Measuring business environment quality in Central Europe

This paper presents five indicators (Corruption Perception Index, Aggregate Governance Indicators, Capture Index, Opacity Index and Corporate Governance Risk index) measuring the quality of the respective business environments in the four Visegrad countries (the Czech Republic, Hungary, Poland and Slovakia). The authors discuss the advantages and disadvantages of the respective methodological approaches and identify the common and different institutional characteristics of the four countries. All measures presented in the paper rely on subjective data collected by opinion surveys and, therefore, the results are often not statistically robust. Nevertheless, the indices consistently reveal the same patterns for all four countries. The quality of the business environment in Hungary is generally perceived as the best, followed by the Czech Republic and Poland, with comparable results, and is found lagging in Slovakia. Although some indices are capable of distinguishing the weaknesses from the strengths of respective institutional set-ups, none reveal why some components are better or worse, or whether these differences are real or perceived.