The CGC also analyzes how well a government performs its roles in different realms of engagement. The challenge is determining which realms should be considered crucial. The CGC has selected six core areas of variables common across all countries, utilizing cluster analysis about topics in international development administration studies. These areas are:
Economy
Education
Health and Welfare
Agriculture and Food
Information and Communications
Technologies (ICT)
Energy and Environment
The CGC recognizes that universal performance standards are not appropriate for all contexts. Existingcompetitiveness indices are developed from experiences in developed countries. However, it is doubtful that these indices are appropriate for discussing GC in developing or under-developed countries, as previously discussed. As such, strategies to enhance competitiveness for developed nations are likely to be different from those used to stimulate competitiveness for developing nations. Thus, extant competitiveness indicators do not provide concrete and practical policy remedies for the leaders of developing and less-developed nations. Therefore, it is necessary to develop indicators that account for contextual idiosyncrasies of government competitiveness. By considering different experiences and policy practices across developed countries (OECD countries) and developing countries (non-OECD countries), the index measures the level of government competitiveness in non-OECD countries by focusing on particular realms of government activity. Therefore, the index goes beyond the six core areas above by exploring competitiveness dimensions specific to OECD and non-OECD countries. South Korea is included in both the OECD and non-OECD country groups, as a reference point. For OECD countries, the index measures four additional areas (totaling 10): Research & Development, culture and tourism, disaster management, and government. For non-OECD countries, the government’s role may be more important because the market and civil society is less developed. Therefore, it is more specifically measured by investigating its internal workings and comprehensive activities (totaling 8).
+Economy
Economic prosperity is a crucial dimension of competitiveness. Economic growth depends to a large extent on the behaviors of consumers and producers, but government activities are also crucial in maintaining economic stability. Examples include maintaining currency stability, enforcing and depending property rights, and establishing the appropriate level of regulations. The following indicators evaluate government capacity to implement effective economic policies and manage markets, focusing on development over growth:
GDP growth rate, inflation rate, foreign exchange reserves, etc.
| |
OECD |
Non-OECD |
| 1 |
Norway |
Singapore |
| 2 |
USA |
Qatar |
| 3 |
Switzerland |
South Korea |
| 4 |
Germany |
Latvia |
| 5 |
Luxembourg |
Kuwait |
+Education
Quality human resources are important for a competitive economy. The educational system of most countries is diverse and complex, with many types of schools interacting in their own ways with the government. Therefore, the government should develop effective educational policies that value certain critical elements based on an integrated standard prioritizing equality of opportunity. Effective and up-to-date education policies are evaluated by the following indicators:
School enrollment, primary education completion rate, literacy, public spending on education, etc.
| |
OECD |
Non-OECD |
| 1 |
New Zealand |
Uzbekistan |
| 2 |
Iceland |
Thailand |
| 3 |
Australia |
South Korea |
| 4 |
Finland |
Ukraine |
| 5 |
Netheland |
Vietnam |
+Health and Welfare
Economic wealth does not necessarily guarantee better lives for individuals. A competitive government should develop an equitable health care and welfare system that provides social safety nets, adopts a life-long approach to health, and supports retirement stability. Moreover, the health and welfare system should not cause fiscal instability or impose an excessive tax burden on citizens. The following indicators evaluate government efforts to improve citizens’ health and welfare:
Public expenditure on health programs, mortality rate under age five, number of hospital beds, etc.
| |
OECD |
Non-OECD |
| 1 |
Netherland |
South Korea |
| 2 |
Denmark |
Argentina |
| 3 |
Sweden |
Croatia |
| 4 |
Iceland |
Uzbekistan |
| 5 |
Finland |
Russia |
+Agriculture and Food
Beyond the economy, education, and health, one of the most basic essentials for life is food. A government that is unable to provide citizens with this essential can be considered a failure. Many governments (in particular, those in developing countries) have attempted to stimulate agricultural development and innovation by establishing funding facilities, extension programs, and subsidies for private-sector and farm activities. A competitive government can effectively intervene in strategic planning and priority setting for agricultural innovation and development, including the provision of incentives for private agents and technical assistance consultants. Food and agriculture indicators include the following:
Crop yield, agricultural land (percent of total land area), food security, etc.
