Research & Methodology
eStandardsForum collects, analyzes, and disseminates publicly available information to provide a comprehensive overview of a country's institutional environment in the context of a liberal market democracy governed by transparent institutions. Three distinct elements are utilized to evaluate a country's performance: a snapshot of nine leading global best-practices indices, as well as eStandardsForum's own Standards Compliance Index and Business Indicator Index – and the underlying reports that make up the indices. The country reports are subject to a comprehensive review at least every twelve months, and undergo ad hoc interim reviews whenever current developments require a re-evaluation of the annual assessment. The publicly available information is collected by the New York-based research team as well as by partner institutions in selected countries. The country reports are complemented with weekly reports on recent developments related to the factors included in the indices, as well as occasional briefs on selected topics that present opportunities for or challenges to responsible private-sector-led growth.
Guiding Principles
eStandardsForum believes that a lack of public information is as much a risk to investors and a threat to financial stability as are inadequate regulatory structures. In accordance with this conviction, the project is committed to using only publicly available information in the assessments. Private knowledge, in so far as it is not verifiable through publicly available sources, is not admissible as a basis for generating a compliance rating. We hope that this approach will promote the release of information into the public domain and thereby enhance the quality and level of dialogue between governments and market participants.
Sources
Assessments include a systematic evaluation of a standard or group of standards. It is not a document or commentary that provides only anecdotal evidence or relies on selective or overly general examples to illustrate practices in a country. Assessments provide a qualitative statement or detailed description of a country's practice and compares this to a particular standard or certain principles within an individual standard. For a given document to qualify as an assessment, it must be publicly available, comprehensive, and objective.
Sources that are not accessible to the public are not used as sources of assessment. Ideally, a source of assessment comprehensively covers the entire standard and all its relevant principles. In reality, however, assessments, reports, and studies often only cover parts of a relevant standard. Naturally, documents qualifying as sources of assessment should be objective and, for this reason, third-party assessments of a country will carry greater credibility than self-assessments. Nevertheless, in the absence of third-party assessments, self-assessments form an important source of information.
Levels of Compliance
The Financial Standards Index is reporting information on two levels. On the first level, it measures the public availability of information on a country's compliance with the 12 Key Standards. If the level of information is unsatisfactory, a rating of "Insufficient Information" is assigned. If the level of information is deemed sufficient, a rating ranging from "No Compliance" to "Full Compliance" is assigned, depending on how well the publicly available sources have evaluated the country's regulatory framework for the respective standard.
These particular categories have been selected because they mirror the process a country follows when implementing standards and codes. The advantage of using categories that are based on qualitative criteria is that the ratings are more verifiable, objective, and informative than a binary "yes" or "no" or a numerical range.
FULL COMPLIANCE: There is publicly available information indicating that the country has incorporated the principles of the relevant standard into laws or regulations, and that these principles are currently being applied and followed in an effective, consistent, and transparent manner.
COMPLIANCE IN PROGRESS: There is publicly available information indicating that the country has incorporated the principles of the relevant standard into laws or regulations and that there has been significant progress made towards the effective enforcement of the laws or regulations by regulators and supervisors, albeit with minor shortcomings.
ENACTED: There is publicly available information indicating that the country has incorporated most of the principles of the relevant standard into laws or regulations. The Enacted category does not address the actual enforcement of the laws or regulations.
INTENT DECLARED: The country has made a formal, public, and authoritative declaration that it will incorporate the principles of the relevant standard into laws or regulations and will adhere to the standard.
NO COMPLIANCE: There is publicly available information indicating that the country has not incorporated the principles of the relevant standard into laws or regulations or has taken any steps to comply with the relevant standard.
INSUFFICIENT INFORMATION: There is not enough information publicly available to make an assessment as to the country's level of compliance with the relevant standard.
Financial Standards Index Score
The Standards Compliance Index provides a score or snapshot of a country's overall compliance with the 12 Key Standards for Sound Financial Systems. It also ranks all countries in our database based on this score.
