News / Economy

    Rival GDP Measure Puts Emphasis on Social Progress

    Rival GDP Measure Puts Emphasis on Social Progressi
    X
    April 11, 2013 8:25 PM
    There is a new way to measure a nation's success, called the Social Progress Index. The economists and other experts behind the SPI say it measures things that directly affect ordinary people, like access to food, opportunity and medical care. That is a different approach than the traditional Gross Domestic Product, or GDP, which just adds up the output of goods and services -- ignoring things like air quality. As Henry Ridgwell reports for VOA, the SPI's creators hope it will offer lessons to policymakers in fast growing African and Latin American economies.
    Henry Ridgwell
    There is a new way to measure a nation's success, called the Social Progress Index. The economists and other experts behind the SPI say it measures things that directly affect ordinary people, like access to food, opportunity and medical care. That is a different approach than the traditional Gross Domestic Product, or GDP, which just adds up the output of goods and services - ignoring things like air quality.

    The SPI's creators hope it will offer lessons to policymakers in fast-growing African and Latin American economies.

    Since the early 20th century, the United States has topped the global table of Gross Domestic Product.

    According to the new Social Progress Index, though, the best country in the world is Sweden. The United States ranks sixth.

    The index was designed by academics from Harvard and the Massachusetts Institute of Technology, together with business professionals from across the globe.

    "We're not measuring economic proxies for well-being; we're measuring the things that matter to real people," said Michael Green, executive director of the Social Progress Imperative, the body behind the project. "Do I have enough food? Do I have shelter? Do I have access to health care? Do I have opportunity in my life?"

    Those questions are answered by measuring 12 diverse components, including nutrition, ecosystem sustainability and personal rights; even measuring access to the Internet.

    Britain comes second in the index - a result that surprised Green.

    "What Sweden and Britain do well is that they combine the European model of a good social welfare system and a focus on environmental sustainability, with the American model of opportunity and freedom, rights, that kind of thing," he said.

    Costa Rica is 12th on the index, the highest-ranked emerging economy in the world. It scores highly on components related to education and environment, and on opportunity.

    That's thanks to its history, says Costa Rican national Roberto Artavia, director of Copa Holdings and vice chairman of the Social Progress Imperative.

    "124 years of continuous democracy. It has had a social inclusion institution since 1971. It has had full social security since 1941. This seems to have actually created the framework for development - social development - to take place."

    The creators of the Social Progress Index insist that it's not politically-motivated.
    Alvaro Rodriquez, one of the co-founders of the index, is chairman of the board of Compartamos, the largest microfinance institution in Mexico and Latin America.

    "It's not about inputs; it's about outcomes. We were very careful in doing that because otherwise there would be in some way an incentive for big governments and more spending. That's not the case," said Rodriquez.

    At 41st, Ghana ranks eight places higher than Nigeria, despite having a similar GDP.

    "Nigeria is bottom of the pile on security. So you've got to try to tackle those kinds of issues. We also found challenges for Ghana. Ghana's got to push a bit harder educationally; it's being left behind by other countries in the region," said Green.

    Green said the message for policymakers is that you can get high levels of social progress at relatively low levels of GDP.

    You May Like

    Wife of IS Leader Charged in Death of US Hostage

    Suspect allegedly admitted to being responsible for American aid worker Kayla Mueller, who officials say was sexually abused and ‘owned’ by one IS member

    Year of the Monkey Could Prove Economic Balancing Act for China

    China is up against a tricky situation on the financial front, facing the need to fight capital flight while also stopping a further slide of foreign currency reserves

    Runners Attempt 26-mile South Pole Marathon in Sub-Zero Temperatures

    How alluring is running 26.2 miles at 10,000 feet when it’s minus 31 Celsius out?

    This forum has been closed.
    Comment Sorting
    Comments
         
    by: Anders Corr, Ph.D. from: New York, NY
    April 18, 2013 7:35 PM
    Of course Sweden, Britain, and Switzerland have the best Social Progress Index (SPI) scores, because these countries have some of the highest GDPs per capita of the fifty countries in the index. It is no coincidence that the three lowest SPI scores – Ethiopia, Nigeria, and Uganda, have very low GDPs per capita. The best way to understand the Social Progress Index is therefore to control for GDP per capita. Corr Analytics did simple regression analysis on the Social Progress Index data to show that approximately 84% of the index is explained by gross domestic product (GDP) per capita. Predictably, countries with large economies relative to their populations will have more wealth that can be channeled to basic necessities measured by the Social Progress Index.

    Therefore the simpler standard used by economists for decades — GDP per capita — works quite acceptably for well-being. Interestingly for development economists, when comparing the index to GDP per capita using loglinear regression, it shows that for countries below the mean GDP per capita ($16,030 in 50 countries sampled by the Social Progress Index), the positive effect of GDP per capita growth on social progress is very high. The effect after mean GDP per capita is still positive, but of a much lesser magnitude. Development funding, therefore, yields the highest social progress gains in relatively poorer countries.
    Adding the degree of democracy to the regression brings the explained variance of SPI to 87%. Democratic nations are better able to leverage GDP for basic necessities, because of effective voting coalitions of the economically disadvantaged.

    The theoretical range of the Social Progress Index is zero to 100, with 100 indicating the greatest possible provision of well-being. The actual range of the data is 32 (Ethiopia) to 65 (Sweden). Given the 33-point actual range, the effect of changes in GDP per capita and democracy are substantial. An increase of $10,000 in GDP per capita for the poorest country in the dataset yields an expected increase of 17.5 points on the Social Progress Index. That same $10,000 increase for the richest country yields only a 0.6 expected increase on the Social Progress Index. A change from pure dictatorship (autocracy) to full democracy yields an expected 7.5-point increase on the Social Progress Index.

