DEVELOPMENT

tioning market economies (15 states), market economies
with functional flaws (51 states), poorly functioning
market economies (40 states) and rudimentary market
economies (7 states). The economic transformation of the
Czech Republic, Taiwan, Singapore, and Estonia were
rated most highly. The majority of the new EU Member
States are also in the group with developed market
economies, except for Bulgaria, Latvia and Romania.
Russia is classified among the states that have market
economies with functional flaws, as are the majority of
the other CIS states (Bertelsmann 2012: 41).
The uniform strength of the political and economic
dimensions have secured top positions for the new European
Union Member States, which, by having fulfilled
the requirements for membership, have already demonstrated
progress in both democratisation and the transition
to market economies. In 2003, 2006, 2008, 2010
and 2012, there were five new EU Member States among
the top ten: the Czech Republic, Slovenia, Estonia, Lithuania
and Slovakia. Based on the 2008 index, Poland
had dropped out of the top ten; and based on the 2012
index, Hungary dropped out. The only one that was not
among in the top ten at any time was Latvia, which is
still in the group of democracies with highly advanced
market economies. Of the non-European states/areas,
the development that occurred in Taiwan from 2009
to 2011 has been given the highest composite score.
In democratisation, Uruguay has also gotten an almost
maximum score, but its economic development has been
more modest. Among the highly advanced states, we
also find some of the other reference state in this report
– Uruguay, Chile, Costa Rica and the South Korea. All
of them can be viewed as developmental leaders in their
region. In regard to economic development, Singapore
has also been assessed quite highly (9.57 points in 2008,
9.14 in 2010 and 9.18 in 2012), along with the Czech
Republic, Taiwan and Slovenia.
Based on the Management Index (2012), the transition
countries were divided into five groups: with very
good management (8 states); good management, but with
shortcomings (36 states); moderately successful management
(43 states); weak management (27 states); and failed
management (14 states) – see Table 2.1.3.
According to the Management Index in 2003, 2008,
as well as 2010 and 2012, Estonia was one of the most
successful transition countries, placing first, second and
third position, respectively, and slightly behind, in seventh
rank, in 2006. Of the other new EU Member States,
only Lithuania and Slovakia are assessed as states with
very good management, but not in all the years – Slovakia
only four times, and Lithuania twice. Latvia is among the
states with good management, but with shortcomings,
but has improved its position somewhat in recent years.
Based on the 2012 index, Taiwan and Brazil have received
significantly better assessments than in previous years. Of
the new EU Member States, the assessment of management
in Slovakia and Slovenia have decreased somewhat
in recent years, and it has fluctuated quite a bit in Lithuania,
the Czech Republic and Poland.
In the assessment of the management of governance
processes, Hungary and Russia have suffered the
greatest decrease. In the indices for 2003 to 2010, Hungary
was among the countries with good management,
but based on the 2012 index, they dropped out of this
group, being the only new EU Member State among
the moderately successful countries (declined from 12 th
position, in 2003, to 48 th , in 2012). Russia has even
declined by two country groups – from 31 st , based on
the 2003 index (good management, but with shortcomings),
to 87 th position in 2006 (moderately successful
management), and finally, into the group of countries
with weak management (98 th in 2008, 107 th in 2010
and 99 th in 2012). According to the Status Index, in
all the years between 1998 and 2011, the political and
economic transformation in the Czech Republic, Slovenia
and Taiwan was consistently more successful than
in Estonia. Process management has been, consistently,
very successful in Chile, and during the last few years,
in Taiwan and Uruguay. However, when combining
both indices through the years, Estonia’s transformation
result has been better, and its positions in the
ranking higher.
Great attention was paid to the relative level of difficulty
related to the specifics of each country’s development,
which was calibrated by using an additional coefficient
to make the final determination of the Management
Index score.
The calibration of the composite Management Index
utilised a coefficient that can reduce the score in the final
index up to 25% – if the value in the quality of management
sub-index is 1.0, it was divided by a coefficient of
1.250; if the value is 1.1, the coefficient is 1.246; if the
value is 1.2, the coefficient is 1.242, etc, until a coefficient
of 1.0, when the level of difficulty is 10.0. Between 2009
and 2011, the highest level of management difficulty was
assigned to Somalia (9.8) and Haiti (9.5). Of the states
with moderately successful management, the level of
difficulty was highest for the Central African Republic
(8.5), Burundi (8.2), Rwanda (7.8) and Mauritania (7.8).
Estonia is among the group of countries with relatively
good management, with a level of difficulty, in 2012, of
1.9. The lowest level of difficulty is assigned to Slovenia
(1.1) and the Czech Republic (1.2).
Based on a summary of the Status and Management
Indices, based on the analysis of the transformation
processes between 1998 and 2011, by the Bertelsmann
Foundation, Estonia has been very successful. This is,
primarily, thanks to the uniform scores and ranks of both
the Status and the Management Index (see Table 2.1.4
and Figure 2.1.1).
It is important to note that the values of the process
management index can also be comparatively low for
successful transition countries (18 th rank for the Czech
Republic and Slovenia; even 48 th rank for Hungary),
which alludes to a poor capability to cope with crises.
In the analytical summaries made on the basis of
the Bertelsmann Transformation Index (BTI) 2012, it is
recognised that it no longer makes sense to view the
given lead group of countries – eight EU Member States
in Eastern and Central Europe, three Latin American
and two Asian states (see Table 2.1.3 and Figure 2.1.1)
– as transition countries in the context of a transition
to democracy and market economies, since this has
already occurred. Underway is the consolidation of the
Estonian Human Development Report 2012/2013
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