Topic 2.

International rankings of Ukraine

1. Human Development Index
2. Index of Economic Freedom
3. Global Competitiveness Index
4. Ease of Doing Business Index
5. Other indexes
1. Human Development Index (HDI) (By UNDP) The HDI was created to emphasize that people and their capabilities
should be the ultimate criteria for assessing the development of a country, not economic growth alone. The HDI can
also be used to question national policy choices, asking how two countries with the same level of GNI per capita can
end up with different human development outcomes. These contrasts can stimulate debate about government
policy priorities. The Human Development Index (HDI) is a summary measure of average achievement in key
dimensions of human development: a long and healthy life, being knowledgeable and have a decent standard of
living. The HDI is the geometric mean of normalized indices for each of the three dimensions. The health dimension
is assessed by life expectancy at birth, the education dimension is measured by mean of years of schooling for adults
aged 25 years and more and expected years of schooling for children of school entering age. The standard of living
dimension is measured by gross national income per capita. The HDI uses the logarithm of income, to reflect
the diminishing
importance of income withincreasing GNI. The scores for the three HDI dimension indices are then aggregated into a
composite index using geometric mean. Refer to Technical notes for more details. The HDI simplifies and captures
only part of what human development entails. It does not reflect on inequalities, poverty, human security,
empowerment, etc. The HDRO offers the other composite indices as broader proxy on some of the key issues of
human development, inequality, gender disparity and poverty. A fuller picture of a country's level of human
development requires analysis of other indicators and information presented in the statistical annex of the report.
Human Development Indices and Indicators: 2018 Statistical update is being released to ensure consistency in
reporting on key human development indices and statistics. It includes an analysis of the state of human
development—snapshots of current conditions as well as long-term trends in human development indicators. With a
comprehensive statistical annex, our data gives an overview of the state of development across the world, looking at
long-term trends in human development indicators across multiple dimensions and for every nation, the 2018
Update highlights the considerable progress, but also the persistent deprivations and disparities. Looking at 2018
results, Norway, Switzerland, Australia, Ireland and Germany lead the HDI ranking of 189 countries and territories,
while Niger, the Central African Republic, South Sudan, Chad and Burundi have the lowest scores in the HDI’s
measurement of national achievements in health, education and income. The overall trend globally is toward
continued human development improvements, with many countries moving up through the human development
categories: out of the 189 countries for which the HDI is calculated, 59 countries are today in the very high human
development group and only 38 countries fall in the low HDI group. Just eight years ago in 2010, the figures were 46
and 49 countries respectively.
2. Index of Economic Freedom
The Index of Economic Freedom is an annual index and ranking created in 1995 by The Heritage Foundation and The
Wall Street Journal to measure the degree of economic freedom in the world's nations. The creators of the index
took an approach similar to Adam Smith's in The Wealth of Nations, that "basic institutions that protect the liberty of
individuals to pursue their own economic interests result in greater prosperity for the larger society".[1][2] About
The Index For much of human history, most individuals have lacked economic freedom and opportunity,
condemning them to poverty and deprivation. Today, we live in the most prosperous time in human history.
Poverty, sicknesses, and ignorance are receding throughout the world, due in large part to the advance of economic
freedom. In 2019, the principles of economic freedom that have fueled this monumental progress are once again
measured in the Index of Economic Freedom, an annual guide published by The Heritage Foundation, Washington's
No. 1 think tank. For twenty-five years the Index has delivered thoughtful analysis in a clear, friendly, and straight-
forward format. With new resources for users and a website tailored for research and education, the Index of
Economic Freedom is poised to help readers track over two decades of the advancement in economic freedom,
prosperity, and opportunity and promote these ideas in their homes, schools, and communities. The Index covers 12
freedoms – from property rights to financial freedom – in 186 countries. The Index of Economic Freedom focuses on
four key aspects of the economic environment over which governments typically exercise policy control:
• Rule of law,
• Government size,
• Regulatory efficiency, and
• Market openness.
In assessing conditions in these four categories, the Index measures 10 specific components of economic freedom,
each of which is graded on a scale from 0 to 100. Scores on these 10 components of economic freedom, which are
calculated from a number of sub-variables, are equally weighted and averaged to produce an overall economic
freedom score for each economy. Ukraine’s economic freedom score is 52.3, making its economy the 147th freest in
the 2019 Index. Its overall score has increased by 0.4 point, with improvements in fiscal health, business freedom,
and property rights outpacing declines in labor freedom and trade freedom. Ukraine is ranked 44th among 44
countries in the Europe region, and its overall score is below the regional and world averages. Progress has lagged on
many much-needed but contentious structural reforms such as cutting subsidies and raising energy tariffs, fiscal
consolidation, and the fight against corruption. As Ukraine’s oligarch-dominated economy improved in 2018, partly
because of greater inflows of remittances, Western institutions found that they had less leverage to press for further
reforms to make the country more prosperous, democratic, and transparent. Ukraine also needs to develop its
capital markets, privatize state-owned enterprises, and improve both its legal framework and the rule of law.
