Pillar 1: Institutions

What does it capture? Security, property rights, social capital, checks and balances, transparency and ethics, public-sector performance and corporate governance.

Why does it matter? By establishing constraints, both legal (laws and enforcement mechanisms) and informal (norms of behaviors), institutions determine the context in which individuals organize themselves and their economic activity. Institutions impact productivity, mainly through providing incentives and reducing uncertainties

 

1. 1. Business costs of organized crime

Response to the survey question “In your country, to what extent does organized crime (mafia-oriented racketeering, extortion) impose costs on businesses?” [1 = to a great extent, imposes huge costs; 7 = not at all, imposes no costs] | 2017– 2018 weighted average or most recent period available

Source: World Economic Forum, Executive Opinion Survey. For more details, refer to Appendix B of this report.

 

1. 2. Homicide rate

Number of intentional homicides per 100,000 population. | 2016 or most recent year available

“Intentional homicide” refers to unlawful death inflicted upon a person with the intent to cause death or serious injury. More details about the methodology can be found at https://dataunodc. un.org/crime/intentional-homicide-victims.

Source: United Nations Office on Drugs and Crime (UNODC).

 

1. 3. Terrorism incidence

Assesses the frequency and severity of terror attacks. The scale ranges from

(highest incidence) to 100 (no incidence). | Weighted count 2013–2017

This indicator has two components: number of terrorism-related casualties (injuries and fatalities) and the number of terrorist attacks over a five-year period, with each year assigned half the weight of the following year. Each component is normalized on a 0 to 100 scale, with 100 meaning “no casualty” and “no attack”, respectively, and then averaged.

 Source: National Consortium for the Study of Terrorism and Responses to Terrorism (START).

 

1.04 Reliability of police services

Response to the survey question “In your country, to what extent can police services be relied upon to enforce law and order?” [1 = not at all; 7 = to a great extent] | 2017–2018 weighted average or most recent period available

Source: World Economic Forum, Executive Opinion Survey. For more details, refer to Appendix B of this report.

 

1. 5. Social capital

Score on the Social Capital pillar of the Legatum Prosperity Index™, which assesses social cohesion and engagement, community and family networks, and political participation and institutional trust. The scale ranges from 0 (low) to 100 (high). | 2017 edition

This indicator measures national performance in three areas: social cohesion and engagement (bridging social capital), community and family networks (bonding social capital), and political participation and institutional trust (linking social capital). More details about the methodology can be found at http://www. prosperity.com/about/methodology.

Source: Legatum Institute.

 

1. 6. Budget transparency

Represents the Open Budget Data Score, which indicates the extent to which the government publishes data related to budget and spending. The scale ranges from 0 (low transparency) to 100 (high transparency). | 2017

The score is based on the evaluation of 20 key criteria related to government practices in publishing open budget data. More details can be found at http://www.worldbank.org/publicfinance/ fmis.

Source: The World Bank Group.

 

1. 7. Judicial independence

Response to the survey question “In your country, how independent is the judicial system from influences of the government, individuals, or companies?” [1 = not independent at all; 7 = entirely independent] | 2017–2018 weighted average or most recent period available

Source: World Economic Forum, Executive Opinion Survey. For more details, refer to Appendix B of this report.

 

1. 8. Efficiency of legal framework in challenging regulations

Response to the survey question “In your country, how easy is it for private businesses to challenge government actions and/or regulations through the legal system?” [1 = extremely difficult; 7 = extremely easy] | 2017–2018 weighted average or most recent period available

Source: World Economic Forum, Executive Opinion Survey. For more details, refer to Appendix B of this report.

 

1. 9. Freedom of the press

Score on the World Press Freedom Index, which measures the level of freedom available to journalists. The scale ranges from 0 (good) to 100 (very bad). | 2018 edition

The index measures media independence, the quality of the infrastructure that supports the production of news, and information and acts of violence against journalists. It is based on two sources:

1) a database of the level of abuses and violence against journalists and media;

2) an expert opinion survey on pluralism, media independence, self-censorship, transparency and infrastructure in each country.

More details about the methodology can be found at https://rsf.org/en/world-press-freedom-index.

Source: Reporters Without Borders (RSF).

 

1. 10. Burden of government regulation

Response to the survey question “In your country, how burdensome is it for companies to comply with public administration’s requirements (e.g., permits, regulations, reporting)?” [1 = extremely burdensome; 7 = not burdensome at all] | 2017–2018 weighted average or most recent period available

Source: World Economic Forum, Executive Opinion Survey. For more details, refer to Appendix B of this report.

