to the government of India, called for transparency and less subjectivity in these indicators. To address these concerns, the updated WGI website provides information on each data source, with links to the methodologies used by the contributing organisations.
