Wednesday, September 27, 2006

Global Competitiveness Index 2006

Well - its out here

am guessing that its indicators of competitiveness, rather than actual economic performance. This tends to favour nations with significant presence of liquidity in financial markets, stable institutions, stable macroeconomies, innovation, education etc etc

Tends to be the most wealthiest nations. But, doesn't mean to say those outside the top 10 are complete basket cases, or could take on the top 10 countries anyway. Studies like this sometimes present a bit of a monotheistic view of the factors needed for economic growth and development.

There seems to be a lot of reflection here in the transparency index too - most of these top 10 placeces are also the least corrupt countries in the world.

According to this work - stable government, stable macroeconomy, stable institutions, a decent legal system tends to improve competitiveness amongst other things.

My bugbear with all of this stuff is that it tends to ignore the influence of the demand side in actual economic performance. You can have great institutions, but you can always be undercut by competitors.

2 Comments:

Anonymous Anonymous said...

> My bugbear with all of this stuff is that it
> tends to ignore the influence of the demand
> side in actual economic performance. You can
> have great institutions, but you can always
> be undercut by competitors.

Yeah, but

1) Doesn't that demand tend be driven by good jobs,
which are driven by those other things?

2) Competition is less of a problem if you're innovating.
And people get bored and innovate if given half a
chance. Hence said institutions.

10:15 AM  
Blogger Accidental Economist (Glenn Athey) said...

Erm. Not quite.

You can be competitive and quite innovative, but if no-one buys your goods and services you are stuck.

Jobs, labour demand - is derived demand - i.e. in response to the demand for goods or services, you decide to produce them, and need labour to do so.

Labour per se doesn't drive demand. Consumer expenditure yes, but that accounts for a share of final demand.

You can have very innovative people, but their ideas aren't making sales in the market, your revenues will not emerge.

3:43 AM  

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