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All that glitters is not gold: a ranking of global rankings

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  • Díaz, Ela
  • Valdés, Rodrigo O.

Abstract

This paper examines the predictive power of different global rankings on country growth. An influential framework to shape policy decisions is to look at a specific global ranking and implement policies to reduce gaps with respect to best practices or the frontier. Using panel data regressions, we show that different rankings predict growth with quite dissimilar levels of success. Rankings with a focus on government effectiveness or, to a lesser extent, on globalization offer statistically significant and economically relevant guidance when we consider three-yearahead growth. Others, usually presented as focused on competitiveness assessments, show zero correlation with future growth. When there are effects, they appear in trend, rather than cyclical, GDP and in foreign direct investment. Total factor productivity growth and exports do not change appreciably. We do not detect nonlinear effects.

Suggested Citation

  • Díaz, Ela & Valdés, Rodrigo O., 2020. "All that glitters is not gold: a ranking of global rankings," LSE Research Online Documents on Economics 123246, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:123246
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    References listed on IDEAS

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    1. Aart Kraay & Norikazu Tawara, 2013. "Can specific policy indicators identify reform priorities?," Journal of Economic Growth, Springer, vol. 18(3), pages 253-283, September.
    2. Doshi, Rush & Kelley, Judith G. & Simmons, Beth A., 2019. "The Power of Ranking: The Ease of Doing Business Indicator and Global Regulatory Behavior," International Organization, Cambridge University Press, vol. 73(3), pages 611-643, July.
    3. Axel Dreher, 2006. "Does globalization affect growth? Evidence from a new index of globalization," Applied Economics, Taylor & Francis Journals, vol. 38(10), pages 1091-1110.
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    Keywords

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    JEL classification:

    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O50 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - General
    • E00 - Macroeconomics and Monetary Economics - - General - - - General

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