Governance is a fundamental pillar of sustainable competitiveness. Good governance provides the framework for economic development, social stability, and environmental protection. It encompasses the quality of institutions, regulatory effectiveness, rule of law, transparency, and the capacity of governments to formulate and implement sound policies. Strong governance creates an enabling environment for businesses, attracts investment, and ensures that economic growth benefits society as a whole while protecting natural resources for future generations.
Strong institutions and effective governance drive sustainable development and prosperity
Bottom Line: Countries with high governance scores consistently demonstrate higher levels of sustainable competitiveness, economic stability, and quality of life.
Key clusters to measure institutional quality and governance effectiveness
Evaluation of the availability and quality of public infrastructure based on performance indicators
Evaluation of the balance and stability of government expenditure
Evaluation of government agencies efficiency and corruption levels
Evaluation of the extend and quality of political decision making
Evaluation of the availability, level, impartiality, and fairness of internal domestic security
Evaluation of stability and quality of government policies against holistic ESG aspects based on performance indicators
A global snapshot of governance performance and trends
Western European still profit from historical rule-of-law applications: Norway (#1), Netherlands (#2), Denmark (#3), Luxembourg (#4), and Estonia (#5) occupy the top five positions
There is a strong correlation between governance and prosperity: Countries with high governance scores consistently demonstrate higher levels of income levels
Top-ranked countries invest heavily in public infrastructure, including transport, renewable energy, digital infrastructure, and public services
Uruguay stands as the highest-ranked nation outside Europe, reflecting the value of decades of democratic stability and strong institutional development
Among major economies, Germany is ranked 13th, France 21st, and the UK 39th, while Japan (#33) and South Korea (#35) lead Asian governance performance.
The US rank of 38 and China on 55 indicate governance challenges in both nations – China due to limited political freedoms and transparency, and the US facing declining trust in institutions, polarization, and regulatory inconsistencies.
Explore how countries compare across governance indicators
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Discover how Governance Capital connects with Natural, Economic, Social, and Intellectual Capital
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