Approach for multi-criteria ranking of Balkan countries based on the index of economic freedom
DOI:
https://doi.org/10.31181/jdaic10017022023pKeywords:
index of economic freedom, Balkan countries, multi-criteria decision-making, double normalization, Entropy, Compromise Ranking of Alternatives from Distance to ideal Solution (CRADIS)Abstract
Understanding the level of economic freedom is an important indicator for investors and policymakers. The index of economic freedom, which the Heritage Foundation releases annually, is the most significant of the methods used to measure this indicator in practice, as this index evaluates the degree of market openness over the degree of fiscal and regulatory restraint. The research presented in this paper was conducted in order to establish the level of economic freedom in the Balkan countries. For this purpose, a multi-criteria ranking of Balkan countries based on economic freedom criteria was used. The weight of the criteria was determined using the Entropy method, and the countries were ranked using the CRADIS (Compromise Ranking of Alternatives from Distance to ideal Solution) method. These methods employed a double normalisation approach, and according to the results of this application, Bulgaria has the best indicators of economic freedom, while Montenegro has the worst, with sensitivity analysis and validation of the results confirming these findings. The approach of using double normalisation contributes to decision-making stability since the results of different methods are uniform when compared to the use of the classical approach in the case of multi-criteria analysis methods.
Downloads
References
Ali, Y., Pervez, H., & Khan, J. (2020). Selection of the most feasible wastewater treatment technology in Pakistan using multi-criteria decision-making (MCDM). Water Conservation Science and Engineering, 5(3-4), 199-213.
Assi, A. F., Zhakanova Isiksal, A., & Tursoy, T. (2020). Highlighting the connection between financial development and consumption of energy in countries with the highest economic freedom. Energy Policy, 147, 111897.
Bari, P., & Karande, P. (2022). Ranking of sequencing rules in a job shop scheduling problem with preference selection index approach. Journal of Decision Analytics and Intelligent Computing, 2(1), 12–25.
Bashir, M. F., Ma, B., Shahzad, L., Liu, B., & Ruan, Q. (2021). China’s quest for economic dominance and energy consumption: Can Asian economies provide natural resources for the success of One Belt One Road? Managerial and Decision Economics: MDE, 42(3), 570–587.
Božanić, D. I., Pamučar, D. S., & Karović, S. M. (2016). Application the MABAC method in support of decision-making on the use of force in a defensive operation. Tehnika, 71(1), 129-136.
Božanić, D., Pamučar, D. (2010). Еvaluating locations for river crossing using fuzzy logic. Military Technical Courier, 58 (1), 129-145.
Brkić, I., Gradojević, N., & Ignjatijević, S. (2020). The impact of Economic Freedom on economic growth? New European dynamic panel evidence. Journal of Risk and Financial Management, 13(2), 26.
Cabello, J. M., Ruiz, F., & Pérez-Gladish, B. (2021). An Alternative Aggregation Process for Composite Indexes: An Application to the Heritage Foundation Economic Freedom Index. Social Indicators Research, 153(2), 443-467.
De Lima Silva, D. F., & De Almeida Filho, A. T. (2020). Sorting with TOPSIS through boundary and characteristic profiles. Computers & Amp; Industrial Engineering, 141, 106328.
De Lima Silva, D. F., Ferreira, L., & De Almeida Filho, A. T. (2023). Preference disaggregation on TOPSIS for sorting applied to an economic freedom assessment. Expert Systems With Applications, 215, 119341.
Dinç, S.C., & Erilli, N.A. (2022). Hybrid Ranking Proposal Based on Spatial Econometrics: An Example of European Economic Freedoms. Ekoist: Journal of Econometrics and Statistics, 36, 205-233.
Đukić, Đ., Petrović, I., Božanić, D., & Delibašić, B. (2022). Selection of unployed aircraft for training of small-range aircraft defense system AHP - TOPSIS optimization method. Yugoslav Journal of Operations Research, 32(3), 389-406.
Ecer, F., & Hashemkhani Zolfani, S. (2022). Evaluating economic freedom via a multi-criteria merec-dnma model-based composite system: Case of OPEC countries. Technological and Economic Development of Economy, 28(4), 1158–1181.
Economou, F. (2019). Economic freedom and asymmetric crisis effects on FDI inflows: The case of four South European economies. Research in International Business and Finance, 49, 114–126.
Harkati, R., Alhabshi, S. M., & Kassim, S. (2020). Influence of economic freedom and its subcomponents on risk-taking behavior: Evidence from dual banking system of Malaysia. Review of Behavioral Finance, 12(4), 335–356.
Hezam, I. M., Mishra, A. R., Rani, P., & Alshamrani, A. (2023). Assessing the barriers of digitally sustainable transportation system for persons with disabilities using Fermatean fuzzy double normalization-based multiple aggregation method. Applied Soft Computing, 133, 109910.
Hwang, C.L., & Yoon, K. (1981). Multiple attribute decision making: Methods and applications A state-of-the-art survey. 1st ed. New York: Springer-Verlag.
Ivanović, B., Saha, A., Stević, Ž., Puška, A., Kazimieras Zavadskas, E. (2022). Selection of truck mixer concrete pump using novel MEREC DNMARCOS model. Archives of Civil and Mechanical Engineering, 22, 173.
Koziuk, V., & Ivashuk, Y. (2022). Does it matter for CBDC design? Privacy-anonymity preferences from the side of hierarchies and egalitarian cultural patterns. Economics - innovative and economics research journal, 10(1).
Lai, H., & Liao, H. (2021). A multi-criteria decision making method based on DNMA and CRITIC with linguistic D numbers for blockchain platform evaluation. Engineering Applications of Artificial Intelligence, 101, 104200.
