All That Glitters Is Not Gold: A Ranking of Global Rankings

Abstract

This paper examines the predictive power of different global rankings on country growth. An influential framework to shape policy decisions is to look at a specific global ranking and implement policies to reduce gaps with respect to best practices or the frontier. Using panel data regressions, we show that different rankings predict growth with quite dissimilar levels of success. Rankings with a focus on government effectiveness or, to a lesser extent, on globalization offer statistically significant and economically relevant guidance when we consider three-year-ahead growth. Others, usually presented as focused on competitiveness assessments, show zero correlation with future growth. When there are effects, they appear in trend, rather than cyclical, GDP and in foreign direct investment. Total factor productivity growth and exports do not change appreciably. We do not detect nonlinear effects.