6.8 Political and Institutional Framework
Why is it significant?
Economic activity occurs within a political, institutional and legal framework. The institutional setting provides market participants with confidence to produce, invest, innovate and work. Consequently, the framework can provide the right incentives for a country to make the best use of its resources.
	How does the UK perform?
	The IMD survey of business perceptions of institutions and government policies shows that overall the UK compares well and has the third most supportive institutional and political environment in the G7. It also shows that the UK is perceived as having the fourth most lightly regulated G7 economy behind Canada, the US and Japan (charts 6.8.1 and 6.8.2).