CPIA Revealed: World Bank sheds more light on its country ratings

In a barely-noticed step, the World Bank has recently revealed a lot about what it thinks. While most donors are rushing to concentrate their aid in ‘good performers’, the World Bank has been using ‘performance based allocation’ in one form or another since the late 1970s. Every year, it systematically rates low income countries, giving each one a score on the Country Policy and Institutional Assessment (CPIA). This rating matters: it goes into a formula which determines how much money a country gets from International Development Association (IDA) (the formula is fairly complicated; see this excellent paper by Ravi Kanbur for a clear explanation).Such an approach makes sense for lots of reasons (better value for money, positive incentives for recipients, etc.). But there was always one problem with the CPIA: the scores were secret. But no more. The Bank has now released all country scores for 2005 (pdf). The results show Armenia topping the list with 4.3 (out of 6). No prizes for guessing the worst: Zimbabwe, of course, with a shameful 1.8 (more than half a full point below the next lowest, Central African Republic!).In defense of the Bank, it was usually the countries themselves that resisted greater disclosure (who ever really wants to share their grades?) and the Bank had started a few years ago to release scores in quintiles. But now all the CPIA scores, including the 16 component scores, are available for scrutiny. This is great news for researchers that want to run the CPIA against other measures and use them to get a better idea of how the Bank thinks and acts. It is also likely to be helpful for the Bank itself since the added analysis will undoubtedly make for a better CPIA in the future. Just as importantly, it sends a positive message about transparency: if it’s good for recipient countries, it must be good for the donors too.