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15 September 2006
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[Federal Register: September 15, 2006 (Volume 71, Number 179)]
[Notices]
[Page 54523-54528]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr15se06-79]
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MILLENNIUM CHALLENGE CORPORATION
[MCC FR 06-15]
Report on the Criteria and Methodology for Determining the
Eligibility of Candidate Countries for Millennium Challenge Account
Assistance in FY 2007
AGENCY: Millennium Challenge Corporation.
ACTION: Notice.
-----------------------------------------------------------------------
SUMMARY: Section 608(d) of the Millennium Challenge Act of 2003, Public
Law 108-199 (Division D) requires the Millennium Challenge Corporation
to publish a report that lists the countries determined by the Board of
Directors of the Corporation to be eligible for assistance for Fiscal
Year 2007. The report is set forth in full below.
Dated: September 11, 2006.
William G. Anderson, Jr.,
Vice President & General Counsel (Acting), Millennium Challenge
Corporation.
Report on the Criteria and Methodology for Determining the Eligibility
of Candidate Countries for Millennium Challenge Account Assistance in
FY 2007
Summary
This report to Congress is provided in accordance with Section
608(b) of the Millennium Challenge Act of 2003, 22 U.S.C.A. 7701,
7707(b) (the ``Act'').
The Act authorizes the provision of Millennium Challenge Account
(MCA) assistance to countries that enter into Compacts with the United
States to support policies and programs that advance the prospects of
such countries achieving lasting economic growth and poverty reduction.
The Act requires the Millennium Challenge Corporation (MCC) to take a
number of steps in determining the countries that, based on their
demonstrated commitment to just and democratic governance, economic
freedom and investing in their people and the opportunity to reduce
poverty and generate economic growth in the country, will be eligible
for MCA assistance during Fiscal Year 2007 (FY07). These steps include
the submission of reports to the congressional committees specified in
the Act and the publication of Notices in the Federal Register that
identify:
1. The countries that are ``candidate countries'' for MCA
assistance during FY07 based on their per-capita income levels and
their eligibility to receive assistance under U.S. law, and countries
that would be candidate countries but for specified legal prohibitions
on assistance (Section 608(a) of the Act);
2. The criteria and methodology that the Board of Directors of MCC
(the ``Board'') will use to measure and evaluate the relative policy
performance of the candidate countries consistent with the requirements
of Section 607 of the Act in order to select ``MCA eligible countries''
from among the ``candidate countries'' (Section 608(b) of the Act); and
3. The list of countries determined by the Board to be ``MCA
eligible countries'' for FY07, with justification for eligibility
determination and selection for compact negotiation, including which of
the MCA eligible countries the Board will seek to enter into MCA
compacts (Section 608(d) of the Act).
This report sets out the criteria and methodology to be applied in
determining eligibility for FY07 MCA assistance.
Changes to the Criteria and Methodology for FY07
MCC has received constructive input on the indicators since the
announcement of FY06's selection criteria and methodology. That input
has been taken into account in creating the criteria and methodology
for the selection of eligible countries for FY07.
Natural Resource Management Indicators
In the FY06 report, MCC signaled interest in finding a better
measure of a country's demonstrated commitment to `` * * * economic
policies that promote * * * the sustainable management of natural
resources.'' To that end, MCC launched a public process, spearheaded by
Governor Whitman, to seek broad input from the academic community,
public and private sector practitioners, researchers at think tanks and
NGOs. We conducted extensive consultations, hosted several public
meetings and researched over 120 potential natural resource indicators.
In June 2005, at a large meeting of experts co-hosted by The Brookings
Institution, MCC announced a public ``call for ideas'' to seek
suggestions for an indicator. We also assembled a group of economists
and natural resources management experts to help us evaluate the ideas
we received. Eight ideas were evaluated, and two received high ratings
from both the evaluators and MCC staff: a Natural Resources Management
index from Columbia University's Center for International Earth Science
Information Network (CIESIN) and the Yale Center for Environmental Law
and Policy (YCLEP) and an Access to Land indicator from the
International Fund for Agricultural Development (IFAD). As a result of
technical consultations with experts in the environmental and land
communities, MCC explored modifications to the original submissions and
determined that the two indices, with some modifications, measure
separate aspects of natural resources management and, thus taken
together, represent a more comprehensive measurement of this criteria
(as well as other criteria noted below).
