In recent times, composite indicators have gained astounding popularity in a wide variety of research areas. Their adoption by global institutions has further captured the attention of the media and policymakers around the globe, and their number of applications has surged ever since. This increase in their popularity has solicited a plethora of methodological contributions in response to the substantial criticism surrounding their underlying framework. In this paper, we put composite indicators under the spotlight, examining the wide variety of methodological approaches in existence. In this way, we offer a more recent outlook on the advances made in this field over the past years. Despite the large sequence of steps required in the construction of composite indicators, we focus particularly on two of them, namely weighting and aggregation. We find that these are where the paramount criticism appears and where a promising future lies. Finally, we review the last step of the robustness analysis that follows their construction, to which less attention has been paid despite its importance. Overall, this study aims to provide both academics and practitioners in the field of composite indices with a synopsis of the choices available alongside their recent advances.
We consider the issue of ranking regions with respect to a range of economic and social variables. Departing from the current practice of aggregating different dimensions via a composite index, usually based on an arithmetic mean, we instead use Stochastic Multiattribute Acceptability Analysis (SMAA). SMAA considers the "whole space" of weights for the considered dimensions. The methodology is applied to the ranking of Italian regions, showing that although the North-South divide is definitely wider than the one measured simply in terms of GDP, there are Southern regions which perform generally better than those belonging to their broad region: a kind of Northern regions within the broader Southern region.
Resilience is a concept referring to the manner in which systems react to, and recover from, shocks. According to several recent analyses, 'resilience' can explain different regional economic performances. However, this study indicates that this explanation is quite unconvincing when applied to the Italian regions in the very long run (1890-2009). Only few shocks emerge to have specific impact effects differing across regions, while the recovery experience is ever spatially homogeneous. Hence, it is difficult to discern genuine differences in regional resilience. This evidence can be interpreted as a reason why the regional differences in Italy are huge and persistent.
Devolution can have incongruous effects on equality. Decentralisation of powers and resources to lower tiers of government can either increase or reduce interpersonal inequalities, depending on characteristics of the devolved region. This column uses data from regions of Western Europe to show that greater fiscal decentralisation is associated with lower income inequality. Devolution is a global trend, advocated by international organisations, including both the World Bank and the OECD, as a mechanism for achieving local prosperity. Decentralisation of powers and resources to lower tiers of government can-under different circumstances and in different contextscontribute to both an increase and a reduction interpersonal inequalities. Decentralisation can reduce interpersonal inequalities by: Exploiting the information advantage over central government and increasing the degree of efficiency in the allocation of resources, better matching to the preferences of local citizens. Bringing government closer to the people and providing better information about local preferences to inform the optimal mix of local policies. Promoting greater voice, transparency, and participation through enhanced accountability to local citizens. Limiting the opportunities for corruption and interest-group capture of the returns of public policies through greater transparency and accountability. Conversely, decentralisation can increase interpersonal inequalities in the following ways: It weakens the capacity of central government to play an equalising role to achieve a balanced distribution of income through social and territorial transfers from the rich to the poor. Diversity and variation in the availability and quality of public services between places generates unequal individual access and provision, regardless of preferences-in England, for instance, this is the so-called 'postcode-lottery' issue.
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