Gross domestic product, or GDP, is the standard metric used to measure the size of a country’s economy. GDP alone, however, does not paint a complete picture of a nation’s economy and is not indicative of the nation’s competitiveness.
The Global Competitiveness Index, released annually by the World Economic Forum, ranks over 140 countries. The ranking is based on a review of the country’s institutions, policies, and other factors that contribute to its overall level of productivity.
To determine the best and worst economies in the world, we reviewed the World Economic Forum’s 2019 Global Competitiveness Index. The index reviewed 116 indicators of a strong economy, grouped into a dozen broader categories: institutions, infrastructure, information and communications technology adoption, macroeconomic stability, health, skills, product market, labor market, the financial system, market size, business dynamism and innovation capability.
The countries reviewed received a score for each indicator, which were then indexed into a final score on a 100-point scale, on which countries were ranked. In addition, we also considered the countries’ unemployment rate for the most recent year available from the International Labour Organization.
The United States ranked first in the 2018 edition of the report, but it fell to second place in 2019.
One of the most crucial aspects of a competitive economy is a strong set of norms and rules that ensure a relatively level playing field for all businesses and workers within that country. Nations that lack such rules and institutions that enforce them are often riddled with corruption, which stifles growth and stagnates the economy. These are the most corrupt countries in the world.
Many of the world’s economies are being held back by gender inequality. Women are paid less than men worldwide, but the level of inequality varies substantially. Women are also sometimes pressured to take less lucrative career opportunities, like those in science and engineering, because of societal norms. Countries that have limited these biases have reaped the economic rewards — over half of the 15 countries that have come closest to gender equality also rank among the most competitive economies in the world. These are the countries that have come the closest to gender equality.