World and U.S. Indices

World Indices

The following indices rank countries based on various social, economic, and political factors by analyzing data in areas ranging from competitiveness to health care to political freedom. The indices enable useful comparisons between countries and provide valuable information about the standard of living around the world.

Capital Markets
Capital Access Index
Since 1998, the Milken Institute has published the Capital Access Index, a report that uses more than 50 measurements, including the strength of banking systems and the diversity and efficiency of financial markets, to rank countries based on the strength of their capital markets. The index focuses primarily on the capacity of entrepreneurs to acquire financial capital in countries around the world.

Competitiveness
Global Competitiveness Report
Since 1979, the World Economic Forum has published the Global Competitiveness Report, which assesses the current productive potential and five-year-growth prospects of 80 countries by using variables such as the level of technology in an economy, the quality of public institutions, and the macroeconomic conditions. The Global Competitiveness Report consists of two complementary indices, the Growth Competitiveness Index and the Microeconomic Competitiveness Index, both of which aim to provide a thorough analysis of competitiveness around the world.

Corruption
Corruption Perception Index
Since 1995, Transparency International has published the Corruption Perception Index, which uses surveys of business people, academics, and country analysts to rank nations according to the level of corruption believed to exist among public officials.

Development
Human Development Index and Human Poverty Index
The United Nations Development Program publishes the Human Development Index, which measures country achievements in human development using variables such as life expectancy, educational attainment, and adjusted per capita gross domestic product. The Human Poverty Index for developing countries, HPI-1, examines the same aspects of human development as the Human Development Index, while HPI-2, the poverty index for industrial countries, examines the additional factor of social exclusion.

Index of Human Progress
Since 1975, the Fraser Institute in Canada has published the Index of Human Progress, which measures achievements in human development in 128 countries. This index builds on the United Nation’s Human Development Index by using unadjusted per capita gross domestic product and six other variables to draw clearer distinctions between countries in the area of development.

Economic Freedom
Economic Freedom of the World
The Fraser Institute in Canada, the Cato Institute in Washington, D.C., and institutes in 54 other countries co-publish Economic Freedom of the World, now in its sixth edition. It uses 37 objective criteria relating to the size of a country’s government, the structure of its economy, its monetary policy, and other factors to assess the economic freedom of up to 123 countries during the past 25 years.

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Index of Economic Freedom
Since 1995, the Heritage Foundation and the Wall Street Journal have co-published the Index of Economic Freedom, a report that contains data and analysis on 161 countries regarding 50 independent variables affecting economic freedom such as foreign investment rules, taxes, tariffs, banking regulations, monetary policy, and black markets.

Health Care
Health Care Index
The Marigold Foundation published a study in 2001 that examined the relationship between a nation’s health-care system and the health of its citizens, and then analyzed the financing and delivery of health care in eight countries to determine whether any had a system that was more efficient at providing care and improving health.

World Health Report 2000
The United Nations World Health Organization published the World Health Report 2000 that uses performance indicators such as mortality rates, health-care expenditures per capita, and fairness of financial contributions to analyze the health-care systems of 191 member countries.

Political Freedom
Freedom in the World
Since 1978, Freedom House has published Freedom in the World, an annual survey that uses information from such sources as foreign and domestic newspapers, nongovernmental organizations, think tanks, and universities to comparatively assess the degree of political rights and civil liberties in 192 countries and 60 related and disputed territories.

United States Indices

The following indices rank U.S. states based on various social, economic, and political factors. The indices examine such factors as economic freedom, education, health, taxes, regulations, and high-tech growth. The rankings enable useful comparisons to be made and encourage competition among states that will improve outcomes.

Competitiveness
Small Business Survival Index
The Small Business Survival Index is an annual publication produced by the Washington, D.C.-based Small Business Survival Committee. The index “provides a measure by which states can be compared according to how the state and local governments treat small businesses and entrepreneurs. In essence, it is a comparative measure of economic incentives: the lower the Small Business Survival Index number, the greater the incentives to invest and take risks in that particular state.” Rankings are based on 20 government-imposed or -related costs that impact small businesses and entrepreneurs. The costs include a number of taxes, most notably the alternative minimum tax, the estate tax, the corporate income tax, and property taxes. The index also considers health-care costs, the state minimum wage, and crime rates, among other factors.

State Competitiveness Report
The State Competitiveness Report, produced by the Boston-based Beacon Hill Institute, measures the overall competitiveness of the 50 states. Competitiveness is defined as “the ability to ensure and sustain a high level of per capita income and its continued growth.” Using this definition, the authors combine more than three-dozen variables into nine sub-indices, each of which, e.g., “government and fiscal policy” and “infrastructure,” represents an element of competitiveness. The nine sub-indices form an “overall index” that is used to rank each state.

Development
Development Report Card for the States
Based on 71 variables, the annual Development Report Card for the States (DRC) provides a snapshot assessment of each state’s economy and its potential for growth. The DRC’s framework “consists of two key ideas: the goal of any state development policy is increased well-being for all its citizens; the success of a state’s economy in delivering a more widely shared standard of living depends upon the vitality of its businesses and the strength of its physical infrastructure, amenities, natural and human capital, financial resources, and innovation assets.” The 71 variables are combined to compare states in three areas: performance, business vitality, and development capacity.

Economic Freedom
Economic Freedom in America’s 50 States
In 1999, researchers at Clemson University published a report that measures economic freedom in each of the 50 U.S. states. The report, titled Economic Freedom in America’s 50 States, defines economic freedom as “the right of individuals to pursue their own interests through voluntary exchange under a rule of law.” The findings are based on “more than 100 different individual measures of economic freedom, spanning government spending, regulation, welfare, school choice, taxation, and the judicial system.”

