Transcript Transformation Index BTI 2016

Transformation Index BTI 2016
Political Management in International Comparison
Foreword – Executive Summary – Global Findings
Content
Foreword ................................................................................................................................................. 1
Executive Summary ............................................................................................................................... 4
Global Findings ...................................................................................................................................... 7
Political transformation ....................................................................................................................................... 7
Economic transformation ................................................................................................................................. 20
Transformation management .......................................................................................................................... 33
Foreword
The impact of failing transformation is today becoming clear with unprecedented urgency and
immediacy – in Europe, too. Hundreds of thousands of people who have fled from war, despotism, hunger and poverty are gathering in emergency shelters, refugee camps and gymnasiums across Europe. Some are refugees from Afghanistan, Eritrea, Iraq or Syria who have escaped civil war or dictatorship, and have sought to save their lives through flight into the safety of Europe; some are migrants from the western Balkans seeking better livelihoods, less
discrimination and greater economic opportunity in the richer countries of the European Union. All have ventured upon often hazardous and dangerous routes in order to escape from
adverse or even life-threatening circumstances.
For years, the Bertelsmann Stiftung’s Transformation Index (BTI) has warned against closing
our eyes to development difficulties, democratic deficits and poor governance. Those of us in
the Western world who’ve questioned the relevance of transformation processes in far-away
countries for Europe are now faced with the reality and impact of human hardship, suff ering
and despair. The increasing flow of refugees and migrants who have reached Europe in recent
months means new challenges for both governments and citizens. It puts to severe test the
much-vaunted European consensus around values based on solidarity and respect for the dignity of the individual, and renders essential a swift, Europe-wide agreement on the issues of
migration and integration. Nor should the global perspective be lost, despite the necessity of
managing the acute crisis within Europe. According to the U.N. Refugee Agency, around 60
million people have currently been displaced from their homes, more than at any time since
the end of World War II. The overwhelming majority live in regions close to their homes or in
countries outside the European Union.
If we are to take the limits of resilience and absorption capacity in destination countries seriously, we are called upon to consider conditions in the countries of origin and contribute to
the fight against the root causes of flight, expulsion and desperation. The BTI, with its comprehensive analysis of political systems, economic development and governance quality in
129 developing and transformation countries, off ers a contribution in this regard. It identifies
strengths and weaknesses in transformation processes, and clarifies the key factors that stand
in the way of successful societal change and determine people’s future prospects and possibilities.
The results of the BTI 2016 point to three trends currently inducing greater numbers of people
to leave their home countries:

Repression is on the rise in many authoritarian states. This is in large part a reaction to
the Arab revolutions, which demonstrated to those in power how fragile the legitimacy
of their rule is when challenged by citizens demanding bread, freedom and dignity.
Many regimes have placed further restrictions on opportunities for political participation, such as the freedoms of assembly and association, civil liberties and press freedom, and have engaged in the targeted persecution of opposition forces and regime
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critics. In the Horn of Africa alone, we see an increasingly repressive Ethiopia, a totalitarian Eritrea, a disintegrating Somalia and a South Sudan mired in civil war. Here, it
is primarily despotism and repression that are driving people into flight.

In many countries, polarization and conflict intensity have either been sustained or on
the rise for years. Particularly worrisome is the fact that a number of governments,
such as those in Afghanistan, Bangladesh and Iraq, have not acted to deescalate conflicts, or else, as in Bahrain, Libya, Pakistan and Syria, have even aggravated conflicts
for reasons of power politics. No BTI governance indicator has shown such clear negative development over the last 10 years as cleavage and conflict management. This
has involved entire population groups facing massive discrimination or a state of complete defenselessness that then f lee conditions of collapsing statehood or targeted persecution.

The trajectories of economic and social development continue to diverge. Inequality, a
lack of investment in education and health, and the absence of viable welfare-state
protections hinder the attainment of equal opportunity and social inclusion. Particularly in sub-Saharan Africa, this in most cases means mass poverty, exclusion and structural discrimination. In other regions, a lack of economic prospects drives people into
flight. Nowhere is this currently more obvious than in the western Balkans, where a
lack of educational opportunities, high rates of unemployment and discrimination
against minorities, particularly the Roma, are combined with a palpable dis- trust in
the political elite’s problem-solving capacities. The lack of any real prospect for the
medium-term integration of the western Balkans into the European Union has induced
further desperation among a large portion of the population.
Repression, persecution and a lack of economic prospects: The BTI 2016 analyzes these three
primary drivers of today’s migration and refugee flows at a detailed level in its country and
regional studies, and also as global trends. As both an analytical tool and a guide to conditions
in countries of origin, the BTI thus fits in well with other Bertelsmann Stiftung contributions
to the debates on managing this major sociopolitical challenge.
As a think tank, the Bertelsmann Stiftung is placing particular conceptual focus on the issue
of refugees’ labor-market integration, which represents an essential step toward establishing
secure livelihoods, winning acceptance and settling in to their new societies. As an operating
foundation, it will work strongly to facilitate the improved integration of migrants at the local
level, whether this is through a refugee fund for the support of volunteer refugee- assistance
teams or by serving as an advisor to municipal partners. In addition, it is a part of a European
consortium of foundations seeking to provide care for and support the integration of underage
refugees traveling without adult accompaniment. This combination of conceptual, operational
and humanitarian activities uses the resources of our institution in a diverse manner for the
solution of one of the most urgent problems of our time.
Migration and refugee flows are key symptoms of underdevelopment and poor governance.
The adoption of the Agenda 2030 for sustainable development at the September 2015 U.N.
summit in New York was aimed at overcoming these challenges. The 17 goals to which the
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international community has agreed are intended to enable all people to live with dignity in
their home countries. By examining political, economic and social developments, the Bertelsmann Stiftung’s leading international indices, such as the BTI and the Sustainable Governance Indicators (SGI), make a crucial contribution to tracking these goals’ realization in a
holistic manner.
Aart de Geus
Chairman of the Board
Bertelsmann Stiftung
Stefan Empter
Senior Director
Bertelsmann Stiftung
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Executive Summary
The political management of democratic transformation, economic development and social
inclusion, as well as the social dialogue around these topics, has become more difficult. The
collapse of states such as Libya, Syria and Yemen has left behind a vacuum that terrorist organizations, such as the Islamic State, have filled with destructive power. The ordeal in
Ukraine, where separatist and hegemonic aspirations challenge a fragile country in transition,
calls to mind the unresolved geopolitical conflicts in the post-Soviet region. In most Arab
countries, a short-lived democratic awakening has long since been suff ocated by a harsh authoritarian rollback, as seen in Egypt. Even in some long-established democracies, such as
Hungary, political opposition and civil society forces critical of the government are being
systematically marginalized. Protests against inequality, economic hardship, corruption and
insufficient social-welfare protections have introduced new divisions between elites and dissatisfied citizens even in such a relatively advanced country as Brazil.
These developments are not isolated cases. The BTI 2016’s data demonstrate a new degree of
repression in many autocracies, a strengthening of existing defects in democratic societies, a
higher intensity of political and social tensions, and a waning capacity for dialogue and conflict resolution among leading political actors in the 129 developing and transformation countries surveyed.
On the BTI’s ten-point scale, the intensity of social, ethnic and religious conflicts has increased in the past 10 years by more than half a point on a global-average basis. The influence
of religious dogmas on political institutions and legal systems has also risen to a similar degree over the last decade. Social conflicts increasingly play out along religious cleavages.
These conflicts are exacerbated by militant and extremist organizations – from Boko Haram
and al-Qaeda to the Islamic State and the Taliban – that primarily follow an Islamic jihadist
ideology.
Remaining moderate Islamist forces, such as the Tunisian Ennahda Party, find it very difficult
in these circumstances to present themselves credibly as democratic partners, particularly as
numerous authoritarian regimes use instability and terrorist threats as a justification to increase repression and curtail political participation rights. It is significant that nearly half of
all surveyed governments today manage conflicts more poorly than was the case a decade
ago.
More democracies, more democratic shortcomings
The harsh authoritarian repression in Arab countries is partially responsible for the fact that
the state of political transformation has once again fallen slightly on a global basis. Worldwide, the number of hard- line autocracies has risen from 33 to 40 countries; in turn, the group
of moderate autocracies with certain basic constitutional and participatory standards has
shrunk from 24 to 15 countries. By contrast, the last two years have seen a slight positive shift
with regard to the ratio of democracies to autocracies.
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While the BTI today again classifies Iraq and Thailand as autocracies, Guinea, Madagascar,
Mali and Nepal once again meet minimum democratic standards; as a consequence, there are
74 democratic countries compared to 55 authoritarian states (BTI 2014: 72 versus 57). This
underscores the fact that democracy as a system of government is not currently on the retreat,
but that government critics have been subject to more persecution and repression, particularly
in authoritarian regimes.
However, this cannot be viewed as an all-clear signal for democratically governed countries.
Free and fair elections, the freedoms of association, assembly and expression, the separation
of powers, and civil rights have been further restricted in many of these states too. Infringements of association and assembly rights, in particular, became more pronounced in a total of
19 countries, or a quarter of all democracies. Press freedom and the freedom of expression,
showing a continuing negative trend, are now more significantly impaired in nearly all EastCentral and Southeast European countries than was the case 10 years ago, particularly in
Macedonia and Hungary.
Citizens doubt democratic institutions’ ability to perform
In many countries, the restriction of political and civil rights can be seen as directly related to
the rise of majoritarianism. Numerous democratic governments with strong majorities have
conceived their electoral victories as an absolute mandate to pursue political goals uncompromisingly, without consulting with the opposition or civil society, and with a disregard for
minority rights. Hungary remains the most prominent negative example of a government running roughshod over the separation of powers through the targeted curtailment of oversight
mechanisms and the freedom of expression. Other defective democracies, such as Argentina,
Ecuador, Macedonia and Turkey, have undergone a similarly strong polarization, engaging in
an exclusionary and paternalistic form of rule that contains essential features of the authoritarian governance practiced in Russia and Venezuela.
Populist, polarizing or illiberal movements often benefit from widespread citizen dissatisfaction with mismanagement and economic injustice. Support for democracy remains high in
most countries with reliable survey data, but in nearly half of all democracies, skepticism has
significantly increased regarding the performance of democratic institutions, the willingness
of political elites to engage in reform, and the capacity of governments to ensure economic
opportunity and social inclusion. This disillusionment has been fueled by the persistent inability of governments to bring office abuse and corruption under control. Despite some notable
progress, for example, in East- Central and South- east Europe, anti-corruption policy remains
the worst-rated aspect of government performance worldwide. Indeed, the BTI 2016 rates this
as insufficient or altogether lacking in 108 countries – in 54 democracies and 54 autocracies.
Singapore is the only autocracy with functioning integrity mechanisms.
Conflicts and transformation crises are also inseparably associated with social ills. Poverty,
inequality and a lack of economic opportunity, in particular, represent a kind of social dynamite apt to explode into pro- tests against poor governance. The socioeconomic development
level has for years been stuck at an extremely low global aver- age, currently at 4.34 points.
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No indicator in the BTI 2016 is rated lower. Given this urgency to act, it is all the more evident that the favorable economic and budgetary conditions in the years before the economic
and financial crisis were not consistently used for sustainable social policies. In recent years,
the scope of governments’ available options has shrunk. Performance declines, particularly in
such significant economies and potential engines of growth as Argentina, Brazil, India, Mexico, Russia and South Africa, have been as continuous as they have been significant. The
worldwide average with regard to economic performance has now declined for the fourth edition of the BTI in a row, from 6.82 in the BTI 20 08 to just 6.03 today. In the same time period, macroeconomic stability also fell in many countries, often triggered or accompanied by a
decline in fiscal discipline, falling commodity-export incomes and at times high bank-bail-out
expenditures, particularly in Eastern Europe. Under these circumstances, it will be difficult for
many governments to carry out much-needed sociopolitical reforms.
Governments not yet equipped for upcoming tasks
Currently, most governments are not sufficiently prepared for all these challenges. The group
of states today rated by the BTI as showing a very good quality of government includes just
six countries – Uruguay, Chile, Taiwan, Estonia, Poland and Lithuania. This is fewer than
ever before. The record low with regard to very good governance corresponds to a record high
for poor governance: The number of governments that the BTI categorizes as having weak or
failed trans- formation management has risen steadily in recent years to its present level of 46,
over a third of the survey sample.
In order to mitigate the intensifying social conflicts and increasing polarization and to restore
citizens’ confidence in political elites, there is an urgent need for more dialogue, a resolute
implementation of reforms, a determined fight against corruption at all levels, and a new consensus between governments and the governed with regard to the appropriate path forward.
