Quantitative evaluation of nation stability

This paper quantitatively evaluates nation stability, defined as the state of a country's social and economic system as measured by multiple evaluation indicators, and observes its transitions. Data Envelopment Analysis/Malmquist Index (DEA/MI) methodology is applied to the panel data for 97 countries for the period 1981–2004, although the DEA application is totally different from the DEA efficiency/productivity analysis. This analysis includes a “unified” country (Germany) and “split” countries (former Soviet Union, Czechoslovakia, and Yugoslavia). Using the novel panel-data handling proposed in this study, we demonstrate shifts in stability before/after the unification or split. The stability of split countries fell by 50% or more, showing that they were extremely unstable before the split. The use of lower-bound DEA together with ordinary DEA enables a country's stability to be evaluated in terms of both negative and positive aspects.