World Governance Indicators: – INSIGHTSIAS

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GS Paper 2:

Syllabus: Governance Related issues.

 

Context:

According to a presentation presented in 2020 by Sanjeev Sanyal, then-Principal Economic Advisor in the Ministry of Finance, the World Bank’s World Governance Indicators (WGI) inputs are arbitrary.

  • The presentation was prepared by the Ministry of Finance for internal circulation within the government to counter the negative commentary on India.

 

What is Governance?

Governance consists of the traditions and institutions by which authority in a country is exercised.  This includes the process by which governments are selected, monitored and replaced; the capacity of the government to effectively formulate and implement sound policies; and the respect of citizens and the state for the institutions that govern economic and social interactions among them.

 

What are World Governance Indicators?

Released by the World Bank.

WGI provide a ranking of 215 countries based on six dimensions of governance:

  1. ‘Voice and Accountability’.
  2. ‘Political Stability and Absence of Violence’.
  3. ‘Government Effectiveness’.
  4. ‘Regulatory Quality’.
  5. ‘Rule of Law’.
  6. ‘Control of Corruption.’

Sources: These aggregate indicators are based on over 30 individual data sources produced by a variety of survey institutes, think tanks, non-governmental organizations (NGOs), international organizations, and private sector firms such as Economist Intelligence Unit (EIU), Varieties of Democracy (V-Dem) Project and Freedom House, etc.

Significance: WGI plays a key role in deciding the sovereign credit rating of any country.

 

Concern of the Indian government:

  • World Governance Indicators (WGI), according to the government, are based on impressions from the Western press or tiny polls of NGOs and a handful of academics, many of whom lack an India specialist.
  • There would be a decline in WGI results as a result of these institutes’ critical comments towards India. This could result in India’s sovereign rating being downgraded.

 

India’s score in the latest WGI:

India’s WGI score is much below the BBB Median on all six indicators.

  • While BBB is an investment-grade rating issued by global rating agencies such as S&P and Fitch.
  • A WGI score below BBB Median would suggest that India falls below the middle when the scores of countries are arranged in a descending order.

 

Major Incidents Which Hugely Affected India’s WGI Rank:

  • Kashmir issue.
  • Harassment of Activists.
  • Sedition laws.
  • Cancellation of NGO licences.

 

InstaLinks:

Prelims Link:

  1. About WGI.
  2. Ranking criteria.
  3. India’s performance in the latest report.

 

Mains Link:

What is good governance? Discuss the various dimensions of good governance in India.

 

 

[Q.3) World Bank’s WGI provide a ranking of countries based on Which of the dimensions of governance?

    1. Voice and Accountability.
    2. Political Stability and Absence of Violence.
    3. Government Effectiveness.
    4. Regulatory Quality.
    5. Rule of Law.
    6. Control of Corruption.

Choose the correct answer using the codes given below:

    1. 1, 2 and 3 only.
    2. 2, 3 and 4 only.
    3. 4, 5 and 6 only.
    4. All of the above. ]

 

Sources: the Hindu.

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