1、Sustainable Value Creation Global metrics for long-term economic and human deve lopmentELITE QUALITY REPORT 2022COUNTRY SCORES AND GLOBAL RANKINGSEQx Country Scores6560555045 -Elite Quality +Tomas Casas i Klett,University of St.Gallen(FIM-HSG)Guido Cozzi,University of St.Gallen(FGN-HSG)Mapbox OpenSt

2、reetMapElectronic copy available at:https:/ report is the result of a collective research and writing effort by its editors and authors.Substantial contributions are recognized in the corresponding sections of the report.The report was edited and authored by Tomas Casas i Klett and Guido Cozzi,and p

3、roduced by Tomas Casas i Klett,Guido Cozzi,Cline Diebold,Alexander Tonn,Camille Zeller and Neha Gupta.If you wish to reference the report use the following citation format:Casas i Klett,T.&Cozzi,G.(2022).Elite Quality Report 2022:Country Scores and Global Rankings.Zurich:Seismo.doi:10.33058/seismo.3

4、0769.00012022 the Foundation for Value Creation,St.Gallen,Switzerland,distributed under the terms and conditions of the Creative Commons license CC BY-NC-ND(http:/creativecommons.org/licenses/by-nc-nd/4.0/).Published by Seismo Press AG,Zurich and Geneva in partnership with the Foundation for Value C

5、reation978-3-03777-264-5(Print)978-3-03777-769-5(E-Book)https:/doi.org/10.33058/seismo.30769.0001Available at SSRN:https:/ interested in the commercial use of the Elite Quality Report 2022:Country Scores and Global Rankings,parts thereof,Country Scores data or Global Rankings data,should obtain writ

6、ten permis-sion by contacting:rightselitequality.org by Niedermann Druck AG,St.GallenCover World Map Attribution:MapBox OpenStreetMapPowerValueEconomicPoliticalElectronic copy available at:https:/ Quality REPORT 2022COUNTRY SCORES AND GLOBAL RANKINGSGlobal Academic PartnersAcademic LeadershipNextGen

7、 Value Creation Barometer partnerHSG student club partnerElectronic copy available at:https:/ of Use and DisclaimerThe Elite Quality Index(EQx)and the Elite Quality Report 2022:Coun-try Scores and Global Rankings(EQx2022 or Report)provide a unique interpretation of political economies across the wor

8、ld and their mid-to long-term prospects.The EQx2022 is based on a methodology that starts with the collection and collation of relevant,up-to-date datasets from a variety of organizations and sources(see Section 7.2 for the com-plete list).The datasets conceptually fit with the EQx and its theoretic

9、al basis(Casas-Klett,2022).The detailed EQx methodology is described in Measuring Elite Quality(Casas-Klett,Cozzi,Diebold,&Zeller,2020),a paper whose main te-nets have evolved since it was first written to support the EQx2021,with changes summarized in Section 2.4.It was developed and inspired by a

10、team of academics and practitioners with the aim of supporting Value Creation business models in elite systems and incentivizing the institution-al arrangements that foster such models.The analysis and interpretations of the results contained in the Elite Quality Report 2022,such as the com-mentarie

11、s on the country scorecards,are the result of individual or collec-tive work and do not necessarily represent the views of the editors,the project team or other project participants.Elite Quality,the Elite Quality Index(EQx)and its underlying method-ologies are the exclusive intellectual property of

12、 the Foundation for Value Creation(FVC)protected internationally by copyright and/or trademark registration.All rights reserved 2022.The EQx2022 is the third in a series of annual reports that aim to elicit a discussion among academics and initiate conversations with a broad range of other intereste

13、d stakeholders.The EQx project is an innovative and timely initiative in our age of disruption,positioned at the intersec-tion between academia,business and policymaking.The EQx2022 was produced from datasets collected,collated and trans-formed by a committed international research team.The Reports

14、under-lying datasets and all included information are subject to change without notice.For country classifications,the Report uses the ISO 3166-1 al-pha-3 country codes defined by the ISO 3166 Maintenance Agency.The terms country and nation as used in the EQx2022 do not always refer to a territorial

15、 entity/state as understood by international law and practice.The term might also refer to self-contained economic areas that are not states,but for which statistical data are maintained on a separate and independent basis.The editors,contributors and research team cannot guarantee that the in-forma

16、tion contained in the underlying datasets are correct,that there are no errors,or that calculations and described methodologies have been consistently applied.The editors,publisher,contributors,and producers of the EQx2022 are not responsible for the suitability or fitness of the contents,supporting

17、 information,interpretation and analysis included in the Report for any purpose.The research team,authors,partners,con-tributors,editors and the Foundation for Value Creation accept no liabil-ity for any content of the Report or its parts,nor for any implications,de-cisions made,or actions taken on

18、the basis of the Report.The research team,authors,partners,contributors,editors,and the Foun-dation for Value Creation might not own or control the rights of the under-lying datasets or information(data and information)used in the Report.They are also not responsible for any use that any party might

19、 make of the data and Information.Unless formally licensed,acquisition of the Report implies no authoriza-tion for third-party products or services derived from any data and infor-mation or any content referred to or included in the EQx2022.The research team,authors,partners,contributors,editors and

20、 the Foun-dation for Value Creation are not responsible for the transformation by any third parties of the information in this Report,or for the actions of anyone who might infringe upon the integrity of the Report or its underly-ing data and information.Any transformation of the Report and its rela

21、t-ed information must be clearly and visibly acknowledged,together with the mandatory citation to the source.Data and information which have been duly credited in Chapter 7,Ref-erences,are subject to the terms of use of these third parties.In summary,while every care has been exercised in preparing,

22、compil-ing,and publishing the data contained in this Report,no responsibility whatsoever can be accepted in respect to any such information,data,analysis or opinion,any loss arising out of any use,or for any errors or omissions contained herein.When the EQx2022 Report,parts thereof,its Country Score

23、s or Global Rankings,directly or indirectly obtained,is distributed or reproduced,the attribution to the source shall be cited as:Casas-Klett,T.&Cozzi,G.(2022).Elite Quality Report 2022:Country Scores and Global Rank-ings.Zurich:Seismo.doi:10.33058/seismo.30769.0001 Any readers and users of the Repo

24、rt,whether they have obtained it via download or otherwise,agree to make all reasonable efforts to comply with these terms themselves and to promote compliance with their own end users.Parties interested in partnering with the non-profit Foundation for Value Creation can e-mail us at:partnervaluecre

25、ation.orgElectronic copy available at:https:/ Value Creation Global metrics for long-term economic and human developmentElectronic copy available at:https:/ of ContentsEXECUTIVE SUMMARY.11.INTRODUCTION.21.1 Beyond measuring Sustainable Value Creation in the political economy.21.2 Measuring intergene

26、rational fairness:A conceptual framework and results of the NextGen Value Creation Barometer.41.3 Inflation control needs responsible and inclusive elites.81.4 Why our research on elites is about sustainability:Elite leadership as Value Creation.101.5 EQx2022 results at a glance.121.6 Building and s

27、haping the EQx community.142.INSIDE THE GLOBAL ELITE QUALITY INDEX.162.1 Conceptual framework and definitions.162.2 EQx architecture.172.3 EQx Pillars .182.4 EQx methodology.222.5 Statistical evaluation of the Elite Quality Index.263.EQX2022 RESULTS.323.1 Elite Quality country scores and global rank

28、ings .323.2 State of elites framework:Country mapping.363.3 Value configuration framework:Value Creation and Extraction and shares of overall economic activity.383.4 Pillar results.403.5 Outstanding country performances by Pillar.524.EQX2022 ANALYSIS AND INTERPRETATION.544.1 Country Scorecards:Deep-

29、dive analyses .554.2 Indicator Scorecards .964.3 EQx-Barometer analyses.1125.INDICATORS.1165.1 Indicator weighting table overview.1165.2 Indicator Table:Definitions and rationale.1186.COUNTRY SCORECARDS.1407.REFERENCES.2927.1 Bibliography.2927.2 Data sources and Indicator references.2967.3 Contribut

30、or citations and recognition.3067.4 Artistic acknowledgments .308Electronic copy available at:https:/ the paintings:Joaquim Chancho generously gave us permission to use his artwork to enhance the aesthetic appearance of the EQx2022.More details on all of the paintings included in the report can be f

31、ound in Section 7.4,p.308.Electronic copy available at:https:/ Abbey Library of St.Gallen(Stiftsbibliothek)in Switzerland has roots that can be traced back to medieval times,serving as a repository of knowledge for over a millennium.Luca Zanier Photography,Corridors of Power ProjectElectronic copy a

32、vailable at:https:/ Quality Report,EQx20221Executive Summary Elite Quality is Sustainable Value Creation Elites are an empirical inevitability,dominating all politi-cal economies.They provide the necessary coordination capacity for an economys resources,whether human,financial or knowledge based.Hig

33、h-quality elites run Value Creation business models that give back more to society than they take.Low-qua-lity elites do the opposite and operate Value Extraction models based on value transfers.What are the main findings of the EQx2022?1.Singapore(rank#1)and Switzerland(rank#2)retain the two top po

34、sitions for the third year running.Both are leaders in the Value Sub-Index,their respective weaknesses being Political Power for Singapore(rank#20)and Economic Power for Switzerland(rank#15).2.Small is beautiful when it comes to Elite Quality.Excelling this year are Australia(rank#3,up 6 places),Isr

35、ael(rank#4,up 3 positions)and Canada(rank#7,up 4 places).Of the countries in the Top 10,only the UK has a population larger than 30 million.3.The UK(rank#8)and US(rank#15)are EQx2022 surprises,having dropped many places(down 5 and 10 places respectively).The reason for such precipitous falls is not

36、because of overly dominant elites as Anglo-Saxon checks and balances remain robust(EQx Power Sub-In-dex,rank#4 and#1 respectively).The fundamental problem is that Anglo-Saxon political elites are not crea-ting enough value(EQx Political Value,rank#17 and a dismal#66 respectively).EQx is the global p

37、olitical economy index This is the 3rd international ranking and measurement of Elite Quality.The EQx2022 covers 151 countries and uses 120 Indicators to describe the global landscape of Value Creation and Extraction during the second year of COVID-19.Elite Quality is an analytical framework designe

38、d to inform policymakers in reforming and incentivizing Sustainable Value Creation and elite business model transformation.4.China(rank#27)is the leading upper-middle inco-me economy;Vietnam is the leading lower-middle income country(rank#38),and Rwanda is the top low-income country(rank#44).All thr

39、ee are posited to see further growth based on the Value Creation of their elite business models.5.EU countries do not particularly distinguish themsel-ves as EQx2022 leaders,although three countries make it into the Top 10(Netherlands,rank#5,Sweden,rank#6,and Estonia,rank#10).Germany has improved by

40、 4 places from last year(rank#11),a solid but not outstanding performance.6.The NextGen Value Creation Barometer,de-veloped in conjunction with the St.Gallen Symposium(see page 4),reflects value transfers across genera-tions.The NextGen country rankings differ from tho-se of the overall EQx and poin

41、t to the need for an intergenerational contract to ensure that the present generation desists from extracting value from future ones.Human,natural and other forms of capital form a legacy to support an inclusive future.7.Latin America has a clear winner in Chile(rank#41).Certain small countries in t

42、he region also do well irrespective of their political systemsee Panama(rank#47)and Cuba(rank#50).The largest eco-nomies urgently need to improve their Elite Quality if they are to develop,including powerhouses such as Mexico(rank#65)and Brazil(rank#81).C Co ou un nt tr ry yR Ra an nk kT Tr re en nd

