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Subjective indices mar World Bank’s Governance Indicators: EAC-PM Paper | Latest News India

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The World Bank should ensure “greater transparency and accountability” while factoring in subjective opinion-based indices as inputs for its World Governance Indicators (WGI) that has significant weightage in sovereign ratings, the Economic Advisory Council to the Prime Minister (EAC-PM) said in a series of tweets citing an internal working paper, and called for independent Indian think tanks to bring out similar perception-based indices for the world in order to break the monopoly of a handful of western institutions.

The paper, jointly written by EAC-PM member Sanjeev Sanyal and deputy director Aakanksha Arora in their individual capacity, says: “One way to respond to this is ignore these as mere opinions” as decline of India’s rankings on a number of global opinion-based indices – on subjective issues such as democracy, and press freedom — has been “a noticeable trend in recent years”.

“However, the issue is that they have concrete implications. For instance, these indices are inputs into the World Bank’s World Governance Indicators (WGI) that, in turn, have approximately 18-20% weightage in sovereign ratings. So, they can’t be completely ignored,” the paper said.

The paper picks three perception-based indices that are used by WGI to convey their point of view — Freedom in the World Index, Economist Intelligence Unit (EIU) Democracy Index and V-DEM indices.

It says that the first index — the Freedom in the World — which has been published since 1973 by Freedom House, India’s score on civil liberties was flat at 42 till 2018 but dropped sharply to 33 by 2022 and that for Political Rights dropped from 35 to 33. Thus, India’s total score dropped to 66 which places India in the “partially free” category – the same status it had during the Emergency.

“In contrast, the Freedom in the World report has given the territory of Northern Cyprus a score of 77 which makes it a free democracy. This is a territory only recognized by Turkey, not even by the United Nations,” it said. Meanwhile, the think-tank continues to treat Jammu and Kashmir as a separate territory since the early 1990s and now places it in the category of “not free”, it added.

On the Economist Intelligence Unit (EIU) Democracy Index, published by a research and consulting

arm of the firm that publishes the Economist magazine, it said: “India is placed in the category of

‘Flawed Democracy’ and its rank deteriorated sharply from 27 in 2014 to 53 in 2020 and then improved a bit to 46 in 2021. The decline in rank has been on account of decline in scores primarily in the categories- Civil Liberties and Political Culture… India’s rank then recovered marginally to 46 in 2021, primarily on grounds that the government rolled back farm-sector reforms, which lead to improvement in scores on the categories- Civil Liberties, Functioning of Government and Political participation.”

“The comparison of scores of other countries on this EIU-Democracy Index has some surprising results. India’s latest score for Civil Liberties lags that of Hong Kong (8.53). Similarly, India’s score for Political Culture is much lower than that of Hong Kong (7.5) and Sri Lanka (6.25). Clearly, this seems very arbitrary,” it added.

The paper cited the Varieties of Democracy (V-DEM) indices as the third example. V-DEM is produced by the Varieties of Democracy Institute at the University of Gothenburg in Sweden, which has six indices (and various sub-indices) covering various aspects of democracy – Liberal Democracy, Electoral Democracy, Liberal Component, Egalitarian Component, Participatory Component, and Deliberative Component. “A time series analysis of the V-DEM scores show that India does well on objective parameters such as share of population with suffrage, but scores on various subjective subindices have declined sharply since 2014. In fact, India’s has been termed as an ‘electoral autocracy’ in the 2021 report, same as it was during the period of Emergency,” it said.

“The cross-country comparison of this index also throws up some interesting results. India’s rank on Liberal Democracy Index is 93. In contrast, Kingdom of Lesotho which started having democratically elected government only in mid 1990s, and has since faced various disruptions including a military coup and emergencies has a rank of 60. Or Kosovo, which declared independence from Serbia only in 2008 has a rank of 79,” it said.

Pointing at deep rooted bias, subjectivity and arbitrary analysis, the paper proposed the Indian government to request the World Bank to bring “transparency and accountability” in the whole exercise by nudging their think-tanks that provide inputs for the WGI.

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