This presentation challenges the methodology and ideological biases of the World Economic Forum's Global Competitiveness Report country rankings. It identifies three major flaws: 1) mixing independent and dependent variables, 2) largely ignoring environmental and social factors, and 3) using ideology-driven indicators. The presentation then details an alternative ranking of 104 countries that removes these flaws, finding that northern European countries generally rank higher while Anglo countries like the US, UK, and Canada rank much lower. It concludes that countries with more neoliberal economic policies tend to rank lower in sustainability and overall performance.

1. Misleading country rankings
Copyright in this presentation vests in the Institute for Sustainable Leadership (ISL).
Permission to use this presentation is granted under Open Access licence subject to:
1. Retaining the ISL background and format.
2. Acknowledging ISL’s authorship of the content and format of this presentation.

2. Quick agenda
This presentation:
1. Challenges the veracity of the World Economic Forum's country rankings
in its Global Competitiveness Report (GCR).
2. Identifies 3 major flaws in the GCR:
a) it mixes inputs & outputs in the same sample;
b) largely ignores environmental and social performance; and
c) is subject to huge ideological bias in the choice of indicators.
3. Details our country ranking, which removes these flaws.
4. Shows that the high-performers are mostly north-European countries.
5. Shows that the GCR grossly overstates the ranking of Anglo countries, in
particular the US, the UK and Canada.
6. Demonstrates that the more neoliberal a country is, the lower it ranks.

3. Flaws/biases in country rankings
Most country rankings are flawed by degrees.
One of the worst, and probably most influential, is
the Global Competitiveness Report (GCR).
It is put out by the World Economic Forum,
which organises the annual meeting at Davos for
world leaders in business and politics.
It is, bluntly put, grossly misleading.

4. Flaws in the GCR
The Global Competitiveness Report is subject to a whole range of
flaws and biases:
1. Mixes independent and dependent variables (inputs & outputs)
2. The inadmissible inputs tend to be ideologically biased
3. Ignores environmental and most social performance outcomes
4. Includes irrelevant data
5. Excludes indicators that run counter to the ideological mindset
6. Suppresses inconvenient research outcomes
7. Uses conflicting competitiveness indicators
8. Uses small opinion-survey sample sizes
Lets examine some of these flaws in detail:

5. Flaw 1: Mixing inputs and outputs
Research 101 emphasises never to mix inputs and outputs
when assessing performance.
After all, a poor-tasting pudding will not get a prize, no
matter how interesting or beautifully written a recipe is !

6. Flaw 1(cont’d): Mixing inputs and
outputs
Why inputs and outputs should never be mixed
A number of comparative studies ask about years of schooling
and/or enrolment rates.
The underlying proposition is that the higher the number of years of
schooling and/or enrolment rate, the higher the country’s ranking.
Is this a reasonable proposition?

7. Flaw 1 (cont’d): Education example
INPUT
Mean years of
schooling HDI 1
2015
OUTPUT
Mean PISA 2
score in
science 2015
Country (years) (score)
United States 13.2 496 3
Finland 11.2 531 3
1 http://hdr.undp.org/en/composite/HDI (Human Dev. Index)
2 https://www.oecd.org/pisa/pisa-2015-results-in-focus.pdf
3 Higher number is better
2-country
comparison
of an
educational
input and an
educational
output
Table 1:
Years’ of schooling and PISA scores do not correlate

8. Flaw 1 (cont’d): Education example
Table 1 shows while the US has a higher input, it has a worse output.
NB Student performance is a function of (among other things):
 teacher qualification, gender, passion, remuneration, social status;
 socio-economic-cultural context;
 class sizes;
 quality and available teaching/learning resources;
 curriculum quality and relevance;
 emphasis on cooperation rather than competition;
 access to a wide range of outdoor activities, and – yes;
 the number of years of schooling.
These constitute inputs called “quality of teaching” and hence learning.

9. Flaw 1(cont’d): Mixing inputs and
outputs
The following comparative studies also ask about years of schooling
and/or enrolment rates:
 Sustainable Society Index (SSI 2014, p. 34)
 Human Development Index (UN 2014, p. 25)
 Sustainable Development Goals Index (Sachs et al. 2016, p. 28)
 GCRs (WEF, various years)

10. Flaw 2: Ignoring environm’l-socio
factors
Not using the earth’s resources responsibly creates a global
“Tragedy of the Commons” problem.
Stern Report (2007, p. vi) says: “our actions now and over the coming
decades could create risks of major disruption to economic and
social activity, on a scale similar to those associated with the great
wars and the economic depression of the first half of the 20th
century”.
Hirschberg et al. (2007, p. 9): “human society has to develop within the
boundaries set by the environment, and … economy has to satisfy
societal needs – not the reverse”.
Sustainable Society Index (SSI 2014, p. 14): “Economic wellbeing is not
a goal in itself. It is a precondition to achieve human and
environmental wellbeing.”