3. Global Competitiveness Index The Global Competitiveness Report (GCR)[1] is a yearly report published by the
World Economic Forum. Since 2004, the Global Competitiveness Report ranks countries based on the Global
Competitiveness Index,[1] developed by Xavier Sala-i-Martin and Elsa V. Artadi.[2] Before that, the macroeconomic
ranks were based on Jeffrey Sachs's Growth Development Index and the microeconomic ranks were based on
Michael Porter's Business Competitiveness Index. The Global Competitiveness Indexintegrates the macroeconomic
and the micro/business aspects of competitiveness into a single index. The report "assesses the ability of countries
to provide high levels of prosperity to their citizens. This in turn depends on how productively a country uses
available resources. Therefore, the Global Competitiveness Index measures the set of institutions, policies, and
factors that set the sustainable current and medium-term levels of economic prosperity."[3][4] Since 2004, the
report ranks the world's nations according to the Global Competitiveness Index.[2] The report states that it is based
on the latest theoretical and empirical research.[5] It is made up of over 110 variables, of which two thirds come
from the Executive Opinion Survey, and one third comes from publicly available sources such as the United Nations.
The variables are organized into twelve pillars,[6] with each pillar representing an area considered as an important
determinant of competitiveness. One part of the report is the Executive Opinion Survey which is a survey of a
representative sample of business leaders in their respective countries. Respondent numbers have increased every
year and is currently just over 13,500 in 142 countries (2010).[7] The report notes that as a nation develops, wages
tend to increase, and that in order to sustain this higher income, labor productivity must improve for the nation to
be competitive. In addition, what creates productivity in Sweden is necessarily different from what drives it in Ghana.
Thus, the GCI separates countries into three specific stages: factor-driven, efficiency-driven, and innovation-driven,
each implying a growing degree of complexity in the operation of the economy. COMPETITIVENESS is the set of
institutions, policies, and factors that determine the level of productivity of an economy, which in turn sets the
level of prosperity that the country can achieve. The GCI includes statistical data from internationally recognized
organizations, notably the International Monetary Fund (IMF); the World Bank; and various United Nations’
specialized agencies, including the International Telecommunication Union, UNESCO, and the World Health
Organization. The Index also includes indicators derived from the World Economic Forum’s Executive Opinion Survey
that reflect qualitative aspects of competitiveness, or for which comprehensive and comparable statistical data are
not available.
4. Ease of Doing Business (WB) The ease of doing business index is an index created by Simeon Djankov at the
World Bank Group. The academic research for the report was done jointly with professors Oliver Hart and Andrei
Shleifer.[1] Higher rankings (a low numerical value) indicate better, usually simpler, regulations for businesses and
stronger protections of property rights. Empirical research funded by the World Bank to justify their work show that
the economic growth impact of improving these regulations is strong.[2] The Doing Business report presents results
for two aggregate measures: the ease of doing business score (formerly called the distance to frontier score) and the
ease of doing business ranking, which is based on the ease of doing business score. The ease of doing business
ranking compares economies with one another; the ease of doing business score benchmarks economies with
respect to regulatory best practice, showing the absolute distance to the best regulatory performance on each Doing
Business indicator. When compared across years, the ease of doing business score shows how much the regulatory
environment for local entrepreneurs in an economy has changed over time in absolute terms, while the ease of
doing business ranking can show only how much the regulatory environment has changed relative to that in other
economies.
The ease of doing business score captures the gap between an economy’s performance and a measure of best
practice across the entire sample of 41 indicators for 10 Doing Business topics (the labor market regulation
indicators are excluded). For starting a business, for example, New Zealand and Georgia have the lowest number of
procedures required (1). New Zealand also holds the shortest time to start a business (0.5 days), while Slovenia has
the lowest cost (0.0). Australia, Colombia and 115 other economies have no paidin minimum capital requirement
(table 9.1).
5. Other indexes
GINI Index What is the Gini Index The Gini index or Gini coefficient is a statistical measure of distribution developed
by the Italian statistician Corrado Gini in 1912. It is often used as a gauge of economic inequality, measuring income
distribution or, less commonly, wealth distribution among a population. The coefficient ranges from 0 (or 0%) to 1
(or 100%), with 0 representing perfect equality and 1 representing perfect inequality. Values over 1 are theoretically
possible due to negative income or wealth. BREAKING DOWN Gini Index A country in which every resident has the
same income would have an income Gini coefficient of 0. A country in which one resident earned all the income,
while everyone else earned nothing, would have an income Gini coefficient of 1. (Deviation from Lorenz curve)
Shortcomings Though useful for analyzing economic inequality, the Gini coefficient has some shortcomings. The
metric's accuracy is dependent on reliable GDP and income data. Shadow economies and informal economic activity
are present in every country. Informal economic activity tends to represent a larger portion of true economic
production in developing countries and at the lower end of the income distribution within countries. In both cases
this means that the Gini index of measured incomes will overstate true income inequality. Accurate wealth data is
even more difficult to come by due to the popularity of tax havens. Another flaw is that very different income
distributions can result in identical Gini coefficients. Because the Gini attempts to distill a two dimensional area (the
gap between the Lorenz curve and the equality line) down in to a single number, it obscures information about the
"shape" of inequality. In everyday terms, this would be similar to describing thecontents of a photo solely by it's
length along one edge, or the simple average brightness value of the pixels. While using the Lorenz curve as a
supplement can provide more information in this respect, it also does not show demographic variations among
subgroups within the distribution, such as a the distribution of incomes across age, race, or social groups. In that
vein, understanding demographics can be important for understanding what a given Gini coefficient represents. For
example, a large retired population pushes the Gini higher.
