Global Edge: Using the Opacity Index to Manage the Risks of Cross-Border Business.

• Author: Marshall, Jeffrey
• Position: Bookshelf - Global Edge: Using the Opacity Index to Manage the Risks of Cross-Border Business. By Joel Kurtzman and Glenn Yago - Book review

Global Edge: Using the Opacity Index to Manage the Risks of Cross-Border Business. By Joel Kurtzman and Glenn Yago. Harvard Business School Press, 224 pages. $29.95.

Opacity is, logically, the obverse of transparency, and that's the core concept that authors Kurtzman and Yago had in mind when they created the Opacity Index. In essence, they wanted to be able to rank countries on a set of key factors that determine how easy it is for corporations to successfully do business there; with that, it becomes a way of measuring key aspects of risk (see cover story, page 32).

As the authors define it in an introduction, opacity is "simply the lack of clear, accurate, formal, clear-cut and widely accepted practices in the broad arena where business, finance and government meet." If this intersection is opaque, "it can become a business bottleneck, fraught with uncertainty and tremendous costs."

They establish a set of criteria they label CLEAR--for level of corruption, effectiveness of legal systems, effectiveness of enforcement policies, transparency of accounting and regulatory quality and enforcement. A reasonable level of...