Yet all of these are governance qualities rated as weak in many countries by the BTI. Even
with regard to international cooperation, the course of democratic and market-economic transformation pursued by around half of all governments is classified as less credible than was the
case a decade ago. If disillusionment and lack of opportunity are not to transform still more
strongly into populist protest or militant radicalization, governments must take their citizens’
demands for more political, social and economic participation more seriously and search for
new paths of dialogue.
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Global Findings
Political transformation
More democracies, but
also more repression
The global turbulence of recent years has been reflected in the overall record of political transformation. The influence of religious
dogmas has continued to grow, while participation rights have been subject to increasing restrictions. Especially in the established
democracies of Eastern Europe and Latin America, many governments have taken electoral successes and comfortable majorities as
license to govern with decreasing consideration for opposing views. However, democracy itself is not in decline. Instead, political regression was most pronounced in autocracies.
The current BTI’s review period certainly lacked nothing in the way of global political turbulence. A trip back in time from February 2013 to January 2015 offers a look at a number of
startling events. In the Arab world and North Africa, the break with old regimes was followed
by disillusionment. Except in Tunisia, the fall of dictators was followed not by democratic
transition, but rather by violent crackdowns on protests and the restoration of the status quo
ante, civil war and state failure, and the rise and territorial gains of terrorist militias, such as
the Islamic State (IS). Religious extremism also entangled West African countries, such as
Nigeria, while other states in the region sought to bring the Ebola epidemic under control.
Images of citizens protesting against their government came from around the world in countries as diverse as Brazil, Chile, Hong Kong, Turkey and Ukraine. While observers held their
breath at the events surrounding the Euromaidan protests, the violent crackdown against the
Kiev demonstrators and the overthrow of Prime Minister Yanukovych, geopolitics returned
unmistakably to the world stage: Russia summarily annexed Crimea, and a violent conflict
blazed up in eastern Ukraine. Meanwhile, EU countries have faced the deep challenges of the
debt crisis and euro bailout, and dissatisfaction with their governments has also driven citizens into the street to protest here, as well. The fact that not just Russia, but also other heavyweights, such as China and Brazil, have evinced economic weaknesses adds to a state of
affairs giving rise to concern.
Public perception is that the world has once again become more violent and less manageable.
Ever more observers regard politics itself as being mired in permanent crisis. The question of
whether political systems have the capacity to manage crises is thus asked today with increasing urgency. What form of governance is sufficiently equipped to master the coming challenges? How serious is the threat to democracies, whether from outside or inside? And are
democratic systems able to create stability in unstable times and fulfill their populations’
hopes for a better future under conditions of peace and prosperity? Theses of a crisis of de7
mocracy, or even of its retreat, are becoming more common. What do BTI findings say about
this?
As in so many cases, the answer is that it depends on the point of view. In looking at the ratio
of democracies to autocracies, the thesis of a “decline of democracies” cannot be substantiated by BTI data. The share of countries categorized as democracies has remained relatively
stable since the beginning of the survey, and is higher than that of autocracies. In the BTI
2016, 57 % of all states, or 74 countries, were democratically governed, as compared to 55%
a decade ago. Since the BTI 2006, there has been regime change in both directions: 39 in total, 22 of which have been from autocracy to democracy.
To be sure, 10 years is a comparatively brief time period over which to consider such profound social changes. However, it is notable that the 39 regime changes in this span have taken place in just 20 countries overall; thus, four-fifths of all countries have not been affected by
regime change at all, while the majority of “regime changers” have shifted between categories
several times. The transition has (thus far) gone in only one direction in just seven countries:
toward democracy in Liberia, Uganda (since the BTI 2008), Bhutan, Côte d’Ivoire and Tunisia (since the BTI 2014), and toward autocracy in Sri Lanka (since the BTI 2012) and Russia
(since the BTI 2014).
The six countries that the BTI 2016 records as having undergone a regime change have all
previously switched between democracy and autocracy at least once. Here, too, the balance
currently falls out in favor of democracies. Four states now fulfill minimum standards with
regard to free and fair elections, the separation of powers, political participation and civil
rights. Guinea’s, Mali’s and Nepal’s switch back into the democratic camp comes after being
newly classified as autocracies only in the BTI 2014. Madagascar had been an autocracy since
the BTI 2012, but has now also returned to democracy.
In Mali, presidential and parliamentary elections took place after the Islamist rebel uprising in
the country’s north had been put down and following the conclusion of a peace agreement
with the Tuareg. Under newly elected President Ibrahim Boubacar Keïta, something like political normality has been restored; it is thus hoped that Mali can return to the 20-year democratic tradition that prevailed before the unrest and continue to move forward in reconstructing the country.
Following the end of its military dictatorship in 2010, Guinea had the chance to determine its
first democratically elected president in September 2013. The democratic future of the country, which is home to the world’s largest bauxite deposits, remains uncertain. The political
climate in the run up to the October 2015 presidential elections was extremely tense.
Madagascar, another country that has moved back into the democratic camp, was once celebrated by donor countries as a model of efficient economic reforms. Five years after Andry
Rajoelina’s coup enabled assumption of power, free and fair elections again took place in
2013. Thus far, however, the new president, Hery Rajaonarimampianina, has failed to intro8
duce any significant reforms. Intra-party conflicts and old cliques appear to be standing in the
way of a genuinely new beginning.
Five years after the end of the civil war and the dissolution of the Constituent Assembly in
Nepal, elections to the second Constituent Assembly finally took place in 2013. For years, the
government and Maoist opposition had been unable to agree on key points of the constitution.
Only the devastating earthquake, with its almost 8,900 dead, served to end the standstill, and
the controversial constitution has now been in force since September 2015.
“Regime changers” are volatile – but the majority are democratic
In all four countries newly classified as democracies, the situation thus remains extremely
volatile. This applies in equal measure to the two countries in the BTI 2016 that are once
again governed as autocracies. Since the military coup in 2006, Thailand has oscillated between democracy and autocracy in every edition of the BTI. The army’s renewed coup in
May 2014 once again smashed hopes of a rapprochement between the antagonistic forces in
Thailand’s society. In the meantime, a draft of a new constitution has been rejected and, as a
result, the next regular elections will take place in 2017 at the earliest.
For the first time since the BTI 2010, Iraq, too, is again governed as an autocracy. Until his
unwilling resignation in August 2014, Shi’ite Prime Minister Nouri al-Maliki had reacted to
the advances of the IS and the disintegration of the country with an authoritarian and repressive policy that – in combination with the Syrian war – served to widen the country’s sectarian gaps further. It remains unclear whether his successor, Haider al-Abadi, is serious in his
commitment to more transparency and greater efficiency. As yet, little with regard to the
country’s precarious position has changed: In the fall of 2015, a third of the country was under IS control, and the population’s discontent over the lack of reforms is growing.
The BTI reveals little evidence of either a wave of authoritarian regime change or a dramatic
surge in democratic transitions. Moreover, the countries that have experienced regime changes make it clear that the border between the two types of systems is permeable and anything
but stable. Both new authoritarian states were categorized in the last BTI survey as highly
defective democracies – the same category that now holds all four new democracies. These
highly defective democracies remain far from a state of consolidated democracy with comprehensive protection for human rights and civil liberties, a solid constitutional foundation
and functioning institutions.
The political systems of a total of 55 of the 74 democracies in the BTI are characterized by
this type of defect to varying degrees. This share has remained relatively stable since the BTI
2006 and includes countries with relatively mild democracy defects, such as India, Panama
and South Africa, as well as democracies with significant defects, such as Guatemala, Kyrgyzstan and Niger. Some 20 % of the democracies surveyed by the BTI are classified as highly defective.
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There is a slightly negative trend at the upper end of the scale, among the democracies in consolidation. Though also relatively stable since the first BTI in 2006, this group has shrunk
from 20 to 19 countries. Ghana and India have shown weaknesses particularly in the area of
political participation rights, such as the freedom of expression and the protection of civil
rights, as well as in the prosecution of office abuse, and have thus slipped into the category of
defective democracies. Conversely, following the political turbulence of recent years and new
President Klaus Johannis’ resolute struggle against office abuse and government corruption,
Romania is back again on the path of consolidation.
Many autocracies are becoming more repressive
A worrisome trend is emerging in the autocratic camp. The group of hard-line autocracies,
where transformation strategies are absent or have failed, has grown to 40 countries, more
than in any other BTI. This is all the more notable given that, in the years previous, this group
had shown a moderating tendency that had consistently expanded the share of moderate autocracies. This has now ended. Only 15 autocracies now protect civil rights even to a rudimentary degree, grant a modest degree of political rights, such as the freedoms of assembly
and expression, or allow parties and interest groups some room for independent action. Nearly
three-quarters of all autocratic regimes quash political opposition as soon as it appears and
limit civil liberties to such an extent that their political systems can only be described as hardline autocracies. Thus, the gravest setbacks in political participation and the rule of law can
currently be observed not in democracies, but in autocracies, and particularly within the hardline autocracies. The supposed decline of democracy is thus in truth a decline of moderate
autocracy.
Trends in democratic quality seem to stand in stark contrast to the dynamics of global political
events as seen in the past two years. The BTI shows only a marginal decline of 0.09 points in
the global average for the 129 countries surveyed. However, this moderate figure masks what
have occasionally been dramatic contrary movements: The biggest setbacks, experienced by
Libya (-1.75 points), Thailand (-1.75), Egypt (-0.98) and Iraq (-0.65), counterbalance the progress made by the biggest gainers, including Mali (+1.60), Madagascar (+1.03), Guinea
(+0.70) and Ukraine (+0.65). Increases of 0.50 points or more were otherwise seen only in
Côte d’Ivoire, where conditions have normalized after a brief but intense civil war, and where
stateness and political participation in particular have improved; in Ukraine, where the increasingly authoritarian trend has reversed since the Maidan protests; and in Tunisia. Macedonia and Mexico, two relatively well-advanced defective democracies, are also among the
countries showing the largest declines.
Regional trends offset each other to a considerable degree, too. For example, the slight deterioration in Latin America (-0.07 points) is matched by improvement in West and Central Africa (+0.08). Although five of the seven BTI regions show a slight decline, the negative trend is
more pronounced only in the Middle East and North Africa (-0.29). This is due to what were
in some cases serious setbacks in 15 of the region’s 19 countries. Tunisia’s remarkable development remains the exception in this regard; thanks to the country’s successful adoption of a
constitution and its mostly free and fair parliamentary and presidential elections, its quality of
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democracy again improved by 0.50 points. Thus, Tunisia is now classified as a defective democracy, with a level of democracy corresponding to that of Mexico or Bosnia and Herzegovina. However, this success story cannot hide the fact that the other countries in the region
have fallen at times far behind the state of political transformation recorded by the BTI 2006.
This negative trend is most pronounced in Egypt and Libya, whose scores have fallen below
those of the Mubarak and Qadhafi regimes, as well as in Yemen and Syria, countries torn by
civil war and extremist terror.
In the other regions, negative and positive developments counter one another almost exactly
in terms of BTI scores. In post-Soviet Eurasia, for example, the progress made by Ukraine
and Georgia has been offset by the negative trends in Moldova and Azerbaijan. In Asia and
Oceania, democracy quality in Nepal improved to roughly the same degree that Bangladesh’s
deteriorated. The average global score of all 118 countries that have been surveyed since the
BTI 2006 has remained similarly stable even over the decade-long comparison (-0.07 points).
Is there thus no reason for worry regarding the quality of democracy? A look at the countrylevel trends paints a different picture: In nearly 60 % of the 129 states, democracy quality declined between 2013 and 2015. Although this regression has been less than 0.25 points in 49
of these 77 countries, the balance of political transformation is nonetheless negative as a consequence. This conclusion changes only slightly when considering shifts over the entire BTIsurvey time series; since 2006, there has been more deterioration than progress in 72 of the
129 states. Moreover, the extent of the deterioration in comparison with the BTI 2014 is
greater than that of the improvements. In a fifth of all countries, the quality of democracy has
declined significantly, while it has significantly improved in less than one-tenth. It is notable
that this erosion of democracy quality has manifested to a greater extent in autocracies than in
democracies. While approximately half of the democratically governed countries show setbacks since the BTI 2014 with regard to democratically oriented political transformation, the
same is true of 71% of the autocracies. This suggests that the much-touted crisis of democracy
is to a large extent also a repression of the democratic elements within autocracies.
