Governance Capital Index

The Global Governance Index

Institutional Quality & Effective Governance

Governance is a fundamental pillar of sustainable competitiveness. Good governance provides the framework for economic development, social stability, and environmental protection. It encompasses the quality of institutions, regulatory effectiveness, rule of law, transparency, and the capacity of governments to formulate and implement sound policies. Strong governance creates an enabling environment for businesses, attracts investment, and ensures that economic growth benefits society as a whole while protecting natural resources for future generations.

View RankingsAll DimensionsDownloads

Governance Indicators

Key clusters to measure institutional quality and governance effectiveness

Infrastructure

Evaluation of the availability and quality of public infrastructure based on performance indicators

Fiscal sustainability

Evaluation of the balance and stability of government expenditure

Rule of Law & Corruption

Evaluation of government agencies efficiency and corruption levels

Democratic participation

Evaluation of the extend and quality of political decision making

Security

Evaluation of the availability, level, impartiality, and fairness of internal domestic security

Sustainable policies

Evaluation of stability and quality of government policies against holistic ESG aspects based on performance indicators

Why Governance Capital Matters

Strong institutions and effective governance drive sustainable development and prosperity

For Investors

  • Reduced political and regulatory risk in investment portfolios
  • Better protection of property rights and intellectual property
  • More predictable and transparent regulatory environment
  • Lower corruption reduces hidden costs and uncertainties
  • Strong infrastructure supports operational efficiency

For Businesses

  • Simplified business registration and licensing processes
  • Fair and consistent application of regulations
  • Access to quality transport, energy, and digital infrastructure
  • Reduced compliance costs in transparent regulatory systems
  • Stable financial systems supporting business operations

Bottom Line: Countries with high governance scores consistently demonstrate higher levels of sustainable competitiveness, economic stability, and quality of life.

The State of the World

A global snapshot of governance performance and trends

Global Scores

Lowest24%
Global Average51%
Global Best74%
Ideal World100%

Global Trends

Positive Trends61%
No Trend12%
Negative Trends27%
Overall Sentiment+33.9%
More NegativeMore Positive

Key Observations

1

Western European still profit from historical rule-of-law applications: Norway (#1), Netherlands (#2), Denmark (#3), Luxembourg (#4), and Estonia (#5) occupy the top five positions

2

There is a strong correlation between governance and prosperity: Countries with high governance scores consistently demonstrate higher levels of income levels

3

Top-ranked countries invest heavily in public infrastructure, including transport, renewable energy, digital infrastructure, and public services

4

Uruguay stands as the highest-ranked nation outside Europe, reflecting the value of decades of democratic stability and strong institutional development

5

Among major economies, Germany is ranked 13th, France 21st, and the UK 39th, while Japan (#33) and South Korea (#35) lead Asian governance performance.

6

The US rank of 38 and China on 55 indicate governance challenges in both nations – China due to limited political freedoms and transparency, and the US facing declining trust in institutions, polarization, and regulatory inconsistencies.

Governance Rankings

Explore how countries compare across governance indicators

Loading map data...

Rank
Country
Score
1Norway73.84
2Netherlands73.59
3Denmark73.53
4Luxembourg72.01
5Estonia70.77
6Lithuania70.74
7Uruguay70.59
8Slovenia70.39
9Ireland70.29
10Finland70.22
11Switzerland69.94
12Austria69.85
13Germany69.79
14Portugal69.78
15Sweden69.43
16Belgium69.28
17Latvia68.17
18Iceland68.17
19Spain67.03
20Poland67.02
21France66.89
22Australia66.52
23Bulgaria65.64
24Croatia65.42
25Greece65.01
26Italy64.54
27Czech Republic64.18
28Moldova63.86
29Liechtenstein63.79
30New Zealand63.78

Note: Showing top 30 countries. Click column headers to sort.

FAQ

Frequently Asked Questions

About governance quality and how it is measured in the GSCI

Governance capital encompasses the quality of institutions, regulatory effectiveness, rule of law, transparency, and the capacity of governments to formulate and implement sound policies. Good governance provides the framework for economic development, social stability, and environmental protection. It creates an enabling environment for businesses, attracts investment, and ensures that economic growth benefits society while protecting natural resources.
The GSCI Governance Index evaluates six indicator clusters: infrastructure quality and availability, fiscal sustainability and government expenditure balance, rule of law and corruption levels, democratic participation and political decision-making quality, domestic security including impartiality and fairness, and the stability and quality of sustainable policies assessed against holistic ESG performance indicators.
There is a strong correlation between governance quality and prosperity. Countries with high governance scores consistently demonstrate higher income levels, more stable business environments, and stronger investment climates. Good governance reduces political risk, protects property rights, provides predictable regulation, lowers corruption-related costs, and delivers quality infrastructure that supports business operations.
Western European countries lead the governance rankings, benefiting from historical rule-of-law traditions: Norway (1st), Netherlands (2nd), Denmark (3rd), Luxembourg (4th), and Estonia (5th). Uruguay is the highest-ranked nation outside Europe, reflecting decades of democratic stability. Among major economies, Germany ranks 13th, France 21st, Japan 33rd, South Korea 35th, the US 38th, the UK 39th, and China 55th.
Top-ranked governance countries invest heavily in public infrastructure including transport, renewable energy, digital networks, and public services. These investments create the conditions for private sector growth and foreign investment. Countries with weak governance face higher costs from corruption, regulatory unpredictability, and inadequate infrastructure. The correlation between governance quality and GDP per capita is among the strongest of all GSCI dimensions.

Explore All Six Capital Dimensions

Discover how Governance Capital connects with Natural, Economic, Social, and Intellectual Capital

View All Dimensions