Feature

Globalization Index 2003

FAQ

Why are only 62 countries included in the index?
Where do the data come from?
What period do the data reflect?
Are the data available online?
Is the A.T. Kearney/FOREIGN POLICY Magazine Globalization Index the only index of its kind?
Why are non-economic measures included in the index?
Why arent any cultural measures included in the index?
My countrys ranking changed between this years and last years index. Why?
Which countrys ranking fell the farthest compared with its ranking last year?
Which countrys ranking rose the most compared with its ranking last year?
Which region is the most global?
Is it possible to have an ailing economy and still score well in the Globalization Index?
Why are some variables double weighted?
Should the citizens of highly global countries be happy about a high score in the index?
Is the net effect of globalization good or bad?
Is the Globalization Index a measure of competitiveness?
Have the results been replicated?
Will the index be available next year?

Why are only 62 countries included in the index?
We must limit ourselves to those countries for which reliable data are available. At the same time, we have tried to balance the selection of small countries so no one region is overrepresented. These 62 countries constitute 85 percent of the worlds population.

Where do the data come from?
The most recently available data were collected from a wide range of sources, including World Development Indicators 2002 (Washington: World Bank), International Financial Statistics Yearbook (Washington: International Monetary Fund, 2002), Yearbook of Statistics 2002 (Geneva: International Telecommunication Union, 2002), the Secure Server Survey available online from Netcraft, and The World Factbook 2002 (Washington: Central Intelligence Agency, 2002).

What period do the data reflect?
Data for 2001 are used to calculate the index published in January/February 2003.

Are the data available online?
The data are available on www.foreignpolicy.com and www.atkearney.com in Excel spreadsheets that can be downloaded to your computer. The full set of rankings are also available online.

Is the A.T. Kearney/FOREIGN POLICY Magazine Globalization Index the only index of its kind?
As far as we can determine, no one else combines the range of factors we do in our tally of globalization scores. We consider personal contact, technology, and political engagement, as well as measures of economic globalization. If you find another index that does this, drop us a line.

Why are non-economic measures included in the index?
All sorts of factors characterize and drive the phenomenon called globalization, and we believe all are important to understand it.

Why arent any cultural measures included in the index?
Culture is an important source of cross-border contact, but it is devilishly difficult to measure that impact, especially given the dearth of reliable and comparable annual measures for all the countries we survey.

My countrys ranking changed between this years and last years index. Why?
Rankings change for any number of reasons. Sometimes, the country has seen a gain or decline in a particular indicator. Other times, there are neither significant declines nor gains in a given country, while other countries pull ahead.

Which countrys ranking fell the farthest compared with its ranking last year?
Saudi Arabia, from 37 to 61.

Which countrys ranking rose the most compared with its ranking last year?
Morocco, from 46 to 29.

Which region is the most global?
Europe is the most global region. Some small and open countries tend to take top places in the index because they rely on other countries for trade, investment, tourism, and travel. You cant travel too far in Europe, for example, without crossing international borders. And bigger economies are less reliant on the rest of the world.

Is it possible to have an ailing economy and still score well in the Globalization Index?
Yes. A country can be highly global and be in the midst of a recession. An ailing economy is more likely the consequence of the business cycle or ineffective economic policy, not the degree to which the country is globally integrated.

Why are some variables double weighted?
We have double weighted some variables, such as investment flows and technology, because we believe that these are important drivers of globalization in a world where these variables affect every aspect of lifeeconomic, political, social, and cultural.

Should the citizens of highly global countries be happy about a high score in the index?
A high score is neither a certain cause for great rejoicing nor for great sorrow. As residents of any highly global nation can attest, global integration can produce both benefits and problems. A world economy that can deliver investment and portfolio flows can also take them away. And while more open borders can make it more difficult to retain a countrys most talented workers, it is easier for these workers to return remittances to family that remain behind and to retain home-country business contacts. The index does not weigh the good effects of global integration against its ill effects. It is designed instead to measure the extent to which globalizing forces are present in selected countries.

Is the net effect of globalization good or bad?
We dont really know. Any guess we would make would be just an opinion and could not arise from the index data. Again, the index only attempts to measure the extent of globalization in several countries. We do not attempt to determine whether the effects of globalization are more positive than negative for any given countryand these effects will vary among different income brackets and social groups within each countrymuch less attempt to assess the effect for all 62 taken together.

Of course, we are curious about the question. Consequently, we always correlate index scores against other interesting measures to get some sense of what the data mean. Are global countries more or less prone to corruption, are their citizens happier or glummer, are their environmental and tax policies characterized by a race to the bottom? Past iterations of the index that provide the answers to these questions are available online in FPs Archive and also in reprint form. Over the three years we have been producing the index, we have looked at levels of corruption, inequality, the digital divide, taxation and government spending, happiness, environment, manufacturing labor cost, and within-firm trade. These exercises do not show causation, but they do point to significant correlations between, for instance, high scores on globalization and good environmental performance.

Is the Globalization Index a measure of competitiveness?
No. Country competitiveness is related to input costs, infrastructure, economic policy, the cost of doing business, and a variety of other factors. Our index does not attempt to measure or rank country competitiveness.

Have the results been replicated?
Yes. We know of at least one academic effort to replicate our results. The data and methodology are publicly available for this purpose and for related research.

Will be index be available next year?
Yes. Look for it in the March/April 2004 issue of FOREIGN POLICY magazine.