2.8 The institutional and political environment

Why is it significant?

A country’s ability to develop a stable, flexible and competitive economy depends on its political and institutional framework.

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 (Chart 2.8.1).  It also shows that the UK is perceived as having the third most lightly regulated G7 economy behind Canada and the US (Chart 2.8.2).  This view is supported by the OECD which finds that the UK had the least restrictive regulatory environment in terms of product market competition.