Competitiveness indices and developing countries: An economic evaluation of the global competitiveness report

Developing countries' policy makers worry about national competitiveness and closely watch indices ranking international competitive performance. This paper analyzes, from a development economics perspective, if competitiveness is a legitimate concern, and if the leading indices deserve the attention they get. It assesses the best-known index, The Global Competitiveness Report of the World Economic Forum, and finds deficiencies at several levels. Its definitions are too broad, the approach biased and the methodology flawed. Many qualitative measures are vague, redundant or wrong. These weak theoretical and empirical foundations reduce the value of the indices for analytical or policy purposes. (C) 2001 Elsevier Science Ltd. All rights reserved.