43、 d v vs s E EQQx x2 20 02 21 1S Sc co or re eChile4 41 10 054.2Panama4 47 7-2 251.9Cuba5 50 03 351.1Uruguay5 51 11 11 150.9Dominican Republic5 53 32 21 150.5Mexico6 65 5-1 10 048.8Colombia8 80 0-9 947.1Brazil8 81 15 546.8Argentina9 91 12 25 545.9Venezuela,RB1 13 34 4-9 940.4Leading Latin American Co

44、untriesC Co ou un nt tr ry yR Ra an nk kT Tr re en nd d v vs s E EQQx x2 20 02 21 1S Sc co or re eSingapore1 10 068.7Switzerland2 20 067.4Australia3 36 665.2Israel4 43 365.0Netherlands5 5-1 164.4Sweden6 60 064.0Canada7 74 463.7United Kingdom8 8-5 563.4Norway9 9-1 163.4Estonia1 10 02 263.1Germany1 11

45、 14 462.7Denmark1 12 2-2 262.5Ireland1 13 37 762.3New Zealand1 14 4-1 162.1United States1 15 5-1 10 061.8Finland1 16 6-3 361.6Austria1 17 72 261.2Japan1 18 8-1 161.2Korea,Rep.1 19 9-3 360.2United Arab Emirates2 20 0-2 259.7EQx2022 Top 20 Countries Electronic copy available at:https:/ value of the EQ

46、xThe consequences of the crisis years of 2020,2021 and 2022 will be felt for years to come.It is less evident how the most salient distributional outcomes of the COVID-19 pandem-ic,rapid inflation and war will play out in the national arenas of the political economy.Some elite systems,countries,and

47、populations will emerge comparably stronger;better equipped both institutionally and technologically to pursue Value Cre-ation and affect institutional change.But there will also be many losers.This will happen where the potential for Value Creation is spirited away because elites have invested in e

48、x-tractive business models that transfer value to them.It is nations where elites have used the ongoing crises to raise the Value Creation potential of their business models that will prosper.Rent seeking models are unsustainable,and in a world as stretched and challenged as it is today,they might b

49、e the straw that break the camels back.Calls for reform will become loud-er in many polities.Leading coalitions of business,political and knowledge elites must react to these calls with an urgent trans-formation of elite business models to promote Value Creation.The original EQx2020,launched in Sept

50、ember of 2020,was a pilot project to measure Elite Quality and covered 32 coun-tries using 72 Indicators.Its release elicited interest and creat-ed debate in both the academic and policy circles of countries as diverse as the US,China,Germany,Bangladesh and Sin-gapore,pleasantly surprising the EQx p

51、roject team.This suc-cess led the teamthe global Elite Quality research community and the Foundation for Value Creationto redouble its efforts and release the first fully-fledged EQx as quickly as possible.This present edition is the second such version with cover-age now expanded to 151 countries a

52、nd based on 120 In-dicators,each evidencing either Value Extraction or Value Creation in the political economy.The EQx2022 is a con-siderable undertaking that includes not only the production of the index scorecards and the validation of its methodolo-gy,but also a theoretical research stream that a

53、ims to ad-dress key questions in development.What does the EQx offer the reader?A glimpse into the future A fundamental assumption made by the EQx is that Value Cre-ation business models lead to a future with better outcomes for economic and human development.The EQx identifies much variance across

54、countries and within regions,which is espe-cially relevant when analyzing similar institutional or geo-graphical settings such as the EU or Latin America.Insights into designing inclusive policies that offer low hanging fruitElite Quality is a new entrant in the market for ideas,but its many practic

55、al applications are becoming evident.The EQx,with its multiple components,provides a benchmark for elite coalitions to design and align specific policies towards the transformation of their business models to support Sustainable Value Creation.The granular results of the EQx2022 go far 1.Introductio

56、nChapter 1:Introduction“Mainstream economic theory might have reached its limits in terms of practical application.Fiscal stimuli pack-ages have indebted many countries,while monetary policies have given rise to the bane of inflation.At the same time,Sustainable Value Creation at the micro-level is

57、all too often ignored in macroeconomic policymak-ing.In China we believe that courageous structural reform is an effective way forward out of crises and in sup-port of inclusive economic development.Reforms must then be based on adjusting the incentive system so that elite business models create rat

58、her than transfer value.The elite theory of economic development provides a framework for such structural reform and captures complex trade-offs that require state capacity while at the same time referencing culture and history.Comparing countries based on Elite Quality and their creation of val-ue

59、is both innovative and difficult.The Elite Quality Index(EQx)is a first valuable initiative in this direction and should inspire debate between researchers,policymakers,and the concerned general public across the world.”Prof.Zhang Jun,School of Economics,China Center for Economic Studies,Fudan Unive

60、rsity,Shanghai,China1.1 Beyond measuring Sustainable Value Creation in the political economyElectronic copy available at:https:/ Quality Report,EQx20223beyond the Index and its Scores and Rankings,covering 2 Sub-Indices,4 Index Areas,12 Pillars and over 100 Indica-tors.With such hard data on the man

61、ifestations of Power and Value in the political economy policymakers can design incen-tives that grasp the low hanging fruit on offer to maximize the winners and minimize the losers in each country to deliver the greatest impact on Value Creation.Original assessments of social risk Countries where e

62、lites continue to run extractive business mod-els(on aggregate)will soon face the wrath of non-elites.If the economic pie shrinks overall,but the slice reserved for elite business models continues to grow,there will be increasing so-cial discontent and protest ahead.From interpretation to impact The

63、 EQx Country Scores and Global Rankings are the essen-tial data we use to offer interpretations.The analyses you will find in this edited work include commentaries on 19 countries(from China to the United States)along with 10 discussions of specific phenomena in the political economy(from the Diver-

64、sity&Inclusion EQx-Barometer to Global Trade Alert Indica-tors).The reader will identify two perspectives in these analy-ses.The first reviews the scorecard rankings to connect the dots and provide a birds eye view of specific Indicator re-sults,weaving these into a comprehensive story of a national

65、 political economy.The second offers a more abstract analyti-cal perspective,highlighting different levels of connectivity between,for example,Power(Sub-Index),Political Value(In-dex Area),and Creative Destruction(Pillar)and then illus-trates the connections through specific Indicators(such as those

66、 related to COVID-19).Both the birds eye view and the high abstraction perspectives provide key insights and often lead to specific recommendations.Surprise 1:Elites are a mathematical certainty;they are inevitableSurprise 2:Elites supply essential coordination capacity to societiesFact 1:Elites can

67、 be high-quality value creatorsFact 2:Elites can also be low-quality value extractorsHypothesis:Elite Quality determines economic and human developmentAction:We measure Elite Quality through the Elite Quality Index(EQx)Takeaway:The EQx is a political economy index that measures the ability of nation

68、al elite business models on aggregate to create value,rather than extract it from an economy.Basic notions about elites and Elite QualityDefinition:Elites are narrow,coordinated groups that run the largest income generating business models in an economy and which successfully accumulate wealth.A sig

69、nificant element of the EQx2022 for the serious reader is the Indicator Table in Visual 5.2,which offers both exact defi-nitions and the Value Creation/Extraction rationale for each of the 120 Indicators included in the Index.The Elite Quality framework is both simple and all-embracing as it aims to

70、 integrate complex social phenomena.Some might see this approach as somewhat radical,and it is undoubtedly ambitious.The EQx attributes every single phenomenon in the economy to elite business models.Tradition,inertia,external shocks,luck,evil and stupidity are all valid factors in determin-ing nati

71、onal trajectories,but here they all take a back seat to elite agency.The EQx follows the money,even as it recognizes the independent agency of narratives or political might.Resid-ual incomes motivate different elite types to coalesce around elite business models.Some of these models are extractive,b

72、ased on rent seeking,discrimination,taking value from the next generation,establishing monopolies,and even engaging in corruption or legalized theft.Others focus on inclusive Value Creation through innovation,production or trade and lead to better futures for all of us.Hence,the main tenet of the el

73、ite the-ory of economic development framework that the EQx is based on is that all social phenomena are the result of elite business models,including press freedom,youth unemploy-ment,equality,wars,modern slavery,inflation,or crime.The desired impact of the EQx2022 is Sustainable Value Creation achi

74、eved through elite transformational leadership.The measurement of each countrys Elite Quality reflects both the sustainability of its elites business models and the funda-mental sustainability of entire societies.The post COVID-19 world that is now suffering from international conflict,infla-tion an

75、d unprecedent levels of extraction from future genera-tions might not be sustainable.This may be a critical juncture where the actions of elites must be guided by the principle of Sustainable Value Creation.Electronic copy available at:https:/ Measuring intergenerational fairness:A conceptual framew

76、ork and results of the NextGen Value Creation BarometerThe conceptual anchor of sustainability is the next genera-tion.Our common understanding of sustainability express-es a fundamental human desire:to leave those that come after us a better world than we inherited.This is the basis for human devel

77、opment and progress.It is also the logic that informs various strands of ethics and science,or insti-tutions like the family and the state.The idea of a“gener-ational contract”captures the principle that generations depend on each other to provide mutual support across different stages of their live

78、s and that those currently alive have a responsibility to future generations.At the heart of the generational contract is the powerful idea of intergenerational fairness,originally framed in Our Common Future,published in 1987,and quoted above.More than three decades later,at the 76th session of the

79、 United Nations General Assembly in 2021,UN Secretary General Antnio Guterres warned governments of a growing intergenerational divide.Young people,he said,will“inherit the consequencesgood and bad”of decisions made by todays leaders in politics and busi-ness.This lack of future-oriented decision-ma

80、king equally concerns future generationsthe more than 10 billion peo-ple that are projected to be alive by the end of the century,compared to the 7.7 billion people alive today.As those currently alive,we have inherited a world that previous generations have built.Most of what we cherish todayour kn

81、owledge,infrastructure,institutions,and val-uesare the consequences of the efforts of our forebears.The development of educational systems,the institutions that secure peace,and technological advances that have enhanced living standards are the equivalent of planting a tree that will bear fruit when

82、 we are no longer here.This is the essence of Sustainable Value Creation.The moment a given generation stops providing for,and instead takes away from the next,the course of history shifts into re-verse.Todays generation is also planting trees,but both literally and metaphorically more trees than ev

83、er are being felled.That is,value is being both created for and extract-ed from future generations.Therefore,the St.Gallen Symposiumthe worlds most long-standing and relevant platform for cross-generational dia-logueis partnering with the Club of Rome to launch a joint initiative in May 2022.A New G

84、enerational Contract will foster dialogue and impactful actions that elevate concerns for intergenerational fairness and place them firmly at the center of the decisions that we take today.“Sustainable development is development that meets the needs of the present without compromising the ability of

85、 future generations to meet their own needs.”Brundtland,G.(1987).Report of the World Commission on Environment and Development:Our Common Future.United Nations General Assembly document A/42/427.Chapter 1:IntroductionElectronic copy available at:https:/ Quality Report,EQx20225A framework for cross-g

86、enerational awareness and actionDialogue and action that is focused on the next generation is most impactful when guided by a conceptual framework and benchmarked by measurements.The Elite Quality In-dex(EQx),an international comparative measurement of Sustainable Value Creation,provides both of the

87、se ele-ments.The EQx assumes that elite business models shape institutional change and that if such models are based on value creation,they support economic and human devel-opment.Elites who run Sustainable Value Creation busi-ness models can have a positive impact on future genera-tions.However,som

88、e elite business models are based on rent seeking and extraction from various sub-sectors of so-ciety.Moreover,such extractive business models may also be based on transfers of value away from the next(future)generation to the present one.The NextGen Value Creation Barometer has been jointly de-sign

