Hong Kong and Singapore have topped America in the latest World Competitiveness Rankings by the Institute of Management Development. This ranking measures how friendly a nation is to business activity.
Economist Dan Mitchell provided a visual illustration of these new rankings.
Switzerland found itself right behind the United States. It is one of the few countries in the world that takes political decentralization seriously and has largely weathered the storm of toxic identity politics and never-ending wars. Other countries, like the United Arab Emirates, entered the top 5 for the first time.
The UAE has distinguished itself from its Middle Eastern peers through emphasizing markets and focusing less on expansionism, something that Islamic megastates like Iran and Saudi Arabia have engaged in over the last few decades.
But Singapore’s rise in these rankings is no coincidence.
A simplified tax code and the ease of starting business has catapulted it in these rankings. America’s tax system, however, is in need of an overhaul. To the Trump administration’s credit, it has at least gotten the conversation started with corporate tax reforms. Unfortunately, there is still a lot of work to do.
Furthermore, given the excessive centralization of its system, America should consider more decentralization in its affairs. Even more radical versions of decentralization, such as separatism, should be considered.
If the United States wants to reclaim its top spot in these rankings, it’s time to stop beating around the bush and actually make an effort to put D.C. on a diet.