Policy indexes – what do they tell us and what are their applications? The case of climate policy and business planning in emerging markets


Working Paper 88

Abstract

The last two decades have witnessed an explosion in the publication of country indexes that measure and rank the relative policy performances of governments. Whilst there is a well understood audience for such rankings amongst policy-makers and the media, much less is known about their use and applicability to business users and business planning.

In this study, we explore if and how policy indexes can assist business decision-making, and compare and contrast the strength and weaknesses of using indexes between their current target audience of government decision makers and business planners.

We focus on one particular area – climate policy – where several of these types of indexes have been developed, all with different aims, varying in methodology applied and data used.

Our analysis is supported by an investigation of the information content of these climate change indexes and by a number of stakeholder interviews with business representatives.

Despite several challenges and limitations to the use of policy indexes by business leaders, we suggest that the need for data and information to support business planning and market entry decisions is strong – particularly in emerging markets and in sectors that face political uncertainty.

Swenja Surminski and Andrew Williamson