89、ed by the St.Gallen Symposium and the EQx team to provide insights on key dimensions of intergenerational fair-ness and how the value creation business models of differ-ent countries compare in this regard.The Barometer uses five equally weighted categories,comprising a total of 20 component Indicat

90、ors(out of the 120 Indicators included in the full EQx),as measurements to highlight intergeneration-al relationships,both in terms of value creation and ex-tractive transfers.The categories selected build on a literature review of intergenerational equity,as well as a global,cross-generational surv

91、ey that asked respondents to rank the importance of key intergenerational issues.The first category,Sustainability and Natural Capital,fo-cuses on the extent to which dominant elite business mod-els deplete or preserve natural resources and ecosystems for future generations.The second category,Equit

92、able Op-portunities,measures the distribution of economic opportu-nities across generations,focusing on factors such as so-cial mobility,youth unemployment and government debt.The third category,Education and Human Capital,stresses the importance of the present generations value creation for the nex

93、t,in terms of investments inand inclusive ac-cess tohigh-quality learning and education.The fourth category,Health and Well-Being,measures the quality and key outcomes of national health care systems,while the fifth category,Innovation and Technology,explores the capacity provided to the next genera

94、tion to drive scientific discovery and develop disruptive business models.Through the NextGen Value Creation Barometer,the Foun-dation for Value Creation and the EQx team have partnered with the St.Gallen Symposium to foster greater intergenera-tional fairness and leadership“with the next generation

95、 in mind”.The Barometer is a unique global assessment in terms of its framework,measurements,and implications.Its findings will help to raise awareness among stakeholders in business,policy,academia and civil societyas well as the general publicon the need for greater intergenerational equity,while

96、encouraging ambitious actions to launch value creation business models with the next generation in mind.At the same time,it will also identify business models that are based on value transfers away from future generations,such as those that allow environmental degradation or result in long-term debt

97、.Given that many intergenerational chal-lenges are deeply embedded in the fabric of the political economy,the findings should inform policy initiatives as well as the transformation of elite business models towards more Sustainable Value Creation.Visual 1.1:NextGen Value Creation Barometer 2022 coun

98、try comparisonJapanGermanyUnited StatesElectronic copy available at:https:/ Visual 1.2:NextGen Value Creation Barometer 2022 table of Global Rankings with component categoriesNNe ex xt tGGe en n V Va al lu ue e C Cr re ea at ti io on n B Ba ar ro om me et te er r R Ra an nk kD Di if ff fe er re en n

99、c ce e v vs s.E EQQx x2 20 02 22 2S Su us st ta ai in na ab bi il li it ty y&NNa at tu ur ra al l C Ca ap pi it ta al lE Eq qu ui it ta ab bl le e OOp pp po or rt tu un ni it ti ie es sE Ed du uc ca at ti io on n&H Hu um ma an n C Ca ap pi it ta al lH He ea al lt th h&WWe el ll l-B Be ei in ng gI In

100、 nn no ov va at ti io on n&T Te ec ch hn no ol lo og gy ySweden157224581New Zealand21234531024Denmark391648789Switzerland4-293012406Israel5-154232332Netherlands6-130873812United Kingdom71153611634Finland8821451675Australia9-6511553415Singapore10-91012822213Norway11-2184194121Ireland9Germa

101、ny13-2269158011Belgium17Korea,Rep.16Japan0Cyprus228Canada18-Austria19-21796146618Estonia20-14France210Portugal2233113166933Spain2325Slovenia2473314278723Czech Republic25Slovak Republic267Ita

102、ly275Poland28United States29-93UAE30-8Lithuania31-343282014236Greece322737147251742Turkey33371145679640Qatar34-9Chile35679111324834Romania3675105559750Cuba379Bahrain38-54Latvia39047463113139Thailand40-38Malaysia4

103、1-8Croatia4264189378245China43-22Tunisia448676126422458Mauritius45-3Colombia463442109892364Kuwait4767Costa Rica48945138453162Peru498Hungary50-026Philippines5898Albania524067114682084Uruguay53-264121338456Paraguay54245533519

104、492Serbia551Saudi Arabia56-31Oman57-22Trinidad and Tob.58357255497593Jamaica596693130351697Timor-Leste604Jordan6957Bulgaria62-5North Macedonia632668120833669Ecuador646Gambia,The6559591147116113Panama66-9Morocco67

105、6297671215252Malawi682284956110141Niger6927231125103145Kenya70649106549178Indonesia71-223Dominican Rep.72-2Nepal733966696074103Ethiopia74-3243510892108Armenia752850137704583Uzbekistan76581NNe ex xt tGGe en n V Va al lu ue e C Cr re ea at ti io on n B Ba ar ro om me e

106、t te er r R Ra an nk kD Di if ff fe er re en nc ce e v vs s.E EQQx x2 20 02 22 2S Su us st ta ai in na ab bi il li it ty y&NNa at tu ur ra al l C Ca ap pi it ta al lE Eq qu ui it ta ab bl le e OOp pp po or rt tu un ni it ti ie es sE Ed du uc ca at ti io on n&H Hu um ma an n C Ca ap pi it ta al lH He

107、 ea al lt th h&WWe el ll l-B Be ei in ng gI In nn no ov va at ti io on n&T Te ec ch hn no ol lo og gy ySweden157224581New Zealand21234531024Denmark391648789Switzerland4-293012406Israel5-154232332Netherlands6-130873812United Kingdom71153611634Finland8821451675Australia9-6511553415Singapore10-91012822

108、213Norway11-2184194121Ireland9Germany13-2269158011Belgium17Korea,Rep.16Japan0Cyprus228Canada18-Austria19-21796146618Estonia20-14France210Portugal2233113166933Spain2325Slovenia2473314278723Czech Republi

109、c25Slovak Republic267Italy275Poland28United States29-93UAE30-8Lithuania31-343282014236Greece322737147251742Turkey33371145679640Qatar34-9Chile35679111324834Romania3675105559750Cuba379Bahrain38-54Latvia3

110、9047463113139Thailand40-38Malaysia41-8Croatia4264189378245China43-22Tunisia448676126422458Mauritius45-3Colombia463442109892364Kuwait4767Costa Rica48945138453162Peru498Hungary50-026Philippines5898Albania5240671146

111、82084Uruguay53-264121338456Paraguay54245533519492Serbia551Saudi Arabia56-31Oman57-22Trinidad and Tob.58357255497593Jamaica596693130351697Timor-Leste604Jordan6957Bulgaria62-5North Macedonia632668120833669Ecuador646Gambia,The

112、6559591147116113Panama66-9Morocco676297671215252Malawi682284956110141Niger6927231125103145Kenya70649106549178Indonesia71-223Dominican Rep.72-2Nepal733966696074103Ethiopia74-3243510892108Armenia752850137704583Vietnam77-391Bosnia and Herz.785391651017782Camb

113、odia79-20Liberia80-694384698132Argentina8166Mexico82-63Congo,Dem.Rep.834907Egypt,Arab Rep.842946Azerbaijan85-330Kazakhstan86-40Burkina Faso87-2255297127104Syria88604Georgia89-57Honduras9038U

114、kraine91-58Gabon9249881294811176Belarus93-3928808814944Russian Federation94-2744435015149Sri Lanka9522Brazil96-843Papua New Guinea9751Iran,Islamic Rep.98478Algeria994779Benin2125Botswana11265Ghana

115、97810780Bolivia96El Salvador99Moldova3274Yemen,Rep.595120Burundi139South Africa353Lebanon1025360Guinea-Bissau115Senegal291Turkmenistan993126Uganda14140Rwan

116、da4985Tanzania9101Nigeria144100Kyrgyz Republic113116Chad5141135Madagascar6150Nicaragua127Togo1111Tajikistan447131India110541Sierra Leone5110Mongolia

117、83814695Zambia118114Myanmar70133Afghanistan0106147Bangladesh81142Guinea19130Mozambique138121Guatemala104136Mali22109Namibia12087Cte dIvoire40124CAF7148I

118、raq10688123Haiti135105Congo,Rep.117146Cameroon134118Mauritania299149Pakistan1102117Lao PDR79144Venezuela,RB03794Libya0965128Eswatini148106Equatorial Guinea133

119、134Angola3125143Sudan690102Zimbabwe139122Lesotho50129Chapter 1:IntroductionElectronic copy available at:https:/ Quality Report,EQx20227iii.9_EPI Environmental Performance Indexiv.11_DOI Inflationiii.7_EDU School life expectancyiii.7_LEW Life expec

120、tan-cy womeniii.7_INT Internet accessiii.9_CDO CO2 emissions(metric tons per capita)iii.9_DBT Government debt as%of GDPiii.7_UNV Top universitiesiii.7_LEM Life expectancy menii.6_ENT Entrepreneurshipiv.12_YUN Youth unemployment rateiii.7_PIS PISA mean scoreiii.8_SUI Suicide rate per 100,000 peopleii

121、.6_RND R&D as a%of GDPi.1_MOD Social mobility(downward)i.3_AFI Academic Freedom Indexiii.8_ SUB Death rates from substance use per 100,000 peopleii.6_VCK Venture capital financei.1_MOB Social mobility(upward)iv.10_HEI Health Efficiency IndexNextGen Value Creation Barometer key findings The complete

122、NextGen Value Creation Barometer rankings by country are presented in Table 2.Some of the results,such as the following highlights,might be surprising;First,the NextGen Value Creation Barometer rankings dif-fer from those of the complete EQx.That is,the intergeneration-al value relationship is a dis

123、tinct social phenomenon warrant-ing discrete attention,research,and action.The top 14 countries in the ranking are diverse but gener-ally small nationswith the exception of the UK(rank#7)and Australia(rank#9).This begs the question of why smaller po-litical economies appear to care more about the fu

124、ture gener-ation than large economies.Sweden(for Europe),New Zealand(for the Pacific),Israel(for the MENA region),Singapore(for Asia),Canada(for North America),Niger(for Sub-Saharan Africa)and Chile(for South America)are the regional champions of the NextGen Value Creation Barometer and offer import

125、ant lessons for their neighbors.The US(rank#29)scores much lower than expected and considerably worse than in the full EQx(rank#15).Despite the fact that its advanced technologies and innovation system creates enormous amounts of value,the overall focus of elites in the worlds largest economy seems

126、to be on the present,not the future,with a high level of government debt,low levels of social mobility,and unequal access to health care.Many highly ranked countries do well in most areas,but this is not true across the board.For instance,many score poor-ly for Health and Well-Being because of high

127、rates of suicide and substance abuse that disproportionally affect the young.As an illustration,although Sweden leads the overall NextGen Value Creation Barometer,its Health ranking is#58;for Swit-zerland,the respective outcomes are#4 and#40;and for the US,#29 and#129.The inheritance left for the ne

128、xt gen-eration is multidimensional,and even countries scoring highly must continue to address all of the extractive aspects of their relationship with future generations.The NextGen Value Creation Barometer offers a compre-hensive view of the intergenerational relationship,highlighting what works an

129、d what doesnt.For instance,Belgium(rank#14)does very well in Education and Human Capital(rank#2)and in Sustainability and Natural Capital(rank#1).Yet,it scores dismally in terms of Equitable Opportunities(rank#107).The conceptual framework supports a refined interpreta-tion of the results and the de

130、sign of actionable projects.Felix Rdiger,Head Content&Research,St.Gallen Symposium and Tomas Casas-Klett,University of St.Gallen,SwitzerlandVisual 1.3:NextGen Value Creation Barometer,5 categories and 20 component Indicators.Electronic copy available at:https:/ Inflation control needs responsible an

131、d inclusive elitesWhen governments force central banks to pursue overly expansionary monetary policies,inflation will take off.A notable example of this has happened in Turkey,where the president has fired three central bankers in the last two years because they saw the need to apply conventional ec