A closer look at the patterns within this finding reveals that the trends of the BTI 2014 have
continued. Given the wave of violence, the civil wars, the strengthening of the Islamic State in
Syria and Iraq and of other extremist groups elsewhere, and all of the resulting humanitarian
catastrophes, a sharp decline or at least a serious deterioration in the BTI’s stateness scores
might be expected. However, the problem of fragile statehood remains relatively limited in
terms of both geographic extent and actual degree. On a global-average basis, there were only
slight losses in all related areas (monopoly on the use of force, state identity, interference of
religions dogmas, and basic administration). As in the BTI 2014, the most significant declines
were registered in the states of the Middle East and North Africa, which produced four of the
seven biggest declines worldwide, including Libya (-2.8 points), Syria (-2.0), Iraq (-1.0) and
Yemen (-0.8). In South Sudan, a political power struggle between the president and the former vice-president led to conflict within the army and spread into civil war. The violent
clashes in eastern Ukraine (-1.5 points in stateness) have not risen quite to this scale; but,
along with the annexation of Crimea by Russia and the loss of control in some parts of eastern
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Ukraine, they led to the largest decline of any country with regard to the monopoly on the use
of force (-4 points).
Ukraine thus remains just above the threshold of the countries the BTI regards as fragile in the
area of core stateness (meaning a weak monopoly on the use of force and weak basic administration.) Overall, this group includes 29 countries, five more than in the BTI 2014. The fact
that no sharp decline in the global average of stateness was recorded suggests a gradual evolution of instability: Violent conflicts during the current review period were preceded by
stateness problems already accounted for in previous BTIs. The phenomenon also has clear
regional contours; 13 of the 29 fragile countries are in sub-Saharan Africa, six in the Middle
East and North Africa, and six in Asia and Oceania. In addition, the BTI lists seven countries
that are regarded as failing states due to an insufficient monopoly on the use of force and underdeveloped administrative structures. In this edition of the BTI, the civil-war-torn nations of
Libya and Yemen join those already listed as failing in the BTI 2014, which included the Central African Republic, the Democratic Republic of Congo, Haiti, Somalia and Syria. Because
Afghanistan has marginally improved in the area of basic administrative structures and the
government is making efforts to provide the population with at least basic health and education structures, the country has risen out of the group with the most strongly pronounced
stateness problems for the first time since the BTI 2006.
Religion’s influence on politics continues to grow
After the clear negative trends highlighted in the BTI 2014 with regard to the rise of militant
extremist violence, the influence of religious dogmas on the internal functioning of political
systems has once again increased. In 21 states, legal systems and political institutions were
more strongly subject to this influence than was the case two years ago, with reductions evident in only five countries. The influence of Islamism has again increased in the Arab states
of Iraq, Libya and Syria; but in Turkey, too, the government is pursuing a more strongly Islamist agenda than in the past.
This stronger religious charge within the political sphere is solely limited neither to the Arab
world, nor to majority-Muslim societies. However, there are clear regional focal points. The
42 countries in which religion currently has at least a perceptible influence on politics are either Arab, African or Asian. The East African region includes countries, such as Ethiopia,
Eritrea and Uganda, whose states are broadly secular, but where mostly Christian churches are
gaining a stronger influence on politics; while in West Africa, in countries such as Senegal,
Mali and Nigeria, the conflict between religious and secular forces over the general orientation of the legal system and institutional structure is intensifying, and Islamist groups are becoming increasingly militant. Finally, in Asia, this group includes those countries with a Muslim majority, such as Afghanistan, Indonesia and Pakistan, as well as states in which the majority religion is Buddhism (Bhutan), Hinduism (Nepal) or Christianity (Philippines). Considering the longer time period since the BTI 2006, the interference of religious dogmas on legal
order and political institutions has shown the largest increase over the last decade; indeed, this
is the most strongly pronounced negative trend within all 18 indicators in the dimension of
political transformation.
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In the area of stateness, too, fragility has increased more strongly in autocracies than in democracies. This is particularly due to the destabilization of some Arab and North African
countries, as well as the fact that some defective democracies, such as Mali, were able to regain stability during the same time period. However, autocracies are also more fragile overall
than are democracies. Thirty-four percent of autocracies, but only 14 % of democracies number among the countries that the BTI regards as having fragile stateness. This can be explained by the fact that popular protests become threats to the regime more swiftly in autocracies and are thus more broadly destabilizing. In addition, the fact that elites challenged in this
way generally fail to respond with strategies of de-escalation plays a significant role.
The trigger for civil war in Libya and Syria was not some nascent democratization, but rather
the brutal repression of civil protests against secular dictatorships whose legitimacy and performance had been increasingly questioned by the population. In Iraq, too, the violent crackdown on peaceful demonstrations by the Sunni population in the north was exploited by militant Islamist groups for their own purposes. In Egypt, the Sisi government has acted with unrelenting severity against the Muslim Brotherhood, now again banned as a terrorist organization, and has thus potentially laid the groundwork for future fundamentalism and violence.
Less and less room for dissent
However, it is not only in Egypt that the need to avert terrorist threats and secure the integrity
of the state is being used to justify massive restrictions on political participation rights and
violations of fundamental civil rights. Overall, a worrisome trend observed since the BTI
2006 is continuing: The greatest declines in quality take place precisely in those areas that
belong to the most fundamental pillars of functioning democracies. On a global-average basis,
the most serious setbacks were again in the areas of political participation rights, such as media and press freedom and the freedom of assembly, while the quality of elections also deteriorated further. This has been accompanied by setbacks nearly as significant in the area of the
rule of law, particularly with regard to the separation of powers and civil rights. In 75 countries, scores in at least one of the two criteria (political participation/rule of law) declined;
while, in 28 countries, significant declines of 0.5 points or more were seen in both criteria.
This contrasts with just 42 countries that showed improvement in one of the two criteria, and
just eight countries with significant improvements in both.
Positive trends are rare in the autocratically governed countries. In recent years, while there
seemed to be a tendency to grant a certain degree of dissent and pluralism – from the approval
of opposition parties’ participation in elections to tolerance for a moderate amount of opposition media and non-governmental organizations – numerous autocratic regimes are now resorting again to cruder methods to inhibit open societal discourse. Arbitrary detentions of human-rights activists and journalists have become more frequent, as have bans on demonstrations and repressive laws against civil society organizations. This often happens under the
guise of fighting terrorism or preventing foreign interference in domestic affairs. The regional
focus here lies primarily in the Middle East and North Africa and in post-Soviet Eurasia. Autocratic regimes reacted severely to the events of the Arab Spring and Euromaidan, with the
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aim of suppressing any protest that could endanger the stability of their own rule. This trend
was exacerbated by the significant upsurge in many autocracies of protests against social injustice, rigged elections, arbitrary actions by the ruling elite and rampant corruption.
Seeking to secure their regimes’ stability, governments have turned to a set of similar instruments, ranging from bans on demonstrations to legal measures creating paternalistic oversight
of civil society organizations, media and opposition parties. Three variants of these “traditional” tools have recently been employed in an increasing number of states: the control of overseas funding flows to local civil society organizations, as well as the registration of these
NGOs as “foreign agents”; the co-option of civil society organizations by state foundations
(Morocco) or the construction of state-directed umbrella organizations (Russia); and, in the
area of media freedom, legally sanctioned regulation of Internet access.
In Russia, while the firm crackdown against civil society and independent media organizations had already strongly increased following the protests against the manipulated parliamentary and presidential elections of 2012, this intensified further after the fall of Ukrainian President Yanukovych. Placing non-governmental organizations under bureaucratic tutelage had
long been on the government’s agenda. A newly adopted law, under which organizations receiving funds from overseas were required to register as “foreign agents,” made the situation
considerably more difficult for many NGOs. Moreover, the measure was also taken as a model; many countries, including defective democracies such as Kyrgyzstan and India, subsequently passed similar measures.
In the shadow of the Ukraine crisis, and initially attracting little attention internationally, the
Azerbaijani government began a large-scale, crudely severe offensive against the political
opposition, imprisoning numerous activists and increasing the pressure on independent media
organizations. President Aliyev had just been elected to a third successive term in office but,
at the same time, anti-government protests by young people in particular had increased in Baku. Here, too, the regime’s hostility was also directed against foreign organizations. Controls
over funding flows to independent organizations from abroad were tightened. Moreover,
Azerbaijan can be deemed a model for the erection of quasi-governmental civil society organizations.
Controversial elections with lower returns than expected for the incumbents triggered an intensified crackdown on opposition forces in Cambodia and Malaysia, and the BTI reflected
this response in the form of the strongest score declines among Asia’s autocracies. Only in
Thailand, where the freedom of assembly was restricted following the military coup, were the
setbacks even greater. In sub-Saharan Africa, the autocratic regimes in Burkina Faso and
South Sudan saw declines of least one point in nearly all political-participation indicators, as
did the Venezuelan government in Latin America.
Participation rights subject to restrictions in democracies, too
Autocracies, which have further curtailed rights of participation in their already rudimentary
democratic institutions, account in large part for the overall decline in BTI political14
transformation scores. But democratically governed countries, too, give little cause for optimism in this regard, as civil rights and opportunities of political participation in many of these
countries are increasingly subject to greater restrictions. To be sure, the erosion of electoral
integrity among the most advanced democratic regions observed in the BTI 2014 has not continued unabated. In Latin America, for example, and with the exception of Peru, no further
erosion of electoral integrity was registered. By contrast, governing parties in the East-Central
and Southeast European democracies of Bosnia and Herzegovina, Hungary, Macedonia and
Montenegro used unfair methods in order to influence electoral results in their favor.
Most brazenly, the Orbán government, after having modified the country’s electoral laws,
once again achieved a two-thirds parliamentary majority despite a popular vote support of
only 44.9 %. Macedonia suffered a serious political crisis when the leading opposition party
disputed its electoral loss by boycotting parliamentary sessions. It was not until the summer of
2015, when the EU stepped in as a mediator, that the crisis could be resolved. Since then, both
the government and opposition have agreed to hold early parliamentary elections in April
2016. It remains unclear, however, whether this fragile compromise will hold. Even if the
downward trend appears to have weakened most recently, elections in 19 of both regions’ 35
democracies were less free and fair than they were in the BTI 2006. Among all the democracies surveyed by the BTI since 2006, electoral integrity has eroded in 36 states across Latin
America, East-Central and Southeast Europe, and South and East Africa. In the latter, this
applied to half of the region’s democracies.
In the last two years, numerous democratically elected governments have again significantly
restricted association and assembly freedoms (– 0.20 points on a global-average basis), curtailed the freedoms of expression and the press (– 0.15), and infringed on personal liberties to
a greater degree (– 0.16). From a regional perspective, the restrictions placed on media freedoms and the freedom of assembly were most significant in sub-Saharan Africa. In countries
such as Kenya, Nigeria and Senegal, demonstration and assembly rights were curtailed with
reference to possible violent escalations or terrorist threats. In Mozambique and Zambia, the
government restricted the opposition’s ability to hold meetings in advance of elections. Conditions for civil society engagement were restricted even in relatively advanced democracies,
such as Botswana, Ghana and South Africa, where traditions of such engagement are established. Much the same was also true of India and South Korea in Asia.
In terms of press freedom, 14 of the 25 democracies in Africa have deteriorated since the BTI
2014. In countries such as Ghana, Kenya and South Africa, this is due less to constraints on
the free expression of opinion than to the increasing politicization of private media conglomerates and the loss of high-quality journalism for economic reasons. Over the last 10 years,
however, positive developments predominate in Africa. In comparison with the BTI 2006, it
is the decline in media and press freedom in East-Central and Southeast Europe that appears
particularly alarming. Here, there have been regressions in all countries except Estonia and
Poland, including at times dramatic deteriorations, as in the case of Hungary (-4 points) and
Macedonia (-5). This has primarily been due to interference with the reporting process by
governments or individual politicians, as well as the acquisition of leading media organiza15
tions by influential businesspeople, thus intensifying competition and economic difficulties
for smaller independent publications. The media, political and economic spheres are more
strongly intertwined, which means the press has increasingly lost its capacity to function in
terms of oversight and as a watchdog. For example, in the Czech Republic, the owner of the
second-largest media company has been deputy prime minister since 2014, and in Bosnia and
Herzegovina, the owner of the largest newspaper is minister in charge of security affairs. The
fusion of the political and economic arenas also increases the pressure on critical journalists,
with the threat of libel suits often leading to self-censorship.
Tendency toward a tyranny of the majority
Hungary’s development exemplifies a trend that has also intensified in other countries in recent years: the rapid rise of what are often populist movements and parties that serve as the
leading edge of expanding popular protests against corruption and mismanagement, and demands for greater responsiveness and accountability on the part of the old political elites. Distrust in democratic governments’ abilities to handle current challenges has increased in all
regions of the world, but particularly among the democracies in consolidation. After attaining
large parliamentary majorities in elections, these new government parties cite the legitimizing
power of popular will they step across constitutional boundaries occasionally and increasingly
lift checks and balances.
