The World Economic Forum has released their 2010-2011 rankings of Global Competitiveness, a subject matter so important that it rates Capital Letters to introduce.
For each country, the economists from the WEF cobbled together a list of numerical criteria, weighted them, and them summed to create a score. Higher scores, and lower ranks, are better.
Coming in dead last is Chad, finishing way below the penultimate Angola. Who’s on first? Switzerland, the country everybody instantly thinks of when somebody says “Economic Powerhouse.” Two more “S” countries rapidly follow—Sweden and Singapore—followed by one more “S” in fourth place: the States.
Then Germany, Japan and then, where else?, Finland. Rounding out the top 10 are Netherlands, Denmark, and The Great White North (a.k.a. Canada).
Interestingly, the two countries China claims as their own, but have managed to operate independently—Hong Kong (11th place) and Taiwan (13th place; and a country which the report mysteriously labels “Taiwan, China”)—soar above the claimant, who comes in a mere 27th place.
The ratings were created, as all such ratings must be created, ad hoc and with data that is measured with error. Since this is so, the danger is not in creating a scheme, but in charging ahead in a Benthamite frenzy, pretending fine distinctions are meaningful. Rankings should not be taken too seriously. Is Singapore really better than the USA, competitively speaking? Or are they “about the same”?
It’s best, then, to take the results from any subjective rating scheme and consider them in blocks (say, in eighths to tenths). This means that, roughly, the top 14 to 17 countries should be considered “First Tier”, with no distinguishing intra-tier, and so on (remembering that the boundaries are fuzzy).
There are some interesting results, the most important contained in their Figure 1 (available in the full report).
As it says, this is the public debt as a percentage of GDP for different groupings of countries from 1950 until 2010, with projections out to 2015. The 100%+ rate starting in 1950 makes sense because, of course, the world was still recovering from World War II (in modern typography, War 2.0).
As the debris was cleared and new structures were built over the craters, and with people still skittish about the idea of powerful governments, the public debt shrank to reasonable levels. Until the Greatest Generation® began to retire and to meet their ultimate reward. The lack of this institutional memory began to show itself starting around 1980.
The levels now are not quite what they were in war time, or just after, but they are close and, if the democracies who make up the G-7 continue to vote themselves largess from the public coffers, we’ll soon return to the point where we owe more (to ourselves) than we can repay.
Since governments can create their own money ab initio, 100%+ debt-to-GDP ratios can be maintained for some time. But not, it need hardly be said, forever. Plus, the world—the G-7 world, anyway—is not rebuilding anything. Except authoritarian governments. At what point War 3.0?
GDP and debt data are pretty solid, and, relative to other measures in the WEF portfolio, contain only small error. But this is probably not so for every dimension that is tracked. The WEF does not provide (as far as I could tell) direct access to their data, but they do give us a tool where we can, for example, create scatter plots of various indexes.
For fun, I inputed “Organized crime” (x-axis) to predict “Overall Rank” (y-axis). Remember: lower is better for both.
The tool lets you click the various dots, an action which brings up the name of the country belonging to the dot; the legend to the right is nearly useless. The country with the lowest organized crime was Rawanda. Yes, I said Rawanda, the country that was dead in the middle for competitiveness. Likewise, and more believably, El Salvador had the highest crime index, yet they were only two places away from Rawanda on the competitiveness rank.
Next, I tried Quality of math and science education. Bit stronger signal than crime, but not much stronger. Singapore was tops here, which is believable. Worst was Angola, also no surprise. The States came in at 52, right behind—you guessed it—Saudi Arabia. We did beat out the old UK (55), so it wasn’t all bad news. Taiwan was 6th and China 33rdth, incidentally.
GDP per capita is always fun. Luxembourgians are mighty rich, with an average $105 thousand per head. It’s less than half this for the USA. But it’s unclear how much the folks in Luxembourg must fork out back to their leaders. However, they cannot be too unhappy with their leaders, because Luxembourg came in fourth in trust of their politicians (p. 369 of original report). The USA is fifty-fourth! Venezuela is last; probably because it is not quite yet the socialist paradise promised by Hugo Chavez. After it arrives, look for Venezuela to take first place.
There is much more: how much economies rely on bribery (New Zealand best, Mali worst), judicial independence (New Zealand best, Venezuela worst), government wastefulness, regulation, terrorism, infrastructure, savings, health, and on an on.
In fact, there is so much tracked, that you will be able to find good news for just about any country. Watch various new sources for confirmation of this.