Global Competitiveness ... US slips?

The World Economic Forum's Global Competitivness Report 2006-07 has just been published and the US surprises by tumbling from first to sixth place; hat tip New Economist.

'Switzerland, Finland and Sweden are the world’s most competitive economies according to The Global Competitiveness Report 2006-2007, released by the World Economic Forum on 26 September 2006. Denmark, Singapore, the United States, Japan, Germany, the Netherlands and the United Kingdom complete the top ten list, but the United States shows the most pronounced drop, falling from first to sixth.'

More specifically on the US the report points to two factors disfavoring the US ...

1. First,with potentially open-ended expenditure commitments linked to defence and homeland security, ongoing plans to
lower taxes further, as well as other longer-term potential claims on the budget, the prospects for sustained fiscal
adjustment seem not too bright. With a low savings rate, record-high current account deficits and a worsening of the
US’s net debtor position, there is a non-negligible risk to both the country’s overall competitiveness and, given the
relative size of the US economy, the future of the global economy.

2. Second, while the US has, in general, anexcellent institutional framework, the quality of the country’s public institutions falls somewhat short of the levels of transparency and efficiency seen in other OECD members,” said Augusto Lopez-Claros, Chief Economist and Head of the World Economic Forum’s Global Competitiveness Network.