Bertelsmann Stiftung’s Transformation Index
Summary: The Bertelsmann Stiftung’s Transformation Index (BTI) analyzes and evaluates democratic performance, “market economy status” and political management in developing and transition countries.
Main Points: The BTI is published every two years. The data covers 128 countries surveys over period of 2006 – 2012. The BTI analyses and evaluates whether and how developing countries and countries in transition are steering social change toward democracy and a market economy. Guided by a standardized codebook, country experts for each of the 128 countries assess the extent to which a total of 17 criteria have been met. These experts ground the scores they provide in assessments that comprise the country reports, all of which are available online. A second country expert then reviews these assessments and scores. In a final step, consistency is then assured by subjecting each of the 49 individual scores to regional and inter-regional calibration processes. Standardizing the analytical process in this way makes targeted comparisons of reform policies possible.
The BTI aggregates the results of this comprehensive study of transformation processes and political management into two indices:
The Status Index, with its two analytic dimensions assessing the state of political and economic transformation, locates the 128 countries on the path toward democracy under the rule of law and a market economy anchored in principles of social justice. The Status Index is formed by calculating the average of the total scores given for the dimensions of political (Democracy Status) and economic (Market Economy Status) transformation:
· The state of political transformation (Democracy Status), is measured in terms of five criteria, which in turn are derived from assessments made in response to 18 individual questions. The BTI’s conception of democracy goes well beyond other definitions of democracy, which are limited primarily to basic civil rights and the conduct of free elections. Stateness, which is seen as a precondition to political transformation, is included in the BTI’s definition of democracy and examined through questions specifically dealing with the state’s monopoly on the use of force and basic administrative structures. It also includes an evaluation of the rule of law with an eye to the separation of powers or the prosecution of office abuse. In addition, it assesses the degree to which the democratic system is consolidated in terms of its acceptance, representativeness and political culture.
· The state of economic transformation (Market Economy Status), is comprised of seven criteria, which are based on a total of 14 individual questions. The BTI’s concept of a market economy includes not only aspects such as economic performance, regulatory or competition policy and property rights; it includes elements of social justice such as social safety nets, equality of opportunity and sustainability as well. In BTI terms, comprehensive development not only aims at economic growth, but also requires successful poverty alleviation and the freedom of action and choice for as many citizens as possible.
The Management Index, which focuses on how effectively policymakers facilitate and steer development and transformation processes, is the key innovation of the BTI. By examining and evaluating decision makers’ reform policies, the BTI sheds light on those factors determining success and failure on the way to democracy and a market economy. Successful transformation management implies that governments are consistent in pursuing their goals, and use their resources wisely and effectively. It also implies that decision makers win the broadest possible consensus for their transformation goals, and work reliably with external supporters and neighboring states. With its focus on political actors’ steering capacity, the BTI is the only index to analyze and compare governance performance with self-collected data.
The level of difficulty, which is constructed from three qualitative and three quantitative indicators, reflects the observation that each country’s quality of transformation is influenced by structural conditions. In this way, difficult initial conditions and scarce resources in a country are factored into the equation for political management performance.
The dataset covers global sample of countries.
Access to database:
BTI 2012 Codebook for Country Assessments, Bertelsmann Stiftung, 2012
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