Ten composite indices for policy-making

Written by Eric Pichon, Agnieszka Widuto, Alina Dobreva and Liselotte Jensen.

Policy-making is a difficult art. In a globalised world, decisions that do not take account of the bigger picture can have far-reaching unintended consequences. The current global debate on measures to tackle Covid-19 and vaccinate entire populations offers ample examples of just how intertwined are the social, economic, technological and other impacts of any policy. Policy-makers need to be able to trust data to help them make the best decisions.

Rough data are sometimes difficult to get hold of. Various non-governmental organisations (NGOs), academics and think-tanks meanwhile produce tools aimed at interpreting data. These include composite indices that gather data from different sources in order to visualise the multiple dimensions of a specific concept more clearly. A composite index often proposes a ranking of countries. Such indices help to capture a comprehensive overview of a given situation and grasp its constitutive elements more easily. They provide for comparisons between countries or regions on a standard basis, and, when they are updated on a regular basis, give a good overview of the evolution of a situation over time. This can help with designing policies to prevent or mitigate risks and to encourage positive development. Indices can also – up to a certain point – help monitor the impact of policies and support forecasting exercises.

Fulfilling its core mission of ’empowering through knowledge’, in this analysis EPRS proposes a non-exclusive selection – which is in no way to be perceived as a ranking – of 10 composite indices in a range of policy areas. The indices selected are from reliable sources, already used as references by policy-makers. The majority have a good geographical coverage. With one exception – retained on account of its quality and uniqueness – they cover all EU Member States and/or most UN member states. The selection is also designed to cover some key EU policies, and most of the UN 2030 Agenda sustainable development goals (SDGs).

Each index is presented in a dedicated chapter that presents its producers and describes their objectives in publishing the index, the data compiled, and their actual and potential use by policy-makers. The chapters also highlight the potential limitations in using the indices. All composite indices of course are inevitably biased, as they select some indicators and reject others. They also standardise data that originated in heterogeneous units; therefore, the more indicators a composite index encompasses, the more bias it may carry. According to experts, this does not challenge the value of indicators, provided the authors’ vision and biases are acknowledged.

The information provided in this publication is geared towards supporting policy-makers by providing sources of data and by identifying possible biases in using them. Evidence and data are key to policy-making, particularly when it comes to making foresight reports, setting priorities, mitigating negative impacts and finding optimum trade-offs. In this context, when used properly, indicators can underpin better regulation.

Read the complete in-depth analysis on ‘Ten composite indices for policy-making‘ in the Think Tank pages of the European Parliament.