 

1. 11. Efficiency of legal framework in settling disputes

In your country, how easy is it for private businesses to challenge government actions and/or regulations through the legal system? [1 = extremely difficult; 7 = extremely easy] | 2017–2018 weighted average or most recent period available

Source: World Economic Forum, Executive Opinion Survey. For more details, refer to Appendix B of this report.

 

1. 12. E-Participation

Score on the E-Participation Index, which assesses the use of online services to facilitate the provision of information by governments to citizens. The scale ranges from 0 to 1 (best). | 2018

The E-Participation Index measures the use of online services to facilitate provision of information by governments to citizens (“e-information sharing”), interaction with stakeholders (“e-consultation”) and engagement in decision-making processes (“e-decision making”).

More details about the methodology can be found at https://publicadministration.un.org.

Source: United Nations, Department of Economic and Social Affairs (UNDESA).

 

1. 13. Future orientation of government

 Average of the responses to the following four Executive Opinion Survey questions:

1) “In your country, how fast is the legal framework of your country in adapting to digital business models (e.g. e-commerce, sharing economy, fintech, etc.)?” [1 = not fast at all; 7 = very fast];

2) “In your country, to what extent does the government ensure a stable policy environment for doing business?”;

3) “In your country, to what extent does the government respond effectively to change (e.g. technological changes, societal and demographic trends, security and economic challenges)?”;

4) “In your country, to what extent does the government have a long-term vision in place?”. For the last three questions, the answer ranges from 1 (not at all) to 7 (to a great extent). | 2017–2018 weighted average or most recent period available

Source: World Economic Forum, Executive Opinion Survey. For more details, refer to Appendix B of this report.

 

1. 14. Incidence of corruption

Score on the Corruption Perceptions Index, which measures perceptions of corruption in the public sector. This is a composite indicator, and the scale ranges from 0 (highly corrupt) to 100 (very clean). | 2016

The index aggregates data from a number of different sources that provide perceptions of business people and country experts of the level of corruption in the public sector.

More details can be found at https://www.transparency.org/cpi.

Source: Transparency International.

 

1. 15. Property rights

Response to the survey question “In your country, to what extent are property rights, including financial assets, protected?” [1 = not at all; 7 = to a great extent] | 2017–2018 weighted average or most recent period available

 Source: World Economic Forum, Executive Opinion Survey. For more details, refer to Appendix B of this report.

 

1.16 Intellectual property protection

Response to the survey question “In your country, to what extent is intellectual poperty protected?” [1 = not at all; 7 = to a great extent] | 2017–2018 weighted average or most recent period available

Source: World Economic Forum, Executive Opinion Survey. For more details, refer to Appendix B of this report.

 

1.17 Quality of land administration

Score on the quality of land administration index, which assesses the reliability of infrastructure, transparency of information, geographic coverage, land dispute resolution and equal access to property rights. The scale ranges from 0 to 30 (best). | 2017

More details about the methodology can be found at http://www.doingbusiness.org/Methodology.

Source: The World Bank Group.

 

1.18 Strength of auditing and reporting standards

Response to the survey question “In your country, how strong are financial auditing and reporting standards?” [1 = extremely weak; 7 = extremely strong] | 2017–2018 weighted average or most recent period available

Source: World Economic Forum, Executive Opinion Survey. For more details, refer to Appendix B of this report.

 

1.19 Conflict of interest regulation

Score on the extent of conflict of interest regulation index, which measures the protection of shareholders against directors’ misuse of corporate assets for personal gain. The scale ranges from 0 to 10 (best). | 2017

The index assesses three dimensions of regulation that address conflicts of interest:

1) transparency of related-party transactions,

2) shareholders’ ability to sue and hold directors liable for self-dealing,

3) access to evidence and allocation of legal expenses in shareholder litigation.

More details about the methodology can be found at http://www.doingbusiness.org/Methodology.

Source: The World Bank Group.

 

1.20 Shareholder governance

 Score on the extent of shareholder governance index, which measures shareholders’ rights in corporate governance. The scale ranges from 0 to 10 (best). | 2017

The index assesses three dimensions of good governance:

1) shareholders’ rights and role in major corporate decisions,

2) governance safeguards protecting shareholders from undue board control and entrenchment, and

3) corporate transparency on ownership stakes, compensation, audits and financial prospects. More details about the methodology can be found at http://www.doingbusiness.org/Methodology.

Source: The World Bank Group