In East-Central and Southeast Europe, this tendency toward a domineering governance style,
paying little heed to minority or opposition rights, is intensifying particularly in Macedonia
and – if to a significantly lesser degree – in Slovakia. This has had increasing impact on the
judiciary, the media and other institutions. In Latin America, President Ortega in Nicaragua
and President Correa in Ecuador have successfully monopolized political power and undermined democratic institutions over the course of years. The already weak opposition has been
neutralized, and Correa in Ecuador, in particular, like Orbán in Hungary, has used new laws to
significantly curtail the freedoms of expression and assembly. The “strategic toolbox” described above for this effective erosion of political participation rights has not been used exclusively by autocratic governments. Officeholders in illiberal democracies have shown themselves to be extremely capable at learning how to copy successful strategies for securing power.
Particularly in Hungary’s case, the Orbán government seems to have sought increasingly to
close ranks with autocratic governments – at least rhetorically – particularly through its public
announcement of intentions to construct an “illiberal democracy” in Hungary. By stressing
Hungary’s own separate national path, the president arguably wanted to generate specific associations with Russia’s “managed democracy” and the increasingly strident emphasis of traditional (non-Western) values aggressively proclaimed by China’s president, along with
Putin. The fact that Jarosław Kaczyński struck a similar note in Poland following the parliamentary elections prompted many observers to fear that the PiS, now furnished with an absolute majority, would be unable to resist the temptation to use this mandate to undermine democratic achievements, although Poland has been able to further consolidate its democracy both
since the last BTI and in a full-decade comparison.
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In any case, paying lip service to democracy does not currently seem to be in vogue. Practices
restricting rights are all too often met with irresolution even within democratic environments,
while the “inferiority” of liberal democracy is trumpeted all too loudly. In this regard, the critics often fail to appreciate that the challenges faced by authoritarian regimes are no smaller
than those of the democracies. Citizen protests against their political elites’ problem-solving
capacities have also increased in non-democratic regimes. The demands for greater social
equality and better state performance in the areas of infrastructure, education and health, as
well as citizens’ rising expectations that governments should be accountable to their people,
are increasing worldwide. It is quite possible that restrictions on participation rights in autocracies as well as in numerous democracies mark a helpless response to this rising discontent.
However, at least within the democracies, civil society’s burgeoning confidence could lead to
more faith in these societies’ own democratic values, both in confronting new challenges and
in restoring potential for conflict resolution and inclusion in the political process.
Hopes pinned on civil societies
In this respect, too, the BTI provides some evidence. In the overwhelming number of democracies, scores in the criteria relating to social and political integration – areas such as a society’s social capital and the extent to which interest groups serve as mediators between state and
society – have remained stable or have even improved, as have ratings for the stability of
democratic institutions, particularly in comparison to the BTI 2006. In Brazil and Chile, the
reactions of governments to protests show efforts to be more responsive to their citizens. In
Romania, Serbia and Slovenia, governments have addressed the office abuse criticized so
strongly by their populations with greater firmness. Bolivia’s government under Evo Morales,
also a so-called left populist, has shown a political style that has become significantly more
inclusive in recent years, and the country is among the overall gainers both in the current BTI
and in comparison with 2006. And, finally, though this must be said with all due caution, Tunisia and Ukraine are possible examples of successful political transformation in regions that
are otherwise not very democratic.
The large, regionally significant democracies could, in theory, provide a stimulus in this regard, but their developments have also been rather disappointing. In the last two years, Brazil,
India, Mexico, Nigeria, South Africa, South Korea and Turkey have offered few rays of hope
with regard to democratization. At best, scores here signal stability, which is notable in itself
given the massive challenges. In India (-0.35 points), Mexico (-0.50) and Turkey (-0.30), the
evidence almost exclusively shows regression. In a longer-term comparison with the BTI
2006, the results are gloomier still; only Brazil and Turkey still have a slightly higher level of
democracy today than was the case 10 years ago. The largest declines are shown in Mexico (1.25) and South Africa (-1.10). This finding is also reflected in transformation-managementscore declines of equal magnitude in these populous countries.
However, there is no overall decline of democracy itself taking place. To be sure, regressions
– particularly in the more established democracies of Latin America and East-Central and
Southeast Europe – are certainly quite worrisome and demand new responses. Yet citizens
17
and civil society have become more confident and more sophisticated in their expectations.
They are expressing their dissatisfaction with ossified structures and established elites more
loudly and with increasing impatience. Finding strategies for a new dialogue between governments and the governed, and daring to deepen democracy instead of smothering dissent
and polarizing social antagonisms, remains the challenge for the years to come.
18
19
Economic transformation
Rising opposition against inequality and social
injustice
Only about 10 % of the countries surveyed correspond to the BTI profile of a developed market economy. Three discrepancies are
particularly striking. First, the contrast between robust macroeconomic performance and low levels of social inclusion remains
persistently great. Second, national finances have been destabilized, in some cases through state-provided assistance to banks and
capital markets. Third, there is a growing gap between aspirations and reality in the large emerging markets, where economic
output has recently flagged.
While ever more citizens in developing and emerging markets are demanding accountability
from their governments’ economic and social policies and calling for greater political and
social inclusion, the international public is becoming increasingly conscious of the immense
political and economic challenges facing the rising economies. Economic issues beyond the
industrialized countries’ borders are today no longer seen solely in a security- or development-policy context, but rather are regarded as having direct relevance to the globalized world
economy.
The importance of emerging economies is shown by a look at the BTI 2016’s two biggest
groups of countries, in this case the market economies with functional flaws and the poorly
functioning market economies. In these groups, which respectively include 52 and 36 countries, and thus two-thirds of the overall country sample, the effects of globalization are gaining
traction in a development of growing relevance for post-industrialized countries, too. Of global GDP, 31 % is currently produced in these countries, and this figure is still on the rise. At
the turn of the millennium, these countries’ share was just 14 %. Three-quarters of the world’s
population lives in these economies, among which are the three most populous emerging
markets: China (6.61 points), India (6.18 points) and Indonesia (6.04 points). If initially local
transformation crises in this group of countries – whether in the form of economic slumps,
failed economic policies or social conflicts – were to spread to other emerging markets, they
would also reach the global level, with direct consequences for the economically networked
world. In China’s case, a moderate slowdown in growth has already sufficed to dim the global
economic outlook.
Conversely, economic transformation strategies that have yielded successes in these not-yetfully developed economies provide insight into promising economic-policy management.
Bhutan is one such example. The experiment with a democratic state capitalism in the country
that invented “gross national happiness” is showing its first successes. The state is placing a
considerable bet on India’s growing appetite for energy. Looking to the expected income from
the export of hydroelectric power, the Himalayan nation is planning not only to refinance the
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enormous public expenditures for the hydroelectric plants currently under construction, but
also to continue to combat poverty effectively by integrating the rural population into the advances being made in education. The BTI country experts and international creditors agree in
their assessment that the country’s present national debt of more than 100 % of annual economic output, which elsewhere would be flagged as a serious credit risk, is not a long-term
obstacle to development. Nevertheless, Bhutan remains far from being a functioning market
economy due to its relative socioeconomic underdevelopment, poor environment for market
competition and significant obstacles to private enterprise.
Côte d’Ivoire, which is even farther from becoming a functioning market economy, also made
significant gains during the review period. This is primarily due to the macroeconomic reforms implemented by Alassane Ouattara, who defended his presidency in violent clashes
with the loser of the 2010 elections. The effects of these reforms can already be seen in the
fact that the third-largest economy in West Africa, in recovery since the end of major political
violence in 2011, improved its score in the BTI dimension of economic transformation by
more than half a point for the second consecutive time. However, the country’s market economy can only become fully functional if the economic and financial policymakers around
Ouattara, the former central banker, offer new political, economic and social opportunities to
the disproportionately young and extremely poor population. This could be achieved, for instance, through a land reform, by expanding the public health and education sectors, by rejuvenating the old political elite with younger members, and by professionalizing the national
security forces in such a way as to take former militia members into account.
Mali, Côte d’Ivoire’s northern neighbor, has also improved economic and social conditions
for successful transformation. Since the June 2013 peace agreement between the government
and the Tuareg, the country’s poorly functioning market economy has regained a portion of its
lost performance and macrostability. However, Mali is still more than half a point below the
economic-transformation level it had reached in the BTI 2012. The repercussions of war in
northern Mali continue to cause serious problems, including the displacement of 100,000
people, persistent food insecurity and employment loss impacting nearly one in three Malians.
Eleven countries without economic transformation
The most significant declines among the functionally flawed and poorly functioning economies were seen in Bahrain, Ghana and Venezuela, all of which have one thing in common:
Their public finances have come under pressure as a result of falling commodity-export income, while currency devaluations have made imports more expensive and increased the
overall price level. Bahrain’s government bought citizens’ loyalty through generous blanket
subsidies while maintaining low tax rates, which is a financially shortsighted policy in a time
of declining oil revenues. In Ghana, long-recognized structural weaknesses in an economy
dependent on gold and cocoa income are becoming increasingly clear. Even after the currency
reform of 2014, the value of the national currency remained in free fall. In combination with
an undisciplined fiscal policy, the pressure on the Ghanaian cedi has helped feed a doubledigit inflation rate. Revenues from the Jubilee oilfield discovered in 2007 and the recent near21
billion-dollar loan from the IMF will afford short-term relief at best. In Venezuela, one of the
world’s biggest oil exporters, the government has continued its generous spending policy despite disastrous economic prospects and depleted reserves. The population is feeling this
mismanagement in the form of inflation and a shortage of basic foodstuffs.
The largest deterioration with regard to economic transformation is evident in the failing
states of Libya and the Central African Republic. In these countries, order has collapsed as a
consequence of military conflicts between civil-war combatants, leaving only rudimentary
market economies. The two states are thus among the small but growing group of countries in
which no economic transformation is taking place due to war or a lack of political will. This
group now contains 11 countries – an infelicitous record for the BTI.
Among these 11 rudimentary market economies, Myanmar is the only one to show significant
gains. Since 2011, the military dictatorship has embarked on a cautious course of political and
economic reform. The introduction of a freely floating exchange rate and steps toward a liberalization of foreign trade have spurred economic growth. In addition, President Thein Sein’s
government not only announced social reforms; in 2014, it also implemented a comprehensive
social security law passed in 2012. Nevertheless, corruption, a poor infrastructure and a weakperforming education system present significant development obstacles. The other rudimentary market economies have remained more or less consistent in their economic weaknesses
or, like Syria (– 0.43 points), have fallen still further back.
Little has changed at the upper end of the economic-transformation scale, with one exception:
Brazil shows a clear negative trend and is the only one of the 30 developed and functioning
market economies to do so. The Brazilian success story has been fading for a number of years
– in large part due to an increasingly expansive spending policy that was implemented in reaction to the financial and economic crisis (which initially endangered macroeconomic stability)
but still failed to prevent the subsequent slump in growth. Despite the successes of the progressive social policies of the Cardoso, Lula and Rousseff governments, Brazil remains
among the countries in which income and wealth are particularly unevenly distributed. Hundreds of thousands of people have taken to the streets in recent years to protest against inflation, corruption and an inefficient public administration.
Overall, most of the 30 advanced countries are found in post-communist Europe or Latin
America, and the composition of this group has changed in only one case: Panama has taken
Bahrain’s place among the functioning market economies. The Central American country has
not only stabilized its fiscal position; it is experiencing a downright construction boom thanks
to large infrastructure projects, such as the expansion of the Panama Canal, which began in
2007.
Six winners, 11 losers
By taking not just the BTI 2016 review period but the past 10 years into view, a number of
quite significant developments become evident – for individual countries, for country groups
22
and sometimes even at the global level. For example, six countries have greatly improved
their state of economic transformation by more than 1.00 point. Uruguay (8.57points/rank 10
in the BTI 2016) has successfully jumped from the functioning to the developed market economy category, and today has one of the most effective social systems worldwide, with exemplary private-property protections. The United Arab Emirates (8.14/rank 14), still classified as
a market economy with functional flaws in the BTI 2006, today numbers for the first time
among the developed market economies, thanks particularly to improvements related to the
equality of opportunity, education policy and the foundations of market-based competition.
Moldova (5.79/rank 60) still demonstrates functional market-economic flaws, particularly
with regard to the concentration and amalgamation of political and economic power. However, it has continuously improved, and its dependence on the recently weakening Russian
economy has been at least somewhat reduced thanks to its free-trade agreement with the European Union.
