Last week Dr David Torstensson presented the findings of the 2019 Global Rule of Law and Business Dashboard at the U.S. Chamber of Commerce in Washington D.C.
Titled Laying the Foundation for Prosperity the Dashboard offers the business community, governments, policymakers and stakeholders across the world an innovative, empirical tool to measure and understand the particular needs of the business community within a rule of law context. What are the issues that are important to business? What is currently being measured internationally? And what does this tell us about the rule of law and business globally?
The 2019 edition Dashboard builds on the work of the previous three editions. The number of economies sampled has over the course of the last six years increased nine-fold and the Dashboard now covers 90 economies in total.
Key findings and results
Key finding 1: While improving the rule of law for business remains a challenge globally
Nowhere in the 90 economies sampled is the rule of law environment for business perfect. No single economy gets a score of 100%. In this sense businesses face challenges everywhere and there is room for improvement in all 90 economies sampled; big, small, developed, developing or emerging. Furthermore, only 13 economies (14.4%) achieve an overall Dashboard score of 75% or more. Put in a different way, this means that businesses around the world really only have a handful of economies where the rule of law environment can be characterised as being very strong and reliable. And while improving the aggregated average score for the entire Dashboard sample in 2019 stands at 56.77%. Looking at regional averages no single region achieves an average score in line with the OECD average benchmark of 72.09%. As in 2017 the highest mean score is that achieved by the Europe and Central Asia region of 67.60%. But given this is by far the most economically developed region it is a fairly low score. Furthermore, most of the sampled economies from Europe and Central Asia (16 out of 22) are OECD members and even more (17 out of 22) are EU Member States. Under these circumstances one would expect the regional average score to be higher.
Key finding 2: The Americas region is failing to catch up
The Americas region remains one of the worst performing regions in the Dashboard. Fourteen out of 26 countries sampled from the region fail to reach 50% with three more – Trinidad and Tobago, Brazil and Panama – all just a few percentage points over 50%. Although improving from 2017, the region’s average score is 50.59% and the median slightly lower at 48.17%. Out of the bottom-15 countries on the Dashboard five – one-third – are from the Americas. And the two worst performing countries on the Dashboard, Venezuela and Haiti, have both seen their score performance deteriorate since 2017. It is striking that with a per capita income and level of socio-economic development comparable to the Middle East and North Africa region and a far higher level of income and development than the sampled economies from Sub-Saharan Africa, the Americas region as a whole is behind the former and only 3.5% ahead of the latter.
Key finding 3: OECD membership helps…up to a point
Most OECD members perform quite well on the Dashboard. All but one – Singapore – of the top 10 economies on the Dashboard are OECD members. The average Dashboard score for OECD economies is 72.09%, which would rank 17th on the Dashboard on its own. There is, however, a wide disparity between the top performers and OECD member states at the bottom. For example, Mexico, despite being an OECD Member since 1994, is almost 40 percentage points behind top-performers Sweden and New Zealand. To catch up to these two Mexico would have to essentially double its current score. Italy and Greece – OECD members and two high-income, long-standing EU Member States – fail to reach even two-thirds of the available score and are ranked 33rd and 45th respectively. Of the two economies currently in the accession process, Colombia and Costa Rica, both are considerably behind their prospective OECD peers. Colombia achieves a score barely over 50% on the Dashboard with an overall result of 53.24%; pretty much unchanged from 2017’s 52.90%. Costa Rica performs better but is still well below the OECD average achieving a score of 61.70% on the 2019 Dashboard.
To learn more about this project and to access the report please use the below link:
About the Author:Amir specializes in the semiconductor industry, both in hardware and software spanning multi and cross market experience in Mobile, Security, Consumer Electronics, Embedded, Telecom, e-Commerce and Military segments. Amir has held senior management roles at a number of organisations and his skills have been utilised to lead and establish new business, integrate new technology and developed measurable outcomes for success with emerging new companies. Amir’s work is international and he had an extensive experience with the North American, European, Asian and the Middle East markets.