132、onomics;to increase interest rates to tame inflation and stop capital flight.As a result,the Turkish lira depreciated by more than 40%in just twelve months,while consumer and producer price inflation had reached 61%and 115%respectively by March 2022.The EQx Inflation Indicator(DOI,iv.11)identifies c

133、ountries suffering similar hyperinflationary fates.The EQx2022 shows a positive correlation between lower inflation and a lower Government debt to GDP ratio(DBT,iii.9).Low debt levels are the best deterrent to overly expansionary central bank policies:when debt is high,any increase in the interest r

134、ate translates into higher government costs.Hence,governments pressure their central banks for monetary expansion,which then leads to inflation.A prominent example of this is the US,which pursued a dangerous mix of ultra-expansionary fiscal and monetary policy in 2021.Moreover,due to excess demand f

135、ueled by a 2021 fiscal deficit of 12.4%of GDP,the US government has lit the fuse for an infla-tionary time bomb to explode in 2022.Fiscal discipline helps control inflation,as evidenced by the negative correlation between Inflation control(DOI,iv.11)and tax moderation(DTR,iii.8).This means that infl

136、ation is under better control in countries that finance their extra spending through taxation rather than through increasing their deficit.If a political elite wants to subsi-dize the poor and troubled small firms,they should tax the rich rather than future generations.For a successful example,see C

137、hina,whose small 3.1%fiscal deficit has set the basis for a much lower vulnera-bility to inflationary pressures.Moreover,despite terrible social and economic condi-tions,even some of the poorest countries,such as Af-ghanistan,have not yet fallen into the inflationary trap(DOI,iv.11,rank#1).We consid

138、er countries with infla-tion rates between 0.5%and 2.5%as being in the opti-mal inflation range and hence all of these countries(39 out of a total of 151)are assigned rank#1.In advanced countries,such as Switzerland(DOI,iv.11,also in the optimal range and thus rank#1),we find that several factors gu

139、arantee healthy monetary and fiscal policy,making the country less vulnerable to inflation.Our control of inflation score positively correlates with Regulatory quality(REQ,i.2),Digital institutional quality(EDB,i.2),Regulatory enforcement(REN,i.3),Health ef-ficiency(HEI,iv.10),and Property rights(PR

140、I,i.2)scores.In general,the control of inflation score also positively cor-relates with other relevant Indicators,most notably,the Global Food Security Index-availability,quality&safety(FSQ,iii.7)and the Global Food Security Index-afford-ability(FSA,iv.10).Therefore,countries with elites that are mo

141、re able to guarantee secure food sources to their popu-lations will prevent inflation from rising too quickly.Not surprisingly,trade barriers dramatically impact in-flation because they reduce foreign competition and input varieties.Consistently,Indicators such as Trade freedom(TRF,iv.10)and opennes

142、s in service and net-work sectors(BSN,ii.4)minimize inflation.In addition,having more women entrepreneurs(IWE,ii.6)implies more competition,and therefore lower inflation.Interestingly,more Collective bargaining coverage(CBC,ii.4)and a higher Unionization rate(UNI,ii.4)negatively correlated with infl

143、ation in 2021.This sug-gests that trade unions coordinated towards more disci-plined policies to help their countries out of the pandem-ic crisis.One must not forget that inflation is a transfer away from ordinary citizens and workers relying on nominal wages to wealthy asset-owning elites.What migh

144、t be even more surprising is that our analysis shows countries with concentrated business elites,as measured by Top 3/Top 30 firm revenues as%of GDP(FRR,ii.5 and FRB,ii.5),were better at resisting infla-tionary pressures.All of this suggests that powerful coa-litions of workers and firms used their

145、power to restrain the extractive value transfers associated with inflation-ary wage-price spirals.This result casts some optimism on how to escape the destructive effects of inflation.During the pandemic,and despite all the associated pressures,the political and business elites of certain countries

146、proved that it is possible to manage elite busi-ness models responsibly without resorting to narrow,non-inclusive policies that lead to inflation.Prof.Guido Cozzi,University of St.Gallen,SwitzerlandChapter 1:IntroductionElectronic copy available at:https:/ Quality Report,EQx20229Electronic copy avai

147、lable at:https:/ Why our research on elites is about sus-tainability:Elite leadership as Value Creation In the EQx2021 we contributed an article titled:What are Elites?Coordination Capacity and Business Model Leadership,that acts as an anchor for this contribution.We noted that the literature on eli

148、tes is traceable back to Aristotle(Politics,Book III),Polybius(Histories,Book VI),and 19th century Marxist thought:“the history of all hith-erto existing society is the history of class struggles”(Marx&Engels,1848).Historically,many theorists have shown little sympathy for elites,e.g,Mills The Power

149、 Elite(1956)or Domhoffs Who Rules America(1967)and The Higher Circles(1970).Classical elite theory(also known as the Italian school of elitists)developed by Pareto(1968),Mos-ca(1939),and Michels(1962),exhorted the analyst to deal with reality as is.In other words,all societies are ruled by an elite

150、that is,by definition,a minority.Olsons The Logic of Collective Action(1965)explains why this is by affirming that large groups have high costs when orga-nizing for collective action,and that therefore narrow dis-tributional elite coalitions will invariably emerge.We posit that elites essentially re

151、present coordination ca-pacity in a political economy:without them there are no COVID-19 vaccines,no metaverse and no green energy.Elite coordination capacity is the power behind elite busi-ness models.Elite agency is compatible with rational choice theory and the maximization of residual income.Eli

152、tes should maximize their utility and if they do so through value creation rather than through value extraction and rent seek-ing there will be economic and human development.Institutions are the mechanism that enables elite business models.Robinson(2010,p.3)points out that this is a two-way relatio

153、nship:“Economic institutions shape the in-centives of key economic actors in society”and,critically,“a crucial factor in explaining the persistence of institu-tions is how elites form around sets of institutions and how elites persist and reproduce over time”.The EQx assumes,emphasizes,and operation

154、alizes the position that elite business model preferences function as an independent variable,leading to institutional arrangements which in turn foster economic development.An elite business model is,because of its size,the resourc-es it coordinates,and its impact on society,a complex en-deavor.For

155、 a business model to be successful in a modern political economy it must align the interests of business elites(the market)political elites(the non-market)and knowledge elites(the narrative).The gravitational force that holds the business,political and knowledge elite coa-lition together are the res

156、idual income streams that accrue from the elite business model.Elite business models are distinct from others on account of their high capacity for value creation and appropriation and the huge amount of residual income that they produce.Without such elite busi-ness models,nations will not develop a

157、nd prosper.Economic development must also consider the micro-level concept of the business model and how it contributes to Sus-tainable Value Creation.The elite theory of economic devel-opment(ETED)research stream(Casas-Klett,2022,in press)is part of ongoing theoretical efforts to support the EQx pr

158、oject.Economic policy must focus on structural re-form and the fine-tuning of the incentive system complement-ed by transformational elite leadership to increase the value creation positions of elite business models(see Figure 1.4).It follows from the analysis up to this point that the under-standin

159、g and evaluation of firm-level micro business models is essential.Currently,the EQx does not address disaggre-gated micro-level Sustainable Value Creation but focuses on the aggregate.Our next major project is to address the mi-cro-level by establishing Sustainable Value Creation posi-tions and rati

160、ngs for firms,as we believe that sustainability can be re-defined and newly understood from a business model perspective.Sustainable Value Creation measure-ments are essentially ESG measurements,and their purpose will be to inform adjustment of equity valuations and debt ratings of firms.The calcula

161、tion of specific Sustainable Val-ue Creation measurements might thus one day become the applied work of accountants,equity valuation experts,credit rating professionals,and sustainability appraisers.Chapter 1:IntroductionElectronic copy available at:https:/ Quality Report,EQx202211The ETED links eli

162、tes with value creation,both at the nation-al aggregate level and the disaggregated organizational level.Since elites can generate residual incomes through both value creation and extraction business models,the moot point is which of these models they pursue.For both countries and firms,the notion o

163、f Elite Quality aligns with the concept of sustainability.While the EQx measures the Elite Quality of nations it provides the conceptual basis for targeted policy measures.A parallel management and fi-nance research stream that aims to recognize elite busi-ness models based on a sustainability frame

164、work rooted in their potential for value creation will provide the basis for transformational elite leadership.Visual 1.4:The Elite Theory of Economic Development(ETED)in the economic policy mix.Source:Figure 7.1 in Casas-Klett(2022,In press)The vision for the overall research project is therefore a

165、m-bitious,as it addresses both the macro-and the micro-lev-els.It is also applied,providing on the one hand a toolset for policymakers and central bankers concerned with eco-nomic development,and on the other it will offer bench-marks for CEOs and boards focused on the Sustainable Value Creation of

166、their business models.Electronic copy available at:https:/ Score 52.6Global Rank 44The highest ranking African country for the second consecutive year and now also the best low-income country;showing great promise as a political economy benchmark for emerging nationsUNITED KINGDOMCountry Score 63.4G

167、lobal Rank 8Falling five places from its Top 3 position in 2021;a sign of a worrying trend or is 2022 an outlier?GERMANYCountry Score 62.7Global Rank 11Solid performance,but elite transformational leadership is urgently neededEQx CountryScores6560505545UNITED STATESCountry Score 61.8Global Rank 15Fa

168、lling from 5th to 15th position overall;a shocking decline with extractive business models on the rise despite phenomenal checks and balances on elite powerMEXICOCountry Score 48.8Global Rank 65A world economic power where elite quality should not be going backwardsCHILECountry Score 54.2Global Rank

169、 41From the highest quality elites in the region to just anotherLatin America economy?1.5 EQx2022 results at a glanceChapter 1:IntroductionVisual 1.5:EQx2022 Elite Quality Global Map,color-adjusted Country ScoresElectronic copy available at:https:/ Quality Report,EQx202213RWANDACountry Score 52.6Glo

170、bal Rank 44The highest ranking African country for the second consecutive year and now also the best low-income country;showing great promise as a political economy benchmark for emerging nationsSWEDENCountry Score 64Global Rank 6Leading the NextGen EQx-Barometer;blessed is the Swedish youthCHINACou

171、ntry Score 57.9Global Rank 27A powerful elite system keeps on delivering value,with state capacity deeply rooted in history and cultureJAPANCountry Score 61.2Global Rank 18A highly civilized society with ineffective leadershipINDIACountry Score 45.4Global Rank 97A remarkable ranking improvement;can

172、elite quality momentum be maintained?AUSTRALIACountry Score 65.2Global Rank 3Moving up from 9th to 3rd place overall;exhibiting stellar performance and down under resilience during the pandemicUNITED KINGDOMCountry Score 63.4Global Rank 8Falling five places from its Top 3 position in 2021;a sign of

173、a worrying trend or is 2022 an outlier?GERMANYCountry Score 62.7Global Rank 11Solid performance,but elite transformational leadership is urgently neededEQx CountryScores6560505545UNITED STATESCountry Score 61.8Global Rank 15Falling from 5th to 15th position overall;a shocking decline with extractive

174、 business models on the rise despite phenomenal checks and balances on elite powerMEXICOCountry Score 48.8Global Rank 65A world economic power where elite quality should not be going backwardsCHILECountry Score 54.2Global Rank 41From the highest quality elites in the region to just anotherLatin Amer

175、ica economy?ISRAELCountry Score 65Global Rank 4Balancing the present and the future,elites are creating a massive amount of value for this generation and the nextSINGAPORECountry Score 68.7Global Rank 1Country rankings change,yet for three years running there has been only one elite quality global l

