Country Insights FAQ
What is the scale for the Country Insights model?
All scores are scaled from 0 to 10, 0 being bad and 10 being good.
How far back does the data go?
For the most part, the data for the Country Insights model goes back to the early 2000s. Some series, predominantly common macroeconomic data series, are collected back to the 1990s.
How far back do the scores go?
Scores go back to September 2005.
Why doesn't the model go back further?
The model's time horizon is determined principally by data availability. The full model extends to 2005, while a simplified model extends to 1990s enabling us to conduct analysis on historic crises.
How is total indebtedness calculated?
The amount of total debt includes external and internal; private, public and bank debt. We then adjust the debt level for GDP per capita to take into account the fact that more developed countries have accumulated more debt as they developed.
How is the model weighted? Does this differ from pillar to pillar?
The factors are weighted equally within each pillar, and each of the pillars respectively receives equal weight in the overall country score.
Do you use absolute or relative scoring?
We score the 25 factors and 72 subfactors differently, based on the national balance sheet approach. In general, we tend to score macroeconomic variables with absolute threshold, and political and social variables with relative threshold.
How is the Country Strength Index calculated?
The Country Strength Index (CSI) is calculated as the simple average of the four pillars of the Country Insights model.
How is the Sovereign Risk Indicator (SRI) calculated?
The Sovereign Risk Indicator (SRI) is calculated as the simple average of the first two pillars of the Country Insights model: External Adjustment Capacity & Institutional Robustness.
How is the Investment Attractiveness Index calculated?
Investment Attractiveness Index is calculated as the simple average of the first three pillars: External Adjustment Capacity, Institutional Robustness and Medium-term Growth Potential.
Does the model rely on 'hard' data or 'soft', survey-based data?
The majority of the inputs to the model are 'hard' data. However, we include survey-based data from the WEF Global Competitiveness Report in Pillar III as well as survey measures of life satisfaction and perceived deprivation in Pillar IV.
How are custom indicators weighted?
Users can flexibly determine the weights of factors for the custom indicators. Factors marked as 'Low' receive 1 unit of weighting, factors marked as 'Medium' receive 2 units of weighting, and factors marked as 'High' receive 3 units of weighting.
For each indicator is the best country 10 and is the worst country 0? If not, how is it normalized?
The best possible score is 10, and in principle the higher the score, the better. There can be multiple countries with 10, but there could also be a case when no country reaches a threshold required for 10 (e.g. overall pillar score on Medium-term growth potential). The same applies to zero. Regarding normalization, various indicators are scored differently; for more detail please refer to the QCA Methodology Whitepaper.
How do I download data?
Data can be accessed through our Data View platform, the Excel Bloomberg add-in and Excel files upon request.
Is the actual score meaningful, or is the meaning found in comparing the score to other countries?
The actual score is meaningful in the sense that it quickly tells users whether the country is strong or weak on a particular measure. In order to better understand the level of strength (weakness), it is useful to compare it against its history or against other countries.
What's a good score? What's a bad one?
We encourage our clients to look at a number of variables when interpreting a score, including: the directional movement of a score over a period of time; the relationship of the score to its peer group, and; the decomposition of the score (if it is comprised of other scores). Futhermore, our expert analysis team is always available to assist in interpreting the score.
What's a meaningful quarterly change? What's a meaningful yearly change?
We usually start by observing changes bigger than 0.5. However, some factors by nature tend to be more stable than others, such as business environment. Statistically speaking, the more factors an indicator includes, the more stable the indicator score will be. Therefore, it is important to observe the trend of changes over a period of time to get a sense for the magnitude of the change.
Why is a score of 5.0 a meaningful threshold?
A score of 5.0 is meaningful in the context of Sovereign Risk Index which has been backtested as far as to 1990s. We have found that countries scored below 5.0 had a meaningful risk of soveriegn crises historically.
What are the rankings shown on the country page?
Rankings on the country page show a country's position out of 174 countries. For some sub-factors, data may not exist for every country. In this case, the ranking is out of the number of countries for which data is available.
I don't see forecast data or an outlook for the country I'm looking at. Why is that?
At this time, we produce country specific outlooks and forecast data on the top 50 economies. On the other countries, we provide expert analysis on a regional basis and also produce regional forecasts and regional outlooks. We will continue to enhance our country outlooks and forecast coverage.
What's your process for cleaning data?
We have established a consistent and recorded process for data clearning, in which we strive to identfiy the best cross-country-comparable databases, reconcile the discrepancy in data between different data sources and make necessary adjustment to bring uncomparable data to a comparable level.
What's your process for aggregating data?
We have established a disciplined process of aggregating data into our database by having multiple rounds of quantitative and qualitative quality assurance.
How do you handle data revisions?
Data revisions are incorporated into the model as part of the quarterly data update process. However, we maintain a point-in-time database which contains historical data, as it was reported at a specific point in time, that doesn't show any subsequent revisions.
How often do you change the methodology of the model?
Once every 18 - 24 months for the sake of consistency in methodology.
Will I be notified when the model is changed?
Yes. Methodology update is a coherent and consultative process whereby we listen to feedback from clients and RGE economists who frequently use the model for their analysis. And all clients will by notified should there be changes in the model.
How do you ensure integrity and consistency of the model if it is changing?
We only promote methodology changes to the model when we have a good reason to believe that the new measurement will provide more meaningful results. However, we maintain multiple versions of the model after any change in methodology to accommodate clients that choose to use the legacy methodology.
When are the scores published?
Three weeks after end of every quarter.
Do you ever update scores and/or data in the middle of a quarter?
No, we do not update scores or data in the middle of the quarter but, rather, incorporate data revisions into our quarterly releases.
How long has this model been in development for?
The first model came out in 2007.