Highlighting Methodological Limitations in the Steps of Composite Indicators Construction

The paper opens the debate on the need to find a stable methodological framework in the construction of composite indicators (CIs) in order to address the methodological challenges including those of sensitivity and uncertainties related to methods used. As CIs are well-known to be essential in public debate, their methodological construction must be known by a large public. Illustrating CIs’ construction steps by a simple indicator, the paper aims to “democratize” this disciplinary field which is still a black box for some researchers but also to show how composite scores are sensitive to methods used and then, its impacts on policies. For example, in the Sustainable Development Indicator case, the geometric aggregation system is favorable to emerging countries which lead the ranking table whereas high income countries (which are leaders in the linear and equal weight system) except Australia, are misclassified. Uncertainty and sensitivity analysis confirm these results showing that the indexes’ scores seem to be influenced by the orientation (implied theoretical framework) given by its sponsors including policy makers. Regarding the validity of the index, correlation tests with some lights and well known indicators, reveal very consistent results.