Now this is innovative. How about an investment index which rates levels of cronyism?

I think this is a great idea, and if anyone put such an index together I would use it when investing to be sure. I think many other people would too. Looks like a business opportunity for someone to me.

“I hereby propose an CMI — that is, a “Cronyism Mitigation Index.” (There could also be an associated fund.) Dimensions of the CMI could include annual metrics on a number of dimensions, such as:

  • Cronyism Hits – Number of accurate media references to rent-seeking activities including (though not limited to) actions taken for subsidies, targeted tax breaks, corporate handouts (“incentives”) or membership on various governmental advisory committees.
  • Lobbying Dollars – Capital spent on non-defensive lobbying activities, such as introducing regulations or going after subsidies.
  • Lobbyists – Number of lobbyists or lobbying firms in the company’s employ relative to market cap.
  • Revolving Door – Number of former employees working for the government and/or the number of former government employees now working for said company.

Because the government extends into so many different sectors at such a great degree, it’s difficult to find any large, well-known companies that would fail to register on any CMI. But a CMI ranking would allow conscientious anti-cronyism investors to select companies that have a low ranking on the CMI relative to other countries.”

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