Rethinking National Competitiveness: A Critical Assessment of Governmental Capacity Measures

An Erratum to this article is available

This article has been updated


Scholars, policymakers, and media have increasingly focused on national competitiveness in the context of globalization and economic growth. This heightened attention underscores the importance of the many indices ranking government performance and effectiveness across countries. The four indices, government efficiency, public institutions, government effectiveness, and quality of government, have dominated this field. However, we found serious limitations they reveal, in terms of analytical soundness and policy relevance and usefulness. This paper systematically provides such a critique and lays the groundwork for thinking about government capacity in a new way: in terms of government competitiveness. So doing, this paper contributes to the literature about national competitiveness, governance quality, administrative reform, and development studies.

This is a preview of subscription content, access via your institution.

Change history

  • 30 March 2017

    An erratum to this article has been published.


  1. 1.

    This proposed definition is however a rough draft, as the first step toward a complete and final definition of GC. After examining limitations of existing indices measuring government capacity and performance, it will be more improved in the future research.

  2. 2.

    For more information on single source bias, see Campbell and Fiske (1959) and Podsakoff and Organ (1986).

  3. 3.

    Iqbal and Shah (2008) estimate the cost of purchasing access to the WGI’s commercially provided sources is about $90,000.

  4. 4.

    For the specific debate about the World Bank WGI, see Kaufmann et al. (2007).

  5. 5.

    In his study (2013), Fukuyama uses output and outcome interchangeably.

  6. 6.

    For the IMD and WEF measurability issues, see Van de Walle (2006), Lall (2001), and Ochel and Rohn (2006); for the World Bank’s WGI, see Arndt and Oman (2006), Langbein and Knack (2010), Thomas (2010), and Weiss (2000); and for the QGI’s QoG, see Agnafors (2013) and Fukuyama (2013).

  7. 7.

    Including only output sides would be more serious problems when we consider how hard to separate the role of government from other factors, such as the role of markets, civil societies, etc.

  8. 8.

    Unlike other indices, the QoG does not provide the rankings of each category, in fact. With the average values of the 106 QoG variables (4 missing data), we calculate the rankings.

  9. 9.

    The QGI dataset is most disaggregated in order to make researchers easily select the sub-variables which fit into their studies.


  1. Agnafors, M. (2013). Quality of government: Toward a more complex definition. American Political Science Review, 107, 433–445.

    Article  Google Scholar 

  2. Arndt, C. (2008). The politics of governance rating. International Public Management Journal, 11, 275–297.

    Article  Google Scholar 

  3. Arndt, C., & Oman, C. (2006). Uses and abuses of governance indicators. OECD development study. Retrieved from

  4. Campbell, D., & Fiske, D. (1959). Convergent and discriminant validation by the multitrait-multimethod matrix. Psychological Bulletin, 56, 81–105.

    Article  Google Scholar 

  5. Cooley, A., & Snyder, J. (Eds.). (2015). Ranking the world. Cambridge: Cambridge University Press.

    Google Scholar 

  6. Davis, K., Fisher, A., Kingsbury, B., & Merry, S. (Eds.). (2012). Governance by indicators: Global power through quantification and rankings. Oxford: Oxford University Press.

    Google Scholar 

  7. Fukuyama, F. (2013). What is governance? Center for global development working paper 314. Washington, DC: Center for Global Development.

  8. Heinrich, C. J., & Lynn, L. E., Jr. (2000). Governance and performance: New perspectives. Washington, DC: Georgetown University Press.

    Google Scholar 

  9. Ho, A., & Im, T. (2012). Defining a new concept of government competitiveness (Jeongbu Kyoungjaengryukeui Gaenyun Jeonglym: Sigangwa Gongganeui Gwanjeomyeseo). The Korean Journal of Public Administration (Haengjeongnonchong), 50, 1–34.

    Google Scholar 

  10. Ho, A., & Im, T. (2015). Challenges in building effective and competitive government in developing countries. The American Review of Public Administration, 45(3), 263–280.

    Article  Google Scholar 

  11. International Institute for Management Development (IMD). (2014). IMD world competitiveness yearbook 2014. Lausanne: IMD World Competitiveness Center.

    Google Scholar 

  12. Iqbal, K., & Shah, A. (2008). How do worldwide governance indicators measure up? World Bank working paper. Washington, DC: The World Bank.

