Research note. Policy Benchmarking and Regulatory Quality Indicators: A Comparative Analysis of World Bank and OECD

Research note by Fabrizio De Francesco

In this paper “Transfer agents, knowledge authority, and indices of regulatory quality: A comparative analysis of the World Bank and the Organisation for Economic Co-operation and Development“, I propose an analytical framework to distinguish the different types of authority that international organisations (IOs) can pursue through policy benchmarking. By relying on functional typologies of governance benchmarks, a descriptive analysis sheds light on in what manner the OECD and the World Bank have strategically chosen to differ in their conceptions of and use of regulatory quality indicators.

Given the increasingly growing “market” for policy benchmarking, the starting assumption is that IOs have been competing in devising and legitimising good governance indices across policy areas in order to influence national policy reform. Governance indices are a source of the authority that allows the OECD and the World Bank to set global standards of policy evaluation, and to frame and promote agendas for policy reform. Time series and cross-sectional data sets provide benchmarks, rankings, and comparative knowledge and increase the interdependence of governments within transnational networks through both learning and competition.

The latter mechanisms of interdependence can be associated to two separate functional features of transnational policy benchmarks. Accordingly, governance indicators can either trigger competition by ranking country policy performance, or facilitate process of learning in which network members work collaboratively and constantly renew and improve their knowledge. These two typologies of policy benchmarking can be differentiated according to modes of knowledge management, the type of benchmarking process, type of transfer agent, as well as methodological and technical features of indices.

The empirical section focuses on four regulatory quality indicators: the World Bank World Governance Indicators and Doing Business and the OECD Product Market and Indicators of Regulatory Management System. The World Bank generally provides knowledge as a “product” and uses a type of benchmarking, namely ranking, that triggers regulatory competition among countries. Its indices are well known by international investors and donors. As a consequence, its communication strategy is extensive and addresses not exclusively national governments but also the scientific community, as well as the general public (that is, the mass media and citizens). The WB expends enormous effort in publishing annual reports that include both indicators (DB and RQ) in order to create easily accessible data sets. This visibility has been appreciated by academics, who have helped to improve the methodology for collecting and aggregating information.

The OECD has sought to manage its knowledge as a process and to promote its policy recommendations and international best practice through learning. Its main aim is to promote comparative knowledge and to share experience of regulatory reform among its member states. The peer-review process is mainly internal to the learning organisation. Both the data sources and the reviewers are governmental. In comparison with the WB, the OECD attracts less attention from scientists. There is no attempt to prove any theory or to correlate reform efforts with economic growth and performance. Overall, the OECD indices are a blueprint for sharing information on regulatory reform and learning from the experience of other governments.

deFrancesco

Fabrizio De Francesco is Lecturer of Public Policy at the University of Strathclyde Glasgow. His research areas are regulatory impact assessment, globalization of rulemaking and indices of good governance and regulatory quality.

Personal webpage
Google scholar

One thought on “Research note. Policy Benchmarking and Regulatory Quality Indicators: A Comparative Analysis of World Bank and OECD