11. Flaw 2 (cont’d): Ignoring enviro-socio
factors
Recent GCRs include so-called environmental and
social sustainability indices, however, these are:
 not reflected in the final country ranking,
 only valued at one-fifth of the economic index, and
 comprised one-third of impermissible input indicators.
Similarly, the 2016 Credit Suisse Global Wealth Report
has no social or environmental outcome indicators
because these are not deemed to be relevant to
notions of wealth.

12. Flaw 3: Ideology-driven indicators
Many indicators, in addition to being inputs, are ideology-driven.
E.g. Question 3.03 in the 2015-2016 GCR asks: “In your country,
to what extent do regulations allow flexible hiring and firing of
workers?”
This question is based on the premise that ease of firing confers
competitiveness. Is this so?

13. Flaw 3 (cont’d): Ideology-driven
indicators
High-performing firms avoid firing wherever possible because:
 national benefits of unregulated dismissals are illusory;1
 firing people is costly: dismissal costs (severance pay, administrative
expenses); rehiring costs (agency costs, search, recruiting, training);
reputational damage; diminished staff health and loyalty; unamortized
staff training costs; loss of IP, loss of highly-trained workers to
competitors; etc.
 firing negatively impacts on business performance, profitability, growth,
workers’ and their families’ health, and does not improve
competitiveness.
 firms that do not fire staff are able to ramp up production quickly once
business improves, and so recover quicker.
1 See IMF (2016, p.108). World Economic Outlook. Accessible at:
https ://www.imf.org/external/pubs/ft/weo/2016/01/pdf/text.pdf

14. Flaw 3 (cont’d): Ideology-driven
indicators
The WEF’s own research data does not support the
GCR’s assertion that easy firing raises competitiveness:
1. A correlation analysis of the GCR’s own 2013-2014 data of
countries’ overall rankings and its rankings on the ability to
fire people easily, showed no correlation (rs = 0.084).
2. Conversely, countries with high job protection (e.g. Austria,
Denmark, Germany, the Netherlands, Norway, Sweden) in
our competitiveness study all scored in the first 8 on a 100-
point scale.
Yet the GCR still pushes its ideological belief that easy
firing improves competitiveness.

15. Flaw 3 (cont’d): Ideological bias
Some major biases are difficult to spot.
E.g. Credit Suisse’s (2016) exclusion of public assets and debt in
wealth calculations distorts rankings.
In our study, the US scores 93 on our 100-point scale of national
debt, whereas Sweden scores 49 (where 1 is best).
On assets, gross fixed capital formation in Sweden exceeds the
US’s by a factor of 1.3 (World Bank data).
Therefore, on both indicators, Sweden performs better.
Not taking these factors into account, inflates the US’s
score and deflates Sweden’s.

16. Other common flaws in country
rankings
Ranking small numbers of countries, e.g. just the 35 OECD countries
Including small countries in rankings, e.g. Monaco, Bahrain, Liechtenstein …
Small sample sizes, e.g. interviewing only 0.00003% of China’s population as
the GCR does
Unequal or no weighting of factors, e.g. overvaluing economic data
Not converting data to per capita, e.g. number of patents
Inclusion of irrelevant data, e.g. fixed telephone lines, size of country
Exclusion of relevant data, e.g. workforce engagement, sustainability
practices, long- vs short-term focus, stakeholder recognition, etc.
Preferring naïve opinions to hard evidence, e.g.
reporting opinions on labour relations rather incidence of strikes
Relying on naïve perceptions, e.g. expecting people to have informed
opinions about dozens of indicators in relation to 140 other countries.

17. ISL’s study of 104 countries
Study parameters
 Ranked 104 countries
 Focused on 23 countries (the G23) in more detail
 All data is from 2013, unless otherwise stated in published paper
 Data source is mostly World Bank or, where WB data is not
available, other publicly available data
 Countries with population < 3 million are excluded
 Countries with insufficient data are excluded
 All inputs, no matter how plausible, are excluded

18. ISL’s study of 104 countries (cont’d)
Methodology
 11 economic outcome indicators
 9 environmental outcome indicators
 9 social outcome indicators
 For each block of indicators, an average score is obtained
 The 3 averages are averaged, converted to a score on a 100-point
scale to obtain an overall average
 Block scores (economy, environment, social) are weighted equally
 Results are compared with results from 2013-2014 GCR
Full paper on this study is available here

