Institutional Quality Index 2021

Institutional quality is essential to strengthening governance mechanisms and democratic legitimacy. At the start of the decade marked by upheaval and uncertainty about the future, and in the midst of a global pandemic, it is urgent to review objective elements to assess and improve our countries’ institutions.

According to Bertha Pantoja, president of the Liberal Network of Latin America (RELIAL), as long as there are strong institutions that promote freedom, these will allow “citizens to re-enjoy the civil liberties that were unjustly taken away from them during the pandemic”, something which most countries continue to suffer under innumerable arbitrary restrictions.

In the irresponsible political maelstrom created by the movement for reforms and protests seeking radical changes to the legal system in Chile, it is necessary to highlight which components are the most valued by international indicators with respect to our institutional framework. We should alert citizens and the conventional constituents that are being elected to ensure respect for their rights and the essential freedoms protected by the Constitution.

Recently, economist Martín Krause, through Libertad y Progreso and in collaboration with RELIAL, published a new version of the Institutional Quality Index (ICI). This edition shows the impact the pandemic had on institutions, mainly with regard to health, work, and freedom. It highlights the expectation of an eventual increase in inequality, which causes so much noise among politicians, showing that the wealth of the main fortunes is in shares “whose price has been artificially inflated by the monetary issuance policies of the main banks on the planet“. On the other hand, the Argentine economist makes a strong criticism of the constructivist desire of the political and business elites for the establishment and installation of an agenda entitled “The Great Reset” (The Great Reset). A book published in 2020 by the president of the World Economic Forum, Klaus Schwab, refers to the total control of the state in terms of the monopoly of protocols and vaccines to counter the pandemic.

The ICI measures 189 countries is based on the relative position of these countries in eight main indices: Rule of Law, Voice and Accountability, Freedom of the Press, Perception of Corruption, Global Competitiveness and  Economic Freedom (Heritage and Fraser), along with the Climate for Doing Business report.

The countries with the best institutional quality are Denmark, New Zealand, Switzerland, Finland, and Canada. It also worth highlighting the entry into the top 20 of the Baltic countries of Estonia (13th) and Lithuania (20th), formerly part of the Soviet Union, which they have introduced deep market reforms and strengthened their institutions away from socialism. The countries with the worst institutional quality are the Republic of Yemen, Syria, Eritrea, Somalia, North Korea.

The relative position Chile has remained stable at 25th place despite the insurrection that took place in October 2019 and the deterioration of institutional relations that’s on the agenda. However, this must be taken with caution since this type of indicator doesn’t show the substantial changes that may occur in the medium to long term. Therefore, we invite Chileans to think about preserving the best of the institutionally given by its current Constitution and definitively amending the course towards Liberty.