ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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The Quality of Governance

How Have Indian States Performed?

There is a core concept of good governance, the combination of authority and responsibility to pursue the common good, that has remained stable over millennia. Building on this concept the paper develops several indices of the quality of governance and applies these indices to rank major states in India. The governance indices have been derived from the three main pillars of the government, i e, the legislature, the judiciary and the executive. Performance on each dimension of governance has been measured using indicators that are all based exclusively on factual data, not perceptions. The paper shows that there is a strong correlation between governance quality and the level of development in a state. When we correct for the effect of development on the quality of governance, it turns out that some of the poorer states significantly improve their rank, implying their governance performance is much better than would be expected at their level of development.

In the preparation of this paper we have greatly benefi ted from sustained discussions with Anjan Mukherji and M Govinda Rao. We have also received helpful suggestion from Pranab Bardhan and Arvind Panagariya. An earlier version of this paper was presented in the NIPFP-Columbia University conference held on 7-8 August 2012 in Delhi. We would like to thank Ulrich Bartsch, Dipankar Gupta, Poonam Gupta and other participants at the conference for their comments.

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