BOFIT Weekly Review 2015/41
Russia behind China in most international comparisons
The latest World Economic Forum (WEF) Global Competitiveness Report 2015-16, which rates competitiveness among 140 countries, ranks Russia 45 and China 28. Overall country scores are based on performance in twelve pillars that are derived from 114 indicators gathered from survey and statistical data. Both Russia and China received their highest rankings for market size. Russia’s other strengths included a high share of population with higher education, as well as wide coverage and use of telephones and internet which are among the indicators depicting ICT infrastructure and “technological readiness”. These subcategories, however, were nearly the only ones where Russia outperformed China, i.e. Russia only outscored China in 25 out of the 114 indicators. Russia ranked weakest in institutions, market competition and quality of its roads. Russia’s and China’s rankings were also nearly the same in the latest IMD Competitiveness comparison.
The competitiveness rankings also utilise indicators from the World Bank’s Doing Business comparison, which considers the challenges facing firms in terms of the encountered regulatory environment and bureaucracy based on ten example processes. Russia and China ranked 62nd and 90th, respectively. Both countries were at the bottom end with regards to construction permits and getting hooked up to the electrical grid. In terms of property registration and starting a business, Russia ranked considerably higher than China, while in trading across borders it was far behind China. The poorest performances for both Russia (136) and China (100) were recorded in Transparency International’s Corruption Perceptions Index.
International comparison indexes sum up vast complex realities that are difficult to measure, let alone compare across countries. To their credit, they provide a fast and easy general overview of relative conditions in different countries. When interpreting such rankings, however, one should remember that these comparisons often rely on proxy variables and focus only on conditions in the largest cities. Specific focused measures may have huge impacts on the country’s rankings, even if little changes in the broader picture (as has sometimes been the case e.g. for Russia). Indexes are constantly developed further, but this also complicates comparisons over time.
International rankings of Russia, China and Finland, 2014–15
Sources: WEF, IMD, WB, Transparency International.