To measure the sustainable management of natural resources for
FY07, MCC has added the Natural Resources Management index and a Land
Rights and Access index (IFAD's Access to Land indicator combined with
the International Finance Corporation's (IFC's) Time and Cost of
Property Registration indicators) as sources of supplemental
information. MCC's Board will consider later this year incorporating
natural resource management indicators as part of the formal selection
matrix for the FY08 selection process. MCC strives for transparency and
continuity between years in our selection process and the indicators in
order to maximize the incentive effect of the country selection
process. The addition of two new indicators is a significant
modification of the overall evaluation of candidate country
performance. By using these indicators as supplemental information for
FY07, with full consideration later this year of formal adoption as
selection indicators for FY08, MCC will provide notice to countries of
their performance and an opportunity to learn how they are being
measured. MCC will engage countries in a dialogue about performance and
potential reforms in these areas and will encourage countries to seek
feedback from the institutions that produce these indicators.
It is important to recognize that all of MCC's indicators have
limitations, including these two additional indicators. For example,
the Eco-Region Protection indicator described below attempts to measure
the breadth and comprehensiveness of a government's commitment to
habitat preservation and biodiversity protection but does not measure
the effectiveness of such efforts. Therefore, MCC will continue to
[[Page 54524]]
review these indicators and explore potential improvements that more
effectively measure a government's commitment to sustainable natural
resource management.
Natural Resources Management Index
CIESIN and YCLEP's composite measure of environmental health and
environmental protection is made up of four indicators described below.
Eco-Region Protection: Produced by CIESIN, this component
assesses whether countries are protecting at least 10 percent of all
their biomes (e.g., deserts, tropical rainforests, grasslands, savannas
and tundra). It is designed to capture the comprehensiveness of a
government's commitment to habitat preservation and biodiversity
protection. The World Wildlife Fund provides the underlying biome data,
and the United Nations Environment Program World Conservation
Monitoring Center--in partnership with the IUCN World Commission on
Protected Areas and the World Database on Protected Areas Consortium--
provide the underlying data on protected areas.
Access to Improved Water: Produced by the World Health
Organization (WHO) and the United Nations Children's Fund (UNICEF),
this component measures the percentage of the population with access to
at least 20 liters of water per person per day from an ``improved''
source (household connections, public standpipes, boreholes, protected
dug wells, protected springs and rainwater collection) within one
kilometer of the user's dwelling.
Access to Improved Sanitation: Produced by the WHO and
UNICEF, this component measures the percentage of the population with
access to facilities that hygienically separate human excreta from
human, animal and insect contact. Such facilities include sewers or
septic tanks, poor-flush latrines and simple pit or ventilated improved
pit latrines, provided that they are not public.
Child Mortality (Ages 1-4): Produced by the Population
Division of the United Nations Department of Economic and Social
Affairs, this indicator measures the probability of a child dying
between the ages of 1 and 4. Since the underlying causes of child
mortality among 1-4 year olds are predominantly environmental, this
indicator is considered to be an excellent proxy for environmental
conditions.
Why It Matters
Eco-region protection is important for sustainable economic growth
and poverty reduction because ecosystems provide essential services
such as clean water, fresh air, healthy soils, livable climates and
wild foods that underpin human welfare. The establishment of
``protected areas'' constitutes a proven approach to preserving
ecosystems. Studies show that, in the absence of a well-managed
protected areas system, the environment inside and outside of protected
areas tends to deteriorate. In addition, protected areas can generate a
significant amount of income by providing opportunities for investments
in tourism and bio-prospecting, generating debt relief through debt-
for-nature swaps and carbon credit arrangements, and attracting
international conservation investments. Weak protection of ecosystems
has a particularly damaging effect on poor people since they rely
directly upon the resource base for food, fiber, fuel, shelter and
water. The benefit-to-cost ratio of effective conservation of wild
areas is estimated to exceed 100:1.
