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       Monday, October 02, 2006

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World Bank Governance Report Blunders in Central Africa

By William Church
Director, GLCSS

The World Bank’s recently issued governance report has created a diplomatic disturbance in some Central African capitals. It is reported that at least one nation has made a formal complaint to the World Bank about the faulty methodology and misleading conclusions of the report.

The Worldwide Governance Indicators for 1996-2005 report has become a measurement tool for international donors, which link funding with the report’s country rating. Therefore, a detailed assessment has been conducted by the Great Lakes Centre for Strategic Studies (GLCSS), and the analysis reveals that the conclusions of the Governance Indicators report, for Central Africa, can be questioned in three areas.

First, the report’s findings conflict with other international reports, and United Nations on-the-ground assessments. Second, the number of survey/poll sources per category used to evaluate Central Africa is half of the number of survey/polls used in evaluating East Africa. Third, the survey or poll organizations used are dominated by non-African assessment organizations.

The World Bank’s evaluation of the Central African Republic (CAR) embodies the best example of how these factors produce a false positive rating, and on the opposite end, Rwanda is an example of these factors producing a false negative rating. In addition, GLCSS believes that a validation of the report’s results by experts familiar with the region would have produced the same concerns as developed by GLCSS.

A significant example is the Central African Republic’s specific rating on Political Stability/No Violence and the country’s overall directional trend. It ranks the CAR (16.5 percentile rating) as more politically stable than Kenya (14.6 percentile rating), Rwanda (12.7 percentile rating) and Uganda (10.4 percentile rating). In addition, the CAR, according to the report, improved in five of the six rating areas since 2004. This includes Voice and Accountability, Political Stability, Government Effectiveness, Rule of Law, and Control of Corruption.

First, the positive trend is contradicted by other reports. The Fund for Peace’s Failed State Index (FSI) shows that the governance risk factors in the CAR have increased. In the report that rated 2005, the CAR increased its overall risk rating from 93.7 (120 the highest risk) to 97.5. It showed an increased risk in six of the 12 rating categories. Perhaps in the most telling contrast of the two reports, the World Bank shows an improved political and security situation, and the FSI shows a significant increase in risk in this same category.

This positive trend is also contradicted by Heritage’s Economic Freedom Index. Like the FSI overall trend, it shows that the amount of economic freedom, which is a reflection of many of the World Bank categories, has deteriorated within the same measured period.

Returning to the specific category of Political Stability, it is difficult to understand how the World Bank ranks the CAR as more stable than Kenya and Uganda. The United Nations Secretary-General in his periodic report on the CAR called it a “fragile democracy”. This comment was made after the CAR held its inaugural round of elections in 2005 and contrasts the seasoned and sometimes noisy democracies of Uganda and Kenya.

Specifically on political stability, the Secretary-General writes, “Since the 2005 presidential and legislative elections, some political parties have been undergoing a crisis of leadership and reorganization.” In addition, the UN has noted numerous rebel groups working in the north of the country and, once again, the UN assessment is that the CAR security situation remains “volatile.”

At the opposite end of the scale is Rwanda, which according to the World Bank, declined in all six rating categories and earned the distinction of scoring the sharpest rating decline in the region. The problems with the CAR evaluation are an important comparison to Rwanda because both evaluations share many of the same survey/polling sources and both had a very limited number of survey/ polling sources compared to other African regions; therefore, it can be assumed that if the evaluation of the CAR is flawed then so is the Rwanda evaluation.

When comparing the evaluation process for both of these countries, the discovery of a limited number of survey sources per category suggests that the rating can be easily impacted by one positive or adverse rating. Rwanda’s rating on Political Stability is the most glaring example. This rating, which affect’s Rwanda’s donor lifeline, was established with only two survey/polling sources.

This contrasts neighboring Tanzania, which has eight survey/polling sources for this category, and the Democratic Republic of the Congo (DRC) with seven survey/polling sources. As proof of the possibility of error, Rwanda and the CAR have the least number of survey/polling sources in this category with two and four respectively.

The combined Central and East Africa region had a survey/polling source size average of 8.2 per category. For example, Kenya led the list with an average of 10.6 sources per category, and Tanzania and Uganda tied for second place with an average of 10.3 sources per category. Rwanda holds the distinction of having the least number of survey sources with an average of five sources per category.

It is a standard research principle that a limited sampling can increase the potential for error. Since Rwanda’s sampling size is the smallest in both regions, the addition or subtraction of an evaluation source may make a difference and this is exactly the case of Rwanda’s overall rating.

The World Bank study removed Columbia University, which had rated 2003 and 2004, from the sampling and either did not replace it or replaced it with Freedom House. Without a doubt, this had an impact. GLCSS has interviewed Freedom House staff in Washington DC and determined that their ratings are not based on first-hand, in-country based evaluations and are known to be disputed. In addition, the World Bank inserted two separate Freedom House studies and counted it as two sources although it came from the same organization.

In another category, the World Bank replaced Columbia University with a United States State Department evaluation, and once again, US State Department reports on Rwanda have been disputed and in some cases they have been questioned by some State Department personnel. This also brings up the question of type of survey source.

A close examination of World Bank survey sources reveals a predominance of sources based in the United States. For Central Africa, there is limited use of European sources and even less of African sources, with the exception of the African Development Bank in rare circumstances. Although there is an availability of other African sources, to include the developing NEPAD initiative, the World Bank chose to load the survey with US-based sources, which definitely do not reflect an understanding of an African context or Europe’s historic understanding of the region.

Beyond this technical discussion of survey source number, the World Bank report appears to lack outside review, which aids the validation of any research. The Fund for Peace’s FSI, contradicts the World Bank’s conclusion that Rwanda is a country in decline. Overall, Rwanda, in the FSI, lowered it risk rating from 96.5 in the rating year of 2004 to 92.9 in the rating year 2005. It improved or remained stable in nine of the 12 categories. This contrasts the World Bank’s findings of Rwanda’s decline in all six of its rating categories, which contains overlapping governance categories with the FSI.

The World Bank study is also contradicted by Heritage’s Economic Index. This study shows improving regulatory and economic freedom over the last decade. Even other World Bank’s studies, contradict the governance study. The World Bank Doing Business study shows that Rwanda only trails Tanzania in reforming rule of law issues like enforcing contracts, improved regulatory laws and other areas.

In summary, the World Bank report is technically flawed. GLCSS believes that the World Bank should include African-based survey sources, increase the overall number of surveys per category, and benchmark its data against other research. Finally, GLCSS would like to note that it attempted to verify its findings by contacting the authors of the Worldwide Governance Indicators report, and it has not received a response or detailed explanation.

The Great Lakes Centre for Strategic Studies is a London-based think tank with offices in Central and East Africa.

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posted by GLCSS at 1:53 AM  


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