Competitiveness and the benchmarking of nations-a critical reflection

Abstract

This paper provides a critical evaluation of the role and validity of indices used to measure national competitiveness. It examines the growth in the number and range of such indices and explores their growing importance in benchmarking national economic performance. It also provides a detailed critical interrogation of four of the most commonly used indices, and examines their robustness in relation to their ability to predict overall economic performance. The results indicate that the indices are poor proxies and predictors of growth and are thus potentially misleading for policy-makers. The paper concludes by reflecting on the broader benchmarking and image-making role played by competitiveness indices. © 2009 International Atlantic Economic Society.