Taiwan was listed in 10th place on The Economist’s second index of crony capitalism, which gives an indication of how much the livelihood of people in certain nations or cities depends on close relationships between businesspeople and government officials.
The index is compiled with the use of data such as a nation’s total wealth in comparison with its GDP, the Forbes rankings of its billionaires and the source of their wealth.
In this year’s rankings, The Economist listed 22 economies that it described as the five richest ones, the 10 biggest emerging ones for which it had reliable data and a selection of other nations where cronyism is a problem.
Taiwan’s score has improved, down three places from its ranking in the 2014 index. Its crony wealth was assessed as 3.2 percent of its GDP, compared with 5.5 percent in 2014.
The higher the ratio, the more likely it is that the economy is suffering from a severe case of crony capitalism, the magazine said.
In its report on the new index, published on Saturday, The Economist said developing economies accounted for 43 percent of global GDP, but 65 percent of crony wealth.
Among the big nations, Russia still scored the worst, in reflection of its “corruption and dependence on natural resources,” and was moved to the top of the list from No. 2 in 2014, the magazine said.
Russia’s percentage of crony wealth in proportion to its GDP was estimated at 18 percent.
It was followed by Malaysia (13 percent), the Philippines (11.3 percent), Singapore (10.7 percent) and Ukraine (6.7 percent).
China — including Hong Kong — was ranked 11th, although in absolute terms it has the biggest concentration of crony wealth in the world, at US$360 billion, the magazine said.
However, once China’s wealth was compared with its GDP, its listing came in “only 11th on our ranking of countries,” the magazine said. “Were all billionaire wealth in China to be classified as rent-seeking, it would take 5th spot in the ranking.”
“Rent-seeking can involve corruption, but very often it is legal,” the London-based magazine said, adding that the term means the owners of a unit of production — land, labor, machines or capital — extract more profit than they would get in a competitive market.
“Cartels, monopolies and lobbying are common ways to extract rents,” the magazine said. “Industries that are vulnerable often involve a lot of interaction with the state, or are licensed by it.”
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