Three other countries with significant improvements in the past 10 years, all of which are
found in sub-Saharan Africa, remain poorly functioning market economies. In Côte d’Ivoire
(4.68/rank 88), Malawi (4.61/rank 90) and Liberia (4.54/ rank 94), the trends are fragile despite the notable progress. These countries’ socioeconomic-development levels and welfare
regimes remain underdeveloped to such an extent that a considerably longer period of economic development, along with social policies involving the redistribution of resources and
societal power, will be needed in order to remedy the structural shortcomings faced on the
path to a socially responsible market economy. Liberia’s example, in particular, illustrates just
how long this path is and how time-consuming the process of overcoming these barriers is
likely to be. While this county has shown by far the greatest development gains of all countries surveyed in the BTI – a total of +2.15 points relative to the BTI 2006 – the post-civil-war
country was unable to prevent the failure of its chronically understaffed and poorly performing health sector during the Ebola crisis.
Standing in contrast to the six countries with significant improvements of 1.00 or more points
are 11 countries that have deteriorated to the same degree in the past decade. Although Hungary (7.79/rank 16) remains a functioning market economy, it was hit harder by the crisis than
were other Eastern European states due to persistently high budget deficits, a high degree of
vulnerability to the fluctuations of international financial markets, its dependence on foreign
investment and the high share of its loans taken out in foreign currencies. Bahrain (6.43/rank
39) is an economically advanced country, but its policymakers have done too little to combat
growing social inequality and have intensified discrimination against the Shi’ite majority
population, a primary reason for the protests in 2011. In Thailand (6.29/rank 42), the economy
has never fully recovered from the 1997 Asian crisis.
In addition, partly because of the ongoing power struggle between the old elites and supporters of former Prime Minister Thaksin Shinawatra (2001 – 2006), the country’s economy continues to perform significantly below its full potential. Hurdles to recovery in Ukraine
(5.36/rank 73) have become considerably higher following the 2008 financial and economic
crisis, and under the influence of the military conflict with pro-Russian separatists. The South
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Asian states of Nepal (4.29/rank 102) and Pakistan (4.11/rank 103), both of which have been
subject to recurrent periods of conflict, have for years lacked robust economic growth and
effective strategies for combating mass poverty. Iran (3.00/rank 117) lacks the basic foundations of a competitive market-based system.
Syrian and Eritrean economies in a sorry state
For the time being, four countries in North Africa, the Horn of Africa and the Middle East
lack any immediate prospect of economic transformation. Libya (2.89/rank 119), Sudan
(2.39/rank 124), Syria (1.89/rank 126) and Eritrea (1.36/rank 128) not only feature rudimentary market economies, but are also among those six countries that have demonstrated the
greatest declines since the BTI 2006. The humanitarian crisis in Syria and the political terror
in Eritrea have driven large numbers of people into surrounding countries and even to Europe,
with these states now numbering among the most significant countries of origin for the growing influx of refugees.
How does the economic balance sheet of the past decade thus appear as a whole? On the one
hand, it is sobering. Even 10 years of mostly rapid growth in the emerging markets have not
contributed to an overall increase with regard to the state of economic transformation. Only
about 10 % of surveyed countries today display functioning market-economic systems as well
as a high degree of socioeconomic development with functioning social systems.
On the other hand, the last decade’s trends also inspire cause for optimism. A consideration of
countries that show significant changes of 0.25 points or more reveals 45 countries with improvements as compared to 39 countries with declines. From this perspective, it is notable that
the global economic crisis has not led to more extensive transformation setbacks in developing countries and emerging markets. This confirms the growing weight of the global South
and clearly distinguishes the current era from earlier phases of world economic development,
when crises in the capitalist centers had a direct impact on the periphery.
Social policies remain a major weak point
One gap documented persistently by the BTI since 2006 has remained clear and stable, specifically, that between the economic and social components of a socially responsible market
economy. Evidently, governments worldwide are more successful in establishing growthpromoting market and competition frameworks, stable currencies and prices, and protections
for private property than they are in overcoming socioeconomic barriers, providing social
security and equality of opportunity, and formulating sustainable environmental and education
policies. Once again, the BTI 2016 reveals economic criteria of currency and price stability
(6.70), private property (6.14), organization of the market and competition (6.07) and economic performance (6.03) to be, on average, significantly above the social criteria of welfare
regimes (5.05), sustainability (4.79) and the level of socioeconomic development (4.34).
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Overcoming the imbalances between economic and social development is more than an altruistic goal. Socially inclusive outcomes, as measured by the BTI through indicators such as
socioeconomic barriers and equal opportunity, actually do contribute to future economic
growth and are thus directly economically relevant. Institutions possessing the political capacity to promote inclusive growth – the success of which are measured by the BTI through the
social-safety-nets and education-policy indicators, among others – are critical for the success
of whole societies over the long term. Social progress can only be achieved in the course of
long-term processes that are generally nonlinear, and that are rarely free of conflict. Countries
that have been equally successful in the economic and political spheres – such as Uruguay,
whose welfare-state traditions stretch back to the early decades of the 20th century – show
just how long the horizon for this type of development can be.
The “Washington Consensus” has failed to achieve its goals
The gap is largest in those places where the need is greatest, such as in the underdeveloped
regions of sub-Saharan Africa, particularly West Africa. Benin, Burkina Faso, Mali and Niger
are representative of a number of countries that have generated an above-average level of
economic growth and are open to market-economic reforms even though this has not also led
to broad-ranging improvements in living standards and opportunities for advancement within
the general population. This assessment also applies to some Latin American and AsianOceanic countries, such as Guatemala, Honduras, Papua New Guinea and – at a somewhat
higher level of development – India.
In 90 % of all surveyed countries, indicators associated with social participation trail those
related to market-economic arrangements. The reasons for this are in significant part to be
found in the one-sided pattern of prioritization that prevailed throughout recent decades. The
fact that many national governments placed a higher priority on structural economic adjustments than on an active social policy must be seen against the background of the development
policy constellation of the late 20th century. Western donor countries and international financial institutions placed their focus on structural economic adjustment, increasing their emphasis on institutional and legal reforms in the 1990s with the declared goal of creating conditions
appropriate for social progress and, particularly, for reducing poverty. According to this
school of thought, the coexistence of market-economic regulatory policies and good economic
performance, on the one hand, and relatively high socioeconomic-development barriers and
social exclusion, on the other, should not necessarily be regarded as a shortcoming or contradiction. Rather, it was viewed as an intermediate stage, with economic and social development likely to follow one another in succession.
But the hoped-for trickle-down effect – a key aspect of a theory positing that liberalization,
deregulation, privatization and low capital-gains tax rates would increase social disparities
only temporarily as the accumulated wealth would lead in the medium term to more investment, increased production, more employment and ultimately higher incomes for the middle
class – materialized to a far lesser degree than predicted. Significantly, at least since the beginning of the 2000s, state-capitalist developing countries following the Chinese model and
25
countries with active social policies, such as Brazil, have been more successful in meeting the
Millennium Development Goal of poverty reduction and in achieving economic growth than
have those orienting themselves toward the so-called Washington Consensus.
The BTI, too, has been unable to confirm the trickle-down effect. The countries with the
greatest “social justice gap” in the BTI 2006 – that is, the greatest difference between the
BTI’s economic and social criteria – have not advanced beyond a very low level of socioeconomic development throughout the last 10 years. This finding suggests that more must be
done to strengthen the institutional underpinnings of social inclusion, and that it must be more
resolutely targeted in the formulation of economic-development strategies.
Incidentally, the 13 countries that – contrary to the general trend – show higher scores in social than in economic criteria are likewise in most cases not to be recommended as models.
The average economic-transformation status of these countries not only lies significantly below the BTI average (4.60 points as compared to 5.62 points), but has also declined by an
average of 0.67 points in the last 10 years. Ten of these 13 countries, including Belarus, Cuba,
Uzbekistan and Venezuela, rank among the lower half in terms of economic transformation.
Although these countries usually feature good framework conditions for a potentially inclusive market-economic transformation in terms of human development, education and health
care, their authoritarian governments oppose the introduction of far-reaching marketeconomic structures in favor of their own specific political-economy regimes.
Social inclusion possible in emerging markets, too
However, the BTI data from the six comparable editions since 2006 yields another explanation for the arrested state of social participation, this one on a global scale. The volatility of
social indicators, such as socioeconomic barriers or social safety nets, is fundamentally lower
than that of economic indicators, such as output strength or anti-inflation policy. Both positive
and negative outcomes of social policies take longer to manifest themselves. This suggests
that social-development progress requires significantly greater political efforts, and demands
policies implemented over a longer term, than is the case for economic-performance variables
and market-based competition and stability policies.
However, even taking this explanation into account, a perceptible if slow global tendency
toward more social inclusion would indeed have been possible. Yet the BTI has identified few
countries in which this justice gap has perceptibly diminished over the last 10 years. These
individual cases include Bhutan, Bolivia, Mongolia and Rwanda. In democracies, such social
progress often goes hand in hand with functioning processes for the development of political
consensus. Thus, among other factors, Mongolia owes its socioeconomic progress to a suspicious public, which has demanded that its political representatives extract a reasonably high
national dividend from foreign mining explorations. Since 2006, Bolivian voters have regularly produced broad political majorities behind the Movimiento al Socialismo’s neodevelopmental economic policy focusing on high levels of public investment, an active social
policy and countercyclical economic policy, while placing far less emphasis on market-based
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competition and private business activity. An inclusive social system can, in turn, contribute
to the further development of a more inclusive democratic political system.
In countries with weaker or less active civil societies – typically autocracies, such as Rwanda,
or young democracies, such as Bhutan – individual governments with social-policy agendas
have taken the initiative and sought to strengthen their legitimacy by achieving palpable improvements in social conditions. The Rwandan government has expanded its provision of free
education from the ages of nine to 12 years old and introduced a statutory health care insurance system. These measures are part of a comprehensive development program that is void
of genuine democratization. Bhutan, too, has invested heavily in education, health care and
infrastructure. The country has demonstrated considerable success in reducing poverty, but
remains in the early stages with regard to the evolvement of a private sector.
These individual cases show that, under stable political conditions and with the prioritization
of inclusive growth strategies, tangible social progress is possible in reasonable time periods.
However, these promising examples do not add up to a significant, positive trend on the global level.
One opportunity for successful social policies in developing countries may rest in the realignment of the development-policy landscape in the 21st century. This could offer new alternatives to the predominantly Western donor countries and financial institutions. South-South
cooperation has increased considerably in recent years. While development cooperation in the
1980s and 1990s was largely defined by the West, now a competition for successful development cooperation between the West, China and other countries is under way. This rivalry
affords developing countries greater opportunity for choice in selecting their partners and
greater freedom in the formulation of their own economic and social-policy priorities – a constellation that, of course, comes with increased national responsibility for that policy. It has
yet to be seen whether non-Western partners will contribute over the long term to a socially
balanced development.
Banks and capital markets more robust than before the crisis
The second gap, which is as dangerous as it is striking, is illustrated by the opposing trends of
two BTI indicators that should be moving in harmony in a functioning market economy: the
organization of the market and competition, and currency and price stability. Instead, BTI
experts judge the fiscal situation and debt levels, in particular, to be significantly less stable in
some regions than was the case a decade ago, while regarding banking systems and capital
markets as being significantly more robust. This trend began shortly before the global economic and financial crisis, and has continued through the current BTI 2016.
In the wake of the 2007 – 2008 global financial crisis, banking systems in developing and
transformation countries have been aligned more strongly toward international standards in
areas such as capital resources, liquidity, independent oversight and transparency requirements. This has been a positive trend. Since the onset of the financial crisis, the corresponding
27
BTI indicator measuring the solidity of banking systems and capital markets has improved
more strongly than any other qualitatively compiled indicator of economic transformation,
and even improved slightly more in the current period – rising by + 0.51 points relative to the
BTI 2008, and by + 0.07 points relative to the BTI 2014.
In many emerging markets, the rapid stabilization of banking systems and capital markets
following the outbreak of crisis in fact testified to the presence of functioning economic governance at the national level. The share of non-performing loans has decreased in most countries since 2009, and governments themselves have stepped in to help make credit available.
Political experiences managing previous crises played a large part in the coordinated and relatively effective policy reaction. Despite all the disruptive consequences, this highlights a possible positive effect of economic crises: They expose regulatory failures of the past and can
thereby initiate a learning process among policymakers that contributes to a more successful
management of future crises.
These experiences were of great importance particularly in developing and emerging markets
that were already strongly integrated into the global economy and were accordingly vulnerable to shocks. For example, this learning process had already taken place in Indonesia and
South Korea during the 1997 Asian crisis. Brazil and Chile, too, are representative of a number of emerging markets that learned lessons regarding the coherency of fiscal and monetary
policies and countercyclical economic policy from the late-1990s’ crisis. Unsurprisingly,
these states have been well-prepared for the new financial- and economic-policy challenge.
