The Global Competitiveness Index as a public policy tool
The Global Competitiveness Report, published since 1979, aims to serve as a neutral and objective tool for governments, the private sector, and civil society to work together on effective public-private collaboration to boost future prosperity. By benchmarking each year’s progress on different factors and institutions that matter for future growth, the Report keeps competitiveness on the public agenda, provides a focal point for the discussion of long-term competitiveness policies, and helps to keep stakeholders accountable.
The ability to compare 138 economies on a variety of indicators helps them to assess gaps and priority areas and to construct joint, public-private agendas to address them. The annual updating of the Index allows countries to track their progress and reassess their agendas, adjusting them if necessary. Some countries have used the Index to build entire competitiveness systems and formally organize their institutions for competitiveness, as illustrated by two examples from Latin America and the Caribbean: the Dominican Republic and Colombia.
The Dominican Republic
In 2014, a group of leading Dominican business leaders began discussions about increasing the country’s competitiveness levels, and mitigating the risks it faces, through a public-private partnership. In August 2015, the Initiative for National Productivity and Competitiveness (IPCN in Spanish) was created by presidential decree and tasked with identifying and promoting actions and reforms that would strengthen productivity and competitiveness.1
The IPCN comprises 35 business leaders and five government ministers: the Minister of the Presidency; the Minister of Industry and Commerce; the Minister of Economics, Planning and Development; the Minister of Finance; and the Administrative Minister of the Presidency. Members of the IPCN agreed to use globally recognized indicators, particularly the Global Competitiveness Index (GCI), to set common goals and coordinate actions between the public and private sectors through three mechanisms:
Nine working groups, organized around the GCI’s 12 pillars of competitiveness, are responsible for formulating action plans and proposals—with priority given to the groups working on pillars on which the Dominican Republic is underperforming. After the first working period, 15 projects were selected, including legal reforms to facilitate creating businesses, a digital platform for import and export procedures, structural changes to improve the transportation system, adjustments to quality control processes, and amendments to taxation legislation.
The Ventanilla de Consultas is an online platform that serves as a communication channel between the public and the IPCN—any citizen may propose actions to improve national or regional competitiveness and productivity. So far this has led to the creation of a commission to aid the private sector in its preparations for an evaluation by the Financial Action Task Force, and to a presidential decree protecting low-income homeowners from new tax legislation.
The Public-Private Partnerships Promotion Unit identifies and evaluates public-private investment projects that could have a large impact on national development, benchmarking them against international PPP best practices. A new PPP law is being written by a team of experts, including the IPCN’s technical support committee and other members of the public and private sectors.
The National System of Competitiveness (SNC) was established in 2006 to coordinate the activities of Colombia’s national government with the private sector, academia, and civil society on issues related to productivity and economic development. Regional Commissions for Competitiveness (RCCs) were also created, to coordinate policy implementation. Within this system, the Private Competitiveness Council was launched by a group of large Colombian firms and universities to be the voice of the private sector. The Council now constitutes the system’s think tank, and uses tools such as The Global Competitiveness Report.2
The system is coordinated by a Presidential Adviser for Competitiveness and Innovation and led by an Executive Committee composed of three government officials (the Minister of Trade and Industry, the Director of National Planning, and the Director of Colciencias [the National Administrative Department for Science, Technology and Innovation]) and two representatives from the private sector (President of the Private Competitiveness Council and President of Confecamaras [the Business Association of Chambers of Commerce]). The Executive Committee also coordinates work with the RCCs and presents annual reports to the National Competitiveness Assembly.
In an ongoing effort to improve capacity to make progress on the competitiveness agenda, the system was recently merged with the Science, Technology and Innovation System; a project management model was implemented; and governance was revamped to better coordinate with the regions and improve empowerment and accountability by introducing a requirement for the Executive Committee to report to the full Council of Ministers.
The system has successfully improved coordination among government agencies, producing a policy document on productive development and implementing an 11-point competitiveness agenda with concrete projects and accountability.