Elite Quality Report 2020: 32 Country Scores and Global Rank

Abstract

Can nations be ranked on the quality of their elites? Elites are dominant coalitions possessing the strongest coordination capacity over a country’s key resources. They run the highest impact business models, which can be value creating or value extracting. We aim to produce a political economy index and present the first ever comparative measurement of Elite Quality (EQ), that is, a country’s elites’ propensity – on aggregate – to create value, rather than to rent seek with extractive business models. Using data on 72 Indicators, the Elite Quality Index (EQx) ranks 32 countries. Based on its multi-layered index architecture, we quantify a country’s overall EQ, as well as offer an in-depth analysis of specific dimensions of EQ, such as the role of power (Power Sub-Index I) and current value creation activities (Value Sub-Index II) in the political and economic realm. On a more granular level, the Index consists of 12 Pillars, including Creative Destruction, State Capture and Capital Rent. We reveal substantial differences in the overall state of Elite Quality around the world and hence divergent mid- and long-term economic growth and human development prospects. In-depth analysis of regional dynamics (North East Asia), specific EQ dimensions as well as various country portraits (incl. the United States, China, German, Japan, Russia, Portugal and others) by experts and academics illustrate the varied use of the EQx as a new analytical tool to explain the political economy of countries. This global Index and country ranking is an innovative heuristic and approach that might help interpret – and possibly transform – the state of the world and its future.

Keywords: index, elite quality, institutions, value creation, rent seeking, crony capitalism, political economy, global ranking, international business

JEL Classification: D72, F50, P16, P48