An estimation model for replicating the rankings of the World Competitiveness Report

The World Competitiveness Report (WCR), a report annually produced by the Institute for Management Development, which is based in Switzerland, is a study that rates and ranks the competitiveness of a certain group of nations (OECD countries plus some newly emerging economies) and is a widely quoted report in the international media, especially by government and public leaders. Although some ideas as to the methodology used in the rating and ranking of countries are given, the details are not provided in the WCRs. Therefore, the methodology used in the WCRs is in large part unknown to the public. An intelligent use of the WCR requires a rather sound understanding of the methodology by its potential users: politicians, company executives, and public policy makers. The objective of this paper is to uncover and understand the methodology of the WCR through exact replications of its rankings at all levels of aggregation. An estimation model based on mathematical programming is used to replicate the WCR rankings.