Countries in this top group are typically open, wealthy and competitive economies, displaying relatively skillful economic policy-making.
Most nations’ budgetary balances were in reasonably good shape before the onset of the economic crisis. All but Norway, with its unique access to surplus-producing petroleum revenues, saw budgets and labor markets come under significant pressure during the recession. Most engaged in fiscal stimulus spending that will necessitate future spending cuts.
The USA’s anti-crisis policy response was most dramatic, with several waves of stimulus and unprecedented industrial policy measures in support of banks and the auto industry. While economic damage was significant, worse effects were averted.
Sweden is engaged in ongoing reform of its generous welfare state, seeking to reduce welfare rolls, improve work incentives and privatize elements of the state-owned economy. Competitiveness gained slightly compared to the SGI 2009 or remained high in each state.
Economies in this top group remain among the world’s most competitive, typically with high GDP per capita and relatively well-crafted policy. However, specific structural elements are posing long-term threats.
The financial crisis demanded particular urgency in the UK, whose high-yield financial sector collapsed, leaving behind a large fiscal gap and discredited regulatory models. Germany’s export-based economy also shrank, but the country’s labor market performed well.
Solid past reforms helped Australia, New Zealand and Chile weather the crisis, but both have structural issues yet to address, with New Zealand’s lack of productivity growth particularly important.
Consensus-driven economic management was more successful in Austria than in Luxembourg, where austerity proposals undermined traditional agreements. Japan’s economy remains stable and competitive, but export-driven growth had slowed even before the crisis.
This group of countries is sharply split, containing some of the criterion’s largest declines and gains relative to the SGI 2009, corresponding to poor crisis handling and successful responses to past woes.
Ireland’s economic collapse revealed the flaws of its pre-crisis “light touch” regulatory framework, with gains largely due to deflation associated with the disappearance of demand. An IMF-led adjustment program has given post-collapse Iceland an economic lifeline, but the future remains uncertain.
The end of Spain’s property bubble exposed serious structural flaws, but short-term reactive policy-making has dominated. By contrast, South Korea’s massive fiscal stimulus and devaluation muted the most serious crisis effects.
Hungary is a standout relative to the SGI 2009, successfully implementing economic adjustments forced by earlier troubles, though much could change under the new regime. Slovakia’s previous liberal reforms were largely retained, though clear flaws went unaddressed.
Reforms in France proved patchwork and badly designed, while Portugal’s steps toward restored growth were derailed by crisis.
In most cases, economic policy-making in this group has been inefficient or focused on the short term, with economies among the least competitive in the OECD.
Italy’s policy has been crisis-driven, focused on supporting the banking sector and ensuring the sustainability of the country’s substantial debt. Domestic competition is anemic.
Turkey and Mexico saw their export sectors sink substantially. Turkey has benefited from the world recovery, while Mexico has struggled to contain the toxic economic effects of the drug trade.
Greece’s structural defects are massive, having led to debt crisis and painful adjustment. By contrast, Poland gained substantially from a low SGI 2009 rating, as a newly coherent economic policy and limited external dependence led it to the OECD’s top growth rate in 2009.