19. Result – GCR revealed to be hugely
biased
When the Global Competitiveness Report is debiased by
removing all methodological and ideological flaws,
 north-European countries continue to rank highly, but
 the 3 largest Anglo countries drop dramatically in their
scores;
i.e. when all rankings are converted to a 100-point scale
(1 being the highest score):
 the US drops from a GCR score of 5 to a score of 57
(This represents the biggest drop in our study.)
 the UK drops from a GCR score of 9 to 40, and
 Canada drops from a GCR score of 11 to 35

20. Result – ISL’s country rankings
1. Switzerland
2. Norway
3. Denmark
4. Austria
5. Sweden
6. Germany
7. Croatia
The unexpected overall high ranking of some countries is due to their
reasonable economic scores and relatively good environmental and
social scores.
Note: 2 countries scored equal 12th
The leading 14 countries on overall averages are (in order):
8. the Netherlands
9. Romania
10. Chile
11. Israel
12. United Arab Emirates
12. Vietnam
13. China

21. Neoliberal orientation and country
ranking
high
Ranking
low
For Anglo countries,
the more neoliberal, the lower the performance
Country Score
New Zealand 16
Australia 21
Ireland 28
UK 40
US 57
low
Neoliberal
orientation
high

22. Indicators
(all on 100-
point scale)
CH NO DK AT SE DE NL CN NZ IT TH SG AU FR IR CA IN UK BR JP FI US RU
Average
economic
score
4 1 13 7 11 8 9 10 24 33 12 2 14 41 32 23 58 37 50 28 42 34 15
Average
environ-
mental
score
60 68 59 63 71 69 79 61 73 62 51 91 94 65 75 98 12 82 41 95 92 97 96
Average
social
score
4 1 5 10 2 8 7 37 12 15 47 18 6 13 14 9 62 16 44 12 3 32 61
Average of
Averages
score
1 2 3 4 5 6 8 13 16 17 18 19 21 26 28 35 37 40 42 44 47 57 64
Global
Competitive
-ness Report
1 6 12 13 10 4 7 23 15 35 28 2 18 19 22 11 44 9 41 8 3 5 47
Diff
between
our study &
GCR
0 4 9 9 5 -2 -1 10 -1 18 10 -17 -3 -7 -6 -24 7 -31 -1 -36 -44 -52 -17
Country rankings for 23 key countries
out of 104 countries ranked on 29 criteria

23. 7 European countries DC 6 Anglo countries
Indicators (all
on 100-point
scale)
CH NO DK AT SE DE NL PRC IN NZ AU IR CA UK US
Average
economic score
(11 indicators)
4 1 13 7 11 8 9 10 58 24 14 32 23 37 34
Average
environ-
mental score
(9 indicators)
60 68 59 63 71 69 79 61 12 73 94 75 98 82 97
Average social
score
(9 indicators)
4 1 5 10 2 8 7 37 62 12 6 14 9 16 32
Average of
Averages
score
1 2 3 4 5 6 8 13 37 16 21 28 35 40 57
Country rankings for 15 selected countries
out of 104 countries ranked on 29 indicators

24. Why do false rankings matter?
1. They engender a false sense of success in the US and UK
2. They pseudo-legitimize a dubious model of capitalism that is
economically, environmentally and socially wanting, and so
provides false role models.
This economic model is variously known as Anglo/US capitalism,
neo-liberalism, the Chicago School, the Washington Consensus,
liberal market economics, the shareholder-centred model, or in its
most extreme form (Stiglitz 2002), market fundamentalism.
The inadequacy of this model has been well established in theory
(e.g. Albert 1993; Komlos 2015; Stiglitz 2013) and in practice (e.g.
the GFC, this study).

25. Volatility analysis
The question arises whether the results obtained in our
study are atypical or indicative of a general trend?
So, we analysed economic output data over 20-year time
span for 1998, 2003, 2008, 2013.
Conclusion: Rankings have remained relatively stable.
Coefficient of volatility never exceeded 0.6, well below
accepted standard of 1.0

