New Criticism on the Competitiveness Concept: A Critical Review of the Concept at the Macroeconomic Level

Abstract

Competitiveness of nations has always been a subject of controversy regarding its validity. It is a concept surrounded by paradox, and it is widely used despite its conceptual fragility and the lack of a definition consensus. Moreover, this omnipresent concept in economic analysis is not included in any economic theory in the strict sense. Up to now, there is no theory of national competitiveness. Despite the abundant publications about competitiveness, a critical review of competitiveness of nation has not yet appeared. This paper is proposed as a critical review of the concept of competitiveness at the nation’s level, and it aims to examine the reasons that make this concept a point of controversy among economists. This paper summarizes the rejection of the competitiveness concept in three points: Firstly, competitiveness is a microeconomic concept which gets deteriorated when applied to a nation, because nations do not compete like companies. Secondly, competitiveness is gained reputation in the political world; it is used without attention to explain success or defeat of an economy in a simplistic way. Today, the concept of national competitiveness is part of a hegemonic discourse. Finally, neither a definition consensus, nor an empirical evidence or a theoretical foundations, the national competitiveness appears such an international ideology rather than an economic concept. This doctrine is more evident with economic patriotism and the globalization that raises the frenzy of competition (Krugman, 1999).