The crony-capitalism index - 2023

Economist Index and Forbes Data

Every year, The Economist publishes an index on crony-capitalism based on data from Forbes. The below is the index for 2023.

As per its estimates, the crony-capitalists’ wealth is around $3 trillion or about 3% of the global GDP. About 40% of crony-capitalist wealth comes from autocratic countries and the rest from China and Democracies.

While this index is followed by many, its methodology suffers from many defects. First, not all cronies make their wealth public. Thus, there could be many whose data is not available. Second, there exists two categorisation - rent seeking and non-rent seeking. These are crude categorisations. Many a times, what we think are highly competitive industries might actually be crony-capitalist industries. For example, the car industry in South Korea is very competitive but there are just three main players and all of them are very close to the government. The same can be said of the oil industry and internet industry in the United States. Third, the index only counts the wealth of billionaires listed in Forbes. While Forbes has done a wonderful job in creating this list, there are many rich individuals who do not make the cut in the Forbes List of Billionaires. They may have fallen short by a few million dollars but are very rich and could have obtained their wealth through crony-capitalism.

Nonetheless, we have an index, though imperfect, and it gives us some insights about the state of crony-capitalism in the world.

By the way, in 2014, Hong Kong was number 1 in this list followed by Russia. In 2023, there is no Hong Kong in this list.

And, in 2014, Czech Republic was not there in the list. In 2023, Czech Republic is top two in the list.

Did Hong Kong billionaires shift to Czech Republic? I need to inspect this.