Because of this previous experience, among other factors, countries in the South were more
reluctant than those in Western Europe and North America to deregulate their financial markets even before the outbreak of the most recent crisis.
However, if we look at those countries where the proportion of non-performing loans has increased rather than decreased since 2009, we can identify regional nodes and causes of declining macroeconomic stability. This share has increased especially in some Southeastern European (Bosnia and Herzegovina, Croatia, Macedonia, Montenegro, Romania, Serbia, Slovenia)
and Central and Eastern European (Czech Republic, Hungary) countries. Armenia, Bhutan
and the United Arab Emirates round out the list. The increase in public debt is an additional
problem. In a number of countries, the public-debt ratio has doubled since 2008 (Croatia,
Ghana, Honduras, Montenegro, Senegal, Serbia, Slovakia) or even tripled (Armenia, Bahrain,
Romania, Ukraine). The leader here is also an Eastern European country; in Slovenia, debt
has increased fourfold and now totals more than 80 % of GDP.
Bank bailouts at the public expense in Eastern Europe
East-Central and Southeastern Europe thus offers a telling example of how the stabilization of
banking systems and restoration of capital-market liquidity have contributed to economic instability. In Hungary, the persistently high level of government debt causes problems, while
state intervention and investments in the banking sector have not yielded a medium-term return of relative stability. Recently, Széchenyi Bank and the Hungarian Trade Bank, both par28
tially owned by the state, declared bankruptcy. Like many other Southeast and East-Central
European states, Croatia lacks institutional guarantees; moreover, budgetary policy is subject
to populist-driven uncertainties.
In addition to a relatively high share of non-performing loans, additional sources of instability
have appeared in the post-Soviet states, including geopolitical conflicts, the low oil price and
the economic sanctions against Russia, which is tightly linked with the countries of the former
Commonwealth of Independent States (CIS) economic area. In this respect, the significance
of the military conflicts involving Russia in Georgia in 2008, and particularly the destabilizing influence of the Ukraine crisis since 2014, can hardly be overestimated. For example, Armenia’s economy has suffered for years from the decline in remittances from labor migrants
in Russia, as well as from a large trade deficit and a crisis-prone tax structure. Kazakhstan,
after initial problems during the financial crisis, was able to restore somewhat more stability,
but cannot cope with the low oil price for long. The volume of foreign direct investment in
Georgia is today considerably lower than before the August 2008 war with Russia.
In the years following the financial crisis, most developing and emerging markets were
affected by declines in investment and declining demand for commodities. Revenue from the
export of oil and other raw materials fell, and because economies in the OECD states
slumped, remittances from labor migrants also declined.
However, some countries have been able to defy this trend. The West African countries of
Côte d’Ivoire (8 points/+5), Guinea (7/+3), Liberia (7/+2) and Togo (7/+3) all have gained
significantly in macro-stability since 2008. In Bolivia, macroeconomic stability has improved
by two points, to a total of nine, over the same time period. The economies of Asia and Oceania have remained at a constant and in many cases high level. South Korea lost a point following the financial crisis, but has remained at a constant eight points since 2010, and despite
lower demand, managed to generate growth through one of the world’s largest state investment packages measured as a share of GDP. Much the same is true of Malaysia, which has
received a constant score of seven points since 2010.
The lesson that economic instability can quickly turn into political instability has roots even
beyond the recent financial and economic crisis. The increasing interconnectedness of the
globalized economy pro-vides for a higher volume of trade and greater efficiency, but also
increases the vulnerability to external shocks, while reducing individual states’ abilities to
take independent economic action. The decoupling of the globalized economy from national
policies contributes to the impotence of national states with regard to increasing socioeconomic inequality, which is a major factor in the strengthening of social protest movements
and populist political forces.
Market pressures limit political participation
On the other hand, global markets, and particularly financial markets, place enormous pressure to act on participatory systems’ political processes. Where the development of political
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consensus and decision-making processes are not restricted from the outset, as in authoritarian
systems, these global market forces tend to limit the scope of distributive-policy decisionmaking. This ultimately amounts to a curtailment of democratic participation rights and a
dominance by the executive. The increase in protests in many countries must be seen in this
context. The South African example of a coordinated and participatory policy process in response to the crisis represents an exception in this regard. As the realization dawned in the
smallest of the BRICS states that even functioning banking regulations and low state debt
offered no protection against the consequences of the global crisis, the government established
a task force based on existing structures that had been set up in 1994 to ensure that social dialogue accompanies the development of economic policies. Consisting of government, labor,
business and community representatives, the National Economic Development and Labor
Council negotiated the framework for political measures and retained responsibility for their
monitoring and implementation. This example shows that democratic processes and successful economic management do not necessarily preclude one another.
Most economies are suffering from more or less pronounced symptoms of a legitimacy deficit, with the number of protests in recent years going up around the world. Protesters’ discontent has manifested itself not only in the desire for more democratic participation and a
stronger rule of law; equally important are the economic-policy demands, such as the fundamental reform or even abolition of the international financial institutions, tax justice, labormarket improvements and the reduction of inequality.
In the major emerging markets that contribute the most to global economic growth, an additional legitimacy deficit is appearing. In many of these countries, the trust and credibility accorded to governments have been based on a high level of economic growth and rapid economic-transformation successes. The deterioration of this credibility was not primarily a result of the world economic crisis, which was generally well-managed. Rather, the lack of a
return to the economic fast lane after the end of the crisis induced a strong decline in confidence. The “new normal” of average-to-good growth rates entails a contraction between continuing high expectations and the economic reality – a contradiction that can be observed
quite well in the debate over China’s growth prospects, where a failure to reach the 7 % mark
is already perceived by some observers as a threat to political stability.
Disillusionment in the BRICS countries
This “new normal” also explains why the BTI experts remain skeptical with regard to the assessment of economic performance in the emerging markets. Growth rates are no longer as
high as in the years of plenty from 2004 to 2007. The indicator surveying the economic output
of developing countries and emerging markets has fallen continually as a global average since
the BTI 2008. Moreover, if the major growth engines of the South and East fall into greater
difficulties, this would have far-reaching consequences for the industrialized and developing
countries alike. In this regard, the negative signals from the emerging markets are worrisome.
Since January 2011, the end of the BTI 2012’s review period, all BRICS countries have declined in terms of economic performance: Brazil (-3 points), India and Russia (both -2 points)
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by the greatest amount, and China and South Africa (both -1) somewhat less. Argentina (-2)
and Mexico (-1), too, have lost momentum. Of the 11 emerging markets in the G-20, only
four – Indonesia, Saudi Arabia, South Korea and Turkey – have maintained the level reached
in January 2011, and none has measurably improved since that point. The other 117 economies have experienced less severe declines in their economic output during this time period,
but their weight in the global economy is also less.
In four of the five BRICS countries, currencies and prices have also grown more unstable.
Brazil’s central bank has had considerable difficulty in keeping inflation under control, particularly as the Rousseff government has been tasked with simultaneously stabilizing government finances, reducing the current account deficit, stopping the depreciation of the currency,
and increasing regulated prices for electricity, gasoline and public transportation. India, too,
had major problems with currency stability at least until 2013. Since that time, falling oil prices and the trust placed in the Modi government have led to a restoration of moderate inflation
rates. The Russian economy is suffering not only from low oil prices, but also from Western
sanctions. The reserves that provided liquidity and boosted the economy during the 2008 financial crisis and in the 2014 – 2015 period are expected to be exhausted in the course of the
next three years. Finally, South Africa shows a volatile exchange rate due to a growing current account deficit, a low savings rate and dependence on short-term capital inflows.
Additional country-specific weaknesses and shortcomings further cloud the economic outlook
for the emerging markets of the G-20 – high socioeconomic barriers in India, the lack of economic stability in Argentina, insufficient protections for private property in Russia, the inequality of opportunity in Saudi Arabia, and insufficiently sustainable policies in Indonesia.
Nevertheless, these nations remain the drivers of economic transformation. Taken together,
they sit significantly above the BTI average in all 14 indicators and, in many areas, continue
to set the standard for other countries – for example, Mexico with regard to anti-inflation policy, South Korea with regard to education policy, or Turkey with regard to strengthening private enterprise. Their ability to retain the top places in future benchmarks will depend on
whether they are able to recover the recently shaken confidence in the resilience of their
economies and their social cohesion.
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32
Transformation Management
More conflict, less confidence
The last few years have been marked by increasing conflict intensity – particularly in Arab and East African countries. Many national
governments are ill-prepared when it comes to addressing conflicts, while some knowingly foment violence. Confidence in political
elites has fallen, with the credibility of many governments diminished on the world stage. It is particularly worrying that the quality
of governance is declining in large, populous states and key anchor countries, sometimes dramatically.
Those working to bring about change often face exceedingly difficult conditions, and nowhere
are the impediments to transformation as daunting as they are in Africa. The countries found
within a 4,000 kilometer radius of Chad, one of the world’s most underdeveloped countries,
comprise three-quarters of the poorest, most conflict-ridden, unstable and structurally disadvantaged countries in the world. From West Africa’s destitute post-conflict states, Liberia and
Sierra Leone, the band of poverty and instability extends through Burkina Faso, Niger and
Chad to divided Libya in the north, the failing states of the Democratic Republic of Congo
and the Central African Republic in the south, and Eritrea, Somalia, South Sudan and Sudan
in the devastated Horn of Africa to the east. Conditions are just as unstable in Mali and Nigeria, which have been shaken by religious extremism.
The adverse state of affairs in devastated Libya and imperiled Ukraine have made transformation all the more difficult. The challenges faced by these two countries are emblematic of
those confronting governments around the world: an increasing potential for conflict, and religious extremism or violent separatism that increasingly undermines statehood. In the age of
the Islamic State (IS) group and neo-hegemonic power politics, it seems that the old rules or
traditional forms of conflict resolution can only achieve so much. The demands on structural
transformation are rising.
European perceptions of an increasingly violent world may be based primarily on events in
neighboring regions, but these fears do correlate with BTI findings: The global average for
conflict intensity among the 118 countries reviewed in 2006 has risen by 0.51 points over the
last decade, which represents a significant jump on a scale of one to 10. This is one of the
most extreme shifts in global average for any BTI indicator.
For all the impact of drug wars and ethnic tensions, the contributions of Latin America and
Asia to this trend is negligible. In fact, without these regions, the conflict intensity indicator
would have risen by 0.64 points. And, in post-Soviet countries, the rise in conflict intensity is
almost entirely driven by the Crimean crisis and the territorial conflict between Russia and
Ukraine. This means that the rise in conflict over the last decade is primarily an African and
Arab phenomenon, taking place specifically in North and East Africa.
It is hardly surprising that the Middle East and North Africa are associated with particularly
negative development: Violence levels remain high in Iraq and Sudan, while Libya and Syria
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are now similarly beset by conflict. But also the countries caught in the crosswinds of the Arab Spring – in particular, Egypt, Tunisia and Yemen – are now subject to significantly higher
conflict levels than they were under the deathly calm of their respective presidential dictatorships.
Major barriers to transformation in Africa
In terms of conflict intensity, West Africa is particularly volatile – the short, fierce and now
contained conflict in Mali, for one, proves that. Over the last 10 years, successful peace initiatives in Côte d’Ivoire and Liberia have been offset by increasing levels of conflict in Burkina
Faso, Guinea and Mali. In South and East Africa, on the other hand, there is a clear negative
trend underway. Up and down the list of countries in this region, latent tensions have grown,
even erupting into civil war in some cases. It’s a list that begins with the further destabilization of the Horn of Africa and the fight for South Sudan, both of which are now taking their
toll on Uganda, and continues through to southern Africa, and to Lesotho, in particular. But
conditions have deteriorated elsewhere, as well, in Burundi, Madagascar, Malawi, Mozambique, Tanzania, Zambia and Zimbabwe.
The drivers of conflict vary: While in the Horn of Africa and South Sudan, it is religiously
motivated terrorism and the struggle for resources that bring increased conflict, the less severe
conflicts in southern Africa are associated with ethnic, social or religious tensions arising in
the context of elections that, while largely free, are polarizing and seldom fair. These conflicts, primarily in defective democracies, together contribute greatly to the higher level of
conflict intensity worldwide.
The barriers to transformation remain highest in West and Central Africa, where the level of
conflict intensity is almost as high as that of the Middle East and North Africa. The type of
good governance exercised consistently and thoroughly by the Liberian government since the
January 2006 election of Ellen Johnson-Sirleaf is a rarity in this region. Of course, this is
hardly a coincidence, as strategic transformation management is far more challenging in poor
countries with low education levels, weak stateness, weak civil society traditions and histories
marked by violent conflict than it is in stable and rich countries.
