The Bertelsmann Transformation Index (BTI), created by the Bertelsmann Foundation in Germany, analyses 137 developing countries and countries in transition to evaluate how they are steering social change toward democracy and a market economy. The BTI is broken into two indices: the Status Index and the Governance Index.

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The Status Index has two analytic dimensions, political and economic transformation, analyzing where each of the countries stands on the path toward democracy and a market economy.

 

The state of political transformation is measured in terms of five criteria, which in turn are derived from assessments made in response to 18 questions. The BTI’s concept of democracy goes beyond other definitions of democracy, which are limited primarily to basic civil rights and the conduct of free elections. “Stateness” is seen as a precondition to democracy, and it is included in the BTI’s definition of political transformation and examined through questions specifically dealing with the state’s monopoly on the use of force and basic administrative structures. 

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The state of economic transformation is measured in terms of seven criteria, which are based on a total of 14 indicators. The BTI’s concept of a market economy includes not only aspects such as economic performance, regulatory or competition policy, and property rights; it also contains elements of social inclusion, such as social safety nets, equality of opportunity and sustainability.

while the Governance Index assesses the quality of political leadership in a country.

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Methodology: 

 

The Transformation Index is based on a qualitative expert survey in which written assessments are translated into numerical ratings and examined in a multistage review process to make them comparable both within and across regions. To mitigate any degree of subjectivity from the qualitative data, the expert reviewers for each country’s report are both local and foreign. 

 

A standard codebook serves as the foundation for the survey process, so there is a single framework for the experts to reference when completing the survey. The first expert completes a draft of the country’s report which is commented on by the other expert, while they independently evaluate each of the indicators in the index, rating from 1 (lowest score) and 10 (highest score). These scores are then reviewed by the BTI board, scholars and regional experts to ensure comparability across time and regions. 

 

The Status Index is aggregated by calculating the average of the total scores given for the dimensions of political (democracy status) and economic (economy status) transformation. The state of transformation in each analytic dimension is equivalent to the average of the scores of the associated criteria. Criterion scores are, in turn, based on the average scores of the equally weighted indicators that comprise the criterion.

 

Combining the two analytical dimensions into a Status Index follows the normative premise of the BTI, under which transformation is always conceived of as a comprehensive transition toward democracy and a market-economic system.