Lack of access to clean water and sanitation services are two of
the most important environmental threats to human health in the
developing world. Every year, roughly 1.7 million lives and 54.2
million ``life-years'' are lost to unsafe water and inadequate
sanitation, and poor people disproportionately bear this burden. Access
to these clean water and sanitation services affects economic growth
and poverty reduction directly through the channels of improved health
and higher total factor productivity. Lack of access to these basic
services affects labor productivity by spreading diseases such as
dengue, hepatitis A and E, cholera, dysentery and diarrheal diseases;
encouraging the spread of malaria-infected mosquitoes; and making it
difficult for people to retain food and nutrients. Poor people
(disproportionately women and children) also spend a significant number
of daylight hours fetching water, which further lowers levels of labor
productivity. In addition, women and older children lose millions of
working days caring for family members afflicted by water-borne
diseases.
A government's commitment to reducing child mortality among 1-4
year-olds provides an excellent indication of its broader commitment to
environmental health and environmental protection. Unlike infant
mortality, the causes of child mortality among 1-4 year-olds are
predominantly environmental. CIESIN and the YCLEP estimate that roughly
80 percent of all of the deaths in the 1-4 age cohort are attributable
to three factors: (1) Indoor air pollution; (2) unsafe water; and (3)
unreliable sanitation. The direct economic impact of indoor air
pollution and unsafe water and sanitation is staggering: 3.3 million
lives and 92.7 million ``life-years'' are lost every year to these
environmental health threats. Indoor air pollution, which is caused
primarily by burning biomass, leads to acute respiratory infections
(ARI), asthma, chronic obstructive pulmonary disease and a whole host
of other health-related issues. Women and young children
disproportionately bear this burden because they usually spend more
time cooking and indoors. Yet with modest investments, these deaths and
illnesses are completely preventable. Studies show that interventions
such as dissemination of improved efficiency household stoves and
public awareness campaigns about the importance of proper ventilation
come at a very low cost and save lives. These interventions have also
been shown to reduce unsustainable biomass harvesting.
Land Rights and Access Index
The Land Rights and Access Index is made up of three indicators:
Access to Land: Produced by IFAD, this indicator assesses
the extent to which the institutional, legal and market framework
provides secure land tenure and equitable access to land in rural
areas. It is made up of five subcomponents: (1) The extent to which the
law guarantees secure tenure for land rights of the poor; (2) the
extent to which the law guarantees secure land rights for women and
other vulnerable groups; (3) the extent to which land is titled and
registered; (4) the functioning of land markets; and (5) the extent to
which government policies contribute to the sustainable management of
common property resources.
Days to Register Property: Produced by the International
Finance Corporation (IFC), this component measures how long it takes to
register property in the capital city. The IFC records the full amount
of time necessary when a business purchases land and a building, and to
transfer the property title from the seller to the buyer so that the
buyer can use the title for expanding business, as collateral in taking
new loans, or, if necessary, to sell to another business.
Cost of Registering Property: Produced by the IFC, this
component measures the cost to register property as a percentage of the
value of the property in the capital city. The IFC records all of the
costs that are incurred when a
[[Page 54525]]
business purchases land and a building to transfer the property title
from the seller to the buyer, so that the buyer can use it for
expanding his business, as collateral in taking new loans, or, if
necessary, to sell it to another business.
Why It Matters
Secure land tenure is a critical component of sustainable natural
resource management because those who lack clear ownership or use
rights to their land are less likely to make long-term investments in
land productivity and more likely to make short-term decisions with
negative environmental impacts such as deforestation. In Ghana, for
example, there is evidence that farmers are significantly more likely
to make long-term investments in land by planting trees when their land
rights are secure. Conversely, insecure land tenure can contribute to
severe land degradation by encouraging the mining of soil fertility and
organic matter, slash-and-burn agriculture and encroachment into
ecologically sensitive areas. Studies show that land tenure insecurity
has accelerated deforestation and a range of other unsustainable
natural resource management practices in Latin America, Africa and
Asia.
