in The World Bank Governance Indicators (WGIs) provide a broad indication of the risks you face in doing business in any given country. What the data shows is that, three decades on from the fall of the Berlin Wall, operators and investors looking to exploit key opportunities in Central and Eastern Europe, the Balkans, CIS and the Caucasus, continue to face a range of significant risks from political instability, poor regulation and corruption. These lead not just to financial risk but also substantial reputational risk. So investors need to investigate in more depth and with greater care. The map below allows you to glance at the scores for selected countries, indicating the degree of commercial risk you are exposed to if you do not analyse the business climate in appropriate depth.
The WGIs are compiled by the World Bank for its annual country reports. They are constructed from a combination of 30 underlying data sources, which range from political risk firms' analysis, to competitiveness indexes, to human rights reports. The WGIs are based on six dimensions of governance: Voice and Accountability, Political Stability and Absence of Violence, Government Effectiveness, Regulatory Quality, Rule of Law, and Control of Corruption.
For each country listed, we have added up the scores for the individual governance dimensions and averaged them out to produce an overall risk score. The data highlights the considerable divergence in the level of risk between the ‘old’ member states of the European Union, its ‘new’ member states in Central and Eastern Europe, its ‘aspiring’ member states in the Balkans, and the Russian-led Commonwealth of Independent States (CIS).
Click on individual countries on the map to see a breakdown. The scores correspond to the following criteria:
- 1 - 19: Extreme governance risk (e.g. Turkmenistan - 13.9);
- 20 - 39: Severe governance risk (e.g. Ukraine - 26.8);
- 40 - 59: Significant governance risk (e.g. Serbia - 54.4);
- 60 - 79: Moderate governance risk (e.g. Poland - 77.1);
- 80 - 100: Low governance risk (e.g. Austria - 93.4)