Where to look when you don’t know where to look

Global Link July 2008

For many associations the decision to "go global" comes only after contact initiated by an interested foreign organization or business, not the result of rigorous market analysis or a deliberate country selection process. Often, associations later realize that these first happenstance forays into the international arena were not good fits for either their members or the association. As most of these requests come from countries beginning to open up politically and economically, many of the principles necessary for effective association management, such as transparency and pluralism, are either unknown or misunderstood. High-quality, objective information is critical to successful country selection. If only there were ways for associations to evaluate different country opportunities and identify risky markets without huge travel budgets to study each country in detail.
Actually, numerous tools to help associations assess the opportunities of one country over another already exist. International organizations, government agencies, and academics have developed environmental indices to help decision-makers objectively compare business, government, and social environments. The World Bank’s Doing Business Index, which measures how “business friendly” a country is, is but one of many economic, social, and political indices. Examining such aspects as how many forms are needed to establish or close a business, how restrictive government rules are on hiring and firing, and barriers to capital, the Doing Business Index creates quantitative measures of how open or repressive countries are to new business ventures such as associations and their members.
Which Indices are Right for You? While each provides hierarchal rankings of social conditions that association leaders require to target the right countries, they measure different aspects of the business climate, government service quality, corruption, civil society and media freedom, and education. Some indicators are publicly available and include informative narratives that association executives unfamiliar with the challenges of working in non-Western environments would find helpful. Freedom House’s Freedom in the World index of political rights and civil liberties, the World Bank Institute’s Governance Matters index, and the Bertelsmann Foundation’s Transformation Index all attempt to measure the “amounts” intangibles such as transparency or corruption in one country compared to another. Using these, association executives can anticipate potential barriers to their associations’ missions and goals.
Other indices have complicated user interfaces designed for specialized groups of experts. These offer greater insight, but their process and conclusions may not be intuitive to those unfamiliar with social index design. All of these indices require some level of interpretation, especially since inevitably indicators, trying to develop a single picture out of different and sometimes contradictory signals, will be at odds with each other. Detailed knowledge of how particular indicators are created and how data are interpreted is usually necessary to apply these data to any particular association’s situation.
Let’s consider Ghana and Indonesia, and three political development indices, Freedom House, The Economist Intelligence Unit, and the Bertelsmann Foundation.

Each index seems to have a different perspective, with Freedom House and the Economist Intelligence Unit varying greatly for Ghana. Determining which one has a more conducive environment requires looking at the detailed measures, analyzing narratives, and assessing which are more important to your members’ and your association’s success.
As Western civil society organizations expand into more countries, measures specific to the nonprofit sector are emerging but are still highly specialized in scope. USAID’s NGO Sustainability Index covers only Europe and former Soviet countries, while the coverage of the Johns Hopkins’ Comparative Nonprofit Sector Project and the Civicus index are very limited in the factors they evaluate. While the intelligence these indices provide is even more vital for association executives, they were created to serve a much broader civil society audience and require experts in nonprofit environment assessment to interpret their meaning for associations.
With these tools, associations can objectively identify those countries whose environments are most compatible with their organizations’ missions and their members’ business needs and eliminate much of the guesswork in selecting where to begin their global initiatives. This is not a task for the uninitiated, however.  Expertise and experience are needed to identify and use the tools to best advantage.

About the Authors

Richard O’Sullivan, principal of Change Management Solutions, email: ROSullivan@aol.com

Mr. O’Sullivan has over 25 years as an economist in the association sector and is a frequent speaker and author on global issues for ASAE. He has worked for both U.S. and the E.U. agencies to create entire association sectors in transitional and emerging economies. O’Sullivan has worked with several U.S. associations in developing global strategies.

Andrew T. Green, Ph.D., principal of DGMetrics (www.DGMetrics.net), e-mail: Andrew@DGMetrics.net
Dr. Green is an internationally recognized authority on index design and development, including nonprofit sector, trade union, and election administration indices. He has worked with numerous nonprofit organizations, government agencies, and international organizations regarding democratic development.  He also teaches a graduate course at Georgetown University on democracy assistance.

Most Popular Social Indices
Freedom House, Freedom in the World
(www.FreedomHouse.org)
World Bank, Doing Business Index
(www.DoingBusiness.org)
World Bank Institute, Governance Matters
(http://info.worldbank.org/governance/wgi2007/home.htm)
Economist Intelligence Unit, Index of Democracy
(www.economist.com/media/pdf/DEMOCRACY_INDEX_2007_v3.pdf)
Bertelsmann Foundation, Bertelsmann Transformation Index
(http://www.bertelsmann-transformation-index.de/11.0.html?&L=1)
Heritage Foundation, Index of Economic Freedom
(http://www.heritage.org/index/)
Transparency International, Corruption Perceptions Index
(http://www.transparency.org/policy_research/surveys_indices/cpi)
USAID, NGO Sustainability Index
(http://www.usaid.gov/locations/europe_eurasia/dem_gov/ngoindex/)
IREX, Media Sustainability Index
(http://www.irex.org/msi/)
Inter-American Development Bank, DataGob: Governance Indicators Database
(http://www.iadb.org/DataGob/)
AfroBarometer
(http://www.afrobarometer.org/)
Latin American Public Opinion Project
(http://www.vanderbilt.edu/lapop/)
International Budget Project, Open Budget Index
(http://www.openbudgetindex.org/)