Alternative versions of the global competitive industrial performance ranking constructed by methods from social choice theory

Subochev, Andrey and Zakhlebin, Igor (2014): Alternative versions of the global competitive industrial performance ranking constructed by methods from social choice theory. Published in: National Research University Higher School of Economics Working Papers No. Working paper WP7/2014/06 (25 July 2014): pp. 1-28.

Abstract

The Competitive Industrial Performance index (developed by experts of the UNIDO) is designed as a measure of national competitiveness. Index is an aggregate of eight observable variables, representing different dimensions of competitive industrial performance. Instead of using a cardinal aggregation function, what CIP’s authors do, it is proposed to apply ordinal ranking methods borrowed from social choice: either direct ranking methods based on the majority relation (e.g. the Copeland rule, the Markovian method) or a multistage procedure of selection and exclusion of the best alternatives, as determined by a majority relation-based social choice solution concept (tournament solution), such as the uncovered set and the minimal externally stable set. The same method of binary comparisons based on the majority rule is used to analyze rank correlations. It is demonstrated that the ranking is robust but some of the new aggregate rankings represent the set of criteria better than the original ranking based on the CIP.

• Item Type: MPRA Paper
• Language: English
• Keywords: Competitive Industrial Performance index, CIP, UNIDO, national competitiveness, aggregate index, competitive industrial performance, ordinal aggregation, social choice, ranking method, majority relation, Copeland rule, Markovian method, social choice function, tournament solution, uncovered set, externally stable set, binary comparison, rank correlation, Kendall distance
• Subjects: C - Mathematical and Quantitative Methods > C6 - Mathematical Methods ; Programming Models ; Mathematical and Simulation Modeling > C65 - Miscellaneous Mathematical Tools; E - Macroeconomics and Monetary Economics > E1 - General Aggregative Models; F - International Economics > F0 - General > F01 - Global Outlook; F - International Economics > F6 - Economic Impacts of Globalization > F63 - Economic Development; L - Industrial Organization > L6 - Industry Studies: Manufacturing > L60 - General

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