  13. Kaufmann, D, Kraay, A., & Mastruzzi, M. (2007). The worldwide governance indicators project: Answering the critics. World Bank policy research working paper 4149. Washington, DC: The World Bank.

  14. Kaufmann, D., Kraay, A., & Mastruzzi, M. (2008). Governance matters VII: Aggregate and individual governance indicators 1996–2007. Washington, DC: World Bank.

    Google Scholar 

  15. Kaufmann, D, Kraay, A., & Mastruzzi, M. (2010). The worldwide governance indicators: Methodology and analytical issues. World Bank policy research working paper 5430. Washington, DC: The World Bank.

  16. Knack, S. (2006). Measuring corruption in Eastern Europe and Central Asia: A critique of the cross-county indicators. World Bank policy research development working paper 3968. Washington, DC: The World Bank.

  17. Krugman, P. (1994). Competitiveness: A dangerous obsession. Foreign Affairs, 73, 28–44.

    Article  Google Scholar 

  18. Lall, S. (2001). Competitiveness indices and developing countries: An economic evaluation of the global competitiveness report. World Development, 29, 1501–1525.

    Article  Google Scholar 

  19. Langbein, L., & Knack, S. (2010). The worldwide governance indicators: Six, one, or none? Journal of Development Studies, 46, 350–370.

    Article  Google Scholar 

  20. Linder, A., & Santiso, C. (2003). Not everything that counts can be counted: A critical look at risk ratings and governance indicators. Nordic Journal of Political Economy, 29, 105–132.

    Google Scholar 

  21. Ochel, W., & Rohn, O. (2006). Ranking of countriesThe WEF, IMD, fraser and heritage indices. CESifo DICE report, 4, 48–60.

  22. Organization for Economic Cooperation and Development (OECD). (2003). OECD environmental indicators: Development, measurement, and use (OECD reference paper). Paris: Organization for Economic Cooperation and Development.

    Google Scholar 

  23. Podsakoff, P., & Organ, D. (1986). Self-reports in organizational research: Problems and prospects. Journal of Management, 12, 531–544.

    Article  Google Scholar 

  24. Putnam, R., Leonardi, D., & Nanetti, R. (1993). Making democracy work: Civic traditions in modern Italy. New Jersey: Princeton University Press.

    Google Scholar 

  25. Rothstein, B., & Teorell, J. (2008). What is quality of government? A theory of impartial government institutions. Governance, 21, 165–190.

    Article  Google Scholar 

  26. Sartori, G. (1970). Concept misformation in comparative politics. The American Political Science Review, 64, 1033–1053.

    Article  Google Scholar 

  27. Talbott, W. (2005). Which Rights should be Universal? New York: Oxford University Press.

  28. Teorell, J., Dahlberg, S., Holmberg, S., Rothstein, B., Hartmann, F., & Svensson, R. (2015). The quality of government standard dataset, version Jan15. Gothenburg: The Quality of Government Institute.

    Google Scholar 

  29. Thomas, M. A. (2010). What do the worldwide governance indicators measure? European Journal of Development Research, 22, 31–54.

    Article  Google Scholar 

  30. Van de Walle, S. (2006). The state of the world’s bureaucracies. Journal of Comparative Policy Analysis, 8, 437–448.

    Article  Google Scholar 

  31. Weiss, T. (2000). Governance, good governance and global governance: Conceptual and actual challenges. Third World Quarterly, 21, 759–814.

    Article  Google Scholar 

  32. World Bank. (1998). Assessing aid—What works, what doesn’t and why. Washington, DC: World Bank.

    Google Scholar 

  33. World Economic Forum (WEF). (2014). WEF global competitiveness report. Geneva: World Economic Forum.

    Google Scholar 

Download references

Author information



Corresponding author

Correspondence to Youngmi Choi.

Additional information

An earlier version of this study was presented at the 76th Annual Conference of the American Society for Public Administration, Chicago, IL, USA, March 6–10, 2015 and at the 2015 Korean Association for Public Administration International Conference, Sangmyung University, South Korea, July 16–18, 2015.

An erratum to this article is available at

Rights and permissions

Reprints and Permissions

About this article

Verify currency and authenticity via CrossMark

Cite this article

Im, T., Choi, Y. Rethinking National Competitiveness: A Critical Assessment of Governmental Capacity Measures. Soc Indic Res 135, 515–532 (2018).

Download citation


  • Government competitiveness
  • National competitiveness
  • Government efficiency
  • Government effectiveness
  • Quality of government
  • Comparative public administration