Download Press Release - KOF Index of Globalization

Press Release
Zurich, 4 March 2016, 9.00 a.m.
The KOF Globalization Index 2016: Netherlands Beat Ireland and
Belgium
The current KOF Globalization Index reflects the extent of economic, social and political globalization in
2013. According to the Index, the degree of globalization in 2013 increased very little compared to the
preceding year. While the Index continued to stagnate in the industrialised countries, Eastern Europe
and the Asian and Pacific regions recorded a rise. The Netherlands are at the top of the Index. Switzerland is occupying the fifth rank.
A number of key developments determined the trend in 2013: The gradual recovery of the global economy
continued. In the USA, signs indicated an imminent normalisation of monetary policy. However, the Fed’s announcement of reduced bond purchases led to major capital outflows and currency devaluations in the emerging
markets. Although the Eurozone finally came out of recession, massive public debt continued to place a strain
on the economies in the crisis countries. The Middle East was dominated by the aftermath of the Arab Spring.
Syria was wrecked by civil war and Egypt saw the military get back into power.
Small globalised countries
According to the KOF Globalization Index, the Netherlands were the most globalised country in the world in
2013, closely followed by Ireland in second and Belgium in third place. The same three countries occupied the
first three places in the previous year’s globalization ranking. Austria remained in fourth place while Switzerland
moved up two places to fifth rank, relegating Singapore to sixth place. Denmark advanced one place to seventh
rank, followed by Sweden, which went down two places to rank 8. The ninth and tenth place are occupied by
Hungary and Canada.
Thanks to the size of their markets, the world’s major economies are more inward-looking and tend to occupy
lower ranks on the Globalization Index. The USA, the world’s largest economy, ranks 34 (–1 rank), China 73 (–
1 rank), Japan 48 (+3 ranks) and Germany 27 (–3 ranks).
The lower end of the Globalization Index showed little movement in 2013. The least globalized country in the
world are the Solomon Islands, followed by Eritrea, Equatorial Guinea, Micronesia, Laos and the Comoros (in
ascending order). Macedonia recorded the largest descent in 2013, slipping down 19 places to rank 93. The
country reverted predominantly in the field of social globalization. Substantial setbacks were also recorded by
Kazakhstan (–17 ranks), Lesotho (–13 ranks), Angola (–9 ranks) and Sierra Leone (–9 ranks). The biggest
climbers in the overall index in 2013 were Puerto Rico (+47 ranks), Egypt (+24 ranks), Zambia (+16 ranks), the
Dominican Republic (+9 ranks) and Malawi (+9 ranks).
The KOF Globalization Index measures the economic, social and political dimensions of globalization.
Economic Globalization
The economic dimension of globalization refers to the extent of cross-border trade, investment and revenue
flows in relation to GDP, as well as the impact of trade and capital transaction restrictions. The financial crisis of
2008 not only put a stop to the extensive economic integration that had lasted since the 1990s but even reversed
KOF Swiss Economic Institute | Corporate Communications | Phone +41 44 632 42 39 | [email protected]
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it to some extent. In 2013, integration of international trade and capital flows largely stagnated. At the same
time, the trend towards restrictions on trade and capital transactions imposed in the aftermath of the financial
crisis was reversed. The increase in economic globalization in 2013 was largely due to a cutback of non-tariff
trade barriers.
As before, Singapore came out top in the Economic Globalization Sub-Index in 2013, followed by Ireland and
Luxembourg. The bottom ranks were occupied by Burundi, Ethiopia and Iran.
Social Globalization
The KOF Globalization Index measures the social dimension of globalization in three categories: Firstly, it assesses cross-border personal contacts in the form of telephone calls, letters and tourist flows as well as the size
of the resident foreign population. Secondly, cross-border information flows are measured in terms of access to
the internet, TV and foreign press products, and thirdly, the index attempts to measure cultural proximity to the
global mainstream by means of the number of McDonald’s and Ikea branches as well as book imports and
exports in relation to GDP. In 2013, social globalization rose slightly faster than in the previous years, primarily
due to the cultural proximity sub-index.
Austria, Singapore and Switzerland held the first three ranks in the Social Globalization Sub-Index (in descending order). At the bottom end of the sub-index are the Democratic Republic of Congo, Myanmar and Ethiopia.
Political Globalization
The political dimension of globalization is measured in terms of the number of foreign embassies resident in a
country, the number of international organisations of which the country is a member, the number of UN peace
missions in which the country has been engaged and the number of bilateral and multilateral agreements the
country has concluded since 1945. In 2013, Italy continued to occupy the top rank in this sub-index, followed by
France in second and Belgium in third place. At the bottom of the field were small islands and archipelagos.
Compared to the previous year, the degree of political globalization rose very slightly in 2013.