26. Full data set
The following table shows results for all 29
indicators for the G23 countries.

27. G23 Results CH NO DK AT SE DE NL CN NZ IT TH SG AU FR IR CA ID UK BR JP FI US RU
Adjusted net national income 2 1 4 12 5 14 8 55 20 23 58 6 3 19 18 9 81 17 38 21 13 7 31
Gross domestic savings 14 8 29 28 26 32 23 4 39 58 22 2 25 51 10 41 18 72 57 48 50 65 27
Inflation 52 6 38 1 50 15 16 22 24 27 7 11 13 36 42 34 96 19 75 44 17 18 78
Patents 3 13 8 12 5 7 9 21 18 22 49 16 20 14 17 19 57 2 46 4 6 1 24
Unemployment 30 18 57 40 69 38 64 32 45 85 3 10 43 81 88 60 20 67 63 23 70 66 41
Current account balance 3 2 7 14 8 10 5 25 96 19 46 4 99 82 9 97 40 98 83 18 90 95 22
Central government debt 18 14 49 80 45 57 73 69 96 27 90 37 82 94 55 53 88 65 100 61 86 6
Foreign direct investment 66 13 50 14 22 49 3 64 23 25 46 1 4 19 2 6 87 12 37 91 100 15 28
Broad money 4 40 42 31 3 11 9 15 22 7 18 2 16 46
International reserves 1 5 4 24 11 26 23 21 19 29 27 2 32 33 71 37 79 42 38 7 36 47 20
Cash surplus/deficit 13 1 32 31 36 22 48 26 58 19 3 39 64 91 18 66 88 40 96 42 74 10
Average economic scores 4 1 13 7 11 8 9 10 24 33 12 2 14 41 32 23 58 37 50 28 42 34 15
Total ecological footprint 81 87 90 91 93 83 88 65 80 74 51 95 100 79 76 99 16 78 54 77 94 98 86
Energy use 77 93 76 80 90 81 85 60 84 68 56 87 91 79 70 98 23 75 47 78 92 97 89
Renewable energy consumption 55 24 50 42 31 75 87 63 45 64 56 95 80 69 84 54 39 86 35 88 37 82 90
Total GHG emissions (MtCO₂e) 62 48 77 74 47 84 86 72 89 64 54 80 93 52 88 94 30 99 49 85 87 100 90
Energy efficiency 2 35 8 26 54 29 43 85 68 13 71 9 63 46 5 87 58 16 44 40 82 73 92
Material footprint 89 97 87 93 86 81 86 68 83 76 57 100 98 80 88 91 33 78 64 79 95 90 53
Adjusted net savings 18 12 20 29 19 30 25 13 33 69 38 1 42 57 27 48 16 67 28 63 54 58 53
Terrestrial/marine protected areas 51 53 26 7 41 1 25 33 4 40 42 82 6 10 80 68 84 39 21 89 37 36 54
Forest area change (1990-2013) 30 52 25 41 47 44 29 10 35 14 17 64 59 18 5 53 27 24 74 48 42 40 45
Average environmental scores 60 68 59 63 71 69 79 61 73 62 51 91 94 65 75 98 12 82 41 95 92 97 96
Gini index 17 8 13 15 3 9 19 78 38 23 86 73 18 16 22 26 33 27 92 48 1 70 61
Life expectancy 3 11 22 15 9 21 12 37 12 4 51 5 7 6 17 10 74 16 53 1 18 25 66
Happiness (WHR) 1 3 2 12 7 22 6 56 8 37 29 20 9 24 15 4 76 18 14 35 5 13 47
Maternal mortality ratio 12 11 19 4 9 14 20 45 29 7 38 27 13 23 21 18 72 24 52 15 1 32 43
Prison population 30 22 17 36 14 27 20 48 72 31 98 81 61 37 28 42 2 58 92 11 15 100 97
Corruption index 7 5 1 19 4 11 8 46 2 37 63 6 9 18 16 10 59 12 40 13 3 14 83
Gender gap (WEF) 7 1 12 28 3 9 11 66 8 31 45 42 27 13 4 23 76 15 62 73 2 22 55
Shared prosperity growth 51 44 84 73 56 65 80 1 96 21 28 75 97 55 41 87 13 63 83 15
Mortality rate, under-5s 15 2 7 11 4 11 12 42 25 7 43 2 13 18 9 24 75 19 50 3 1 28 37
Average social scores 4 1 5 10 2 8 7 37 12 15 47 18 6 13 14 9 62 16 44 12 3 32 61
Overall scores, o/o 100 1 2 3 4 5 6 8 13 16 17 18 19 21 26 28 35 37 40 42 44 47 57 64
GCR scores, o/o 100 1 6 12 13 10 4 7 23 15 35 28 2 18 19 22 11 44 9 41 8 3 5 47
Score diff. bet'n GCR & this study 0 4 9 9 5 -2 -1 10 -1 18 10 -17 -3 -7 -6 -24 7 -31 -1 -36 -44 -52 -17
Note: Grey columns denote Anglo countries, for G104 countries see .................

28. Full data set
Electronic supplementary material
The online version of this article
(https://doi.org/10.1007/s10551-018-3805-6)
contains supplementary material, which
includes results for the entire 104 countries.