We just had a visit from Glenn Yago, director of capital studies at the Milken Institute, who dropped by to talk about his new book. The title is "Global Edge," and the theme is something called the opacity index — a framework that Yago and co-author Joel Kurtzman have created to measure an important category of risk that investors encounter in new markets, especially emerging ones. "These are the small-scale, high-frequency risks," explains Yago — specifically, those having to do with corruption, underdeveloped legal, accounting and regulatory systems, and the like.

The list of risks will sound familiar to corporate dealmakers trying to execute cross-border transactions. What's new is the systematic attempt to measure them country by country and forge a tool for better decision-making. Which country leads in clarity? For 2005, the U.K. ranked first. The U.S. was fourth, after Finland and Hong Kong, according to the index. China, meanwhile, was No. 42. "Global Edge" comes out next month from Harvard Business School Press.
— Kenneth Klee

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