Bertelsmann Transformation Index
The Bertelsmann Transformation Index (BTI) is a biennial assessment published by the Bertelsmann Stiftung, a German nonprofit foundation, that evaluates the progress of 137 developing and transition countries toward consolidated democracy under the rule of law and market-based economies oriented toward social justice.[1] Launched in 2003, the index initially covered 116 countries and has since expanded its scope while maintaining a focus on nations outside the OECD as of 1989, excluding most states with populations under one million except for select cases like Bhutan and Montenegro.[1] The BTI comprises two primary indices: the Status Index, which measures the achieved levels of political and economic transformation through 17 criteria encompassing aspects such as stateness, rule of law, market organization, and welfare regime performance; and the Governance Index, which appraises the political management's effectiveness in steering reforms, including steering capability, resource efficiency, consensus-building, and international cooperation.[2] Scores, ranging from 1 (failure) to 10 (advanced success), are derived primarily from qualitative evaluations by over 260 country experts using a standardized codebook, supplemented by quantitative indicators like inflation rates and education spending, with rigorous peer review and calibration to ensure comparability.[2] Through detailed country reports and global analyses, the BTI identifies patterns in transformation successes and setbacks, such as the role of effective governance in sustaining democratic institutions amid economic pressures, and serves as a data resource for international organizations assessing development trends.[1] Recent editions, including BTI 2024, document a global decline in democratic quality and governance performance, with autocratization trends eroding transformation advances in numerous states.[3]Overview
Definition and Objectives
The Bertelsmann Transformation Index (BTI) is a biennial global assessment tool developed by the Bertelsmann Stiftung that evaluates the progress of political and economic transformation toward constitutional democracy and a socially responsible market economy in 137 developing and transition countries.[2] It integrates qualitative expert analyses with quantitative scoring to measure both the current status of transformation—via the Status Index, which gauges levels of democracy rule of law and market organization—and the effectiveness of governance in advancing these goals—via the Management Index, which assesses leadership quality, policy formulation, and implementation amid contextual challenges.[2] Launched in 2003, the BTI employs a standardized codebook to ensure comparability across diverse regions, drawing on assessments from over 250 country experts and regional coordinators.[4][5] The index's core objectives center on identifying the drivers of successful versus failed reforms by systematically comparing transformation dynamics and governance performance worldwide.[5] It seeks to furnish policymakers, researchers, and international organizations with evidence-based insights into causal factors influencing development outcomes, such as effective steering of political processes (e.g., stateness, political participation, and stable representation) and economic reforms (e.g., organization of the state and competition).[2] By highlighting best practices and pitfalls, the BTI aims to foster adaptive strategies that enhance the resilience and sustainability of democratic institutions and market-oriented systems, particularly in contexts of instability or authoritarian backsliding.[4] This comparative framework supports global dialogue on reform efficacy, emphasizing empirical patterns over normative ideals.[5] Ultimately, the BTI's purpose extends beyond measurement to informing practical interventions, enabling stakeholders to refine approaches based on verifiable trends in governance quality and transformation trajectories observed biennially.[2] It prioritizes data-driven evaluation of how leadership navigates structural constraints, rather than assuming uniform paths to success, thereby contributing to a nuanced understanding of causal mechanisms in political and economic change.[5]Publisher Background
The Bertelsmann Stiftung, which publishes the Bertelsmann Transformation Index (BTI), is a private operating foundation headquartered in Gütersloh, Germany. It was established on February 8, 1977, by Reinhard Mohn, the owner and CEO of Bertelsmann AG, a multinational media, services, and education conglomerate, as a mechanism to channel the Mohn family's and company's resources into political, cultural, and social initiatives amid Germany's post-war economic and fiscal landscape.[6][7] The foundation operates independently under private law and finances its projects exclusively through internal resources, primarily dividends from its indirect holdings in Bertelsmann SE & Co. KGaA, where foundations linked to the Stiftung control approximately 80.9 percent of the capital shares.[8][9] In fiscal year 2024, it allocated €41.3 million to program activities, including indices like the BTI, without granting funds to external parties.[10] This corporate-derived funding sustains long-term investments in areas such as democracy promotion and market economy analysis, aligning with the Stiftung's self-stated values of freedom, solidarity, and goodwill.[11] The Stiftung's mission emphasizes evidence-based social reform, developing solutions to strengthen societal systems, individual potential, and governance structures, particularly in Europe and developing regions.[11] It positions itself as non-partisan, focusing on empirical analysis rather than ideological advocacy, though its origins in a major media empire have drawn scrutiny for potential alignment with pro-market and pro-EU policies, as evidenced by its extensive networking in Brussels institutions.[12] Such ties raise questions about full detachment from corporate interests in evaluations of global transformation processes, including those assessed in the BTI.[13]History
