Nordic countries, better known for providing a high degree of social protection, dominate the World Economic Forum's (WEF) annual ranking of the most competitive economies released Oct. 13. Finland led the business forum's 2004 overall growth competitiveness index for the second year running, ahead of the United States, Sweden, Taiwan, Denmark and Norway. Other Asian countries also filled the top 10 alongside Taiwan, with Singapore in sixth place and Japan in ninth. Switzerland and Iceland took the remaining places at the head of the ranking. Overall, the 2004 survey favored smaller economies and highlighted the quality of public institutions as well as the legal framework that companies rely on for a steady business. "It is vitally important that countries improve the quality of their public institutions over time," says Augusto Lopez-Claros, chief economist at the WEF. The business community has traditionally regarded high taxation and spending on social security -- a feature of many Nordic economies -- as a burden for financial performance. But the 8,700 executives questioned by the WEF again gave positive marks to the economic and business environment in the northern European countries. The WEF - a think tank funded by about 1,000 corporations -- underlined budget surpluses there, as well as low levels of corruption, a steady legal environment for business and a high degree of technological innovation. "The Nordic countries are characterized by excellent macroeconomic management overall," Claros-Lopez said. "These countries prove the point that enhanced competitiveness and boosting the capacity of economies to operate effectively in the global economy is a multifaceted challenge requiring concerted actions on a number of fronts," he added. The United States, which also ranked second last year, was burdened by the poor quality of its public institutions and the instability of its macroeconomic environment, despite its "overall technological supremacy," the WEF said.