176、eaderElectronic copy available at:https:/ Building and shaping the EQx community The EQx research project was born with a spirit of open-ness,inclusiveness,and broad international participation.The conceptual framework and accompanying infrastruc-ture are designed to foster the growth of a vibrant c

177、ommu-nity motivated by transforming elites and Sustainable Val-ue Creation.We engage with both institutions and individuals,from users who are stimulated by the EQx rankings to those who wish to become stakeholders in the project and contribute as partners,researchers or patrons.Call to researchersT

178、he EQx2022 Report is a call to all researchers interested in joining the EQx academic community.We will be undertaking projects of both a theoretical and empirical nature,some targeted at publication in leading peer-re-viewed journals,while others will focus on the task of providing practical insigh

179、ts for policymakers and firms,es-sential to create a real impact on business model transformation.Some research partners may wish to take respon-sibility for work in a particular country.We also encourage the submission of original ideas for new Indicators that describe Value Creation and Value Extr

180、action phenomena in the economy.If you are interested in joining this unique research opportunity,or just learning more about our plans,get in touch with us at:researchelitequality.orgDo you wish to partner with the Foundation for Value Creation(FVC)?The non-profit Foundation for Value Creation lead

181、s the EQx outreach efforts,supports our research and pub-lications program and develops other formats to advance Sustainable Value Creation narratives.We would be delighted to hear from potential benefactors.You may wish to associate your institution with the FVCor become involved personallyfor a va

182、riety of reasons.You could be a concerned citizen or running an elite business model;in either case there are many ways to support ideas that grow the pie in the political econ-omy.Together we can help steer our countries institutions and elite business models towards Sustainable Value Creation.Star

183、t a conversation with us now at:partnervaluecreation.orgThe EQx for readers and followers The project aims to be meaningful to those who care about taking the long view,building a sustainable society,transforming the political economy,generating ideas for new business models,using power for the grea

184、ter good,creating value,investing in the future,or for others who are just interested in global rankings and cur-rent affairs.The EQx can be followed on key social media platforms at LinkedIn,Facebook,Twitter,Instagram and via our website:www.elitequality.orgChapter 1:IntroductionElectronic copy ava

185、ilable at:https:/ Quality Report,EQx202215“Whether one likes it or not,elites play a big role in a nations success or failure.They can promote all-round well-being;but they can also be exploitative,stalling the nations overall progress.The newly created Elite Quality Index(EQx),under the academic le

186、adership of the University of St.Gallen,is an exciting experiment in scoring and ranking the quality of elites in different nations.This work can potentially play a role in helping nations reform their leadership,thereby contributing to overall social welfare.”Kaushik Basu,Professor of Economics and

187、 Carl Marks Professor of International Studies,Cornell University;Former Chief Economist of the World BankElectronic copy available at:https:/ 2 presents the conceptual political economy frame-work of the EQx anchored by the dual notions of Power and Value and discusses how these are operationalized

188、 within the EQx architecture.The discussion proceeds to review the index construction methodology that has been applied to the EQx.The Chapter closes with a statistical assessment,testing and validation of the data used for the EQx2022s 120 Indicators.2.1 Conceptual framework and definitionsThe EQx

189、proposes an analytical framework to interpretand possibly transformthe state of the worlds political econo-mies.It is based on a simple idea.The EQx posits that the busi-ness models chosen and run by elites determine economic and human development.That is,elites(the who)affect human and economic dev

190、elopment outcomes(the what),sometimes directly and mostly indirectly via their sway on institutions(the how)that set the rules of the game.These rules bestow on elites a license to operate.Both the how and the what have been theoretically discussed at great length and are amply measured.Measuring th

191、e who element in the political econo-my is the research gap that we seek to pursue.We do so at the national level,i.e.by considering the aggregate national elite systems in terms of the Value Creation and Value Extraction im-pacts of their primary business models.Elites are a mathematical certainty

192、and exist in every society on earth.Their business models generate the most income and are run by leaders possessing the strongest coordination capacity over societys key resources,such as human,financial,and other capital.Moreover,the business models of elites successfully ac-cumulate wealth.Crucia

193、lly,these business models can be locat-ed on a continuum,which ranges from Value Creation to Value Extraction.The latter represent rent seeking,where“a rent is an unearned reward sought through a quest for privilege”(Hillman&Ursprung,2015,p.3).While rent seeking models are bene-ficial for the operat

194、ors,they result in social loss.The EQx terms elites that run business models creating more value than they extract,high quality.They grow the whole(economic)pie to increase their own wealth and,in doing so,enrich society as a whole.Visual 2.1 describes this metaphor visually.Low quality elites,on th

195、e other hand,do the opposite and increase their own slice of the pie at the expense of non-elites.In short,elites can be high-quality value creators,or low-quality value extractors.Obviously,a value creating busi-ness model can be transformed into a rent seeking one,or vice versa.This fluidity motiv

196、ates the annual release of the EQx with the aim of highlighting constructive changes towards transfor-mational leadership made by elites and policymakers.The EQx proposes that from a sustainability perspective the oper-ation of Value Creation business models is in the long-term best interests of the

197、 elites,their families,and associates.By doing this,not only do elites grow their own wealth,but do so by growing non-elite wealth too,without prejudicing the opportunities of non-elites,thereby accruing social legitimacy.Social and political sta-bility are essential for prosperity.Furthermore,we ar

198、gue that the prosperity of a nation as a whole depends primarily on the nature of the business models chosen by elites;more specifically,whether elites allocate societys key resources such as savings,talent,or land to value-boosting projects or to projects based on value trans-fers away from produce

199、rs.At one extreme,rentier capitalism is when“economic and political power allows privileged individu-als and businesses to extract a great deal of such rent from every-body else”(Wolf,2019).In contrast,high-quality elites have a transformative role in the political economyand on society in generalas

200、 by definition,they give more than they take.2.Inside the Global Elite Quality IndexChapter 2:Inside the Global Elite Quality IndexVisual 2.1:Macro perspective of Elite Quality:The economic impact of elite business model choicesGrow the slice The economyElite Quality:LowElite Quality:HighGrow the pi

201、e Electronic copy available at:https:/ Quality Report,EQx2022172.2 EQx architecture The EQx is a political economy index that measures the overall Elite Quality of nations in terms of the ability of elite business models to create value,rather than rent seek,as evidenced by aggregated datasets.At th

202、e top of the EQx architecture(see Visual 2.2),all of the components of the Index come together to produce the EQx,with its Country Scores and Global Rankings.We de-construct and operationalize Elite Quality through Sub-Indices I and II:Power and Value.The Value Sub-Index I provides direct evi-dence

203、of Value Creation and Extraction through elite business models,even though the latter might be easier to measure,since the results of rent seeking are more visible.The Power Sub-Index II conceptualizes the potential for Value Extraction,since there can be no value extraction without power.Hence,powe

204、r is not value extraction per se,but rather a necessary,albeit insufficient condition for it to take place.In many coun-tries,elites enjoying high degrees of power invest in and oper-ate inclusive Value Creation business models.Visual 2.2:EQx Architecture Source:derived from Figure 6.3 in Casas-Klet

205、t(2022,In press)(x1)Index Level 1(x2)Sub-Indices Level 2(x12)Pillars Level 3(x120)Indicators Level 4Electronic copy available at:https:/ of EQxs two Sub-Indices contain a political and an eco-nomic dimension.The former indicates where the rules of business are determined and Value Creation/Extractio

206、n is en-abled,and the latter denotes where Value Creation/Ex-traction is actually implemented via suitable business models.This conceptual 2x2 brings to life the EQxs matrix-like 4 In-dex Areas.Firstly,Political Power measures the capture of three kinds of rules:rules of the state,business regulatio

207、n,and the rules of human labor.Secondly,Economic Power mea-sures elite dominance in the economy,at both firm and in-dustry level,as well as in terms of creative destruction.Third-ly,Political Value measures Value Extraction in the political dimension;the states unearned income,its taking of in-come,

208、and its giving of income.Fourthly,Economic Value measures Value Extraction from the economys three mar-kets:products and services,the capital markets,and the la-bor markets.The 4 Index Areas act as a matrix,the 4 quad-rants of which are represented in Visual 2.3.Visual 2.3:Index Areas matrix,where P

209、ower and Value Sub-Indices meet Political and Economic Dimensionsman Capture(i.3).State Capture addresses how distributional coalitions capture the state and its government branches,for ex-ample,through Political corruption(COR,i.1).Regulatory Cap-ture suggests the extent to which rules and regulati

210、ons,both in terms of process and output,have been captured by interest groups.Human Capture accounts for the power of labor and civ-il service coalitions,the power of those who can implement dis-criminatory practices,and the power of elite business models to influence wages and working conditions.2.

211、3 EQx PillarsEach EQx Index Area is then complemented by 3 conceptually related Pillars;yielding a total of 12 Pillars in all(see Visual 2.4).The purpose of the Pillars is to define and create conceptual lenses through which we can approach,understand and measure spe-cific phenomena.The Political Po

212、wer Pillars(i)were selected to address the capture of 3 kinds of rules:the rules of the state via State Capture(i.1),the rules of business regulation via Regulatory Capture(i.2),and the rules for labor markets and civil service jobs via Hu-Chapter 2:Inside the Global Elite Quality IndexElectronic co

213、py available at:https:/ Quality Report,EQx202219Coalition Dominance(ii.4)FirmDominance(ii.5)CreativeDestruction(ii.6)StateCapture(i.1)RegulatoryCapture(i.2)HumanCapture(i.3)CapitalValue(iv.1 1)LaborValue(iv.12)ProducerValue(iv.10)GivingIncome(iii.7)UnearnedIncome(iii.9)P Po ow we er rSub-Index IV Va

214、 al lu ue eSub-Index IIEconomic Power(ii)Index AreaPolitical Power(i)Index AreaEconomic Value(iv)Index AreaPolitical Value(iii)Index AreaTakingIncome(iii.8)Index PillarsLevel 1Level 2Level 3Visual 2.4:EQx Architecture,specifying Level 2 and 3 constituentsThe Economic Power Pillars(ii)measure elite C

215、oalition Dominance(ii.4)and Firm Dominance(ii.5)within the econ-omy,as well as their opposite:the extent of Creative Destruc-tion(ii.6).Coalition Dominance examines the economic power of leading industries by measuring the degree of busi-ness diversity and the distribution of power in an economy thr

216、ough Indicators such as the Economic Complexity Index(ECI,ii.4).Firm Dominance measures the power of single businesses within the economy,using Indicators such as Top 3 firms revenues as%of GDP(FRG,ii.5).We borrow Schumpet-ers(1942)concept of Creative Destructionthe replacement of outdated business

217、practices with innovative new structuresfor the third Economic Power Pillar,which includes measures for Entrepreneurship(ENT,ii.6)and VC finance(VCK,ii.6).The aim is to measure the pressure for renewal and disruption that exist within an economy and fuel Value Creation.The Political Value Pillars(ii

218、i):Giving Income(iii.7),Tak-ing Income(iii.8)and Unearned Income(iii.9),reflect policy de-cisions in the political sphere that relate to redistribution in its broadest sense:“from one subset of society to benefit a different subset”(Acemoglu&Robinson,2012,p.76).An important point here is that we onl

219、y consider the merits of such redistribution in terms of Value and try to assess whether it has been extracted or created for each surveyed Indicator.Giving Income measures how the government manages and uses public finances,in terms of the provision of public goods such as education or the amount o

220、f subsidies distributed in an economy.Taking Income addresses how the state collects such income,as in Tax revenue as%of GDP(dev.fm optimum)(DTR,iii.8),or whether it allows the exis-tence of business models that take the ultimate valuelifeas in Death rates from substance use disorders per 100,000 pe