In addition to cultivating a longer term perspective on land use,
secure land tenure also eases the difficulty of establishing the
systems of securitization that are necessary to deliver water and
sanitation services; private companies and public utilities generally
do not provide access to credit, water, sanitation, telephones or
electricity unless the individuals requesting service possess a
property title.
Secure and formal land tenure and efficient title registration
services also play a central role in the economic growth process by
giving people long-term incentives to invest and save their income,
enhancing access to essential public services, allowing for more
productive use of time and money than protecting land rights,
facilitating use of land as collateral for loans and contributing to
social stability and local governance. These improvements also favor
growth that is ``pro-poor'' because the benefits generally accrue to
those who have not possessed such rights in the past and who are
affected even more by high property registration costs in time and
money. Land policy reform can be particularly meaningful for women.
Research shows that when women have secure access to land and are able
to exercise control over land assets, their ability to earn income is
enhanced, household spending on healthcare, nutritious foods and
children's education increase and human capital accumulation occurs at
a faster rate. Women's ability to inherit and possess control rights to
land also serves as a crucial social safety net.
Consultations with the land policy community have revealed that,
while IFAD's indicator places great emphasis on equitable access to
land in rural areas, it does not fully address the efficiency of the
property rights system and urban property issues. Therefore, MCC will
combine IFAD's indicator with the IFC's time and cost of property
registration indicators. The IFC indicators are compiled by means of a
rigorous process of consultation with local experts, cross-checking
with official sources, government officials and relevant stakeholders
to ensure the accuracy of the information that is collected. These
indicators are highly actionable and target the urban and peri-urban
commercial and residential property areas not measured by the IFAD
indicator. Non-rural land use is certainly important for poverty-
reducing economic growth, but the conversion of rural land to urban
land is also important to sustainable natural resource management and
sound land policy affects the quality of this process of land use
change.
Placement of the Natural Resource Management Indices
While MCC's authorizing legislation outlines the natural resource
management indicator as a measure of economic policy in the economic
freedom category, and the proposed indicators meet that criterion, MCC
is considering eventual placement of both indicators in the Investing
in People category as potentially the most appropriate. Investing in
people means, among other characteristics, investing in the assets
required for a sustainable livelihood. The Natural Resources Management
index measures whether governments are investing their resources in
ways that will enable poor people, particularly poor women and
children, to live healthy and productive lives. The Access to Improved
Water, Access to Improved Sanitation and Child Mortality subcomponents
of this index are also responsive to MCC's legislative mandate of
measuring a government's commitment to reducing child mortality. Land
is a crucial asset and a social safety net that poor people rely on to
improve their well-being. By measuring whether governments are
improving their laws, policies and administrative practices to make
land access more secure, the Land Rights and Access index will help MCC
identify countries that are committed to investing in the
entrepreneurship of their people and empowering people to more fully
harness their skills and talents to improve their livelihoods. Access
to land often determines whether or not the poor can earn enough income
to survive and invest in their own futures. It is also important to
note that the Land Rights and Access index explicitly addresses the
issue of gender equality and qualifies as a measure of a government's
commitment to investing in women (as outlined in MCC's authorizing
legislation). Gender inequality has been an important component of MCC
Compact development, and equitable access to land in particular has
shown itself to be essential if all members of society are to benefit
from economic growth. MCC's use of a Land Rights and Access index is
also responsive to the broader legislative mandate that MCC, in all of
its activities, ``take into account and assess the role of women and
girls.''
Modification of Indicator Sources
Due to improvements in data quality and availability, MCC has made
several source changes to the FY07 selection criteria. Rather than
relying on multiple sources for its Inflation indicator, MCC will rely
exclusively on annual data reported in the International Monetary
Fund's (IMF) World Economic Outlook (WEO) database. For Public
Expenditure on Health, MCC will also substitute World Health
Organization data for the data it has collected through national
governments in previous years. Finally, for its Public Expenditure on
Primary Education indicator, MCC will draw on the United Nations
Educational, Scientific and Cultural Organization (UNESCO) as its
primary source and self-reported data from national governments as a
secondary source. Efforts are currently underway at UNESCO to improve
country coverage, and MCC plans to discontinue use of self-reported
country data as coverage expands.