Corruption Perceptions Index (Transparency International) is an index published annually by Transparency
International since 1995 which ranks countries "by their perceived levels of public sector[1] corruption, as
determined by expert assessments and opinion surveys."[2] The CPI generally defines corruption as "the misuse of
public power for private benefit".[3] The CPI currently ranks 176 countries "on a scale from 100 (very clean) to 0
(highly corrupt)". Denmark and New Zealand are perceived as the least corrupt countries in the world, ranking
consistently high 5 mong international financial transparency, while the most perceived corrupt country in the world
is Somalia, ranking at 9 out of 100 since 2017.[4]
The Bertelsmann Stiftung’s Transformation Index (BTI) 2018. It covers the period from February 1, 2015
to January 31, 2017. The BTI assesses the transformation toward democracy and a market economy as
well as the quality of political management in 129 countries. More on the BTI at http://www.bti-
project.org
The Happy Planet Index (HPI) is an index of human well-being and environmental impact that was
introduced by the New Economics Foundation(NEF) in July 2006. The index is weighted to give
progressively higher scores to nations with lower ecological footprints.
The Global Innovation Index (GII)[1] aims to capture the multi-dimensional facets of innovation and
provide the tools that can assist in tailoring policies to promote long-term output growth, improved
productivity, and job growth. The GII helps to create an environment in which innovation factors are
continually evaluated. It provides a key tool and a rich database of detailed metrics for economies. The
core of the GII is to provide an annual ranking of countries by their capacity for, and success in,
innovation. It continues to be co-published by Cornell University, INSEAD (European Institute of Business
Administration), and the World Intellectual Property Organization, in partnership with other
organisations and institutions,[2]:333 and is based on both subjective and objective data derived from
several sources, including the International Telecommunication Union, the World Bank and the World
Economic Forum.[3]:203 The index was started in 2007 by INSEAD and World Business,[3]:203a British
magazine. The GII is commonly used by corporate and government officials to compare countries by their
level of innovation.[4]
The International Innovation Index is a global index measuring the level of innovation of a country,
produced jointly by The Boston Consulting Group (BCG), the National Association of Manufacturers
(NAM), and The Manufacturing Institute (MI), the NAM's nonpartisan research affiliate. NAM describes it
as the "largest and most comprehensive global index of its kind".[1]
The Environmental Performance Index (EPI) is a method of quantifying and numerically marking the
environmental performance of a state's policies. This index was developed from the Pilot Environmental
Performance Index, first published in 2002, and designed to supplement the environmental targets set
forth in the United Nations Millennium Development Goals.[1]The EPI was preceded by the
Environmental Sustainability Index(ESI), published between 1999 and 2005. Both indices were developed
by Yale University (Yale Center for Environmental Law and Policy) and Columbia University (Center for
International Earth Science Information Network) in collaboration with the World Economic Forum and
the Joint Research Centre of the European Commission. The ESI was developed to evaluate
environmental sustainability relative to the paths of other countries. Due to a shift in focus by the teams
developing the ESI, the EPI uses outcome-oriented indicators, then working as a benchmark index that
can be more easily used by policy makers, environmental scientists, advocates and the general public.[2]
Other leading indices like the Global Green Economy Index (GGEI)[3] provide an integrated measure of
the environmental, social and economic dynamics of national economies. The GGEI utilizes EPI data for
the environmental dimension of the index while also providing a performance assessment of efficiency
sectors (e.g. transport, buildings, energy), investment, green innovation and national leadership around
climate change. In January 2012 four EPI reports have been released — the Pilot 2006 Environmental
Performance
Index,[4] and the 2008, 2010, and 2012 Environmental Performance Index.[5][6] For the 2012 report, a
new "Pilot Trend EPI" was developed to rank countries based on the environmental performance
changes occurred during the last decade, allowing to establish which countries are improving and which
are declining.[7] In the 2014 EPI ranking, the top five countries were Switzerland, Luxembourg, Australia,
Singapore, and the Czech Republic. The bottom five countries in 2014 were Somalia, Mali, Haiti, Lesotho,
and Afghanistan. The United Kingdom was ranked in 12th place, Japan 26th place, the United States
33rd, Brazil 77th, China 118th, and India came in 155th.[8] The top five countries based on their 2012
Pilot Trend EPI were Estonia, Kuwait, El Salvador, Namibia and Congo.