Measuring Democracy - - Artur Victoria Studies

nternational Political Risk Service Group Ltd. is a				even though such differences may still exist.
private company that provides analysis of political risk				Democratic Accountability is a measure of how
for 140 countries in the world. The data are				responsive government is to its people. The points in
organized into two groups. First group of data are				this component are awarded on the basis of the
country reports that are concentrated mainly on the				type of governance enjoyed by the country in
risk in the business environment and economic				question. The following types of governance are
conditions of the country.				defined:
Several issues related to economic policy and				Alternating Democracy
regulatory framework are referred to in the report.				The essential features of an alternating democracy
The type of data provided in this way is given in the				are:
appendix for about 100 countries. This type of data				• A government/executive that has not
provided in this report is not very relevant for the				served more than two successive terms.
measurement of democracy. The more relevant for				• Free and fair elections for the legislature
the purpose of the measuring democracy are the				and executive as determined by constitution or
data provided in the International Country Risk Guide.				statute;
The data in the Guide are updated on the monthly				• The active presence of more than one
basis and the number of countries included is 140.				political party and a viable opposition;
The only problem is the fact that the data are				• Evidence of checks and balances among
accessible only to subscribers. However the sample				the three elements of government: executive,
report for September 2001 is available for free and				legislative and judicial;
the data can be assessed from it. The ICRG				• Evidence of an independent judiciary;
assesses risk on the basis of the three groups of risk				• Evidence of the protection of personal
components. Those risk components are grouped				liberties through constitutional or other legal
into three Risk Categories – Political, Economic				guarantees.
and Financial. The political risk category is composed				Dominated Democracy
of 12 components and the financial and the economic				The essential features of a dominated democracy
risk categories of 5 each. The sum of the risk scores				are:
of all elements of one component determines the				• A government/executive that has served
risk score for that component, and the risk score of				more than two successive terms.
each component determines the overall risk rating.				• Free and fair elections for the legislature
Somewhat arbitrarily, the scores of components are				and executive as determined by constitution or
weighted and then added so that the political risk				statute;
category participates by ½ in the final score,				• The active presence of more than one
while other two participate by ¼ in the final				political party
score. For each score, whether for component, one				• Evidence of checks and balances between
element of component or the whole score the				the executive, legislature, and judiciary;
highest score means lower risk. The scores are				• Evidence of an independent judiciary;
available for each component, for three groups of				• Evidence of the protection of personal
components and for the overall index.				liberties.
Of the three components used in the risk				De-facto One-Party State
assessment, two of them are economic. They use				The essential features of a de-facto one-party state
economic statistic indicators that do not tell much				are:
about democracy. Component of political risk is the				• A government/executive that has served
one that is covering areas that are relevant for the				more than two successive terms, or where the
democracy measurement. Political risk component has				political/electoral system is designed or distorted to
12 subcomponents of its own. These components				ensure the domination of governance by particular
differ by weight by which they participate in the final				government/executive.
score, and some of them are divided into				• Holding of regular elections as determined
sub-components from which the score of the				by constitution or statute
individual component is set.				• Evidence of restrictions on the activity of
The components of the scale are the followings				non-government political parties (disproportionate
(their weights are shown in parentheses: government				media access between the governing and
stability (12), socio-economic conditions (12),				non-governing parties, harassment of the leaders and
investment profile (12), external conflicts (12), military				or supporters of non-government political parties, the
in politics (6), religion in politics (6), law and order (6),				creation impediments and obstacles affecting only the
ethnic tensions (6), democratic accountability (6), and				non-government political parties, electoral fraud, etc).
bureaucratic quality (6).				De jure One-Party state
The First five components are divided into three				The identifying feature of a one-party state is:
sub-components each. The score of its				• A constitutional requirement that there be
sub-component determines the score of the				only one governing party.
component in this case and each sub-component has				• Lack of any legally recognized political
a maximum score of 4. Law and Order component is				opposition.
divided into two sub-components, with maximum				Autarchy
score of 3 for each of them.				The identifying feature of an autarchy is:
The components are defined in the following way.				• Leadership of the state by a group or single
Government Stability is an assessment both of the				person, without being subject to any franchise, either
government’s ability to carry out its declared				through military might or inherited right.
program(s), and its ability to stay in office.				In an autarchy, the leadership might indulge in some
Socioeconomic conditions is an assessment of the				quasi-democratic processes. In its most developed
socioeconomic pressures at work in society that				form this allows competing political parties and regular
could constrain government action or fuel social				elections, through popular franchise, to an assembly
dissatisfaction.				with restricted legislative powers (approaching the
Investment Profile is an assessment of factors				category of a de jure or de facto one party state).
