Frequently Asked Questions (FAQs)

Countries scoring comparatively high have elites that create more value than they capture. Such countries can expect higher economic and human development levels in the future.

Countries scoring comparatively low have elites that capture more value than they create (equivalently referred to as rent seeking or rentier elites). Such countries may develop more extractive institutions over time.

No, not automatically. Rather, it means that elites are very dominant. Often, political power is a pre-condition for rent seeking. However, there are countries where dominant elites use their power to create value.

No. EQx does not consider specific individuals or groups in a particular country, nor has it developed any methodology in this direction. The EQx multi-level architecture allows to analyze the elite quality at the aggregate level.

EQx tells a story of elites at the national aggregate, built on evidence supplied by a variety of datasets (Indicators) which are normalized, aggregated and weighted according to the EQx methodology.

The Index of Elite Quality (EQx for short) is a political economy index that measures and ranks countries on the basis of their elite quality. Elite Quality is understood as the aggregate impact of elites on the economy.

Elites are groups which possess the strongest coordination capacity over a society's key resources. As a network of powerful individuals, elites operate business models that generate wealth and allow them to maintain their position.

The coordination capacity of elites develops and allocates society's resources and human capital. Not all elites use their coordination capacity to enlarge the economic pie available to the whole of society.

EQx's central premise is that elite quality can help explain discrepancies in general economic performance and human development between countries over time.

As summarized by Hillman and Ursprung: 'in the rent seeking literature, a rent is an unearned reward sought through a quest for privilege. The seeking of rents is personally beneficial… but socially costly.'

The EQx has a multi-level architecture that allows to quantify and analyse different aspects of elite quality. There are two main Sub-Indices: Power and Value. Each of the two Sub-Indices contains a Political and an Economic dimension, yielding 4 Index Areas.

This Sub-Index measures elites' capacity to project influence and enforce preferences on the political economy. Equivalently, it is the ability to shape the economic and political business models of the nation.

This Sub-Index is anchored in the ideas of Value Creation developed in management and in rent seeking theories of economics. Value Creation and rent seeking Value Extraction are on opposite sides of the spectrum.

Political Power measures the capture of 3 kinds of rules: the rules of the state, the rules of business regulations, and the rules of labor markets and civil service jobs.

Economic Power measures elite dominance in the economy at the firm level, at the industry level, and in terms of creative destruction.

Political Value measures the extent of Value Creation vs. Extraction in the political dimension.

Economic Value measures elites' current Value Creation and Extraction activities in the economic realm, in the economy's 3 markets: the products and services market, the capital market, and the labor market.

The weights of each Indicator, Pillar, Index Area and Sub-Index are determined by a panel of experts. The EQx' participatory expert panel approach implies that established weights are reviewed and updated regularly.

A variety of data sources are used for EQx. These include public sources and renowned international organisations such as the World Bank, IMF, OECD, as well as other leading indices.

The methodology used for the EQx undergoes a continuous peer review process, as it aims at validation and further development.

The EQx includes 151 countries that fit the methodology and data availability criteria.

For commercial use of EQx or derived data, please contact us at rights@elitequality.org.

Casas, Tomas and Cozzi, Guido, Elite Quality Report 2021: Country Scores and Global Ranking (May 13, 2021). Available at SSRN: https://ssrn.com/abstract=3845376