The UK has slipped down an international league table which measures how well elite groups within a country, including business leaders and politicians, contribute or take away from economic development and value creation.
According to the Elite Quality Index 2022, which ranks 151 countries against 120 different indicators, the UK ‘has lost considerable ground’ from the last edition, falling from an impressive third place in 2021 to eighth in 2022.
The global index, which is led by the University of St Gallen (Switzerland) along with international academic partners and the St.Gallen-based Foundation for Value Creation, focuses on how and whether the activities of elite groups benefit the wider population – both in relation to economic growth but also political power.
The latest analysis, carried out by University of Bath economist Professor Maik Schneider, suggests that a combination of factors have contributed to the UK’s fall in performance. Covid and Brexit have compounded these, but large regional inequalities have played a significant part too.
It notes that the UK’s Covid-related measures were moderate relative to many Western European countries – e.g., France, Germany, or Italy. It also highlights a decline in public trust in government elites following lockdown breaches and more recently revelations of parties inside Number 10.
Despite an ultimately successful vaccine roll-out, the report states that ‘the governmental elite’s management of the pandemic was not able to prevent a sorrowful Covid-19 mortality rate’ where the UK ranks 113th among the 151 nations listed.
It also finds that the realities of Brexit have exacerbated supply chain shortages and put extra pressure on inflation, where the UK’s leading position in 2021 dropped dramatically to 40th.
Most significantly, however, the reports suggests that the UK has much work to do in levelling up long-standing differences in living standards between different parts of the country. For regional redistribution of government spending, the UK ranks 120th.
More positively, it suggests the UK maintains its ‘great entrepreneurial strength’ and financial markets – ranked among the best in the world. It is also a leading country according to the Environmental Performance Index, despite uphill challenges in getting to net zero.
Author of the UK chapter Professor Maik Schneider from Bath's Department of Economics explains: “For the UK, 2021 was marked by two overarching developments – Covid and the plunge into the new reality of Brexit as the transition period ended on 31 December 2020.
“These combined factors and dual pressures have significantly contributed to the UK’s fall in performance, and it has struggled more than most. But other, longer-standing issues remain important too – most notably entrenched regional divides.
“Elites can and do create economic value, and in a number of areas the UK shows excellent performance. But this index should act as an important wake-up call for specific areas where policymakers should now focus attention so that wealth creation at one end genuinely benefits wider society.”
The Elite Quality Index 2022 ranked Singapore in first position and Switzerland second. It suggests both countries are leaders when it comes to creating economic and political 'value', but that their respective weaknesses are 'political power' (Singapore ranks 20th) and economic power (Switzerland ranks 15th), which indicates there is a high concentration of power in the political and economic elites.
Overall, the report finds that smaller countries generally showed greater resilience during the year of COVID-19, topping nine of the top 10 spots. Australia in third and Israel fourth, had impressive showings up six and three places respectively. In addition to the UK, countries which fell in the ranking included the US where the index finds political elites do not create enough political value for wider society. The US is ranked 66th for political value.