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Composite Indicators of Country Performance: A Critical Assessment

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Michael Freudenberg

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Abstract

Composite indicators are synthetic indices of individual indicators and are increasingly being used to rank countries in various performance and policy areas. Using composites, countries have been compared with regard to their competitiveness, innovative abilities, degree of globalisation and environmental sustainability. Composite indicators are useful in their ability to integrate large amounts of information into easily understood formats and are valued as a communication and political tool. However, the construction of composites suffers from many methodological difficulties, with the result that they can be misleading and easily manipulated. This paper reviews the steps in constructing composite indicators and their inherent weaknesses. A detailed statistical example is given in a case study. The paper also offers suggestions on how to improve the transparency and use of composite indicators for analytical and policy purposes ...

Indicateurs composites de performances des pays : Examen critique

Les indicateurs composites, qui résultent de la fusion de plusieurs indicateurs, sont de plus en plus utilisés pour classer les pays dans des performances et des domaines d’action divers. A l’aide de ces indicateurs, des pays ont été comparés dans les domaines de la compétitivité, la capacité d’innovation, le niveau de mondialisation et la viabilité écologique. Les indicateurs composites sont appréciés en raison de leur capacité à intégrer de grandes quantités d'informations sous une forme aisément compréhensible, ce qui fait d’eux des outils de communication et des instruments d’action précieux. L’élaboration des indicateurs composites soulève néanmoins de nombreuses difficultés méthodologiques ; ils peuvent de ce fait être sources d’erreurs et sont aisés à manipuler. Le présent document décrit les différentes étapes d’élaboration des indicateurs composites et les lacunes qui leur sont inhérentes. L’annexe fournit des tableaux statistiques détaillés. Le document propose également ...

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Paper provided by OECD, Directorate for Science, Technology and Industry in its series OECD Science, Technology and Industry Working Papers with number 2003/16.

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Date of creation: 12 Nov 2003
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Handle: RePEc:oec:stiaaa:2003/16-en

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  1. Socio-Economics of Innovation
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  1. Avanzini, Diego B., 2009. "Designing Composite Entrepreneurship Indicators: An Application Using Consensus PCA," Working Papers UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER). [Downloadable!]
  2. Tatjana Slavova, 2008. "A rank order and efficiency evaluation of the EU regions in a social framework," Empirica, Springer, vol. 35(4), pages 339-367, September. [Downloadable!] (restricted)
  3. Wolfgang Ochel, 2005. "Concepts and Measurement of Labour Market Institutions," CESifo DICE Report, Ifo Institute for Economic Research at the University of Munich, vol. 3(4), pages 40-55, 01. [Downloadable!]
  4. Ugo Gentilini, 2006. "How are We doing on Poverty and Hunger Reduction? A New Measyre of Country-Level Progress," Departmental Working Papers of Economics - University 'Roma Tre' 0068, Department of Economics - University Roma Tre. [Downloadable!]
  5. López García, A. Mª & Castro Núñez, R.B., 2004. "Valoración de la actividad económica regional de España a través de indicadores sintéticos," Estudios de Economía Aplicada, Estudios de Economía Aplicada, vol. 22, pages 1-21, Diciembre. [Downloadable!] (restricted)
  6. Arvanitidis, Paschalis & Petrakos, George, 2007. "Characteristics of Dynamic Regions in the World Economy: Defining Knowledge-Driven Economic Dynamism," Papers DYNREG19, Economic and Social Research Institute (ESRI). [Downloadable!]
  7. Laurens Cherchye & Knox Lovell & Wim Moesen & Tom Van Puyenbroeck, 2005. "One Market, One Number? A Composite Indicator Assessment of EU Internal Market Dynamics," Public Economics Working Paper Series ces0513, Katholieke Universiteit Leuven, Centrum voor Economische Studiën, Working Group Public Economics. [Downloadable!]
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  8. Laurens Cherchye & Wim Moesen & Nicky Rogge & Tom Van Puyenbroeck & Michaela Saisana & A. Saltelli & R. Liska & S. Tarantola, 2006. "Creating Composite Indicators with DEA and Robustness Analysis: the case of the Technology Achievement Index," Public Economics Working Paper Series ces0613, Katholieke Universiteit Leuven, Centrum voor Economische Studiën, Working Group Public Economics. [Downloadable!]
  9. Martínez Roget, F. & Murias Fernández, P. & Miguel Domínguez, J.C. De, 2005. "El análisis envolvente de datos en la construcción de indicadores sintéticos. Una aplicación a las provincias españolas/DEA Construction of Composite Indicators. An Application to the Spanish Pro," Estudios de Economía Aplicada, Estudios de Economía Aplicada, vol. 23, pages 753-771, Diciembre. [Downloadable!] (restricted)
  10. Gomez-Limon, Jose A. & Riesgo, Laura, 2008. "Alternative Approaches On Constructing A Composite Indicator To Measure Agricultural Sustainability," 107th Seminar, January 30-February 1, 2008, Sevilla, Spain 6489, European Association of Agricultural Economists. [Downloadable!]
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