Potential Future Changes
MCC reviews all of its indicators annually to ensure the best
measures are being used and may, from time to time, recommend changes
or refinements if MCC identifies better indicators or improved sources
of data. MCC takes into account public comments received on the
previous year's criteria and methodology and consult with a broad range
of experts in the development community and within the U.S. Government.
In assessing new indicators, MCC favors those that: (1) Are developed
by an independent third
[[Page 54526]]
party; (2) utilize objective, analytically rigorous and high-quality
data; (3) are publicly available; (4) have broad country-coverage; (5)
are comparable across countries; (6) have a clear theoretical or
empirical link to economic growth and poverty reduction; (7) are
policy-linked (i.e., measure factors that governments can influence
within a two- to three-year horizon); and (8) have broad consistency in
results from year to year. There have been numerous noteworthy
improvements to data quality and availability to current indicators as
a result of MCC's application of the indicators and the regular
dialogue MCC has established with the indicator institutions.
In addition to the changes identified in this Report, MCC will
explore additional changes to the indicators for the FY08 process. For
example, in the FY06 Report, MCC signaled its interest in a more
comprehensive measure of trade barriers. MCC has not yet identified a
more comprehensive measure with good country coverage and which is
publicly available, but several new indicators of tariff and non-tariff
barriers are under development. The Heritage Foundation, for instance,
plans to make significant revisions to its Trade Policy indicator in
order to better account for non-tariff barriers such as quotas,
voluntary export restraints, import bans, import and export taxes,
import and export subsidies, import and export licensing requirements
and the red tape involved with each stage of importing and exporting.
MCC hopes that by highlighting our intention to look for better and
more comprehensive indicators MCC will stimulate interest in improving
the available data.
Criteria and Methodology
The Board will select eligible countries based on the following,
among other factors: (1) Their overall performance in relation to their
peers in three broad policy categories--Ruling Justly, Encouraging
Economic Freedom and Investing in People; and (2) the opportunity to
reduce poverty and generate economic growth. Section 607 of the Act
requires that the Board's determination of eligibility be based ``to
the maximum extent possible, upon objective and quantifiable indicators
of a country's demonstrated commitment'' to the criteria set out in the
Act. For FY07, there will be two groups of candidate countries--low-
income countries and lower middle-income countries. Low-income
candidate countries refer to those countries that have a per capita
income equal to or less than $1,675 and are not ineligible to receive
United States economic assistance under part I of the Foreign
Assistance Act of 1961 by reason of the application of any provision of
the Foreign Assistance Act or any other provision of law. Lower middle-
income candidate countries are those that have a per capita income
between $1,676-$3,465 and are not ineligible to receive United States
economic assistance.
The Board will make use of sixteen indicators to assess policy
performance of individual countries (specific definitions of the
indicators and their sources are set out in Annex A). These indicators
are grouped for purposes of the FY07 assessment methodology under the
three policy categories listed below.
------------------------------------------------------------------------
Encouraging Investing in
Ruling justly economic freedom people
------------------------------------------------------------------------
1. Civil Liberties.............. 1. Cost of 1. Public
Starting a Expenditure on
Business. Health.
2. Political Rights............. 2. Inflation...... 2. Public
Expenditure on
Primary
Education.
3. Voice and Accountability..... 3. Fiscal Policy.. 3. Immunization
Rates (DPT3 and
Measles).
4. Government Effectiveness..... 4. Trade Policy... 4. Girls' Primary
Education
Completion.
5. Rule of Law.................. 5. Regulatory
Quality.
6. Control of Corruption........ 6. Days to Start a
Business.
------------------------------------------------------------------------
In making its determination of eligibility with respect to a
particular candidate country, the Board will consider whether a country
performs above the median in relation to its peers on at least half of
the indicators in each of the three policy categories and above the
median on the corruption indicator. One exception to this methodology
is that the median is not used for the Inflation indicator. Instead, to
pass the Inflation indicator a country's inflation rate needs to be
under a fixed ceiling of 15 percent. The indicator methodology will be
the predominant basis for determining which countries will be eligible
for MCA assistance. In addition, the Board may exercise discretion in
evaluating and translating the indicators into a final list of eligible
countries. In this respect, the Board may also consider whether any
adjustments should be made for data gaps, lags, trends or other
weaknesses in particular indicators. Likewise, the Board may deem a
country ineligible if it performs substantially below the median on any
indicator and has not taken appropriate measures to address this
shortcoming.
