Constructing a Bias-Free Trade Governance Indicator: Revealing the Biases of Existing Survey Indicators

Shintaro Hamanaka (), Aiken Tafgar () and Ronald Ico ()
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Shintaro Hamanaka: Asian Development Bank
Aiken Tafgar: Consultant at the former Office of Regional Economic Integration, ADB
Ronald Ico: Consultant at the former Office of Regional Economic Integration, ADB

No 454, ADB Economics Working Paper Series from Asian Development Bank

Abstract: Governance is one of the key factors that shape the economic performance of an economy in terms of economic and trade growth. However, accurately measuring the quality of governance is not an easy task. Research typically uses governance indicators from surveys, which may have biases and inherent errors. In this paper, we attempt to construct an alternative governance indicator, which is free from perception and subjective biases. Our exercise is based on the inference that economies with good trade governance can compile high quality trade statistics; the latter being a close proxy for the former. This study comes up with a global ranking of the quality of (trade) governance. The paper also compares our bias-free indicator against existing survey governance indicators.

Keywords: bias; corruption; governance; indicators; perception; survey; trade (search for similar items in EconPapers)
JEL-codes: F14 F15 (search for similar items in EconPapers)
Pages: 17 pages
Date: 2015-09-29
New Economics Papers: this item is included in nep-int and nep-sea
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Persistent link: https://EconPapers.repec.org/RePEc:ris:adbewp:0454

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