Origins and Initial Development
The Bertelsmann Transformation Index (BTI) was initiated by the Bertelsmann Stiftung, a German non-profit foundation established in 1977 by media entrepreneur Reinhard Mohn to promote societal progress through research and policy initiatives.[14] The BTI emerged in the context of post-Cold War transformations, particularly following the fall of the Berlin Wall in 1989 and the subsequent waves of democratization and market reforms in Eastern Europe, Latin America, and parts of Asia and Africa.[15] Recognizing the need for systematic monitoring of these processes amid varying successes and setbacks, the foundation developed the index to provide empirical assessments of political and economic transformation toward democracy and market-oriented systems.[16] The first edition of the BTI was published in 2003, marking its launch as a biennial report evaluating governance, democracy, and economic performance in transition and developing countries.[17] Initial reports focused on a selection of countries undergoing significant reforms, including post-communist states like those in Eastern Europe and select developing nations such as India, Egypt, Sudan, and Togo, with detailed country-specific analyses based on expert qualitative assessments.[17][18] This inaugural phase emphasized identifying factors enabling or hindering sustainable transformation, drawing on first-hand expert evaluations rather than aggregated secondary data alone, to highlight causal links between governance quality and reform outcomes.[2] Early development involved refining a framework that integrated status indices for democracy and market economy with a management index assessing governance steering capabilities, informed by the foundation's prior work on comparative policy studies.[19] By the mid-2000s, the index expanded its scope, incorporating more countries and adapting to emerging challenges like democratic backsliding, while maintaining a commitment to evidence-based, country-tailored insights over generalized rankings.[20] Subsequent editions, starting with 2006, built on this foundation by increasing the number of assessed nations—reaching over 100 by later reports—and enhancing data rigor through multistage peer reviews of expert contributions.[21] This iterative process solidified the BTI's role as a tool for policymakers, underscoring the interplay of institutional stability, economic liberalization, and political accountability in transformation trajectories.[16]Key Milestones and Updates
The Bertelsmann Transformation Index (BTI) was first published in 2006 by the Bertelsmann Stiftung, initially assessing transformation toward democracy and market economy in approximately 125 developing and transition countries.[22] Subsequent editions have appeared biennially, enabling longitudinal tracking of governance quality, political stability, and economic reforms across the covered nations.[23] A key expansion milestone occurred progressively from early editions onward, with the number of evaluated countries growing to 137 by the 2024 report, incorporating additional states to reflect evolving global dynamics while excluding OECD members prior to 1990 and micro-states under 1 million residents (with exceptions like Bhutan and Montenegro).[1] This broadening enhanced the index's comparative scope without altering the exclusion criteria fundamentally.[2] The 2018 edition highlighted accelerating global instability, documenting declines in democratic quality and market economy performance amid rising autocratic governance in many assessed states.[24] The 2022 update represented a stark threshold, recording for the first time a majority of countries (72 out of 137) as autocracies rather than democracies, alongside an unprecedented surge in poorly governed regimes unable to steer effective transformation.[25] [26] Methodological refinements have focused on strengthening the multistage review of expert surveys, including standardized numerical coding of qualitative assessments and cross-validation by regional specialists, though core indicators for status indices and governance management have persisted without overhaul.[2] The 2024 edition, covering the review period from February 2021 to January 2023, maintained this framework while emphasizing post-pandemic governance challenges in its analyses.[27]Methodology
Country Selection Criteria