Where necessary, the Board may also take into account other
quantitative and qualitative information to determine whether a country
performed satisfactorily in relation to its peers in a given category.
As provided in the Act, the Chief Executive Officer's report to
Congress setting out the list of eligible countries and identifying
which of those countries the MCC will seek to enter into Compact
negotiations with will include a justification for such eligibility
determinations and selections for Compact negotiation.
There are elements of the criteria set out in the Act for which
there is either limited quantitative information (e.g., rights of
people with disabilities) or no well-developed performance indicator.
Until such data and/or indicators are developed, the Board may rely on
supplemental data and qualitative information to assess policy
performance. For example, the State Department Human Rights report
contains qualitative information to make an assessment on a variety of
criteria outlined by Congress, such as the rights of people with
disabilities, the treatment of women and children, worker rights and
human rights. Similarly, as additional information in the area of
corruption, the Board may consider how a country scores on Transparency
International's Corruption Perceptions Index as well as on the defined
indicator.
Relationship to Legislative Criteria
Within each policy category, the Act sets out a number of specific
selection criteria. As indicated above, a set of objective and
quantifiable policy indicators is being used to establish eligibility
for MCA assistance and measure the relative performance by candidate
countries against these criteria. The Board's approach to determining
eligibility ensures that performance against each of these criteria is
assessed by at least one of the sixteen objective indicators. Most are
addressed by multiple indicators. The specific indicators used to
measure each
[[Page 54527]]
of the criteria set out in the Act are listed below.
Section 607(b)(1): Just and democratic governance, including a
demonstrated commitment to:
(A) Promote political pluralism, equality and the rule of law;
Indicators--Political Rights, Civil Liberties, Voice and Accountability
and Rule of Law.
(B) Respect human and civil rights, including the rights of people
with disabilities; Indicators--Political Rights and Civil Liberties.
(C) Protect private property rights; Indicators--Civil Liberties,
Regulatory Quality, Rule of Law and Land Rights and Access.
(D) Encourage transparency and accountability of government; and
Indicators--Political Rights, Civil Liberties, Voice and Accountability
and Government Effectiveness.
(E) Combat corruption; Indicators--Civil Liberties and Control of
Corruption.
Section 607(b)(2): Economic freedom, including a demonstrated
commitment to economic policies that:
(A) Encourage citizens and firms to participate in global trade and
international capital markets; Indicators--Fiscal Policy, Inflation,
Trade Policy and Regulatory Quality
(B) Promote private sector growth and the sustainable management of
natural resources; Indicators--Inflation, Days to Start a Business,
Cost of Starting a Business, Fiscal Policy and Regulatory Quality.
(C) Strengthen market forces in the economy; and Indicators--Fiscal
Policy, Inflation and Regulatory Quality.
(D) Respect worker rights, including the right to form labor
unions; Indicators--Civil Liberties and Voice and Accountability.
Section 607(b)(3): Investments in the people of such country,
particularly women and children, including programs that:
(A) Promote broad-based primary education and
(B) Strengthen and build capacity to provide quality public health
and reduce child mortality. Indicators--Girls' Primary Education
Completion, Public Expenditure on Primary Education, Immunization
Rates, Public Expenditure on Health.
Where necessary the Board will also draw on supplemental data and
qualitative information, including Natural Resources Management (CIESIN
& YCLEP) and Land Rights and Access (IFAD and IFC) indices, the State
Department's Human Rights Report and Transparency International's
Corruption Perception's Index.
Annex A: Indicator Definitions
The following 16 indicators will be used to measure candidate
countries' demonstrated commitment to the criteria found in Section
607(b) of the Act. The indicators are intended to assess the degree to
which the political and economic conditions in a country serve to
promote broad-based sustainable economic growth and reduction of
poverty; and thus provide a sound environment for the use of MCA funds.
