It is the third yearly list of the institute based on the categories advanced economy, appealing environment and effective government. The list are cities where people and companies are most likely to want to visit, do business or travel for those in the top list and the least for cities on the opposite end of the spectrum, said Fernando Prado, managing partner of the institute.
After Sydney came Canada's Toronto, Sweden's Stockholm, Austria's Vienna and Italy's Venice. On the opposite end are Egypt's Cairo, Kenya's Nairobi, Pakistan's Karachi, Iran's Tehran and Iraq's Baghdad.
The basis of the institute in its ranking is an online survey with 22,000 respondents from G8 nations. It held the poll in January and February 2013. Respondents were asked to answer questions only about cities they were familiar with.
About 200 to 300 respondents ranked each of the 100 cities based on 13 characteristics, with the city being considered beautiful and safe for visitors and residents as the two topmost attributes.
The 11 other characteristics were based on the cities' economies such as production of a wide range of unique products and services, home to headquarters of leading companies, advancement in technology, financial viability, potential for growth and provision of a favourable environment to do business.
Questions about the environment include experiences on food, sports, architecture and entertainment as well as residents who are famous artists, scientists, inventors and sportsmen.
For the government category, the questions covered safety, structure of political and legal institutions, progressive social, economic and environmental policies and viable transportation and communications infrastructure that are working and run by well-respected leaders.
Other cities high on the list include Italy's Florence (6), Ireland's Edinburgh (7), Canada's Vancouver (14) and Australia's Melbourne (15). New York City was on 21st spot, followed by Ireland's Dublin and France's Paris.
On questions on the lower rankings of New York and Paris despite their cities being popular with travelers, Mr Prado explained that international media attention, including fictional films and TV shows, could have a strong impact on a city's reputation, regardless where what is being presented is true or only based on perceptions.
He cited Colombia's Bogota which is at the bottom of the list because of the city's reputation as the drug capital of the world.