The CalPERS Fixed Income Sovereign Team conducts credit analysis through a process that evaluates both quantitative and qualitative factors. Quantitative factors include economic indicators to assess the country's ability to pay back and service its debt. Qualitative analyses are used to assess the country's willingness to meet creditor obligations. Willingness to repay debt is measured by policy continuity, governance, voice and accountability, freedom of press, labor rights, rule of law, judicial system effectiveness and efficiency, women's rights, GINI indicator, corruption indicator, ease of doing business, freedom of association, human rights, human development index, freedom of religion, etc. Examples include
Ease of Doing Business: An index developed by the World Bank Group. A higher ranking (a low numerical value) indicates better, usually simpler, regulations for businesses and stronger protections of property rights, and the opposite is true with regards to lower rankings (a high numerical value). The index is based on the average of ten sub-indices—starting a business, construction permits, getting electricity, property registration, access to credit, investor protection, paying taxes, trading across borders, enforcing contracts, and resolving insolvency. World Bank empirical research shows a relationship between economic growth and improving ease of doing business.
Corruption Perception Index: An index composed by Transparency International starting in 1995 and released on an annual basis. It measures perceived levels of corruption that’s determined by expert assessment and opinion surveys. The scale ranges from 100 (very clean) to 0 (highly corrupt) based on the misuse of public power for private gain.