The Bertelsmann Transformation Index (BTI) includes countries undergoing political and economic transformation processes, specifically those that have not yet achieved a fully consolidated democracy and market economy.[28] Selection further requires a population exceeding 1 million inhabitants and excludes member states of the Organisation for Economic Co-operation and Development (OECD), focusing instead on developing and transition economies where such transformations remain relevant.[28] This approach ensures the index targets nations with ongoing challenges in establishing stable democratic institutions and competitive market systems, rather than advanced economies presumed to have completed these processes.[2] As of the BTI 2024 edition, the index covers 137 countries, an increase from 116 in its initial 2003 assessment, reflecting expansions to include additional qualifying states as transformation dynamics evolve globally.[2] Countries are grouped into seven regions for comparative analysis: Latin America and the Caribbean (22 countries), West and Central Africa (20), East Central and Southeast Europe (12), Middle East and North Africa (17), Sub-Saharan Africa (excluding West and Central Africa, 21), Asia (32), and South and Central America (wait, overlap; actually standard regional breakdown as per methodology).[2] These criteria prioritize empirical relevance over exhaustive global coverage, omitting micro-states and high-income OECD nations to maintain focus on actionable transformation insights.[28]Expert Assessment Process
The expert assessment process for the Bertelsmann Transformation Index (BTI) relies on contributions from approximately 286 country experts drawn from leading academic institutions and civil society organizations across 137 developing and transition countries.[2] Experts are selected primarily through recommendations by regional coordinators in consultation with the BTI project team, prioritizing professional expertise in the respective country, independence from political influences, and impartiality to ensure balanced evaluations.[29] Typically, each country is assessed by two experts—one local and one foreign—to incorporate both insider knowledge and external perspectives, minimizing biases inherent in single-viewpoint analysis.[2] Assessments are guided by a standardized codebook that outlines 49 specific questions corresponding to 17 criteria: five for political transformation (e.g., stateness, political participation), seven for economic transformation (e.g., organization of the state, market organization), and five for governance quality (e.g., resource efficiency, consensus-building).[2] The process begins with one expert drafting a comprehensive qualitative country report, drawing on empirical data, recent developments, and the codebook's definitions to evaluate transformation progress. The second expert then reviews the draft, provides comments, and supplements it as needed, while both independently assign numerical scores on a 1-10 scale to each of the 49 indicators, reflecting the degree to which criteria are met.[2] This dual evaluation yields around 7,124 individual scores across all countries, combining qualitative narratives with quantitative ratings to capture nuances in governance and transformation dynamics.[2] To ensure consistency and reliability, the assessments undergo a multistage review and calibration. Regional coordinators oversee intraregional comparisons for alignment within geographic areas, followed by interregional calibration to standardize scores globally, addressing variations in expert interpretations.[2] The project team and BTI board conduct final validations, cross-checking against available data sources and resolving discrepancies, which helps mitigate subjectivity while preserving the experts' grounded insights into causal factors like institutional weaknesses or policy failures.[2] This rigorous procedure, repeated biennially, underpins the BTI's emphasis on evidence-based evaluations rather than aggregated secondary data alone.[2]Core Criteria and Sub-Indicators
The Bertelsmann Transformation Index (BTI) evaluates the status of political and economic transformation through distinct sets of core criteria, each broken down into sub-indicators assessed on a scale from 1 to 10 by country experts using a standardized codebook.[2][28] The political transformation component, measuring progress toward consolidated democracy, comprises five core criteria encompassing 18 sub-indicators that gauge institutional foundations, participation, legal protections, institutional durability, and societal cohesion.[2] These include, under stateness, sub-indicators for monopoly on the use of force, state identity, absence of religious dogma interference, and basic administration; under political participation, free and fair elections, effective power to govern, association and assembly rights, and freedom of expression; under rule of law, separation of powers, independent judiciary, prosecution of office abuse, and civil rights; under stability of democratic institutions, performance and commitment to such institutions; and under political and social integration, party system functionality, interest group representation, approval of democracy, and social capital.[28] The economic transformation component, assessing advancement toward a functioning market economy, relies on seven core criteria with 14 sub-indicators focused on developmental levels, market structures, stability, property rights, welfare provisions, performance outcomes, and sustainability.