‘Subjective indices mar indicators’

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 perceptionbased 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 WGI that, in turn, have approximately 18-20% weightage in sovereign ratings. So, they can’t be completely ignored,” the paper 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.