The BTI takes this fact into account by incorporating a level of difficulty in its calculation of
the overall management score of each government. For example, the United Arab Emirates,
one of the richest countries in the world, shares 42nd place in the unweighted Management
Index with Niger, which comes in last in the Human Development Index (HDI). But once you
factor in the markedly higher barriers that Niger’s government faces in its policymaking (a 7.7
degree of difficulty compared to 3.5 in the UAE), their respective rankings in the Management Index change, with the Arabian state coming in 50th, and the West African one in 32nd.
It is often power elites who foment violence
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How well are politicians equipped to deal with the challenges presented by an increased likelihood of violence and heightened societal conflicts? Not at all well is the worrying answer
revealed by the BTI. In the last 10 years, no other factor of political leadership has experienced as great a drop in quality, on global average, as the ability to effectively manage conflict.
This is particularly true of Arab and African governments. In the Middle East and North Africa (minus Kuwait, Oman and Qatar, only later included in the BTI country sample) the average results for conflict management fell by 2.67 to just 3.50 points, the worst score in interregional comparison by some distance. The capacity and willingness to resolve conflicts has
decreased in more than three-quarters of Arab countries since 2006. The most extreme example is Bahrain, where the Sunni ruling class uses the “divide and conquer” principle to discriminate against the Shi’ite majority in its overall efforts to weaken broad-based calls for
democratic reforms. Searches carried out in the homes of Shi’ite clerics, destruction of houses
of worship, dismissal of Shi’ite public officials and doctors, and the arrest of dissidents and
opposition leaders – all of this has polarized Bahraini society. A gradual but marked drop of
six points since the end of the liberal phase over 10 years ago has put the Bahraini elite at the
bottom of the BTI rankings for conflict management. A rating of just one out of a maximum
of 10 points means, in real terms, that not only has the government made no effort to resolve
conflicts, but that it has in fact knowingly fomented confrontation – just like the regimes in
Libya and Syria.
These examples show that while protests and demonstrations by pro-democracy forces may
well help increase conflict, they do not bear the causal responsibility for polarization and political violence. Here, as in other Arab countries with comparable increases in conflict, such as
Egypt and Saudi Arabia, it is in fact the power-hungry elites who have no interest in moderating opposing viewpoints or balancing out existing inequities and, instead, knowingly stoke
polarization in their respective societies in order to justify repression and maintain their power.
The situation in sub-Saharan Africa is hardly better. In 23 of the 38 countries reviewed in the
region, the willingness and ability to defuse societal conflicts has declined over the last decade, with significant drops in Eritrea and Mali. West African countries are faced with specific
challenges arising from a significant increase in religious extremism which has become more
militant and aggressive due to the unstable conditions in North Africa, environmental degradation caused by climate change and an increase in smuggling activity in the Sahel region.
Apart from those West African countries with the highest levels of democracy – Benin, Ghana, Liberia, Niger and Senegal – where governments are relatively accomplished at defusing
conflicts, the mere presence of a political elite disinclined to actively stoke conflict can be
counted as a success. Here, Côte d’Ivoire has shown particular improvement, while government incapacity in Nigeria has seen this important anchor country increasingly drawn into the
vortex of political violence.
Of the sub-Saharan African countries, the quality of conflict management has dropped considerably in Ethiopia, Lesotho and Uganda. In Ethiopia, the government’s sustained ethnic
35
and political discrimination against over a third of the population has reinforced the Oromo
people’s ethnic separatist ambitions. In Lesotho, the military putsch marked an abrupt end to
the cautious rapprochement of politically opposed camps. Meanwhile, in Uganda, the government knowingly infuses political conflicts with ethnic issues. After the end of the review
period, power-political considerations drove Burundi’s government to deliberately light the
fuse of ethnic conflict between Hutus and Tutsis, consciously risking another civil war. These
four cases exemplify the declining interest in and ability to put aside conflicts in sub-Saharan
Africa in general and the southern and eastern regions of Africa in particular, where the regional average for conflict management (absent the later inclusion of Lesotho and South Sudan in the country sample) now stands at 5.27 points, having fallen 0.67 points over the last
10 years.
Little consensus on goals
This inability or unwillingness to mitigate conflict is often directly related to increasing uncertainty about the best route to take. The stakeholder consensus on the goals of transformation
has become more fragile. Once again, this was most apparent in South and East Africa, where
the regional average for shared objectives fell from 6.39 to 5.83. Ten years ago, in seven of
the 19 countries, one could at least assume that the most politically relevant actors all agreed
that democracy and a market economy represented desirable sociopolitical models. Today,
that is far less apparent, particularly in Madagascar, Mozambique and Tanzania.
These three countries were previously regarded as role models when it came to development
policies: Madagascar for its liberal economic reforms; Mozambique for its democratization
and healthy economic growth; Tanzania for its successful debt reduction and good governance. Today, however, the situation is dominated by disillusionment among donor nations and
dissent on the ground. This provides a discursive platform to those who propagate authoritarian modernization models, such as those observed in Ethiopia and Rwanda, and wish to draw a
connection between their countries and Asian developmental success stories. Moreover, Chinese involvement in Africa reduces the continent’s dependence on Western stipulations regarding economic reforms and the fight against corruption.
There has been a marked reduction in consensus around the major cornerstones of transformation in the post-Soviet region, as well, where Russian hegemonic ambitions have forced
elites in numerous neighboring countries to position themselves ideologically, thus exacerbating polarization in their countries. While the Eurasian Economic Union (EEU) refers to
“shared values of freedom, democracy and market rules,” in light of Russia’s “guided democracy,” it is doubtful whether there really is a shared understanding of these guiding principles
throughout the region. Recently, the stakeholder consensus fell significantly in Azerbaijan,
Russia and Moldova, as well, where surveys reveal that Putin, the president of Russia, is the
most highly regarded political figure and where numerous citizens and politicians, disappointed by the inefficiency of the present government, look admiringly to authoritarian alternatives,
such as the Belarusian model.
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In East-Central and Southeast Europe, on the other hand, there is still widespread consensus
on the goals of transformation and – retrograde tendencies notwithstanding – none of the
countries reviewed received a score below 7, which presupposes general agreement (even if
conflict over appropriate strategies remains). However, the democratic ideal is counteracted in
some countries by illiberal and majoritarian tendencies. The respective governments of Hungary and Macedonia, in particular, increasingly tend to regard the opposition as an enemy and
their political mandate as carte blanche to govern heedlessly and unilaterally, while Serbia
and Slovakia, with markedly better governance, have also taken a step backward.
In some countries faced by specific sets of problems, the ability to contain the influence of
anti-democratic veto actors has also diminished over the last decade. This applies particularly
to Thailand (-5 points), where the military continually intervenes in the political process and
deposes undesired governments, but also to Mexico, torn apart by the drug war (– 4), Hungary, for its “illiberal” democracy (-3), and Egypt, for President alSisi’s authoritarian restoration
that began in 2013 (-3).
With the ability to manage conflicts in decline and some regions featuring a weaker stakeholder consensus regarding the pursuit of democracy and a market economy, together with the
increasing influence of anti-democratic veto actors, the global average for the BTI criterion of
consensus-building is slightly lower than it was two years ago. Improvements in civil society
participation of the type seen in Tunisia and Ukraine failed to reverse this trend, as did attempts at reconciliation witnessed in countries such as the Central African Republic, which
took the first steps toward investigating past human rights abuses. This is a worrying result in
a time when transformation management should be serving to moderate and level the effects
of increasing instability and conflicts of interest.
Uruguay, the role model
However, consensus-building is just one of the quality criteria required in governance. As
such, it remains to be seen whether the aforementioned findings are exceptional or, rather,
representative of a comprehensive failure of policy. Global averages don’t tell the whole story
here; the average score for all of the countries reviewed in the Management Index stands at
4.86 points – exactly where it was a decade ago.
With the exception of Taiwan, the group of countries credited with very good governance is
made up exclusively of Latin American and European countries, as was the case two years
ago. At the head of the pack is Uruguay, which has once again recorded improvements in coordination capacities, with the Finance Ministry and Presidential Office putting aside their
dispute over economic policies. Over the last 10 years, the country has continuously boasted
the highest quality of democracy of all the countries reviewed in the BTI, and this is confirmed by the Management Index, where it consistently scores top marks in every assessment
related to dialogue, mediation, consensus-building and cooperation. Particularly exemplary
are its innovative forms of civil society participation as well as the transparent and cooperative work of its development authorities.
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However, the group of very well-governed countries has shrunk to just six countries. Slovakia, where the government tends to feed polarization in its dealings with the opposition, has
experienced a slight loss in the area of consensus-building. A worsening overall economic
situation saw Brazil drop out of the group of front-runners, to 14th place, with deficits in
steering capability ascribed to Dilma Rousseff’s government.
Big mouth, no teeth
Brazil’s exit from the top ten means that there are no more large, populous countries among
the Management Index’s top performers. It is now all the more striking that excellence in political steering is generally found in countries that are smaller in both population and area.
Among the 20 best-governed countries in the BTI, only three – Chile (2nd place), Botswana
(9 th) and Brazil (14 th) – are larger than Germany in area, and only two (Brazil and South
Korea) have a population exceeding 50 million. The 15 largest countries in the BTI by area all
followed a negative trend in governance – with the exception of Iran, which improved upon a
very low level of performance. The governments of some large countries exhibited a marked
drop in performance in just two years, including Libya (-1.65 points), Russia (-0.73), Brazil (0.57), Mongolia (-0.43) and Kazakhstan (-0.42). Others didn’t fall quite so sharply, but their
function as anchors for their respective regions sends a warning signal; such was the case for
Argentina (-0.21) and Mexico (-0.30) in Latin America, China (-0.23), India (-0.21) and Indonesia (-0.26) in Asia, as well as Algeria (-0.15) and Saudi Arabia (-0.11) in the Middle East
and North Africa.
This trend was confirmed in the 15 most populous countries. Besides Iran, only Pakistan improved, and then only slightly and from an equally low level. Every other populous country
experienced a drop in governance quality, sometimes pronounced as with Egypt (-0.14), Vietnam (-0.20) and the Philippines (-0.29) – and sometimes significant – as with Nigeria (0.90), Ethiopia (-0.70), Turkey (-0.63) and Thailand (-0.59).
A worrying aspect of this overall negative trend in governance is the fact that 12 of the 15
most populous countries display less willingness and capacity for international cooperation
than they did two years ago, with the results for Nigeria, Russia and Turkey being particularly
pronounced. There was trouble throughout the BRICS countries: Brazil, China, India and, as
mentioned, Russia all experienced major drops, while South Africa’s declining diplomatic
engagement in the area of regional integration completed the picture of reduced cooperative
capacities among these five countries. Here, it is striking that one factor of international cooperation suffered in particular: credibility. In a time when increased interconnectedness and
complex global problems call for even greater international cooperation, the ability of governments in major anchor countries to present themselves as peaceable and trustworthy is, in
fact, on the decline.
Almost half of all governments are losing credibility
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However, it’s important to take a differentiated view here: The democratic giants, such as
Brazil, India and Indonesia, ceded little, if anything, of their already high levels of credibility.
The soccer World Cup, for instance, defied the PR strategists who had hoped to turn it into a
giant advertisement for the Brazilian government, instead focusing the world’s attention on
poverty, police violence and the Petrobras corruption scandal. Indonesia may have scared off
some investors with its nationalistic tone and protectionist tendencies, but it remains stable
and, as the largest Muslim democracy, it still manages an impressive performance on the
world stage.
More severe is the drop in approval ratings for the “Mexican JFK,” President Enrique Peña
Nieto, which he experienced in the course of the drug war and student murders, particularly as
Mexico’s credibility has dropped for the third time in the last 10 years (-1 point). The Turkish
government and President Erdoğan have fallen even further since the BTI 2014 (-2 points).
This is driven, on the one hand, by suspicion related to the country’s trend of increasing Islamization and, on the other, by an opaque foreign policy course that appears more decisive in
its dealings with the Kurds than the regional aggressors, the IS.
Major power China has also lost a degree of credibility once again (-1). Here, Western fears
of industrial espionage and cyberattacks combine with China’s rearmament policy and increasingly hegemonic, confrontational behavior in the East Asian region. The credibility of
Nigeria, the most important anchor country in West Africa, is similarly limited (-2); it failed
to rise to its regional responsibility in the Mali crisis and resorted to torture and groundless
suspicion of innocent civilians in its fight against the terror group Boko Haram.