| |
OECD |
Non-OECD |
| 1 |
USA |
Kuwait |
| 2 |
Turkey |
Mongolia |
| 3 |
Mexico |
Rwanda |
| 4 |
Canada |
Cambodia |
| 5 |
Australia |
India |
+Information and communications technology (ICT)
he potential benefits of ICT are well known. It enhances enterprise efficiency, reduces costs, and broadens both local and global market reach. Because privateenterprises play a major role in national economies, the benefits of IT collectively translate into job creation, revenue generation, and overall country competitiveness. However, the costs of ICT infrastructure are typically high, so it is sometimes necessary for government to intervene. Indicators of ICT measure how effectively a government promotes information technology for economic efficiency and quality of life, and how effectively government manages related impacts:
Mobile internet subscriptions, ICT penetration, usage patterns, etc.
| |
OECD |
Non-OECD |
| 1 |
Finland |
South Korea |
| 2 |
Netherland |
Singapore |
| 3 |
Sweden |
Bahrain |
| 4 |
USA |
Uruguay |
| 5 |
Norway |
Latvia |
+Energy and Environment
Economic growth sometimes occurs at the cost of environmental sustainability. Protecting the environment is possible only through united efforts of all actors of society, such as government and non-governmental organizations, corporations, the agricultural sector, environmentalists, and the general public. However, the government is the controlling authority in most of environmental protection issues. It is responsible for managing national environmental policy to foster sustainable economic development and protect the health and safety of citizens. Under resource constraints, moreover, supplying enough energy to the general public and developing alternative energy sources are responsibilities that primarily concern the government. The following indicators measure government ability to develop effective environment and energy policy:
Energy consumption per capita, CO2 emissions per capita, renewable energy ratio, etc.
| |
OECD |
Non-OECD |
| 1 |
Norway |
Costa Rica |
| 2 |
Portugal |
Paraguay |
| 3 |
Switzerland |
Brazil |
| 4 |
Netherland |
Columbia |
| 5 |
Sweden |
Equator |
+Research and Development
Governments play an important role in providing funding for public R&D programs in support of industrial policies or science and technology development strategy. In particular, most OECD member countries have developed long-term strategic visions to encourage R&D. A government can be a financier of R&D activities as well as a performer of R&D itself. Moreover, a government provides education, training, and skills development to foster knowledge creation and diffusion. Indicators in this area measure government efforts to support creative breakthroughs in a variety of fields across the hard, social, and applied sciences:
Business startup index, net technology exports, number of patents, government-based R&D budget
- 1. USA
- 2. Japan
- 3. Germany
- 4. Switzerland
- 5. Switzerland
+Disaster Management
Culture can be a driver of economic growth through the promotion of creativity. Many governments have historically de-emphasized culture in favor of other pressing development needs. Recently, however, governments have begun to realize that culture can play a significant role in tourism, support urban and rural revitalization, and generate social and economic benefits for individuals and communities. Many governments are now focusing on cultural development by providing educational opportunities, engaging new audiences, and promoting tolerance and understanding. Government effectiveness in establishing a supportive environment for cultural activities is measured by the following:
Imports and exports of creative products, employment in culture/art sectors, number of facilities (e.g. museums and theaters), etc.
- 1. USA
- 2. England
- 3. Germany
- 4. France
- 5. Italy
+Culture and Tourism
Culture can be a driver of economic growth through the promotion of creativity. Many governments have historically de-emphasized culture in favor of other pressing development needs. Recently, however, governments have begun to realize that culture can play a significant role in tourism, support urban and rural revitalization, and generate social and economic benefits for individuals and communities. Many governments are now focusing on cultural development by providing educational opportunities, engaging new audiences, and promoting tolerance and understanding. Government effectiveness in establishing a supportive environment for cultural activities is measured by the following:
Imports and exports of creative products, employment in culture/art sectors, number of facilities (e.g. museums and theaters), etc.
- 1. Ireland
- 2. New Zealand
- 3. Iceland
- 4. USA
- 5. Switzerland
+Government
Government capacity for each activity area depends on the stability of a country’s political system and civil society. Even for a government that can produce effective public policies, efficient implementation is difficult if the country’s political system and civil society are unstable. Therefore, these factors should be a consideration in measuring GC. The following indicators measure government efforts to make political institutions and civil society stable:
Social capital, corruption perceptions index, election processes, democracy, etc.
- 1. Denmark
- 2. Sweden
- 3. Norway
- 4. Finland
- 5. New Zealand
Normalizing and rescaling various indicators into an aggregated index while minimizing biases is a persistent challenge. Each international index has dealt with this issue differently. GC derives maximum and minimum z-scores from means and standard deviations. The following equation explicates the mechanism used to calculate the GC score. The final overall ranks are sums of scores from common areas and areas specific to each country.