221、ople(SUB,iii.8).The Unearned Income Pillar focuses on the ex-ploitation of natural resources,such as Natural resources rents as%of GDP(NRR,iii.9),or of the future at the expense of the present,like Government debt as%of GDP(DBT,iii.8).Thus,the Political Value Pillars offer a picture of the degree to

222、 which pro-duction has been channeled into or shifted away from innova-tive and wealth-creating sectors of the economy(Porter,1990).The Economic Value Pillars(iv)directly measure the extent of Value Creation and Value Extraction from the economys three markets:the products and services mar-kets,the

223、capital markets and the labor markets.Producer Value(iv.10)estimates the value created or the rents ex-tracted by producers and suppliers in the market for goods and services.Capital Value(iv.11)measures the value created or the rents extracted both directly and indirectly through participation in t

224、he financial market.Labor Value(iv.12),which includes Indicators such as Unemployment rate(UEM,iv.12)and the Human flight and brain drain(BRN,iv.12),allows us to assess the value created or the rents extracted in the labor markets,for example,from in-terventions in both supply and demand.Electronic

225、copy available at:https:/ What is Power?The capacity to enforce ones preferences;Power also has the potential for Value Extraction What is Value?The outcome of productive activities;its creation increases the overall economic pie What is Political?The dimension where business model rules are determi

226、ned,and Value Creation/Extraction is enabled What is Economic?The dimension where Value Creation/Extraction is implemented via suitable business models Chapter 2:Inside the Global Elite Quality IndexElectronic copy available at:https:/ Quality Report,EQx202221Electronic copy available at:https:/ of

227、Indicators and dataset collection(Step 3)All 120 EQx Indicators provide evidence of Value Creation or Value Extraction in the political economy,either at present,or potentially in the future.As a whole,their aim is to capture and measure all relevant aspects of Elite Quality,according to the Elite Q

228、uality theoretical framework,summarized in the In-troduction to this Report.For the full list of EQx Indicators,see Section 5.2.The underlying datasets are collected from a variety of re-nowned international organizations(Section 7.2 provides a comprehensive list of the data sources for each individ

229、ual Indi-cator).Datasets are then categorized according to whether and how they should be transformed before being utilized to create the EQx Indicators.Some Indicators are obtained di-rectly from the original data;for example,Control of corrup-tion(COC,i.1)uses one of the Worldwide Governance Indi-

230、cators provided by the World Bank.Other Indicators are obtained after some basic transformation of the source data-set,e.g.,by setting absolute numbers in relation to a countrys total population or GDP.Another set of Indicators require more complex transformation,implying data cleaning and more exte

231、nsive data repurposing,as is the case for Top 3 In-dustries as%of VA(IVA,ii.4).Generally,the most recently available data is used to compute EQx Indicators.That is,wherever possible,the EQx2022 uses data from 2021,and in some cases even from 2022.2.4 EQx methodology The EQx aims at being an academic

232、ally grounded and statis-tically valid measure of national Elite Quality.The multi-dimen-sionality of the underlying concept is mirrored by the four-level architecture of the index,which allows for an easy interpreta-tion of the state of Elite Quality in a particular country.Visual 2.5 below illustr

233、ates the 9 separate steps in the process for constructing the index.Steps 1 and 2 are detailed in Ca-sas-Klett(2022)and discussed in Sections 1.1 and 1.2 of this Report.Steps 3 to 6 are summarized below.Step 8,the statis-tical assessment,is described in Section 2.5 of this Report.Throughout the inde

234、x construction process,judgement calls are inevitable.Hence,our goal is to follow the OECDs Hand-book on Constructing Composite Indicators(2008),in that“transparency must be the guiding principle of the entire ex-ercise”(p.17).As a result,the following Section describes exactly how the EQx is calcul

235、ated,as well as the underlying assumptions.EQx Concept Step 1Discussion of the theoretical frameworkStep 2Theoretical consistent selecti-on of IndicatorsEQx Input Step 3Datacollection and preparationStep 4Handling of missing dataStep 5Normalization Step 6Weighting and aggregationEQx OutputStep 7Dete

236、rmination of Country Scores&Global RankingsStep 8Robustness andsensitivityStep 9Visualization of results and publicationVisual 2.5:EQxs 9 step construction process Chapter 2:Inside the Global Elite Quality IndexElectronic copy available at:https:/ Quality Report,EQx202223Handling of missing data(Ste

237、p 4)Fortunately,the datasets considered for the EQx are,for the most part,characterized by being relatively complete.General-ly,the EQx approach to missing values aims to avoid any sys-tematic bias in the index scores as a result of missing data-points.That is,a lack of data should not penalize or f

238、avor any country but should solely influence the accuracy of its score.High data quality is achieved in three main ways.Firstly,the EQx solely considers Indicators(as well as countries)that meet several minimum data requirements.Datasets are only included in the EQx analysis if they cover a minimum

239、of 15%of the coun-tries under consideration.Additionally,they must provide recent information on a countries Elite Quality,i.e.,no later than 2018(although there are,on occasion,some exceptions to this rule).The selection of countries for the EQx2021 was based on the following criteria:countries wer

240、e included if their index score was based on at least 40 datapoints,and more specifically,on at least 3 datapoints per Index Area and 1 datapoint per Pillar in at least 11 Pillars.The EQx2022 includes the same countries as the EQx2021.Secondly,if recent data is not available for only a small number

241、of countries,the missing datapoints are imputed with the latest available data.Thirdly,the EQx implements an“available-case analysis”(Little&Rubin,2002,p.54),where Indicators are not omitted if they have missing values but included if they fulfill the above mini-mum requirements.As a consequence,if

242、the value for an Indi-cator is missing for a particular country,the weight of the miss-ing Indicator is distributed among the remaining Indicators of the same Pillar,in proportion to their respective weights.The EQx methodology thus builds on the premise that Indicators within the same Pillar measur

243、e similar aspects of Elite Quality.For the EQx2022,a countrys Index Score is derived from a minimum of 54 datapoints(the case of Turkmenistan).Of the 120 EQx2022 Indicators,almost 80%cover at least half of all 151 countries included in the index,50%cover at least 85%of countries,and roughly 20%cover

244、 all 151 countries.On av-erage,a countrys index score is computed using 93.2 data-points.An obvious concern is that missing values are not completely random but based on a systematic pattern(OECD,2008,p.24),as data availability might be related to a countrys Elite Quality.This could represent an imp

245、ortant endogeneity bias for the EQx.However,a positive relationship between Country Scores and data availability would not necessarily indicate bias.Provided that the existing Indicators are unbiased,the EQx scores would not be biased,just less precise.By using less,but correct information,the state

246、 of Elite Quality would still be depicted.We are confident that this argument applies to the EQx,since it uses data from renowned and trustworthy interna-tional organizations.Still,data constraints might hamper the cross-country compara-bility of EQx Country Scores.Some Indicators stem from differ-e

247、nt years,while others cover a heterogenous set of countries.The latter implies that each Country Score relies on a different set of Indicators(Little&Rubin,2002,p.54),which might lim-it the meaningfulness of the international ranking.However,while these important limitations should be kept in mind,w

248、e are confident that the EQx offers valuable insights on aggre-gate Elite Quality in the considered countries.Reassuringly,a number of robustness tests suggest that the EQx rankings are largely robust to modifications in key modeling assumptions(see Section 2.5).Electronic copy available at:https:/

249、of Indicator values(Step 5)Because Indicators initially have different scales and measure-ment units,normalization is necessary prior to aggregating the data to“avoid adding up apples and oranges”(OECD,2008,p.27).Initially,a logarithmic transformation is applied to Indicator datasets:firstly,if Pear

250、sons second coefficient of skewedness exceeds unity,indicating strong skewedness(Bel-fiore&Favero,2019,p.63);and secondly,if the Indicator is not already based on an existing index.This is to improve the distribution of the data and thus yield more meaningful Indica-tor scores.In total,15 of the 120

251、 EQx Indicators are based on a log transformation.Subsequently,data is standardized,i.e.,converted to a com-mon scale(with mean zero and standard deviation one)by calculating z-scores:where xq,c indicates the value of Indicator q of country c,and Iq,c denotes the standardized value.This improves the

252、 compa-rability of datasets with large differences in scales and units,as is the case with the EQx Indicators.Next,and only if nec-essary,outliers are winsorized to fall within a-2,+2 interval.The resulting values are then rescaled so that the Indicator scores all range between 0 and 100,using:Lastl

253、y,and again,if necessary,Indicators are adjusted for polarity.That is,they are transformed so thatconsistently across all datasetsa value close to 100 indicates a high level of Elite Quality,and a value close to 0 represents a low level of Elite Quality.Weighting scheme(Step 6a)The weighting scheme

254、of any index is decisive since it rep-resents an important determinant of the resulting scores and rankings.By weighting index elements,different levels of rele-vance can be attributed to them.Best practice in index con-struction suggests that weights must be explicitly consistent with the concept o

255、f the index and fully transparent.In other words,first,a weighting scheme must reflect what the index aims to measure and second,each of the datasets that constitute the index must have their weight assigned in a documented and traceable manner.The weight of each Indicator in the EQx depends on its

256、weight within its Pillar,the weight of that Pillar within its Index Area,the weight of that Index Area within its Sub-Index,and the weight of that Sub-Index within the overall EQx.What does the EQx aim to measure?Again,the aim is to por-tray the overall Elite Quality of nations in terms of the aggre

257、-gate Value Creation of a countrys elite business models as ev-idenced by aggregated datasets.Sub-Index weightsThe EQx sees Power as a necessary condition for Value Ex-traction and rent seeking.The Power Sub-Index I is thus a pre-dictor of potential future Value Extraction.Therefore,the rela-tive we

258、ighting for the two Sub-Indices,Power and Value,is conceptual and has been determined by the authors after thor-ough deliberation:the Power Sub-Index I has a weight of 1/3 whereas the Value Sub-Index II is weighted at 2/3.Index Area weightsThe EQx could also have been called the political economy in

259、dex because it measures Power and Value in the political economy.Accordingly,each of the EQxs two Sub-Indices con-tain a political and economic dimension.The weights of the resulting two Index Areas within Power Sub-Index I and Value Sub-Index II are also the result of the conceptual design of the E

260、Qx and the authors judgments:the weights for both are es-tablished at roughly 1/3:2/3(conceptual deliberations 2 and 3).This determines the weights of all four Index Areas:Political Power(PP),Economic Power(EP),Political Value(PV)and Economic Value(EV).For Power Sub-Index I,the rationale is that Eco

261、nomic Power is supreme,while Political Power re-flects potentially extractive processes if these successfully tran-sition into the economic arena.For Value Sub-Index II,the ra-tionale is the higher significancein terms of direct impact on Chapter 2:Inside the Global Elite Quality IndexzElectronic co

262、py available at:https:/ Quality Report,EQx202225citizens and economic agentsof the economic over the po-litical in the overall Value Creation processes of the political economy.Anticipating the linear aggregation scheme dis-cussed below,the three conceptual deliberations in weighting imply the follo

263、wing index area weights within the overall EQx:11.1%(PP),22.2%(EP),22.2%(PV),and 44.4%(EV).Pillar and Indicator weightsWhile the weights of the Sub-Indices and Index Areas are de-termined by conceptual deliberations,a panel of experts is used to determine the weights of the Pillars and Indicators.A

264、Budget Allocation Process(BAP)is employed to establish the weighting of the Pillars within each of the 4 Index Areas,as well as weighting the Indicators within each of the 12 Pillars.Visual 2.6 summarizes the structure and weighting scheme used in the EQx.Section 5.1 lists all Indicators with their

