The Best Countries for Business
Forbes magazine has just released its ranking of the “best countries for business.” 127 nations are ranked. The stated criteria are a country’s tax burden, red tape, investor protections, stock market performance, promotion of free trade and freedoms of expression and organization – criteria that are said to suggest a country’s “ability to attract entrepreneurs, investors and workers,” and thus “to rebound from the current malaise.”
#1 on the Forbes hit parade for the second straight year is Denmark. Rounding out Forbes’s Top 10 are: the U.S., Canada, Singapore, New Zealand, the U.K., Sweden, Australia, Hong Kong/China, and Norway. Falling out of the Top 10 were Switzerland (from #10 to #15), and more conspicuously, Finland (from #3 to #13) and (sorry, Henry) Ireland (from #2 to #14). Even Iceland, where the economy has crashed and burned, comes in at #22. If Iceland ranks that high, then things must really be tough in the rest of the world.
Anchoring the bottom of the scale, at #127, is Zimbabwe. The rest of the Bottom 10, listed from the bottom up, are Burundi, Chad, Bolivia, Tajikistan, Gambia, Cameroon, Nicaragua, Bosnia and Herzegovina, and Venezuela.
For the full listing of all 127 countries, click here.
I hope that those who are better versed than I am (i.e., almost anybody) will chime in about these rankings and the substantive and methodological issues they raise.
Comments
I do have a few comments to make:
1. They use freedom house data. Well, Freedom house data is based in interviews with experts, and no one knows how those views are agregated, how these experts are selected and so on.
2. The competitiviness report (another source) has similar sample bias, since are based in intervews with experts, as far as I know.
3. It would be nice to see how they weight each part of the index.
4. Last, but not least, what the hell performance of stock market is doing as a componet of the index?
A country may have great enviroment for business, but a bad performance in stock market, for a lot of reasons, and vice-versa.
For example, Venezuela, which is in the end of the list, had experienced the bigger growth in stock market among Latin America countries a few years ago.
I just learned in the last post of Andrew Gelman in his blog to not say something sucks, but… This index sucks!
Posted by: Manoel Galdino | April 22, 2009 06:13 PM
Methodology, if it is anything like their school rankings, (25% based on ‘ratemyprofessor.com’ and 25% by ‘who’s who in America’ listings it is just crap.
Posted by: frank | April 22, 2009 10:57 PM