Introduction
The impact of globalisation has reduced the distance between countries. Technological advancement has shown an exponential growth during the last 80 years and most of the credit goes to an increased closeness between countries. The political and economic situation of a country categorizes it as developed or less developed. Currently there are a number of indexes which rank countries based on internal development such as GDP, happiness Index, Competitiveness Index, Connectedness index etc. However, with increasing concerns towards environment and global economic imbalance, we require a measure which not only evaluates a country based on its internal development but also on how it helps others to develop.
The GEQ index analyse countries based on the 4 quadrants of Emotional Intelligence. It consists of 27 components which are categorised in the appropriate quadrant based on their attributes and impact on the country. These components are scored and ranked individually. A weighted scoring of these components provides an overall coalesced balanced scorecard. A detailed explanation of definition, methodology and calculation is provided in Methodology page.
Self-awareness
Understanding a country’s internal key economic factors which impact its internal growth and sustainability. These cannot be changed in the short-term. This includes its population growth, population density, working group, agricultural land areas, inequality, etc. A country which is already ahead in these parameters has more potential to prosper.
Social awareness
This will focus mainly on two points: 1) how much a country is aware and concerned for environmental issues; 2) How it is helping less developed nations. shows how the country’s citizens are socially connected and their awareness towards climate change. The includes indicators like press freedom, giving i.e. donation and volunteering, mortality rate of young children which reflects on health systems and awareness, pollution level and renewable energy output. This measure not just signifies the impact of government policies but also signals to people’s empathy and social connectedness.
Self-management
How well a country’s internal economy is doing. This directly or indirectly reflects the government’s long-term and short-term policies. This includes the country’s current inflation, unemployment, per capita GDP, expenditure on education etc. These measures can be controlled by its economic policies in short term as well. A high score indicates that the country has a good economic and political leadership.
Relationship management
It stipulates how well a country’s macroeconomic policies are. It includes foreign investments, development assistance, international movement and passport flexibility and tariff rates. This quadrant summarises a country’s dependency on other countries and international support it gains and extends in this global age.
Why country ranking is important?
There are many global rankings done by various institutes and organisations based on different factors with diverse objectives. Some popular indexes include ease of doing business, global competitiveness index, human development index, corruption perception index, etc. (discussed below in section 2.1). These indexes provide the way forward to the policymakers of various countries for appropriate schemes. They also help international organisations in developing strategies for their geographical expansions.
To position economic growth in a wider perspective requires both innovation of the tools, methodology and policy within the field of economics, and also the repositioning of the field of economics in relation to other critical fields such as the environment, social affairs, and political affairs, not only at the analytical and rhetorical levels but through the problematic integration of policies in practice (Lees, 2020). New theories, models, and methodologies are being explored to move beyond a few economic factors to meet the concerns and challenges of sustainable and equitable development in the new conditions.
In this globalised situation, a country must understand its relative strengths and weaknesses and develop relevant policies to overcome the challenges. Notably, the developing countries look towards more developed countries to adopt new technologies and strategies to increase the quality of life of its people. It is necessary to understand and examine benchmark countries, their policies, and initiatives. The ranking method based on a composite index provides a tool that saves time and energy of an ordinary person by reducing the need to go through hundreds of complex economic concepts and indicators to determine how well a country is performing.
They provide an instant idea of the success of economies relative to others. Their users need no more statistical knowledge than readers of sports news. Even as cricket teams are ranked in step with their performance, countries are ranked in step with their ability to generate GDP, human development, the standard of living, democratic rights, and an appealing business environment.
The use of composite indexes is continuously increasing by modern day policymakers. These indexes provide them a benchmark to apply appropriate policies and strategies to overcome their current challenges. The word “composite” is defined by many economists and institutions. A mathematical combination (or aggregation as it is termed) of a set of indicators is most often called an “index” or a “composite indicator”. Composite indicators are based on sub-indicators that have no common meaningful unit of measurement and there is no obvious way of weighting these sub-indicators (Saisana and Tarantola, 2002). Freudenberg (2003) defines composite indicators as synthetic indexes of individual indicators. Saltelli (2007) defines composite indicators as “to indicate a manipulation of individual indicators, and possibly weights, to produce an aggregate ordinal or cardinal measure of country performance”.
Composite indicators are much like mathematical or computational models. As such, their construction owes more to the craftsmanship of the modeller than to universally accepted scientific rules for encoding (OECD, 2008). The author has tried to create an index which can bridge the gap of the currently available indexes by providing a balanced view considering the current global and economic situation.
Why GEQ Index is different?
Emotional intelligence is an essential skill for navigating the complexities of the world today. It’s a key predictor of effectiveness, relationships, wellbeing & quality of life (6seconds.org, 2018). This index uses Goleman’s framework on the country’s key performance indicators by carefully categorizing some of them into the framework’s four quadrants. Though, when an analysis is based on both key economic and social indicators of a country, it becomes more complicated, but it can provide a holistic view of the country’s performance. In the current environment, along with the country’s economic, political and social dimensions, it is also essential to understand how economic sharing activities are taking place across the countries and how they are working towards sustainable development. This index provides a two-way approach of analysing a country’s journey towards sustainable development. Internal looking indicators are categorised under self-awareness, and Self-management quadrants and external looking indicators are categorised under social-awareness and relationship management quadrants. Some of the unique components included in this indicator are population change, where two sub-components – population growth, and population density are used and given equal weight to calculate population change. With over 7 billion people, the world is already facing resource scarcity, especially land scarcity. While scoring population growth, higher scores are given where the population growth is within +/- 0.5% limit, as the author assumes that anything above or below this will harm sustainable growth. Further, the author assumes that, higher population density causes depletion of resources due to concentrated use, which creates economic inequality. In addition to the generally applied indicators, this index also used some already established indexes that focus on a specific area like corruption, income inequality, ease of doing business, giving score, press freedom, and passport freedom. It helps in creating a greater depth in the GEQ index as these indexes are constructed using focused objectives. The index will measure (as a balanced scorecard) and rank countries based on how they have adjusted between their own development, their willingness to contribute towards the environment, and their support to other countries to begin sustainable development. The components of each quadrant are scored and ranked individually. The aggregate index is computed by giving equal weight to all the quadrants. One major problem with any composite index is that it is very difficult if at all possible, to construct an objectively determined unique measure since, in the ultimate analysis, it will depend on the preference ordering of the evaluator. Hence, if the composite index is sensitive to the weights attached to its various components, then the rationale for the particular weighting system employed needs to be convincingly argued. Otherwise, the critical role played by the weighting system itself in driving the summary measure will seriously undermine the usefulness of the index as a criterion for the objective evaluation because of the arbitrariness in choosing such a weight system in the first place (Chowdhury, 1991).Developed by
The GEQ index was developed as a project work by a student of Executive MBA from Judge Business School, University of Cambridge. If you have any questions please contact :Credits and References
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