But the greatest decline in international credibility – aside from those of Libya and Qatar –
was that of the Russian government (-3). President Putin insisted on “moral autonomy,” refusing to bow to any demands not set by Russia itself. This includes, in particular, the definition
of territorial spheres of influence and aggressive foreign policy behavior. Only Bashar alAssad’s regime in Syria, the ruling clique in Eritrea and Kim Jong-un’s regime in North Korea fared worse than the Russian government in credibility rankings.
Almost half of all countries reviewed for the BTI experienced a decline in credibility. In total,
58 governments are seen as less reliable in their democratic and market-economic reform
efforts, while just 31 governments managed to increase their international standing. This
negative trend was particularly apparent in post-Soviet Eurasia as well as in the Middle East
and North Africa. Both regions started from a low level of 5.85 in BTI 2006 and then fell
even further, with a regional average decline in standing of around 0.75 points.
In West and Central Africa, post-conflict countries that are now consolidating their reform
course, particularly Côte d’Ivoire and Liberia, contributed to a slight regional plus. Developments in South and East Africa moved in the opposite direction, with the willingness for reform once again subject to unpredictable, populist fluctuations, particularly in the defective
democracies of southeastern Africa. In Latin America, only Cuba and Paraguay managed to
raise their international standing over the last decade through international cooperation and
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willingness for reform. While the consolidating democracies of Chile, Costa Rica and Uruguay managed to retain their high standing, the level of credibility dropped in 11 countries
across the region (falling by 0.71 points, to 6.91). Mexico and Nicaragua were the most
affected, and while they are seen as reliable economic partners, they are perceived as less politically credible in international cooperation due to escalating violence and rampant corruption (Mexico) or a lack of democratic credibility (Nicaragua).
Less dialogue, but more action
With a number of countries making less effective use of international support for domestic
reform plans and displaying less willingness for regional cooperation (Hungary, Nigeria and
South Africa fell repeatedly here), the overall score for the BTI criterion of international cooperation deteriorated. This means that both of the BTI criteria related to compromise, dialogue and cooperation – domestic consensus-building and international cooperation – were
caught in a downward trend, one which was particularly pronounced in Arab and African
countries as well as post-Soviet Eurasia.
The ability to engage in dialogue and find consensus may have diminished across the globe
and even sharply so in some regions, but the same cannot be said for the more internal government criteria of the Management Index, such as steering capability and resource efficiency.
The first thing to note is that a lack of stakeholder consensus does not necessarily mean that
governments are no longer capable of setting priorities and sticking to them. This is particularly evident in South and East Africa, where 13 of the 18 countries reviewed in the BTI 2006
(thus excluding Lesotho and South Sudan) have actually improved their capacity for longterm, strategic planning, while a further two managed to sustain their original levels. This
confirms the findings of the BTI 2014, which found a greater capability and stronger political
will for setting priorities in African countries overall than 10 years previously. Of the 34 subSaharan countries reviewed, 25 managed significant (14) or slight (11) improvements, particularly the West African countries undergoing reform – Côte d’Ivoire, Guinea and Liberia –
as well as Kenya. Whether this is attributable to donor encouragement, low starting level or
the type of planning performance seen in Mauritius and Namibia, which is competitive even
by international standards, the average score for sub-Saharan Africa has increased by a full
1.50 points over the last decade. However, the journey from planning to implementation is
often long, and almost none of the African countries managed comparable improvements in
the implementation of political plans. Progress of the kind witnessed in Côte d’Ivoire and
Guinea is offset by ground lost in countries such as Angola and Ethiopia.
Polarization and poor steering: two sides of the same coin
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Across every aspect of steering capability – prioritization, implementation and policy learning
– there was a sharp decline registered for many of the countries whose governments are increasingly driving polarization of societal forces. At the bottom end of the scale, this applies
to Sudan, Syria and Venezuela, where the respective ruling elites are focused solely on retaining their power, eschewing long-term planning in favor of ad hoc policies and favoritism. The
strategies of dynastic dominance that prevail in the Kingdom of Bahrain and the Sultanate of
Oman fare little better, as do the failure of implementation in corruption-ravaged Nigeria and
Pakistan or the extremely confrontational policies introduced by Bangladesh, as well. But
even at the upper end of the scale, the will and capacity for policymaking fell, particularly in
East-Central Europe, with Hungary being the worst offender. The government led by Prime
Minister Orbán further undermined the division of powers, increasingly reserved decisionmaking processes and implementation procedures for the innermost government circles, and
proved both sensitive and aggressive when confronted with criticisms of its planning and implementation. In evaluating the ruling party, Fidesz, the BTI country assessment highlights a
marked discrepancy between the political skill it demonstrates in retaining power and its lack
of conceptual abilities. The OECD agrees, finding Hungary’s political management to be
characterized by “a short-term focus, heterogeneity and fragmentation in terms of content, a
lack of guidelines and/or standards for developing and articulating strategic plans, lack of
associated financing, and difficulty in monitoring implementation.” No other country has experienced as great a loss in steering capability during the last decade as Hungary, which lost
three whole points in the BTI evaluation (prioritization: – 3 points; implementation: – 2; policy learning: – 4). With 5.33 points, Orbán’s government now stands level with the governments of Peru and Tunisia, which, while facing similarly daunting planning and implementation difficulties in starkly polarized societies, act in a far more consensus-oriented fashion.
The greatest recent decline in steering capability came in Bulgaria, which has been shaken by
political crises and changed government no fewer than five times during the review period.
With widespread corruption increasingly interfering with steering capability, the capacity for
long-term planning fell sharply, as did the standing of the government. A July 2014 survey by
the Open Society Institute found that it commands the trust of just 10 % of the population.
Hungary and Bulgaria are both particularly vivid current examples of a phenomenon witnessed across East-Central and Southeastern Europe: declining democratic quality – with the
regional average falling continually since 2006 – accompanied by reduced political steering
capability. Over the last decade, Bosnia-Herzegovina, Croatia, Romania, Slovakia and Slovenia have all declined markedly in terms of the ability and will they need to advance their
transformation.
Steering capability improves in Africa and Latin America
Conversely, the last decade has seen numerous countries, particularly in Africa, pushing
ahead in every area of steering capability, most starting from low levels of political management. Exemplifying these countries are the West African states of Côte d’Ivoire and Guinea,
both of which emerged from successful democratization processes with a determination to
implement economic reforms and restructure their security sectors with the support of the
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international community. Guinea’s government displayed political courage over the last two
years in striving for long-term reform goals that promised no short-term political wins while
maintaining an already fragile elite consensus, battling an Ebola epidemic and having the influential military be a potential veto actor. Côte d’Ivoire’s government, on the other hand,
won widespread respect from donor countries for its policies, which balanced investment
promotion and economic restructuring with education and health policy measures. While Côte
d’Ivoire’s reform of its justice system and security sector is faltering, and Guinea made numerous failures in the initial struggle against Ebola, overall, both governments demonstrated
determination and an ability to follow through.
In Latin America, too, the trend over the last 10 years is positive, with two-thirds of all countries under review showing improvement in strategic planning, implementation and policy
learning. And, once again, we can single out a pair of success stories here, in the form of Bolivia and Colombia. While they may not yet have joined the regional frontrunners in the Management Index (Chile, Costa Rica and Uruguay), when it comes to political steering capability, they have already caught up with Brazil, for example. In Bolivia, the government led by
Evo Morales managed not only to break the reform blockade of the old elite through constitutional reform, but also widened political participation, increased the state’s role and societal
participation in the exploitation of raw materials, and successfully intervened in sociopolitical
affairs. This resulted in, among other things, a significant drop in poverty. Considering how
great a need there is for reform and just how entrenched the old elite was, this long-term perspective in strategic planning and consistency in political implementation are all the more
impressive.
No less ambitious, Colombia’s government under Juan Manuel Santos advanced its plans for
peace and social policies. The learning capacity of the Santos administration, which dissolved
the deadlocked policy of confrontation with the guerrillas through peace negotiations, was
combined with the realization that lasting peace could only come by reintegrating of combatants into society and pursuing social inclusion in economic and social policies. By the fall of
2015, even though there was nothing to show for the peace agreement than an announcement,
and even though the government faced continued resistance from its own camp as well as
extensive corruption, a lack of implementation capacity and other structural difficulties in
regions controlled by guerrillas, drug traffickers or paramilitaries, preparations for the peace
agreement and gains made in social policies have nonetheless been thoroughly commendable.
Numerous anchor countries fall
Driven by positive trends in Africa and Latin America, the average score for steering capability among all countries continuously reviewed by the BTI climbed by 0.19 points over the last
decade, while strategic planning and prioritization rose by 0.48 points. However, this development has faltered in the last two years; implementation and policy learning have even retreated slightly, primarily driven by major falls in South and East Africa. Moreover, there are
few political heavyweights among the 35 countries registering gains in steering capability,
with one of the lone exceptions being Indonesia, where the Widodo government is now pursu42
ing clearer priorities. Among the 46 relegations, on the other hand, there are numerous anchor
countries that experienced either slight (India, Mexico, Russia), more noticeable (Argentina,
Nigeria, Thailand, Turkey) or major (Brazil, Ghana) falls in steering capability, primarily in
the implementation of their own political agendas. The Brazilian government may have been
successful from a sociopolitical perspective, but it failed to reach its goals relating to economic growth and containment of inflation, while the Ghanaian government continued to suffer
from a lack of the qualified personnel needed to effectively plan and implement its policies.
Steering capability is the strongest of the four BTI governance criteria in just six of the 129
countries: Bolivia, Iran, Macedonia, Russia, Turkey and Uganda. One thing these countries
have in common is an executive that assumes a highly dominant role, whether through charismatic leadership, a polarized domestic political climate or erosion of the division of powers.
Aside from Bolivia, rule of law and vertical accountability have fallen in all of these countries
over recent years, such that heads of state can rule heedlessly and unilaterally if they choose,
particularly in the authoritarian contexts of Iran and Russia. The overall negative effect of this
is particularly acute for the criterion of consensus-building, but also in international cooperation.
Resource efficiency remains a work in progress
Resource efficiency is the best-rated criterion of the Management Index in just four countries,
and only one of those managed a good score. Once again, the resource efficiency champion is
Singapore, the only country for years now that has managed to clear the nine-point hurdle for
this BTI criterion. The city-state shares first place for efficient use of financial and organizational resources with Estonia, Lithuania and Taiwan, with the firmly established, functionally
impressive meritocratic system in the public sector being a significant factor. Singapore joins
Chile, Estonia, Taiwan and Uruguay as one of the five countries with the best anti-corruption
policies worldwide (9 points), although it attracted some criticism for a lack of transparency,
insufficient access to state information and awarding bloated, potentially corrupting salaries to
leading public servants. In particular, however, Singapore stands out from all other countries
reviewed by the BTI in the fact that its government – with effective inter-ministerial coordination through the office of the prime minister – is the global leader in bringing together differing political objectives and forming them into coherent policies (10 points).
But Singapore is the great exception here, as elsewhere the picture remains the same in every
BTI: In the overwhelming majority of countries, which in this edition means 113 cases, the
criterion of international cooperation offers the best score; and in two-thirds of cases, this time
88, resource efficiency is the worst-scoring criterion. The global average reflects this: At 4.80
points, it corresponds with the resource efficiency of Algeria or Ukraine, and it’s not just that
this criterion receives the worst scores, but also that two of its three indicators – use of resources (4.71) and anti-corruption policies (4.35) – are the worst performance aspects of all
government policies.
Overall, democracies score better than autocracies in the criterion of resource efficiency (average 5.60 vs. 3.72 points), and this gap has actually expanded slightly since the last review.
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This can largely be attributed to losses by the moderate autocracies, such as Angola, Armenia,
Burundi, Russia, Togo, Venezuela and Zimbabwe. In Zimbabwe, resource efficiency has deteriorated in all areas, while in Armenia it is the quality of anti-corruption policies that has experienced the greatest drop (– 2 points).
Although resource efficiency is consistently the worst-scoring BTI criterion, the global average has risen slightly over the years, with an increase of around a third of a point over the last
decade, driven particularly by improvements in policy coordination and anti-corruption policies. However, this moderate progress alone was not enough to close the significant gap between the aspects of moderating and coordinating governance. The average score for all indicators relating to political steering mechanisms – in the areas of prioritization, implementation, policy learning, efficiency, coordination and anti-corruption policies – remains under the
five-point mark (4.98 points), while indicators for consensus-building and international cooperation lie almost a full point ahead (5.86 points).
The positive lesson to draw here is that coordinating and steering capabilities have improved
somewhat, but the declining quality of mediation and consensus-building is cause for concern.
At a time of increasing protests and growing instability, it is worrying that these aspects of
governance, in particular, are in retreat. These qualities are needed now more than ever if we
are to keep conflicts from escalating further.
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