RESULTS BY SUB-INDICES
The tables may be interpreted both from top to down and from bottom to up. In the first approach economies are ranked from right to left, in the second – from left to right. Higher place of a country in the table means that its economy contains more rightness (self-regulation) and less leftness (governmental regulation). The countries with GDP per capita over 35 thousand international dollars are in colored boxes.
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Public Finance Sub-Index
Table 1. Public Finance Sub-Indices – 2015
Scale 1. Leftness-Rightness of Economies by Public Finance Sub-Index (2015)
By Public Finance Sub-Index Singapore’s economy (0.183) is the rightest one, and economy of France (0.601) is the leftest one among all considered. Azerbaijan (0.381) is almost on relative center point and near the median of Scale. The closeness of relative center and median indicates the approximate numerical equality of the countries on both sides of the relative center.
Both economically developed and developing countries are almost equally distributed to the right and left from the relative center. It leads to the conclusion that there is no strict interde¬pendence between the Public Finance Sub-Index and economic development. In other words, the degree of government intervention in the economy on this parameter is not conditioned by the level of national economic development and is not a condition for it.
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Price Regulation Sub-Index
Table 2. Price Regulation Sub-Indices – 2015
Scale 2. Leftness-Rightness of Economies by Price Regulation Sub-Index (2015)
By Price Regulation Sub-Index New Zealand’s economy (0.112) is the rightest one among the analyzed and Iranian economy (0.657) is the leftest. Azerbaijan’s economy (0.301) is close to the median point, righter the relative center.
The relative center is shifted from the geometric center to zero which indicated that by this sub-index the countries tend to the rightness. It, however, does not mean that the economies, which are located between the geometric center and the zero, are categorically right-wing economies by this sub-index. In accordance with the theoretical interpretation of IL(R)E, the results obtained on a particular sub-index (as well as the integral index) allow to evaluate (measure) the leftness-rightness of economies only comparatively to each other.
The price regulation models preferred by developed and developing countries vary conside¬rably. In economically developed countries, prices tend to be more liberal, i.e. governments intervene in the pricing in a lesser extent.
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Foreign Trade Sub-Index
Table 3. Foreign Trade Sub-Indeces – 2015
Scale 3. Leftness-Rightness of Economies by Foreign Trade Sub-Index (2015)
Regarding regulation of foreign trade, Singapore’s is the most liberal economy (0.070), and Iranian economy (0,698) is the leftest. Among 62 countries, Azerbaijan (0.337) is the tenth country on severity of the government regulation of foreign trade operations. The median is righter than the relative center; in the majority of ranked countries foreign trade is more liberal than it’s expressed by the relative center.
If to compare with developing countries, the governments in economically developed countries usually less strictly regulate foreign trade. This is quite understandable: the majority of goods and services produced in the developed countries are competitive, and therefore their leaders and business communities are more interested in the liberalization of international trade. As for developing countries, they strive to protect their domestic markets harder, although the domestic market protection measures can stimulate economic development only under certain additional conditions.
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Table 4. LicensingSub-Indeces – 2015
Scale 4. Leftness-Rightness of Economies by Licesing Sub-Index (2015)
By Licensing Sub-Index Singapore's economy (0.015) is the rightest one, and Cyprus occupies the leftest point (0.345) among 62 economies under view. Azerbaijan’s economy (0.096) is located righter than 29 economies and lefter than 32. Nevertheless, it’s located on the right side from relative center – because the economies of the left wing are more distanced from the relative center than the economies on the right wing. (In research for 2014, which covered only 37 countries, on this sub-index Azerbaijan’s economy was located to the left from relative center).
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Employment Regulation Sub-Index
Table 5. Employment Regulation Sub-Indices – 2015
Scale 5. Leftness-Rightness of Economies by Employment Regulation Sub-Index (2015)
Regarding regulation of labor relations between employer and employee Denmark and Switzerland (0,025) are most liberal countries: they are located close to the extreme right point. The leftest economy belongs to Indonesia (0.525). Luxembourg (0.448), France (0.446) and Mexico (0.430) also attach higher importance to the protection of employees’ direct social rights and “in return” rather severely limit the freedom of companies. United States (0,050), Czech Republic (0,051), Ireland (0,083), United Arab Emirates and Georgia (both 0.086), on the contrary, provide in this area extensive rights to businesses in cost of limiting the rights of workers. On this sub-index, Azerbaijan is among the liberal countries and its economy is much to the right both from the center, and the median.
Stochastic ranking of developed and developing economies suggests that “softness or stiffness” (within certain limits) of the state regulation of working time, hiring and firing rules is not a condition for economic development and is not conditioned by it.
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Minimum Wage Sub-Index
Table 6. Minimum Wage Sub-Indices - 2015
Scale 6. Leftness-Rightness of Economies by Minimum Wage Sub-Index (2015)
In the United Arab Emirates the minimum wage level is regulated neither by law nor collective agreements. When IL(R)E – 2014 Report was in progress, Singapore’s situation was identical. In January 2014, Singapore has officially set minimum wage for cleaner jobs in the amount of USD 1,000 per month. Since this group of workers is small, Singapore also, along with the UAE, placed at "0". (It is expected that starting September 2016, the minimum wage will be set in Singapore for the security guards too). By MW Sub-Index, these two economies are – with absolute indicator – the rightest economies among ranked 62.
Seven economies (of Austria, Denmark, Finland, Italy, Norway, Sweden and Switzerland) are conditionally placed on 0.050 point. In these countries a minimum wage is not defined legislatively, but still governed by collective agreements. Sub-indices also are conditional for Cyprus, Egypt and South Africa (0.080) where the state sets the minimum wage, but for limited categories of employees.
In a number of economies the minimum wage, even being enshrined in law by the state, is subject for collective agreements. In these cases the agreed minimum, as may be expected, exceeds the statutory which is regarded as a kind of minimum limit of the minimum wage. Since the leftness-rightness of economy is defined by government interference, and, to the same, statutory minimum expresses the final lower limit, then legally approved figure is used in this study.
As the right pole allowed to certain conventions, the analysis of the relative center and the median, in comparison with the previous cases, has a smaller value. But these conventions do not affect the leftness-rightness of economies in relation to each other. The economy of Azerbaijan (0.219) is located to the right from both the relative center and the median.