Methodology
The KOF Globalization Index, which measures the economic, social and political dimensions of globalization,
observes changes in the globalization of a series of countries over a long-term period. Based on 23 variables,
the KOF Globalization Index 2016 covers 187 countries and relates to the period 1970 to 2013. The Index
comprises an economic, a social and a political component and measures globalization on a scale from 1 to
100. The underlying variables are divided into percentiles to smooth out outliers and reduce fluctuation over
time. The data on which the Index is based were updated for recent years using the original sources. The new
data are not comparable with last year’s KOF Index since the database was also updated and recalculated for
all previous years. All comparisons with previous years that appear in the above text are based on the new
calculation method.
Contacts
Florian Hälg | Phone +41 44 632 54 46 | [email protected]
Corporate Communications | Phone +41 44 632 40 61/ 53 44 | [email protected]
Read an interview with Florian Hälg in the current KOF Bulletin:
http://kof.ethz.ch/en/publications/kof-bulletin/ 
Detailed information regarding the KOF Globalization Index 2016 is available at:
http://globalization.kof.ethz.ch/ 
More Information:
Dreher, Axel (2006): Does Globalization Affect Growth? Evidence from a new Index of Globalization. Applied
Economics 38, 10:1091-1110.
Dreher, Axel, Noel Gaston und Pim Martens (2009): Measuring Globalization – Gauging its Consequences.
New York: Springer.
KOF Swiss Economic Institute | Corporate Communications | Phone +41 44 632 42 39 | [email protected]
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Graphs
gle_1.eps (lgr_4) of g2016e.plf, 25.02.16
ChartKOF
1 Index of Globalization Worldwide
KOF Index of Globalization Worldwide
Chart 2
G 1: World’s
The World’s
15 Most
Globalized
Countries
The
15 Most
Globalized
Countries
70
100
90
80
70
60
60
50
40
50
30
20
2000
2005
2010
2015
economic
KOF Index of Globalization
Economic Globalization
Social Globalization
Political Globalization
social
Spain
Cyprus
Norway
Portugal
Finland
Canada
Sweden
Hungary
Austria
Denmark
1995
Singapore
1990
Switzerland
1985
Ireland
30
Belgium
0
Netherlands
10
40
political
gl_2a.eps (lgr_4) of g2016.plf, 25.02.16
Chart 3
The
15 Least
Globalized
Countries
G 2:World’s
The World’s
15 Least
Globalized
Countries
ChartKOF
4a Index of Globalization Across Regions
KOF Index of Globalization Across Regions
40
80
35
70
30
25
60
20
15
50
10
5
social
Sudan
Myanmar
Afghanistan
West Bank and Gaza
French Polynesia
Cayman Islands
São Tomé and Príncipe
Tonga
political
Burundi
Comoros
Lao PDR
Equatorial Guinea
economic
Micronesia, Fed. Sts.
Eritrea
40
Solomon Islands
0
30
20
1985
1990
1995
2000
2005
gl_2b.eps (lgr_3) of g2016.plf, 25.02.16
ChartKOF
4c Index of Globalization Across Regions
KOF Index of Globalization Across Regions
80
80
70
70
60
60
50
50
40
40
30
30
1985
1990
1995
2000
KOF Index of Globalization worldwide
Middle East & North Africa
Sub-Saharan Africa
2005
2010
2015
2015
KOF Index of Globalization worldwide
East Asia & Pacific
gl_2c.eps (lgr_3) of g2016.plf, 25.02.16
South Asia
Latin America & Caribbean
missing data
ChartKOF
4b Index of Globalization Across Regions
KOF Index of Globalization Across Regions
20
2010
20
1985
1990
1995
2000
2005
KOF Index of Globalization worldwide
Western Europe & Industrialized Countries
East Europe & Central Asia
KOF Swiss Economic Institute | Corporate Communications | Phone +41 44 632 42 39 | [email protected]
2010
2015
Grafiken
gl_3.eps (lgr_4) of g2016.plf, 25.02.16
ChartKOF
5 Index of Globalization According to Income
KOF Index of Globalization According to Income
90
80
70
60
50
40
30
20
1985
1990
1995
2000
2005
2010
2015
KOF Index of Globalization worldwide
OECD countries
Non OECD countries with high income
Non OECD countries with low income
Chart 6
The Biggest Changes
(as compared to previous year)
Chart 7
The Changes Among Most Globalized Countries
(as compared to previous year)
60
4
50
3
40
2
30
1
20
0
10
-1
0
KOF Swiss Economic Institute | Corporate Communications | Phone +41 44 632 42 39 | [email protected]
France
United Kingdom
Luxembourg
Czech Republic
Spain
Slovak Republic
Cyprus
Norway
Finland
Portugal
Canada
Sweden
Hungary
Danmark
Singapore
Austria
Switzerland
Ireland
Belgium
Puerto Rico
Egypt, Arab Rep.
Zambia
Dominican Republic
Malawi
Sierra Leone
Angola
Lesotho
-4
Kazakhstan
-3
-30
Macedonia, FYR
-20
Netherlands
-2
-10