Measuring Elite Quality

The aim of this paper is two-fold. Firstly, we present a methodology to measure the novel concept of elite quality (EQ), that is, country’s elites’ propensity– on aggregate – to create value, rather than rent seek. A four-level architecture allows for both an overall quantification of a country’s EQ, as well as an in-depth analysis of specific political economy dimensions, such as elite power. Secondly, the Elite Quality Index (EQx) is brought to life using data on 107 indicators for 151 countries. Our index negatively correlates with inequality measures, which suggests that more powerful elites less inclined to run value creation business models will exacerbate inequality. A variety of robustness tests suggest that the EQx scores and ranking are robust to ceteris paribus changes in key modelling assumptions. Thus, the EQx offers a reliable framework and potentially a new tool to analyze the political economy of countries.