Lai, H., Liao, H., Šaparauskas, J., Banaitis, A., Ferreira, F. a. F., & Al-Barakati, A. (2020). Sustainable Cloud Service Provider Development by a Z-Number-Based DNMA Method with Gini-Coefficient-Based Weight Determination. Sustainability, 12(8), 3410.
Liao, H., & Wu, X. (2020). DNMA: A double normalization-based multiple aggregation method for multi-expert multi-criteria decision making. Omega, 94, 102058.
Liao, H., Long, Y., Tang, M., Streimikiene, D., & Lev, B. (2019). Early lung cancer screening using double normalization-based multi-aggregation (DNMA) and Delphi methods with hesitant fuzzy information. Computers &Amp; Industrial Engineering, 136, 453–463.
Mukhametzyanov, I. (2021). Specific character of objective methods for determining weights of criteria in MCDM problems: Entropy, CRITIC and SD. Decision Making: Applications in Management and Engineering, 4(2), 76-105.
Özkaya, G. (2022). Ekonomik Özgürlük Kavramı Açısından Ülke Karşılaştırmaları: Çok Kriterli Karar Verme Yaklaşımı. Celal Bayar Üniversitesi Sosyal Bilimler Dergisi, 20(3), 245-268.
Pamučar, D., Božanić, D., Đorović, B., & Milić, A. (2011a). Modelling of the fuzzy logical system for offering support in making decisions within the engineering units of the Serbian army. International Journal of the Physical Sciences, 6(3), 592-609.
Pamučar D., Božanić D., & Đorović B. (2011b). Fuzzy logic in decision making process in the Armed Forces of Serbia. Saarbrücken: LAP Lambert Academic Publishing & Co.
Pamučar, D., Božanić, D., & Milić, A. (2016). Selection of a course of action by Obstacle Employment Group based on a fuzzy logic system. Yugoslav Journal of Operations Research, 26(1), 75-90.
Pamučar, D., Đorović, B., Božanić, D., & Ćirović, G. (2012). Modification of the dynamic scale of marks in analytic hierarchy process (AHP) and analytic network approach (ANP) through application of fuzzy approach. Scientific Research and Essays, 7(1), 24-37.
Puška, A. (2011). Analiza osjetljivosti u funkciji investicionog odlučivanja. Praktični menadžment, 2(3), 80-86.
Puška, A., Stević, Ž., & Pamučar, D. (2022). Evaluation and selection of healthcare waste incinerators using extended sustainability criteria and multi-criteria analysis methods. Environment, Development and Sustainability 24(9), 11195-11225.
Rozman, Č., Grgić, Z., Maksimović, A., Ćejvanović, F., Puška, A., Šakić, B., & Bobić (2016). Multiple-criteria approach of evaluation of milk farm models in Bosnia and Herzegovina. Mljekarstvo, 66(3), 206-214.
Saha, A., Mishra, A. R., Rani, P., Hezam, I. M., & Cavallaro, F. (2022). A q-Rung Orthopair Fuzzy FUCOM Double Normalization-Based Multi-Aggregation Method for Healthcare Waste Treatment Method Selection. Sustainability, 14(7), 4171.
Saha, A., Simic, V., Senapati, T., Dabic-Miletic, S., & Ala, A. (2023). A Dual Hesitant Fuzzy Sets-Based Methodology for Advantage Prioritization of Zero-Emission Last-Mile Delivery Solutions for Sustainable City Logistics. IEEE Transactions on Fuzzy Systems, 31(2), 407–420.
Shahnazi, R., & Dehghan Shabani, Z. (2021). The effects of renewable energy, spatial spillover of CO2 emissions and economic freedom on CO2 emissions in the EU. Renewable Energy, 169, 293–307.
Stojanović, I., Puška, A., Selaković, M. (2022). A multi-criteria approach to the comparative analysis of the global innovation index on the example of the Western Balkan countries. Economics - innovative and economics research journal, 10(2), 9-26.
Sudhana Rao, K., Kolluru, M., & Hyams-Ssekasi, D. (2022). Emerging change: exploring the new economy paradigm. Economics - innovative and economics research journal, 10(1), 157-182.
Tešić, D., & Božanić, D. (2018). Application of the MAIRCA method in the selection of the location for crossing tanks under water. Tehnika, 73(6), 860-867.
Tešić, D., Z., Božanić, D., I., Pamučar, D., S., & Din, J. (2022). DIBR - Fuzzy MARCOS model for selecting a location for a heavy mechanized bridge. Vojnotehnicki Glasnik, 70(2), 314–339.
Verma, V., Bisht, P., & Joshi, S. (2022). Sustainable Supply chain Systems of Food and Beverages SMEs: Analyzing sustainable performance using Structured Equation Modeling. Journal of Decision Analytics and Intelligent Computing, 2(1), 53-68.
Wang, L., & Rani, P. (2022). Sustainable supply chains under risk in the manufacturing firms: an extended double normalization-based multiple aggregation approach under an intuitionistic fuzzy environment. Journal of Enterprise Information Management, 35(4/5), 1067-1099.
Zavadskas, E. K., & Turskis, Z. (2010). A new additive ratio assessment (ARAS) method in multicriteria decision‐making. Technological and Economic Development of Economy, 16(2), 159-172.
Zhang, H., Liao, H., Wu, X., Zavadskas, E. K., & Al-Barakati, A. (2020). Internet Financial Investment Product Selection with Pythagorean Fuzzy DNMA Method. Engineering Economics, 31(1), 61–71.