[2] Specific sub-indicators cover socioeconomic barriers under level of socioeconomic development; market organization, competition policy, foreign trade liberalization, and banking system under organization of the market and competition; monetary and fiscal stability; property rights and private enterprise; social safety nets and equal opportunity under welfare regime; output strength under economic performance; and environmental policy alongside education and R&D policy under sustainability.[28] Complementing the status indices, the BTI's management index scrutinizes governance quality via four primary core criteria—steering capability, resource efficiency, consensus-building, and international cooperation—supported by 17 sub-indicators, with assessments contextualized by a level-of-difficulty criterion incorporating structural constraints, civil society traditions, conflict intensity, and rescaled socioeconomic metrics like GNI per capita and education indices.[2] Sub-indicators for steering capability include prioritization, implementation, and policy learning; for resource efficiency, efficient asset use, policy coordination, and anti-corruption measures; for consensus-building, agreement on reform goals, neutralization of anti-democratic actors, cleavage management, civil society participation, and reconciliation efforts; and for international cooperation, effective use of external support, credibility, and regional engagement.[28] This structure enables granular evaluation of transformation processes, with indicators derived from empirical benchmarks and expert judgment to ensure comparability across the 137 countries covered in the 2024 edition.[2]Scoring and Aggregation Methods
The Bertelsmann Transformation Index (BTI) employs a scoring system based on expert assessments conducted by country specialists using a standardized codebook. These assessments evaluate 137 developing and transition countries across 17 criteria—comprising 5 for political transformation, 7 for economic transformation, and 5 for governance—supported by 49 specific indicators. Scores are assigned on a scale from 1 (indicating failure or severe deficiency in transformation processes) to 10 (indicating consolidated achievement of democracy and market economy standards), derived from qualitative analysis of empirical evidence such as constitutional frameworks, electoral processes, economic policies, and institutional performance.[2] Each initial score undergoes a rigorous review process, including validation by a second expert, regional coordinators, the project team, and the BTI board to ensure inter-expert reliability and methodological consistency.[2] Aggregation for the Status Index, which measures the overall state of political and economic transformation, proceeds through unweighted arithmetic means. At the lowest level, scores for the 49 indicators are averaged equally to produce criterion-level scores. These 12 criteria scores (5 political and 7 economic) are then averaged separately to yield dimension scores for democracy status and economy status. The Status Index is finally calculated as the simple average of these two dimension scores, resulting in a composite score on the 1–10 scale without differential weighting across components.[2] This approach emphasizes balanced evaluation but assumes equal importance among indicators, potentially overlooking contextual variances in transformation challenges.[2] The Management Index, assessing governance quality, follows a similar averaging structure for its 5 criteria but incorporates an adjustment for governance difficulty. Criterion scores are derived as averages of associated indicators, then combined into an overall management performance score. This is offset against a difficulty score aggregated from 6 indicators capturing structural constraints like economic volatility or societal polarization, yielding a net governance effectiveness measure on the 1–10 scale. The adjustment accounts for exogenous barriers, recognizing that high performance under adverse conditions merits stronger evaluation than equivalent scores in favorable environments.[2] No explicit formulaic weights are applied beyond these averages, maintaining methodological transparency while relying on expert judgment for nuance.[2] Rankings and classifications, such as categorizing countries into "failed," "defective," or "mature" democracies, emerge from thresholding these aggregated indices—e.g., Status Index scores above 7 indicating advanced transformation—facilitating cross-country comparisons. The BTI's reliance on ordinal expert scoring, rather than purely quantitative metrics, prioritizes depth in capturing causal dynamics of transformation but introduces subjectivity mitigated through calibration rather than statistical aggregation techniques like factor analysis.[2] This framework has remained stable since early editions, with expansions primarily in country coverage rather than core scoring mechanics.[2]Indices and Components
Status Indices: Democracy and Market Economy
