The Role of Composite Indices in International Economic Diplomacy

As risks of all sorts, from economic and financial crises to terrorism acts and pandemics, keep on characterising and affecting all aspects of life globally, at the individual and societal level, national and international organisations, as well as governments, need to be constantly adapting and collaborating through international diplomacy to pursue common goals for people’s well-being. This is where the topic of composite indices comes up. Composite indices are used by national and international organisations, and governments and businesses alike, to monitor different performance aspects of the economy of a country and the people therein; and they have historically been valuable as communication tools and as inputs into decision and policymaking. In this work, we delve into the relevant literature to explore the link between international diplomacy, institutions, and composite indices, with the aim to highlight the usefulness of composite indices in practice. We conclude with final thoughts and recommendations for future research on the topic.