ABSTRACT
This chapter explores whether widely used composite measures correctly capture what need to measure to make sound development decisions. It draws on evaluation research on the World Bank Group's Country Policy and Institutional Assessment and Doing Business indicators, the United Nations Development Programme's Human Development Index (HDI), and the United Nations' Multidimensional Poverty Index. While the lively communications style has helped give the index an international profile and attracted the interest of senior policymakers, its presentation as a measure of reform could mislead its users about what the indicator really portrays and what interpretations can be drawn from it. When creating a composite indicator, being clear about the data and methods behind the formulation of each element and providing information on each subcomponent can allow users to better understand what the data actually measure. The Doing Business indicators can show the pros and cons of converting a composite indicator from a rating to a ranking.
