Monday, January 03, 2011

Enough spin and bullshit: Measuring success and failure using key performance indicators

Politicians are quick to grandstand about their achievements and their "contributions" to the development of our wretched land, the Philippines. Whenever statistics about the economy or survey results describing public sentiment is released, politicians will go on a media blitz to ensure that an association between these and themselves are implanted in the vacuous minds of their constituents. Retrospective narrative about statistics is easy. But it takes real courage and conviction to use statistics as prospective measures of future performance.

Given that the government of President Benigno "Noynoy" Aquino III has made lofty campaign promises regarding quality of governance (kung walang corrupt...), quality of life (...walang mahirap), and economic development ("gains are being felt..."), I propose that the following key performance indicators (KPIs) be used to quantify both (1) targets, and (2) on-going performance.

* * *

Corruption

The Philippines moved up (favourably) in the global Transparency International corruption perceptions index (CPI) from 139th in 2009 to 134th in 2010. As expected this "move" was trumpeted as something that had to do with "only four months of the Aquino administration".

The key metric, however, the CPI rating itself has not changed and remains at 2.4 for 2010. The CPI is a rating over a scale of perceptions from survey respondents ranging from zero (highly corrupt) to 10 (not corrupt).

Note data format: Year, CPI Rating, (Country Rank).

2010 2.4 (134)
2009 2.4 (139)
2008 2.3 (141)
2007 2.5 (131)
2006 2.5 (121)
2005 2.5 (117)
2004 2.6 (102)
2003 2.5 (92)
2002 2.6 (77)
2001 2.9 (65)

We need to keep our eye on the ball on this one and ensure that we improve in absolute terms.

Human Development

The most widely-accepted measure of "human development" is the Human Development Index developed by the United Nations Development Programme (UNDP). The HDI describes using a number between zero (low development) and one (high development) the degree of human development in the country based on an aggregation of several key social measures (e.g., access to health and education services, income, security, inequality, etc.).

From separate documents from the UNDP site, we can see below how the Philippine steadily slipped in ranking over the last decade:

Note data format: Year, HDI rating, (world rank)

2010 0.638 (97) #
2005 0.771 (90) #
1998 0.744 (77) #

For some reason, the above figures taken from separate UNDP documents are not consistent with the historical HDI figures for the Philippines provided in the current Philippine country profile page of the UNDP. The historical HDI figures in that page are as follows:

Note data format: Year, HDI rating

2000 0.597
2005 0.619
2010 0.638

No global ranking is provided for years previous to 2010 in the above current historical list. This could be a result of changes in the way the HDI is calculated applied over the last few years and the ensuing re-calculation of historical HDI figures to make these consistent with today's index. Nonetheless, the prognosis of the UNDP is not bright...
Between 1980 and 2010 Philippines's HDI rose by 0.7% annually from 0.523 to 0.638 today, which gives the country a rank of 97 out of 169 countries with comparable data. The HDI of East Asia and the Pacific as a region increased from 0.391 in 1980 to 0.650 today, placing Philippines below the regional average.

Catch up? Leapfrog? How we arrest our slide and at what rate we ramp up on any serious effort to compete depends ultimately on us.

OFW remittances

Among countries that benefit significantly from remittances from their overseas workers, the Philippine economy has the highest rate of dependency on this source of income. From less than 10 percent in 2002, the Philippines has since become dependent on foreign remittances to the tune of this accounting for 12 percent of its GDP in recent years.

Note data format: Year, % of GDP

2008 12.0% (ref. ADB)
2006 12.5% (ref. WB)
2005 13.5% (ref. BSP)
2002 9.4% (ref. WB)

A high dependence on salaries paid by foreign employers indicates a wretched level of underdevelopment as far as any indigenous ability on our part to create our own prosperity.

* * *

So the baselines we could set as we greet the Year 2011 would be as follows:

(1) Corruption: CPI of 2.4 at end of year 2010
(2) Human Development: HDI of 0.64 at end of year 2010
(3) OFW remittances: 12% of GDP for 2008

The challenge for the Government is to:

- Come up with target figures for each of the above metrics
- Grow the cojones to measure and evaluate itself along these lines

That's a fair enough request -- no, challenge -- for a bunch of people who are always quick to toot their horns whenever such figures come out, as can be seen in this news report:
After only four months of the Aquino administration, the Philippines’ ranking in the global corruption index improved five rungs better, according to the Transparency International.

In a media briefing in MalacaƱang, Presidential Spokesperson Edwin Lacierda said the recent survey somehow reflects the Aquino administration’s determination to promote good governance.

If Lacierda is confident that this reflects Noynoy's efforts to "promote good governance" then he should make good on this confidence by quantifying Noynoy's goals using these measures.

5 comments:

  1. It somehow reflects. They're not sure how, but...somehow it does. This administration couldn't find a KPI if they were trapped in a phone booth with it.

    I think these are pretty good targets, for a start. What would not be good, however, is if the country hits them and then stays there for the next five years.

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  2. Actually those figures are baselines. The targets should be figures representing improvements over those baselines. The beauty of these is that they are all measurable by third parties. And yes, targets should be set for each year and then re-baselined every year hence.

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  3. The sad bit is these baselines are also incredibly modest. It really wouldn't take much effort to improve from these, even before constitutional changes. The trick though is to get them to make the effort to make the effort. Doubles intended.

    If I might propose an easy key performance indicator to build on: Catch and convinct the guy that got caught on a councilor's camera right before he shot the cameraman.

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  4. Indeed, even with the basics of management, we struggle. One cannot manage what one does not measure.

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  5. Too much negative vibes here... let's get into solutions

    ReplyDelete

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