As you've probably noticed, the World Economic Forum's Global Competitiveness Report 2006-2007 is out. Am I the only one who finds the ‘stages of economic growth’ component of the new methodology to be a bit odd? From Chapter 1.1 (emphasis mine):
Specifically, we separate countries into three stages, based on the idea that as countries move along the development path, wages tend to increase, and that in order to sustain this higher income, labor productivity must improve. We integrate this concept into the index by attributing higher relative weights to those pillars that are relatively more relevant for a country given its particular stage of development.
Happily, none of the stages is named “takeoff”. Instead the 3 stages are called: factor-driven, efficiency-driven, and innovation-driven. Each of the 9 new pillars (like higher education, institutions) is attached to one stage, and per capita GDP determines a country's stage. Why would you assign a different calculation to each income band? So that “the index can gradually ‘penalize’ those countries that are not preparing for the next stage,” say the authors.
I’m all for comparing apples to apples, and countries clearly should and do have different priorities. Maybe the differences in weighting aren’t big enough to matter (you can find those in the chapter as well), but I’d prefer to see the same calculation used for all countries. To compare similar countries they could just as easily include tables that compare countries within the same GDP band to each other.
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