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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. 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!]
  2. 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!]
  3. 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!]
  4. 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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