265、re-spective weights,both within their Pillar,as well as within the overall EQx.Visual 2.6:EQx weighting overviewLevel 1Level 2Level 3Level 4Conceptual Deliberation 1Conceptual Deliberation 2,3Budget Allocation ProcessBudget Allocation ProcessEQxPowerValuePolitical PowerEconomic PowerPolitical ValueE

266、conomic Value12 Pillars120 IndicatorsIndividual Indicators within Pillar weightsIndividual Pillar within Index Area weights34%66%IndexSub-Index ISub-Index IIIndex Area(i)Index Area(ii)Index Area(iii)Index Area(iv)34%34%66%66%Aggregation scheme(Step 6b)Finally,the EQx applies a linear aggregation sch

267、eme.This im-plies constant and full compensability between each aggre-gated element at the respective aggregation level(OECD,2008,p.33).Within Pillars,Indicators are assumed to mea-sure similar aspects of Elite Quality,and as a consequence,full compensability is intended.A similar reasoning applies

268、to the aggregation of Pillars within Index Areas.Moreover,a lin-ear aggregation scheme transmits the relative importanceas determined by the underlying weighting schemeof the ele-ments that are aggregated at the respective level to the index(Santeramo,2017,p.131).Therefore,Index Areas and Sub-Indice

269、s are also linearly aggregated,to ensure a full trans-mission of the relative weights as implied by the theoretical framework.Electronic copy available at:https:/ Statistical evaluation of the Elite Quality Index“global uncertainty and sensitivity analyses are often not done.Anyone turning to a mode

270、l for insight should demand that such analyses be conducted,and their results be described adequately and made accessible”(Saltelli et al.,in a comment published in Nature,2020,p.483)IntroductionWhen the EQx was first introduced in 2020,the index pro-vided,for the very first time,a framework to comp

271、aratively measure whether a countrys elites run business models that primarily focus on value creation or value extraction.Al-though the first iteration of the EQx covered only 32 coun-tries,geographical coverage surged to a remarkable 151 countries in the EQx2021,a number that has been main-tained

272、for the EQx2022.The increase in country coverage in 2021 was accompanied by an even larger increase in global media and press attention for the index.Newspaper articles appeared worldwide:in Angola,W Argentina,Bra-zil,China,Finland,Germany,India,Russia,Singapore,Switzerland,Turkey,Ukraine,the United

273、 States,and Ka-zakhstan,to name only a few.In their coverage of the EQx,journalists have generally focused their analyses on their countries own position in the global EQx ranking.This ranking emerges as an output of the underlying model,which constructs the index.However,when modelling any such ind

274、ex,uncertainties arise at each step of the construction process.For instance,how are the Indicators selected and used;how are the normalisa-tion,weighting,and aggregation schemes chosen?This rais-es two key questions:how reliable and meaningful are the EQx rankings?And how do the uncertainties that

275、underlie the index assumptions propagate to the country rankings?These questions have been addressed in a peer-reviewed paper re-cently published in Social Indicator Research that critically re-flects on the EQx2021 rankings(Diebold,2022).This article provides a summary of the main insights from tha

276、t paper.Chapter 2:Inside the Global Elite Quality IndexLiterature and MethodologyThe paper conducts a global Uncertainty and Sensitivity Analysis(UA and SA).The UA aims to quantify the overall uncertainty i.e.,variation in the model output as a result of the uncertainties in the inputs,while the SA“

277、is the study of how the uncertainty in the output of a model()can be ap-portioned to different sources of uncertainty in the model in-put”(Saltelli,2002,p.579).Global UA and SA take ac-count of the entire variation in the range of inputs and explore all sources of uncertainty simultaneously in order

278、 to capture possible synergy effects among uncertain input fac-tors(Iooss&Saltelli,2015,p.2;OECD,2008,p.118).In particular,the OECD(2008,p.117)suggests following the approach presented by Saisana et al.(2005)to conduct a global UA and SA based on a single Monte Carlo experi-ment,where the index is c

279、alculated numerous times based on randomly selected input factors.The input factors trigger which methodological choices are adopted.Table 1 lists the input factors,along with their associated distribution and ex-planation.Input factors are sampled randomly and inde-pendently,using Sobols quasi-rand

280、om sequence,following the process developed by Sobol and Kucherenko(2005).For each set of input factors,the model is evaluated,yield-ing a probability distribution function(pdf)of the model out-put.The descriptive analysis of this pdf constitutes the UA,while the SA apportions the uncertainty in the

281、 model output to individual or the interaction of methodological choices in the index set-up.Electronic copy available at:https:/ Quality Report,EQx202227Table 1:Summary of the uncertain input factors and their distribution Input factor Definition Distribution 1 Imputation of missing values 1,2 wher

282、e 1 handling of missing values according to EQx2021 methodology,2 missing values fully imputed using predictive mean matching.2 Measurement error 1,2 where 1 original raw data is used,2 normally distributed random error with mean 0 and standard deviation(std.dev.)equal to 1/5th of an indicators obse

283、rved std.dev.is added to raw data.3 Omission of individual indicators 0,1 where 0,1(+1)no indicator excluded,1(+1),2(+1)exclude indicator 1,(.)(+1),1 exclude indicator.4 Choice of conceptual optima 1,2,3 where 1 EQx conceptual optima where applicable,2 EQx optima plus one std.dev.of the indicators r

284、aw data,3 EQx optima minus one std.dev.of the indicators raw data.5 Normalisation scheme 1,2 where(prior to rescaling,values to range from 0 to 100)1 EQx normalisation,2 MinMax.6 Weighting scheme 1,2,.9 where 1 EQx weighting,2 equal indicator weights(Altern.1),3 equal pillar weights(Altern.2),4 equa

285、l indicator and pillar weights(Altern.3),5 equal indicator,pillar and index area weights(Altern.4),6 equal indicator,pillar,index area and sub-index weights(Altern.5),7 equal final indicator weights(Altern.6),8 Sub-index Power&Value at 0.25&0.75(Altern.7),9 Sub-index Power&Value at 0.5&0.5(Altern.8)

286、,10 equal index area and sub-index weights(Altern.9).7 Aggregation scheme 1,2 where 1 EQx aggregation(linear),2 geometric aggregation at sub-index level.Note:stands for uniform,and indicates a discrete uniform distribution.Electronic copy available at:https:/ total of 80,000 model runs were performe

287、d in the course of the Monte Carlo experiment.This implies that index scores and ranks are computed for all 151 countries consid-ered by the EQx2021,for each of the 80,000 random combinations of methodological choices.Hereinafter,the index as computed using any realisation of uncertain input factors

288、 is denoted as Monte Carlo EQx(MCEQx).Uncertainty AnalysisThe pdf of the MCEQx provides the basis for the UA,where the output distribution is presented and characterised(Sais-ana et al.,2005,p.310;Saltelli et al.,2019,p.30),quan-tifying the uncertainty in the model output.Figure 1 compares the EQx20

289、21 ranking with the distribution of ranks implied by the MCEQx.The figure shows that coun-tries ranking in the top 50 of the EQx2021 have a compara-tively low variation in comparison to the MCEQx ranks;their rank seems largely robust to alternative methodological choic-es.However,starting with Cuba

290、at rank#53,the overall sta-bility in the rankings is dramatically reduced.Countries,espe-cially those in the middle and lower performing sections of the EQx2021 rankings exhibit a large range of possible ranks de-pending on the methodological set-up,implying that any inter-pretation or conclusion on

291、 the Elite Quality of these countries should be treated with caution.Interestingly,countries in the bottom 10 of the EQx2021 ranking again fluctuate much less when ranked using alternative methodological choices.Sensitivity AnalysisIn the next step,a variance-based SA was conducted to identify the i

292、nput factors that contribute most to the variation of the model output.The paper computes Sobol indices(Sobol,1990),applying an estimator recently presented by Azzini et al.(2020).Figure 2 plots,for each input factor,the Sobol sensitivity indices of first-order effect(Si,red)and total effect(SiT,blu

293、e)for the average shift in country rank-ings(R).R is calculated as the average of the absolute dif-ference in countries rankings in comparison to the baseline EQx2021 ranking,for all countries.Note that to distinguish relevant input factors from less important ones,Sobol sensi-tivity indices do not

294、rely on an absolute threshold,but rather indicate the relative importance of input factors.The first-order effect indicates the share by which output variance could be reduced if the considered input factor could be fixed individually.None of the first-order sensitivity indices is equal to 1,which i

295、mplies that no input factor uniquely determines the index ranking.Taken individually,the input factors determining the normalisation and the weighting scheme are by far the most important,explaining roughly 20%and 40%of output variance respectively.Next,total order effect was inspected,which adds to

296、 an in-put factors Si all interaction effects that involve said input factor.The SiT reveals that the influence of the methodologi-cal choices surrounding the measurement error,the omis-sion of indicators,the choice of conceptual optima and the aggregation scheme are relatively negligible.Accounting

297、 for interaction effects,the most influential input factors are those that trigger the imputation of missing values,the nor-malisation and the weighting scheme.A notable difference between Si and SiT indicates interaction effects with one or several other inputs.Interestingly,the weight-ing scheme c

298、ontributes to the output variance mainly individu-ally,not via interaction effects,while conversely the importance of the normalisation scheme is largely due to interaction effects caused by whether missing values are imputed.Chapter 2:Inside the Global Elite Quality IndexElectronic copy available a

299、t:https:/ Quality Report,EQx202229Visual 2.7:Boxplot of MCEQx ranks per countryNote:Countries are ordered by their EQx2021 rank,indicated by the blue dot.Grey boxplots illustrate the distribution of the MCEQx:boxes include 50%of a countrys MCEQx ranks,and the horizontal line within a box indicates a

300、 countrys median MCEQx ranking.Whiskers span up to+/-1.5 times the interquartile range (IQR:Q3 Q1),up to the lower observed point from the MCEQx ranks that falls within this distance.All other observed ranks are plotted as outliers(grey dots).RankCountryElectronic copy available at:https:/ 2.8:Sobol

301、 sensitivity indicesNote:Whiskers denote confidence intervals obtained from the bootstrap technique.In order to estimate the numerical approximation error,Sobol sensitivity indices for a dummy input factor that has no influence on the index ranking are also computed.The estimate of the dummy input f

302、actor is visualised through the use of a dashed line.This allows for the identification and visualization of those input factors whose contribution to the output variance is less than the approximation error.Discussion of the Results in the Context of the EQx2022What do the papers results imply for

303、the EQx methodology?Generally,it must be noted that judgement calls are inevita-ble throughout any index construction process.Thus,it is of-ten difficult to argue why one scheme or methodological ap-proach is chosen over another.Among the three most important input factors,the weighting scheme can a

304、rguably be most convincingly rooted in the the-oretical framework.Indeed,in the case of the EQx,the weightings,particularly at the index area and sub-index lev-els,are deduced from conceptual deliberations.On the other hand,it may be more difficult to legitimise applying one ap-proach to missing val

305、ues,or one normalisation method over another with convincing arguments.Since a large amount of uncertainty stems from the interaction between how missing values are handled and the normalisation scheme,a promis-ing approach in improving the meaningfulness and robust-ness of the EQx ranking would be

306、to reduce the index sensi-tivity towards how missing values are addressed.This can most intuitively be achieved by reducing the amount of miss-ing values in the EQx Indicator data.Roughly 26%of all Indicator data was missing in the EQx2021.An improved procedure to impute missing values with past dat

307、a has led to a reduction of this statistic by roughly 4 percentage points,to 22.4%,in the EQx2022.This has been the most im-portant adjustment to improve the robustness and meaningful-ness of the EQx2022 rankings.Nevertheless,there is a trade-off between the number of Elite Quality aspects and count