The Status Index of the Bertelsmann Transformation Index (BTI) evaluates the achieved level of political and economic transformation across 137 developing and transition countries, distinguishing it from the Governance Index, which focuses on steering capabilities. It aggregates scores from expert assessments to rank countries on their proximity to a consolidated democracy under the rule of law and a market economy embedded in principles of social justice, with data reflecting conditions as of the reference year for each biennial report, such as January 2023 for the 2024 edition.[2][3] The political transformation dimension, often termed the democracy status, is assessed through five criteria encompassing 18 indicators, each scored on a 1–10 scale by regional experts using a standardized codebook that emphasizes empirical evidence over normative ideals. These criteria include:- Stateness: Examines the state's monopoly on the legitimate use of force, acceptance of a defined citizenship, absence of institutional interference by religious dogmas, and functionality of basic administration.[2]
- Political participation: Gauges the conduct of free and fair elections, elected officials' effective power to govern, associational and assembly rights, and freedom of opinion and expression.[2]
- Rule of law: Assesses separation of powers, independent judiciary, prosecution of abuses of office, and protection of civil rights.[2]
- Stability of democratic institutions: Evaluates the performance and acceptance of democratic institutions by relevant actors.[2]
- Political and social integration: Analyzes the integration of differing interests via a party system responsive to voters, representation by interest groups, popular approval of democracy, and levels of social capital and trust.[2]
- Organization of the market and competition: Covers market organization, non-discriminatory competition policy, liberalization of foreign trade, and stability of the banking system.[2]
- Currency and price stability: Focuses on monetary and fiscal policies ensuring low inflation and prudent public debt management.[2]
- Private property: Evaluates legal security of private ownership, equal treatment of enterprises, and allocation of resources via market forces.[2]
- Welfare regime: Assesses social safety nets and equal opportunity frameworks that mitigate exclusion without distorting market incentives.[2]
- Economic performance: Measures output strength through growth rates, employment levels, and productivity.[2]
- Sustainability: Includes environmental stewardship and policies for education, research, and development.[2]
- Socioeconomic level of development: Accounts for barriers to transformation posed by low human development indicators.[2]
Management Index: Governance Quality
The Management Index, also referred to as the Governance Index, evaluates the quality of political leadership in guiding transformation processes toward constitutional democracy and a market-based economy in 137 developing and transition countries. It focuses on the steering capacity of political actors, assessing how effectively governments prioritize, implement, and adapt policies amid structural constraints. Unlike status-oriented measures, this index emphasizes performance in political management, with scores derived from qualitative expert assessments translated into numerical ratings on a scale of 1 to 10.[2][30] The index comprises four core criteria, each evaluated through specific sub-indicators totaling 20 across the framework. Steering capability examines whether leaders set strategic priorities aligned with transformation goals, credibly implement reforms, and demonstrate policy learning by adapting to evidence and setbacks; for instance, in the 2024 edition, global averages hovered below 5 points, indicating widespread deficiencies in long-term vision and adaptability.[2][30] Resource efficiency assesses the rational use of state and administrative resources, effective policy coordination across institutions, and the pursuit of anti-corruption measures to prevent abuse; low scores often reflect bureaucratic silos or patronage networks undermining fiscal discipline.[2] Consensus-building gauges efforts to forge agreement on transformation objectives, neutralize veto actors or anti-democratic forces, manage societal cleavages, integrate civil society, and promote reconciliation in divided contexts; this criterion highlights the role of inclusive dialogue in sustaining reforms.[2] International cooperation evaluates the constructive use of external support, maintenance of credible partnerships, and contributions to regional stability; higher performers leverage aid and alliances without compromising sovereignty.[2] Scores for each criterion are averaged from expert ratings guided by a standardized codebook, then aggregated into the overall Governance Index, with an adjustment for the level of difficulty—a non-scored factor incorporating structural constraints (e.g., conflict intensity, low civil society traditions, and socioeconomic indicators like GNI per capita PPP and UN Education Index). Assessments involve in-depth country reports by regional specialists, peer-reviewed for consistency, ensuring comparability across diverse contexts; the index is recalibrated biennially, with the 2024 report covering the 2022–2023 period. Globally, governance scores averaged around 4.5 in 2024, underscoring persistent challenges in resource efficiency and consensus-building, though outliers like Uruguay (8.5) demonstrate feasible high performance under moderate difficulties.[2][28][3]Country-Specific Scores and Trends
