15/12/2006 12:02:33 pm
Competitive on Paper or in Reality? If a country is considered competitive, one would imagine that its economic growth rate would be high. But there is no connection between a country′s position in the annual Competitiveness Report from the World Economic Forum and its economic growth rate. Then, one has to ask whether reality or the map is wrong. I would say the map. This index is not a good measure of competitiveness.

Now, the WEF has taken this even further, in the publication "Lisbon Review 2006". They have evaluated how well the EU countries fulfil the criteria set up in the Lisbon Agenda. And the Lisbon Agenda is mainly a political compromise without any sensitive elements. Thus, the WEF now measures something even more remote to reality.

Yet, this is described in the media as the list of the best reforming countries. The Times concluded that "Denmark leads way on reform of economy". But it is fairly easy to see that this cannot be a measure of actual competitiveness or substantial reform. Again, there is no correlation with the real growth rate of the countries.

Among the top ten on the list, there is no country from Eastern and Central Europe ? and they have very high growth rates. Both sluggish Germany and France end up above booming Ireland. The map is simply wrong again. This is probably more of a measure of political correctness of countries. And that is dangerous: what if countries design their reform agendas from these criteria? They will fail.

The countries that do really well have focused on doing other reforms, that the EU and WEF seem to consider unimportant. They have de-regulated the labour markets, decreased taxes, privatised state companies, opened up for trade and decreased the size of the state. And that has created real success for people in real life.