308、ries cov-ered by the index on the one hand,and data availability and ranking robustness on the other hand.A complete reduction of the former to the detriment of the latter does not appear to be desirable,in the view of the index authors.Hence,the EQx2022 once again follows the OECD guidance(2008,p.1

309、7)in that“transparency must be the guiding principle of the entire exer-cise”(OECD,2008,p.17).The EQx2022 presents each coun-trys performance together with the available number of data-points that a countrys EQx score is calculated from.This transparently illustrates that each index score relies on

310、a different set of Indicators,which affects the cross-country comparability of index scores.Any interpretation or conclusion on the Elite Qual-ity of countries with low data availability should be treated with caution.More generally,this approach allows for the interpreta-tion of a countrys EQx perf

311、ormance and relative position in the country rankings in the context of data availability.Cline Diebold,Doctoral Researcher,Institute of Economics(FGN-HSG),University of St.Gallen,SwitzerlandChapter 2:Inside the Global Elite Quality IndexElectronic copy available at:https:/ Quality Report,EQx202231E

312、lectronic copy available at:https:/ 3.1:EQx2022 table of Country Scores and Global Rankings with Power and Value Sub-IndicesChapter 3:EQx2022 Results3.EQx2022 Results3.1 Elite Quality country scores and global rankingsC Co ou un nt tr ry yGGl lo ob ba al l R Ra an nk kT Tr re en nd d v vs s E EQQx x

313、2 20 02 21 1C Co ou un nt tr ry y S Sc co or re eR Ra an nk kT Tr re en nd d v vs s E EQQx x2 20 02 21 1S Sc co or re eR Ra an nk kT Tr re en nd d v vs s E EQQx x2 20 02 21 1S Sc co or re ed da at ta ap po oi in nt ts s#/1 12 20 00 0T Tr re en nd dT Tr re en nd dSingapore1 10 068.71 14 41 165.11 10

314、070.4103Switzerland2 20 067.41 11 10 066.42 20 067.9115Australia3 36 665.26 67 767.54 42 264.0116Israel4 43 365.05 53 368.36 62 263.3113Netherlands5 5-1 164.47 7-2 267.27 7-3 363.0115Sweden6 60 064.01 10 0-3 366.88 81 162.6117Canada7 74 463.72 24 470.41 17 7-2 260.3116United Kingdom8 8-5 563.44 4-1

315、169.31 15 5-3 360.4119Norway9 9-1 163.42 22 2-4 462.45 5-2 263.8115Estonia1 10 02 263.13 3-1 170.01 19 93 359.6104Germany1 11 14 462.79 91 167.01 14 42 260.6117Denmark1 12 2-2 262.51 15 5-6 665.11 11 1-1 161.2119Ireland1 13 37 762.32 29 93 356.83 34 465.1116New Zealand1 14 4-1 162.11 18 82 263.61 10

316、 0-5 561.4114United States1 15 5-1 10 061.81 10 072.62 29 9-1 11 156.3117Finland1 16 6-3 361.68 86 667.02 21 1-8 858.9117Austria1 17 72 261.22 20 01 163.11 18 8-1 160.3117Japan1 18 8-1 161.22 21 11 162.91 16 6-5 560.4114Korea,Rep.1 19 9-3 360.21 12 24 465.92 24 4-1 10 057.4109UAE2 20 0-2 259.71 13 3

317、-9 965.42 27 7-1 156.9101Bahrain2 21 11 13 359.33 39 98 854.99 91 19 961.578Qatar2 22 2-1 159.13 36 6-1 11 156.01 13 36 660.789Belgium2 23 39 958.51 19 99 963.33 32 23 356.1115France2 24 4-1 158.21 17 70 063.93 35 5-6 655.3119Portugal2 25 53 358.12 23 3-1 11 160.82 28 81 14 456.8113E EQQx xS Su ub b

318、-I In nd di ic ce es sP Po ow we er r (I I)V Va al lu ue e (I II I)Very High Quality ElitesHigh Quality ElitesElectronic copy available at:https:/ Quality Report,EQx202233C Co ou un nt tr ry yGGl lo ob ba al l R Ra an nk kT Tr re en nd d v vs s E EQQx x2 20 02 21 1C Co ou un nt tr ry y S Sc co or re

319、 eR Ra an nk kT Tr re en nd d v vs s E EQQx x2 20 02 21 1S Sc co or re eR Ra an nk kT Tr re en nd d v vs s E EQQx x2 20 02 21 1S Sc co or re ed da at ta ap po oi in nt ts s#/1 12 20 0E EQQx xS Su ub b-I In nd di ic ce es sP Po ow we er r (I I)V Va al lu ue e (I II I)Czech Republic2 26 6-4 458.14 46

320、6-1 13 352.51 12 28 860.9115China2 27 7-1 157.92 27 77 757.52 23 30 058.1109Lithuania2 28 8-4 457.01 16 63 365.14 48 8-1 15 553.0103Poland2 29 96 656.93 31 1-1 156.62 26 61 11 157.1114Thailand3 30 00 056.65 54 4-1 151.72 20 01 159.1108Slovenia3 31 1-2 256.52 24 40 059.73 39 9-9 955.0102Cyprus3 32 2-

321、1 156.44 44 4-2 253.02 22 25 558.1103Malaysia3 33 3-8 856.23 34 4-5 556.23 30 0-6 656.2110Spain3 34 4-7 756.02 26 6-3 358.94 42 2-1 11 154.5118Oman3 35 54 455.83 32 23 35 556.63 34 4-2 255.487Slovak Republic3 36 64 455.63 30 08 856.73 38 88 855.0105Hungary3 37 7-4 455.23 35 50 056.04 41 1-7 754.8115

322、Vietnam3 38 8-2 254.66 60 01 14 449.52 25 50 057.198Latvia3 39 9-1 154.32 25 51 159.15 52 2-2 251.9102Italy4 40 0-3 354.24 41 1-5 554.54 43 3-2 254.1116Chile4 41 10 054.23 37 7-1 10 055.54 45 51 13 353.5116Mauritius4 42 28 853.56 65 5-4 448.33 31 11 18 856.190Romania4 43 35 553.25 59 9-3 349.74 40 0

323、1 11 154.9104Rwanda4 44 48 852.65 53 3-1 13 351.84 47 71 18 853.182Bulgaria4 45 54 452.34 48 8-3 352.45 51 16 652.3103Kazakhstan4 46 60 052.06 66 62 248.24 44 4-6 653.9107Panama4 47 7-2 251.98 81 1-2 23 345.43 36 68 855.293Croatia4 48 8-5 551.74 47 7-1 152.55 55 5-1 10 051.2101Indonesia4 49 9-5 551.

324、44 43 35 553.25 59 9-1 12 250.6116Cuba5 50 03 351.19 93 39 943.43 37 7-1 155.059Uruguay5 51 11 11 150.93 33 31 10 056.37 79 94 448.296Azerbaijan5 52 2-1 10 050.97 71 1-1 14 446.84 49 9-1 10 052.988Dominican Republic5 53 32 21 150.57 76 61 14 446.45 50 01 15 552.589Belarus5 54 4-3 350.28 85 5-1 15 54

325、4.54 46 62 253.187Saudi Arabia5 55 59 950.14 45 56 652.77 73 37 748.892Serbia5 56 61 14 450.13 38 82 22 255.18 87 72 247.698Costa Rica5 57 70 049.95 50 04 452.27 72 2-3 348.8102Cambodia5 58 81 15 549.81 13 30 06 637.73 33 31 10 055.990Greece5 59 9-1 12 249.75 51 11 152.27 75 5-2 23 348.5115Ghana6 60

326、 03 349.55 56 69 950.66 69 91 149.095Philippines6 61 16 649.46 62 21 19 949.16 64 4-2 249.5104Kuwait6 62 2-8 849.07 74 4-1 15 546.46 61 1-2 250.389Peru6 63 3-3 348.98 82 2-2 27 745.45 58 81 14 450.6108Timor-Leste6 64 43 30 048.88 89 99 943.85 54 43 39 951.359Mexico6 65 5-1 10 048.85 52 2-1 15 551.98

327、 89 9-1 10 047.2115Mongolia6 66 6-4 448.48 84 40 044.76 62 2-9 950.389Russia6 67 7-2 248.39 92 2-1 19 943.55 57 76 650.8109Moldova6 68 81 148.16 61 12 249.18 85 5-3 347.684Botswana6 69 9-1 13 348.15 57 7-1 18 850.59 94 4-1 17 746.987Turkey7 70 01 17 748.06 67 7-1 148.08 80 03 35 548.1108Ethiopia7 71

328、 14 48 847.77 77 73 30 045.97 74 44 43 348.787Cte dIvoire7 72 29 947.51 10 02 2-2 20 041.96 60 03 31 150.477Togo7 73 31 12 247.48 80 03 36 645.47 76 6-1 12 248.474Liberia7 74 45 53 347.41 11 19 91 18 840.15 56 65 57 751.173Uganda7 75 50 047.48 83 32 23 345.37 77 7-1 16 648.491Kenya7 76 6-1 10 047.46

329、 63 3-2 22 248.69 97 70 046.791Benin7 77 7-1 19 947.28 86 6-1 15 544.07 71 1-1 16 648.874Paraguay7 78 86 647.11 10 03 37 741.96 63 38 849.787Lao PDR7 79 94 447.19 98 82 29 942.56 65 5-1 10 049.477Colombia8 80 0-9 947.15 55 58 850.91 10 09 9-2 23 345.2113Brazil8 81 15 546.84 42 28 853.81 12 20 00 043

330、.4117Jordan8 82 21 16 646.84 49 91 13 352.41 11 15 59 944.097Ecuador8 83 39 946.77 78 81 14 445.68 88 81 11 147.294Georgia8 84 4-1 12 246.61 11 10 0-1 11 141.36 67 7-7 749.396Burkina Faso8 85 5-6 646.61 11 13 3-1 12 241.16 66 67 749.385Ukraine8 86 6-1 10 046.67 79 96 645.59 90 0-1 14 447.1102Madagas

331、car8 87 78 846.51 13 37 73 336.15 53 31 151.785Uzbekistan8 88 8-6 646.41 10 09 9-2 26 641.47 70 01 18 848.983North Macedonia8 89 9-3 30 046.37 70 0-2 21 146.91 10 01 1-2 27 746.087Malawi9 90 01 12 246.01 12 22 2-1 18 839.96 68 84 41 149.189Argentina9 91 12 25 545.95 58 81 14 450.51 11 19 91 14 443.7

332、109Albania9 92 2-1 14 445.97 73 33 346.61 10 07 7-2 26 645.593Trinidad and Tobago9 93 3-1 13 345.88 88 8-1 143.99 96 6-1 11 146.873Guatemala9 94 41 15 545.89 90 02 28 843.89 92 28 846.995El Salvador9 95 53 35 545.81 11 12 2-4 441.28 82 24 45 548.090Niger9 96 6-3 345.69 97 7-1 142.89 91 16 647.076Ind

333、ia9 97 72 21 145.44 40 04 454.71 13 33 31 11 140.8107Papua New Guinea9 98 8-3 30 045.11 12 23 3-1 139.88 84 4-4 45 547.770South Africa9 99 91 145.12 28 83 357.41 14 41 1-4 438.9112Bangladesh1 10 00 02 26 645.11 12 20 01 19 940.08 86 62 20 047.686Bolivia1 10 01 1-4 444.91 11 14 4-5 541.09 95 5-1 11 146.987Guinea1 10 02 2-6 644.89 94 43 32 243.41 10 06 6-3 38 845.675Armenia1 10 03 3-4 444.87 72 21 1