The Bertelsmann Transformation Index (BTI) 2024 evaluates 137 developing and transition countries on the Status Index, which aggregates democracy and market economy performance on a scale of 1 to 10, yielding a global average of 4.60—the lowest recorded to date. Taiwan achieves the highest Status Index score, reflecting strong democratic institutions and market-oriented reforms, while Côte d'Ivoire registers the lowest, marked by persistent state failure and weak economic structures. Among the 63 classified democracies, only a shrinking subset sustains advanced transformation, with 74 autocracies now encompassing over 4 billion people and exhibiting entrenched governance challenges.[26][31] The Management Index, assessing governance quality, reveals a divide between efficient authoritarian systems and dysfunctional regimes, with a global average underscoring broad inefficiencies. Singapore, Qatar, and the United Arab Emirates top this index due to effective steering of policies despite limited political pluralism, averaging scores above 7 in resource stewardship and consensus-building. In contrast, 45 countries, predominantly autocracies like Burkina Faso, Mali, and Myanmar, score below 3, hampered by corruption, conflict, and institutional disarray.[26] Trends from BTI 2022 to 2024 indicate stagnation or regression in most regions, with 25 countries experiencing diminished electoral freedom and fairness, contributing to a net increase in autocratic dominance. Notable positive shifts include Lesotho, Tanzania, and Zambia, where incremental gains in political participation and economic stability reversed prior declines, alongside Moldova's emergence as a nascent democracy under expanded civic engagement and electoral reversals in Honduras, Kenya, and Zambia that curbed authoritarian drifts. Negative trajectories dominate, however, as seen in El Salvador, Myanmar, and Sudan, where coups, civil strife, and policy failures eroded scores; broader examples encompass Belarus and Russia with deepened autocratic consolidation, Türkiye's institutional erosion, and economic collapses in Myanmar and Sri Lanka, amplifying poverty and inequality. Southern African nations like Botswana, Namibia, and South Africa also posted governance losses amid rising discontent.[26][3]| Criterion | Top Performers (Examples) | Bottom Performers (Examples) | Key Trend Observations |
|---|---|---|---|
| Status Index (Democracy & Market Economy) | Taiwan (high overall) | Côte d'Ivoire (state failure) | Average decline to 4.60; 25 countries with freer election losses |
| Management Index (Governance) | Singapore, Qatar, UAE (efficient steering) | Burkina Faso, Mali, Myanmar (disorganized autocracies) | High authoritarian efficiency vs. 45 low-scoring failures; regional drops in southern Africa |
| Positive Shifts | Lesotho, Tanzania, Zambia; Moldova, Honduras, Kenya | N/A | Electoral reversals in select cases amid global nadir |
| Negative Shifts | N/A | El Salvador, Myanmar, Sudan; Belarus, Russia, Türkiye | Autocracy entrenchment and economic deterioration prevalent[26][3] |
Publications and Data
Report Cycles and Releases
The Bertelsmann Transformation Index (BTI) reports are published biennially by the Bertelsmann Stiftung, with the first edition released in 2006.[27] Subsequent editions have followed every two years, assessing transformation processes in developing and transition countries based on a standardized review period typically spanning the prior 24 months ending in January of the publication year.[27] This cycle allows for systematic tracking of governance, democracy, and market economy developments across an expanding set of nations, initially focusing on around 50 countries and growing to 137 by recent editions.[13] Editions include detailed country reports, status indices for democracy and market economy, a management index evaluating governance quality, and a global trend analysis summarizing key findings.[27] For instance, the 2022 edition analyzed crisis management during the initial phase of the COVID-19 pandemic, while the 2024 edition— the tenth in the series—covered the period from February 1, 2021, to January 31, 2023, highlighting declines in governmental steering capacity amid global challenges.[32] [27] Reports are typically released in the first half of the named year, with data derived from expert assessments submitted in the preceding months.[33] The next BTI edition is scheduled for early 2026, maintaining the established biennial rhythm to provide updated, comparable insights into transformation trajectories.[33] This periodicity ensures relevance for policymakers and researchers while accommodating the resource-intensive process of qualitative expert evaluations across diverse regions.[27] Historical releases include:| Edition | Review Period (Approximate) | Key Focus |
|---|---|---|
| 2006 | Pre-2006 data | Initial baseline for transformation countries[27] |
| 2008 | 2006–2007 | Early progress tracking (inferred from biennial pattern) |
| 2010 | 2008–2009 | Expansion of covered nations |
| 2012 | 2010–2011 | Governance and economic reforms |
| 2014 | 2012–2013 | Post-financial crisis assessments |
| 2016 | 2014–2015 | Rising authoritarian trends |
| 2018 | 2016–2017 | Democratic backsliding analysis |
| 2020 | Up to January 2019 | Pre-pandemic stability evaluations[23] |
| 2022 | 2020–2021 | Pandemic response and resilience[32] |
| 2024 | February 2021–January 2023 | Steering capacity amid geopolitical shifts[27] |