Governance capital

Governing National Development: Shaping Social and Economic Capital

The Natural Capital of a country is a given. Everything else – the society, the economy - is shaped by the legal, regulatory and physical (human built) framework. This framework – the environment in which society exists and businesses operate - is developed, maintained and updated by authorities and institutions, most often government bodies. The Governance Sub-Index therefor encompasses all aspects that shape the framework of society (the Social Capital), and in which the economy (Intellectual Capital, Resource Management) operates.

governace capital scheme

The Governance World Map

The Governance Sub-Index of the Sustainable Competitiveness Index is based on quantitative data series – i.e. not qualitative evaluation of government systems. In addition, some aspects of government direction implications (such as human rights, freedom of press, etc.) are assigned to the Social Capital Index. The Governance Sub-Index aims at evaluating the suitability of a country’s regulatory framework and infrastructure environment to facilitate sustainable competitiveness. The regulatory and infrastructure framework should enable a framework in which the country’s natural, social and intellectual capital can flourish to generate new and sustain existing wealth.

Global Governance Capital Ranking

Observations on the Governance ranking include:

  • The Governance Ranking is topped by Estonia, followed by Indonesia. China is ranked 6
  • The highest ranked European country is Germany (4), followed by Estonia (6), Norway (7), and Iceland (8).
  • The USA is ranked 19, while the UK is somewhat left behind at 88.
  • Most African nations are also ranked low
  • South America scores above average in this on this Sustainable Competitiveness Sub-Index

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