Economic Freedom of North America
Economic Freedom of North America, published by the Fraser Institute in Canada, measures economic freedom in each of the 50 U.S. states and in the 10 Canadian provinces. The study uses two indices, each based on a 10-point scale, to analyze economic activity and growth. The first index, called the subnational index, “measures the impact of provincial and municipal governments in Canada and state and local governments in the United States.” The second index, called the all-government index, “includes the impact of all levels of government—federal, provincial/state, and municipal/local—in Canada and the United States.” A total of nine variables are used in three areas: size of government, takings and discriminatory taxation, and labor-market freedom.

Education
Education Freedom Index
Published by the New York City-based Manhattan Institute, the Education Freedom Index “measures the extent of government-subsidized or -regulated educational choices offered to families in each state.” The report also analyzes “the relationship between the amount of education freedom in a state and the level of academic achievement demonstrated by its students.” Four components are examined to measure education freedom: charter schools, subsidized private schools, home schooling, and public-school choice.

Report Card on American Education
The ninth annual Report Card on American Education by the Washington, D.C.-based American Legislative Exchange Council “covers two generations of students, 1976–2001, and grades each state using over a hundred measures of educational resources and achievement.” The District of Columbia is also included in the analysis. The study examines the correlation between “inputs” and “outputs” in the educational system, and it gathers demographic information, including public-school enrollment and charter-school development, that is relevant to the public education system in each state. Educational inputs include “dollars spent per student, teacher salaries, class size, and number of schools.” Educational outputs refer principally to student achievement, most accurately measured by comparing standardized test scores.

Health
America’s Health: United Health Foundation State Health Rankings
The 2002 edition of America’s Health by the United Health Foundation in Minnetonka, Minnesota, uses a methodology that “weighs the contributions of various factors such as smoking, motor vehicle deaths, high school graduation rates, children in poverty, access to prenatal care, disabilities, and incidence of preventable disease” on the overall health of individuals, families, and communities in each state. The report is compiled using data from the departments of Health and Human Services, Commerce, Education, and Labor; the National Safety Council; and the National Association of State Budget Officers. States are compared and ranked based on 19 composites, 11 of which reflect risk factors such as violent crime and lack of health insurance, and eight of which reflect outcomes such as cancer deaths and infant mortality. The report is based on the belief that states will improve outcomes by reducing risk factors.

High-Tech Growth
State New Economy Index
In 1999, the Washington, D.C.-based Progressive Policy Institute released its first State New Economy Index. The report used 17 indicators “to measure the degree to which state economies were structured and operated according to the tenets of the New Economy.” The Institute’s 2002 index uses 21 indicators based on newly available data to better measure all sectors of the New Economy, not just “high tech.” The 21 indicators are divided into five categories: knowledge jobs; globalization; economic dynamism and competition; the transformation to a digital economy; and technological innovation capacity. The report combines these five categories to rank each of the 50 states in terms of their adaptability to the New Economy.

State Technology and Science Index
The State Technology and Science Index, produced by the Santa Monica-based Milken Institute, provides a detailed look at the technology position of each state. The index “encapsulates a comprehensive inventory of technology and science assets that provides states with a benchmark, monitors its technology progress, and can be leveraged to promote economic development.” States are ranked on 73 separate measurements in five categories: research and development inputs; risk capital and entrepreneurial infrastructure; human capital investment; technology and science workforce; and technology concentration and dynamism. Individual measurements include everything from the percentage of a state’s population with Ph.D.s to research and development expenditures per capita.

Taxes, Spending, and Regulations
Cost of Government Day
“Cost of Government Day,” calculated each year by the Washington, D.C.-based Americans for Tax Reform, is “the date of the calendar year on which the average American worker has earned enough gross income to pay off his or her share of spending and regulatory burdens imposed by all levels of government: federal, state, and local. Cost of Government Day represents the total cost of government as a percentage of national income. The percentage is then multiplied by 365 days to determine the number of days worked to pay for the total cost of government.” The report uses the latest Congressional Budget Office forecast to determine federal expenditures, the national income and product accounts to determine state and local expenditures, the net national product to determine national income, and the best academic sources to determine federal, state, and local regulatory costs.

Fiscal Policy Report Card on America’s Governors: 2002
The Fiscal Policy Report Card on America’s Governors: 2002, published by the Washington, D.C.-based Cato Institute, is “a comparative analysis of the budget and tax records of 42 governors.” Seven governors were excluded because they assumed office too recently for their records to be accurately assessed. Alaska’s governor was also excluded because of peculiarities in Alaska’s budget involving severance taxes that make interstate tax comparisons problematic. The highest grades are awarded to governors who cut taxes and spending the most, whereas the lowest grades are awarded to governors who increased spending and taxes most. The grades are based on 17 objective measures of fiscal and economic performance using tax and spending data from the U.S. Bureau of the Census, National Association of State Budget Officers, and National Conference of State Legislatures.

Tax Freedom Day
“Tax Freedom Day,” calculated each year for the past 30 years by the Washington, D.C.-based Tax Foundation, is “the day when Americans will finally have earned enough money to pay off their total tax bill for the year. All income that’s officially called income by the government is counted, and everything the government considers a tax is counted,” including all federal, state, and local taxes. Using net national product to determine income, the report projects an effective tax rate for each state and then applies the calculated percentage to a calendar year to provide an illustration of how long Americans work in each state to pay their total tax bill each year. Overall, Tax Freedom Day “provides taxpayers with a ‘tax barometer’ that measures the total tax burden over time and by state.”