Barriers and Opportunities for Enhancing Capital Flows
In the COMCEC Member Countries
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Appendix 7: EIU Business Environment Rankings methodology
Business environment rankings methodology
Outline of the model
The business rankings model measures the quality or
attractiveness of the business environment in the 82
countries covered by Country Forecasts using a standard
analytical framework. It is designed to reflect the main
criteria used by companies to formulate their global
business strategies, and is based not only on historical
conditions but also on expectations about conditions
prevailing over the next five years. This allows the Economist
Intelligence Unit to use the regularity, depth and detail of its
forecasting work to generate a unique set of forward-looking
business environment rankings on a regional and global
basis.
Thebusiness rankingsmodel examines ten separatecriteriaor
categories, covering the political environment, the
macroeconomic environment, market opportunities, policy
towards free enterprise and competition, policy towards
foreign investment, foreigntrade and exchangecontrols, taxes,
financing, the labourmarket and infrastructure. Each category
contains a number of indicators which are assessed by the
Economist Intelligence Unit for the last five years and the next
five years. The number of indicators in each category varies
from five (foreign trade and exchange regimes) to 16
(infrastructure),andthereare91indicators intotal.
Almost half of the indicators are based on quantitative data
(for example, GDP growth), and are mostly drawn from
national and international statistical sources (see sources
below) for the historical period (2008-2012). Scores for the
forecast period (2013-2017) are based on Economist
Intelligence Unit forecasts. The other indicators are
qualitative in nature (for example, quality of the financial
regulatory system), and are drawn from a range of data
sources and business surveys, frequently adjusted by the
Economist Intelligence Unit, for 2008-2012. All forecasts for
the qualitative indicators covering 2013-2017 are based on
Economist Intelligence Unit assessments.
The rankings are calculated in several stages. First, each of
the 91 indicators is scored on a scale from 1 (very bad for
business) to 5 (very good for business). The aggregate
category scores are derived on the basis of simple or
weighted averages of the indicator scores within a given
Calculating the rankings