affecting the risk to investment that are not covered				However, the defining feature is whether the
by other political, economic and financial risk				leadership, i.e. the head of government, is subject to
components.				election in which political opponents are allowed to
Internal Conflict is an assessment of political violence				stand.
in the country and its actual or potential impact on				Bureaucracy Quality - high points are given to
governance. The highest rating is given to those				countries where the bureaucracy has the strength
countries where there is no armed opposition to the				and expertise to govern without drastic changes in
government and the government does not indulge in				policy or interruptions in government services. In
arbitrary violence, direct or indirect, against its own				these low-risk countries, the bureaucracy tends to be
people. The lowest rating is given to a country				somewhat autonomous from political pressure and to
embroiled in an on-going civil war.				have an established mechanism for recruitment and
External Conflict measure is an assessment both of				training. Countries that lack the cushioning effect of a
the risk to the incumbent government from foreign				strong bureaucracy receive low points because the
action, ranging from non-violent external pressure				change in government tends to be traumatic in terms
(diplomatic pressures, withholding of aid, trade				of policy formulation and day-to-day administrative
restrictions, territorial disputes, sanctions, etc) to				functions.
violent external pressure (cross-border conflicts to				The definitions given above are taken from the ICRG
all-out war).				methodology section. They are not defined more
Corruption is an assessment of corruption within the				precisely, nor are criteria for assigning scores given.
political system. The most common form of				Especially some sub-sections are not defined, so it is
corruption met directly by business is financial				not totally clear what is meant under terms like cross
corruption in the form of demands for special				border conflict, government unity or popular support.
payments and bribes connected with import and				Another problem with these political risk indicators is
export licenses, exchange controls, tax assessments,				that it is not stated how are they measured, and
police protection, or loans. Although this measure				how are different scores allocated. About the data
takes such corruption into account, it is more				collection and score allocation the methodology
concerned with actual or potential corruption in the				section says that ICRG staff collects political
form of excessive patronage, nepotism, job				information and financial and economic data,
reservations, 'favor-for-favors', secret party funding,				converting these into risk points for each individual
and suspiciously close ties between politics and				risk component on the basis of a consistent pattern
business.				of evaluation, but from their methodology section it
Military in Politics even at a peripheral level, is a				is not clear what does that consistent pattern of
diminution of democratic accountability. However, it				evaluation is supposed to mean, and what are the
also has other significant implications. The military				criteria for allocating scores. Without the information
might, for example, become involved in government				about what data are used in assessment and what
because of an actual or created internal or external				criteria are used for allocating scores it is not possible
threat. Such a situation would imply the distortion of				to assess how reliable and valid these indicators are.
government policy in order to meet this threat, for				The political risk assessments are made on the basis
example by increasing the defense budget at the				of subjective analysis of the available information that
expense of other budget allocations. In some				is conducted by the staff. Financial and economic risk
countries, the threat of military take-over can force				assessments are made solely on the basis of
an elected government to change policy or cause its				objective statistical data. The methodological part also
replacement by another government more amenable				says that to ensure consistency, between countries
to the military’s wishes. A military takeover				and over time, points are assigned to different
or threat of a takeover may also represent a high				components for a country on the basis of a series of
risk if it is an indication that the government is unable				pre-set questions for each component. But those
to function effectively.				sets of questions were not accessible, so it is not
Religious Tensions may stem from the domination of				possible to assess do they provide sound ground and
society and/or governance by a single religious group				clear criteria for allocation of points.
that seeks to replace civil law by religious law and to				We could not assess the temporal variance in the
exclude other religions from the political and/or social				data since the report is freely available only for one
process; the desire of a single religious group to				time point. Only the overall data for political and total
dominate governance; the suppression off religious				risk are given for a timeframe of some 2 years.
freedom; the desire of a religious group to express				Maximum score of the index is 100 for political risk.
its own identity, separate from the country as a				Some cases show change of up to 10 points during
whole.				the period covered, suggesting that the index may
Law and Order is defined by two sub-components.				be capable of capturing short-term changes. But since
One of them is the strength and impartiality of the				the time series are not given for components, it is
judicial system and the other is popular observance				not possible to say how much of the reported
of the law				change in random fluctuation that may be caused by
Ethnic Tensions is an assessment of the degree of				simple measurement error.
tension within a country attributable to racial,				Apart from the general data about risk, each report
nationality, or language divisions. Lower ratings are				has a section in which a number of individual countries
given to countries where racial and nationality				are covered. Those reports are mainly descriptive
tensions are high because opposing groups are				and cover most important developments, so the
intolerant and unwilling to compromise. Higher ratings				emphasis is different from a one country to another.
are given to countries where tensions are minimal,

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Measuring Democracy - - Artur Victoria Studies