DEVELOPMENT
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2.1<br />
General success of the development:<br />
Bertelsmann Transition Index<br />
Peeter Vihalemm<br />
In May of 2004, the Bertelsmann Foundation in Germany<br />
first published the results of a project that was<br />
started in 1996, which tried, with the help of comparative<br />
composite indices, to measure the development of<br />
116 transition countries/economic areas on their path<br />
to democracies based upon market economies, during<br />
the years 1998 to 2003. In autumn 2005, the second<br />
Bertelsmann Transition Index was published, which<br />
analysed development between 2001 and 2005; in February<br />
2008, the third index, which included development<br />
from 2005 to 2007; in November 2009, the fourth<br />
index, which summarises development from 2007 to<br />
2009. The fifth index (BTI 2012), published in March<br />
2012, included developments from 2009 to 2011, and<br />
the number of states/territories that were under observation<br />
had increased to 128.<br />
The surveys do not include the states that were<br />
OECD members in 1989 – democratic states with<br />
highly developed economies that has been consolidated<br />
for a long time (Western European states, USA, Canada,<br />
Japan, Australia, New Zealand), as well as states with<br />
populations under 2 million. However, an exception<br />
was made in the case of several smaller states, which<br />
are interesting from a transformational point of view,<br />
and also includes Estonia.<br />
The cognitive value of the Bertelsmann Transition<br />
Index is based on the multidimensional institutional<br />
model of the transformational process that forms the<br />
basis of this index, and which can be successfully<br />
employed to compare the economic and political developments<br />
occurring in various parts of the world. Based<br />
on this model, transformation is defined as “a politically<br />
managed broad-based process of change, in the course<br />
of which an authoritarian system develops in the direction<br />
of democracy and a market economy” (Bertelsmann<br />
2012: 131).<br />
With the help of a special codebook, a network of<br />
international experts, assembled by the Bertelsmann<br />
Foundation, evaluates and analyses the political and<br />
economic development of each country, by using the<br />
international statistical data available for each country.<br />
Nineteen criteria were used to compute the com posite<br />
index for comparing the states in 2004, of which,<br />
many were comprised of several indicators, for a total<br />
of 58. In both 2008 and 2012, 17 criteria and 52 indicators<br />
were used to compute the index (Bertelsmann<br />
2008: 73–85; Bertelsmann 2009: 16–22; Bertelsmann<br />
2012: 129–132). The scores based thereon comprised<br />
expert opinions on a scale of one to ten, which were<br />
often based on quantitative (statistical) indicators.<br />
Based thereon, two composite indices were compiled<br />
– the Status Index and the Management Index – see<br />
Table 2.1.1. The Status Index assesses the political and<br />
economic development (transformation) of the countries<br />
with the help of two analytical dimensions. These<br />
are, on the one hand, the movement toward democracy<br />
under the rule of law and, on the other hand, the<br />
movement toward a market economy anchored in principles<br />
of social justice. The Management Index assesses<br />
the quality of governance, as well as effectiveness in<br />
establishing and fulfilling goals.<br />
Transformation – the integral reorganisation<br />
and formation of society – does not mean straightforward<br />
or irreversible development without setbacks<br />
or missteps (Bertelsmann 2012: 131), which is clearly<br />
indicated, for instance, by Hungary’s political retrogression,<br />
as well as by the great fluctuations in the success<br />
of Slovenia’s and Slovakia’s process management, etc.<br />
(see Tables 2.1.2 and 2.1.3).<br />
Comparing the various aspects of Estonia’s development<br />
between 2009 and 2011, based on the assessments<br />
of the aforementioned criteria (Table 2.1.1), we see that<br />
the stability of the democratic institutions, organisation<br />
of the market and competition, as well as the extent of<br />
private ownership get high marks. In Estonia’s case, relatively<br />
low marks are given to the level of socio- economic<br />
development, as well as the growth potential and sustainability<br />
of the economy in the years impacted by the<br />
economic crisis.<br />
Based on the Status Index, Estonia’s transition path<br />
has been successful – placing second, after Slovenia, in<br />
the summary for 2006; in third position, after the Czech<br />
Republic and Slovenia, in 2008; in fourth place, after<br />
the Czech Republic, Slovenia and Taiwan in 2010; and<br />
in 2012, after the Czech Republic, Taiwan, Slovenia, and<br />
Uruguay, in fifth p position. In all cases, the results were<br />
uniformly high in both political and economic development<br />
(Table 2.1.2).<br />
In Table 2.1.2, we see that the composition of<br />
the group of highly advanced countries with market<br />
economies has been very stable. All the countries were<br />
already included in this group in the 2003 index, and<br />
the composition has remained the same, although<br />
some states, within the group, have experienced rises<br />
and falls – Uruguay underwent a strong rise from 13 th<br />
position to fourth (the determining factor was a very<br />
successful political democratisation process, which put<br />
Uruguay in first place, among the transition countries,<br />
while remaining in tenth place based on the success<br />
of its economic reforms; see Table 2.1.3). Slovakia and<br />
Hungary have also undergone sudden increases and<br />
decreases: Hungary has declined from first rank, which<br />
62<br />
Estonian Human Development Report 2012/2013