Wednesday, October 3, 2018

Country Economic Strength Assessments Based on Indices


The following table shows eight index values for seven countries: China; Brazil; Germany; India; Russia; Turkey; and the United States:

index
china
brazil
germany
india
russia
turkey
united states
median
above median
ease of doing business world bank
65.3
56.5
79
60.76
75.5
69.14
82.5
69.14
germany russia united states
eiu democracy
3.1
6.86
8.61
7.23
3.17
4.88
7.98
6.86
germany india united states
global innovation
53.1
33.4
58.03
35.8
37.9
37.42
59.81
37.9
china germany united states
heritage economic freedom
57.8
51.4
74.2
54.5
58.2
65.4
75.7
58.2
germany turkey united states
transparency international corruption
41
37
81
40
29
40
75
40
china germany united states
world economic forum competitiveness
5
4.1
5.7
4.6
4.6
4.4
5.9
4.6
china germany united states
world justice rule of law
0.5
0.54
0.83
0.52
0.47
0.42
0.73
0.52
brazil germany united states
worldwide government world bank
50-75th
25-50th
90-100th
50-75th
50-75th
50-75th
90-100th

germany united states



The seven indices compare countries based on governance (EIU Democracy index; Heritage Economic Freedom index; World Justice Rule of Law index; and Worldwide Government index); competitiveness (Global Innovation index and World Economic Forum Competitiveness index); and business environment (World Bank Ease of Doing Business index and Transparency International Corruption index).   Values from each of these indices for the seven countries are provided along with the median value of the seven countries for each index.  The median value for each index is shown in red, those values below the median in blue, and values above the median in black.

These indices individually are intended to measure and compare such governance characteristics of a country as accountability, political stability, governmental effectiveness, regulatory quality, and the rule of law.  Two indices attempt to measure a country’s competitive strengths.  And two indices attempt to measure the ease and the risk of doing business in a country.   Political economists have long looked to such characteristics as measurements of a country’s disposition for economic success.

For each index, only two countries are always above the median: Germany and the United States.  Other countries appearing above the median are China (appears three times above the median) and Russia, India, Turkey and Brazil (each appearing once above the median).

I am assuming that the indices collectively provide a stronger indication than the individual indices of a country’s disposition for economic strength.  Therefore, appearing above the median consistently, as Germany and the United States do, is a good indication that these two countries likely have the strongest economies of the seven countries shown.  And such conclusions could be useful to chemical companies in deliberations on whether to make investments in a country.



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