The indicators are not goals in themselves; rather they measure
policies that are necessary conditions for a country to achieve broad-
based sustainable economic growth. The indicators were selected based
on their relationship to economic growth and poverty reduction, the
number of countries they cover, their transparency and availability and
their relative soundness and objectivity. Where possible, the
indicators are developed by independent sources.
Ruling Justly
1. Civil Liberties: A panel of independent experts rates countries
on: freedom of expression; association and organizational rights; rule
of law and human rights; and personal autonomy and economic rights.
Source: Freedom House.
2. Political Rights: A panel of independent experts rates countries
on: the prevalence of free and fair elections of officials with real
power; the ability of citizens to form political parties that may
compete fairly in elections; freedom from domination by the military,
foreign powers, totalitarian parties, religious hierarchies and
economic oligarchies; and the political rights of minority groups.
Source: Freedom House.
3. Voice and Accountability: An index of surveys that rates
countries on: ability of institutions to protect civil liberties; the
extent to which citizens of a country are able to participate in the
selection of governments; and the independence of the media. Source:
World Bank Institute.
4. Government Effectiveness: An index of surveys that rates each
country on: the quality of public service provision; civil services'
competency and independence from political pressures; and the
government's ability to plan and implement sound policies. Source:
World Bank Institute.
5. Rule of Law: An index of surveys that rates countries on: the
extent to which the public has confidence in and abides by rules of
society; incidence of violent and nonviolent crime; effectiveness and
predictability of the judiciary; and the enforceability of contracts.
Source: World Bank Institute.
6. Control of Corruption: An index of surveys that rates countries
on: the frequency of ``additional payments to get things done;'' the
effects of corruption on the business environment; ``grand corruption''
in the political arena; and the tendency of elites to engage in ``state
capture.'' Source: World Bank Institute.
Encouraging Economic Freedom
1. Cost of Starting a Business: The Private Sector Advisory Service
of the World Bank Group works with local lawyers and other
professionals to examine specific regulations that impact business
investment. One of their studies measures the cost of starting a new
business as a percentage of per capita income. Source: World Bank
Group.
2. Inflation: The most recent 12-month change in consumer prices as
reported in the IMF's International Financial Statistics or in another
public forum by the relevant national monetary authorities. Source: The
International Monetary Fund's World Economic Outlook (WEO) database.
3. Fiscal Policy: The overall budget deficit divided by GDP,
averaged over a three-year period. The data for this measure is being
provided directly by the recipient government and will be cross-checked
with other sources and made publicly available to try to ensure
consistency across countries. Source: National Governments and the
International Monetary Fund's World Economic Outlook (WEO) database.
4. Days to Start a Business: The Private Sector Advisory Service of
the World Bank Group works with local lawyers and other professionals
to examine specific regulations that impact business investment. One of
their studies measures how many days it takes to open a new business.
Source: World Bank Group.
5. Trade Policy: A measure of a country's openness to international
trade based on average tariff rates and nontariff barriers to trade.
Source: The Heritage Foundation's Index of Economic Freedom.
6. Regulatory Quality: An index of surveys that rates each country
on: the burden of regulations on business; price controls; the
government's role in the economy; foreign investment regulation; and
many other areas. Source: World Bank Institute.
Investing in People
1. Public Expenditure on Health: Total expenditures by government
at all levels on health divided by GDP.
[[Page 54528]]
Source: The World Health Organization (WHO).
2. Immunization: The average of DPT3 and measles immunization rates
for the most recent year available. Source: The World Health
Organization (WHO).
3. Total Public Expenditure on Primary Education: Total
expenditures by government at all levels of primary education divided
by GDP. Source: The United Nations Educational, Scientific and Cultural
Organization (UNESCO) and National Governments.
4. Girls' Primary Completion Rate: The number of female students
completing primary education divided by the population in the relevant
age cohort. Source: World Bank and the United Nations Educational,
Scientific and Cultural Organization (UNESCO).
[FR Doc. E6-15323 Filed 9-14-06; 8:45 am]
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