2015 Change Readiness Index Methodology

2015 Change Readiness Index Methodology

The CRI combines data from 22 primary survey questions, gathered from 1,270 country experts around the world, with a rich secondary dataset made up of more than 120 secondary variables, which are clustered into 73 secondary data indicators within the index.

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The Change Readiness Index (CRI) covers 127 countries including the original 90 covered in the 2013 CRI  plus a combination of additional developed and developing nations.

Country selection

The countries are distributed across a range of income levels. Countries included in this index were selected based on our ability to obtain sufficient or comparable primary and secondary data. The selection of countries provides a useful comparison between the change readiness of advanced and developing nations.

Country

income group
Economies

according to GNI per capita1
Number

of countries (127)
Share

in index sample %
High >US$12,616 35 27.6
Upper middle  US$4,086 - $12,615 33 26.0
Lower middle  

US$1,036 - $4,085
34 26.8
Low <US$1,035 25 19.7

Scoring methodology

The 2015 CRI is structured around three pillars (enterprise capability, government capability and people & civil society capability), with sub-indices for each pillar, and primary survey question responses and secondary data variables feeding each sub-index score. The composite/overall change readiness score is calculated by weighting standardized pillar scores, which are derived from weighted standardized sub-index scores. Sub-index scores are derived from standardized primary survey question responses and secondary data, with equal weighting given per variable, whether it is a primary survey question or secondary data indicator.

 

Enterprise

capability
Government

capability
People

& civil society capability
Relates to broad capability of private and state-owned enterprises Relates to capability of governmental and public regulatory institutions Relates to individual, societal and cultural determinants of capability
Labor market Macroeconomic framework Human capital
Economic diversification Public administration and state business

relations
Entrepreneurship
Economic openness Regulation Civil society
Innovation and R&D Fiscal and budgeting Safety nets
Business environment Rule of law Technology use
Financial sector Government strategic planning and horizon

scanning
Gender
Infrastructure Environment and climate change Inclusiveness of growth
Informal sector* Food and energy security Demographics
Technology infrastructure Security Health
  Land rights Access to information

In addition to the secondary data, between October 2014 and January 2015 the researchers at Oxford Economics conducted a survey of 1,270 country experts, with 10 per country.

Primary survey experts

For the 2015 CRI, we surveyed individuals with at least 7 years of experience analyzing, studying or living in their reporting country. The individual had to have a good knowledge of economic policymaking, social structures and governance institutions in that country and was not currently employed directly by a government department in the country that directly influences and/or enforces policy making. A minimum of a tertiary-level educational qualification from an accredited university or vocational college degree program was required. Country experts came from a range of industries and sectors, where possible, including senior managers within the private sector, academia and trade unions.

Weighting

To calculate the composite change readiness scores within the Index, each individual indicator (primary or secondary) was first multiplied by its respective equal weighting within its sub-index. These weighted scores for each indicator were aggregated to give the corresponding sub-index score. Next, each sub-index score was multiplied by its equal weighting within its pillar and these weighted sub-index scores were aggregated to give the corresponding pillar score. 

Finally, each pillar score was multiplied by an equal weighting factor (one-third), and these weighted pillar scores were then aggregated to give the overall change readiness composite score. For the purposes of this Index, each of the primary survey and secondary data values were normalized into a standard range, facilitating the aggregation of the variables into sub-index, pillar, and composite scores. In this case, standardization was achieved by converting raw data values into ‘trimmed Z-scores,’ which were calculated by subtracting the sample mean from the raw score and dividing the result by the standard deviation. The sign of the standardized score indicates whether the raw value for a given country is above or below the sample mean. Outlier values were trimmed to avoid distorting effects. There are two key issues to weighting that were addressed within the context of this Index: 

1. Weights of pillars in the composite overall Index (and the weights of sub-indices within pillars) 

The 2015 CRI, in line with the 2013 CRI, uses equal weights throughout the Index for pillars and sub-indices within pillars. In deciding upon a weighting structure for the Index, various alternatives were considered, including ‘Principal Components Analysis’ (PCA), to take account of the correlation between variables. Sensitivity analysis was undertaken for different weighting approaches, including using PCA to estimate weights. PCA produced only minor variations in the weightings of the three pillars, thus confirming the validity of using equal weights as per the 2013 Index. This confirmed that the data is not significantly distorted by equally weighting different data.

2. Weighting between primary survey responses and secondary data

Overall the 2015 Index is weighted 23:77 for primary versus secondary data (22 primary questions and 73 secondary data series). Within each sub-index, an equal weighting is given per variable, whether it is a primary survey question or secondary data indicator. In 2013, the index contained 69 secondary data series and 21 primary questions, meaning that although the 2015 index contains more primary and secondary data points, the weighting of primary to secondary data within the index has remained constant this year. 

Footnotes

*Question only asked of developing countries

1http://data.worldbank.org/about/country-classifications

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