Each of the 12 standards is given equal weight in the final standards index score. The compliance categories are scored as follows:
| Full Compliance | 10 points |
| Compliance in Progress | 8 points |
| Enacted | 6 points |
| Intent Declared | 3 points |
| No Compliance | 1 points |
| Insufficient Information | 0 points |
A percentage score is determined, based on the average score across all the standards. A country's scores may range from a maximum of 100 (full compliance in all categories) to a minimum of 0 (no assessment available for any of the standards).
Based on the overall percentage score, an overall level of compliance with the 12 Key Standards for Sound Financial Systems is assigned to a country based on the following scale:
| Very High Compliance | score 80 to 100 |
| High Compliance | 60 to 80 |
| Medium Compliance | 40 to 60 |
| Low Compliance | 29 to 40 |
| Very Low Compliance | 0 to 20 |
Business Indicator Index Score
The Business Indicator Index gives a score for a country's economic, political, and business environment compared with a model that experience has established as the best approach to sustainable development. The rankings indicate degrees of compliance with the main attributes of the "standard" model. The score is calculated as follows: A country is given a score of either 1 (complies) or 0 (does not comply) for each of the 12 business indicators. The sum of each of these scores is the final overall score, which can range from 0 (no compliance with any factors) to 12 (full compliance with all factors).
Based on the final overall score, a country is categorized as follows:
At Standard: Countries scoring greater than 9
Standard in Progress: Countries scoring between 6 and 9
Below Standard: Countries scoring below 6
The details of the scores given for compliance in each of the factors are:
| Indicator | Best Practice Benchmark | Points |
| 1. Economic Model | Market-based economy | 1 point |
| 2. FOREX Regulations | No Capital Controls | 1/2 point |
| No Exchange Controls | 1/2 point | |
| 3. Foreign Investment Law | Yes, adequate Foreign Investment Law | 1 point |
| 4. Trade Regulation | No Import Regulation | 1/4 point |
| No Protective Tariffs | 1/4 point | |
| Yes, Export Incentives | 1/4 point | |
| No Export Disincentives | 1/4 point | |
| 5. Tax Regime | Creates Incentives for Investment | 1 point |
| 6. Tax Rates | Low / Competitive | 1 point |
| 7. Bankruptcy Indicators/ Property Rights | Established | 1 point |
| 8. International Dispute Settlement | Credible History/Marginal Success | 1 point |
| 9. Political Environment | Positive Commitment to growth / globalism by ruling authority | 1/3 point |
| Positive Attitude toward utilization of global resources to promote growth | 1/3 point | |
| Positive Commitment to growth / globalism by political opposition | 1/3 point | |
| 10. Political Stability | Yes, for foreseeable future | 1 point |
| 11.Corruption | No Concern | 1 point |
| 12. Adherence to global labor standards | Complies | 1 point |
Best Practice Report Note
eStandardsForum's Best Practice Report (BPR) provides a comprehensive overview of a country's position with respect to leading global indicators addressing its political, economic, business, and social climate. It also provides a summary of developments in a country's compliance with international standards and codes, as well as its economic and legal framework. Accordingly, a BPR consists of the following sections:
1. Performance in eStandardsForum's Indices
This comprises a short summary of a country's performance in the Financial Standards Index and the Business Indicator Index. This section is followed by a more detailed summary of observance of standards and codes, which represents the compiled executive summaries of eStandardsForum's country compliance reports against these standards.
2. Performance in Global Indices
In this section, the rank and score of a country in nine distinct global indices is summarized. The country's relative position in these indices is made more comparable by calculating the quintile corresponding to the country's rank. In addition, a short summary interpreting the country's performance in the nine indices is provided.
3. Credit Ratings:
Long-term foreign currency ratings and outlooks, indicating the likelihood of a sovereign default of the country, are provided as of the last date of upgrade or downgrade by the three leading credit rating agencies.
4. Macroeconomic data
This section provides the latest GDP and GDP-per-capita figures, projected GDP growth, and inflation as provided by the latest available IMF World Economic Outlook; unemployment figures by the CIA World Factbook; the latest inward and outward foreign investment figures as reported in UNCTAD's annual World Investment Report; and the most recent figure for official development assistance (ODA) received or disbursed, as reported by the OECD.