    The regression also elucidates countries that are social performers and laggards given GDP per capita. Vietnam, Costa Rica, the Philippines, Britain, Bulgaria, and Argentina are the six highest performers given GDP per capita. With the exception of Vietnam, these countries are democratic. The UAE, Nigeria, Russia, South Africa, Kazakhstan, and Botswana are the six lowest performers on the Social Progress Index given GDP per capita. Most of the laggards are dictatorial or have pseudo-democratic forms of government.

    Graphs, tables, and data further illustrating the observations on SPI above are available at www.canalyt.com.

    Featured Videos

    Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
    'No Means No' Program Targets Sexual Violence in Kenyai
    X
    February 08, 2016 4:30 PM
    The organizers of an initiative to reduce and stop rape in the informal settlements around Kenya's capital say their program is having marked success. Girls are taking self-defense classes while the boys are learning how to protect the girls and respect them. Lenny Ruvaga reports from Nairobi.
    Video

    Video 'No Means No' Program Targets Sexual Violence in Kenya

    The organizers of an initiative to reduce and stop rape in the informal settlements around Kenya's capital say their program is having marked success. Girls are taking self-defense classes while the boys are learning how to protect the girls and respect them. Lenny Ruvaga reports from Nairobi.
    Video

    Video New Hampshire Voters Are Independent, Mindful of History

    Once every four years, the northeastern state of New Hampshire becomes the center of the U.S. political universe with its first-in-the-nation presidential primary. What's unusual about New Hampshire is how seriously the voters take their role and the responsibility of being among the first to weigh in on the candidates.
    Video

    Video Chocolate Lovers Get a Sweet History Lesson

    Observed in many countries around the world, Valentine’s Day is sometimes celebrated with chocolate festivals. But at a festival near Washington, the visitors experience a bit more than a sugar rush. They go on a sweet journey through history. VOA’s June Soh takes us to the festival.
    Video

    Video 'Smart' Bandages Could Heal Wounds More Quickly

    Simple bandages are usually seen as the first line of attack in healing small to moderate wounds and burns. But scientists say new synthetic materials with embedded microsensors could turn bandages into a much more valuable tool for emergency physicians. VOA’s George Putic reports.
    Video

    Video Bhutanese Refugees in New Hampshire Closely Watching Primary Election

    They fled their country and lived in refugee camps in neighboring Nepal for decades before being resettled in the northeastern U.S. state of New Hampshire -- now the focus of the U.S. presidential contest. VOA correspondent Aru Pande spoke with members of the Bhutanese community, including new American citizens, about the campaign and the strong anti-immigrant rhetoric of some of the candidates.
    Video

    Video Researchers Use 3-D Printer to Produce Transplantable Body Parts

    Human organ transplants have become fairly common around the world in the past few decades. Researchers at various universities are coordinating their efforts to find solutions -- including teams at the University of Pennsylvania and Rice University in Houston that are experimenting with a 3-D printer -- to make blood vessels and other structures for implant. As VOA’s Greg Flakus reports from Houston, they are also using these artificial body parts to seek ways of defeating cancerous tumors.
    Video

    Video Helping the Blind 'See' Great Art

    There are 285 million blind and visually impaired people in the world who are unable to enjoy visual art at a museum. One New York photographer is trying to fix this situation by making tangible copies of the world’s masterpieces. VOA correspondent Victoria Kupchinetsky was there as visually impaired people got a feel for great art. Joy Wagner narrates her report.
    Video

    Video Sanders, Clinton Battle for Young Democratic Vote

    Despite a narrow loss to former Secretary of State Hillary Clinton in last week's Iowa Democratic caucuses, Vermont Senator Bernie Sanders secured more than 80 percent of the vote among those between the ages of 18 and 29. VOA correspondent Aru Pande talks to Democrats in New Hampshire about who they are leaning towards and why in this week's primary.
    Video

    Video German Artists to Memorialize Refugees With Life Jacket Exhibit

    Sold in every kind of shop in some Turkish port towns, life jackets have become a symbol of the refugee crisis that brought a million people to Europe in 2015.  On the shores of Lesbos, Greece, German artists collect discarded life jackets as they prepare an art installation they plan to display in Germany.  For VOA, Hamada Elrasam has this report from Lesbos, Greece.
    Video

    Video E-readers Help Ease Africa's Book Shortage

    Millions of people in Africa can't read, and there's a chronic shortage of books. A non-profit organization called Worldreader is trying to help change all that one e-reader at a time. VOA’s Deborah Block tells us about a girls' school in Nairobi, Kenya where Worldreader is making a difference.
    Video

    Video Genius Lets World Share Its Knowledge

    Inspired by crowdsourcing companies like Wikipedia, Genius allows anyone to edit anything on the web, using its web annotation tool
    Video

    Video In Philippines, Mixed Feelings About Greater US Military Presence

    In the Philippines, some who will be directly affected by a recent Supreme Court decision clearing the way for more United States troop visits are having mixed reactions.  The increased rotations come at a time when the Philippines is trying to build up its military in the face of growing maritime assertiveness from China.  From Bahile, Palawan on the coast of the South China Sea, Simone Orendain has this story.
    Video

    Video Microcephaly's Connection to Zika: Guilty Until Proven Innocent

    The Zika virus rarely causes problems for the people who get it, but it seems to be having a devastating impact on babies whose mothers are infected with Zika. VOA's Carol Pearson has more.
    Video

    Video Stunning Artworks Attract Record Crowds, Thanks to Social Media

    A new exhibit at the oldest art museum in America is shattering attendance records. Thousands of visitors are lining up to see nine giant works of art that have gotten a much-deserved shot of viral marketing. The 150-year-old Smithsonian American Art Museum has never had a response quite like this. VOA's Julie Taboh reports.

    World Currencies

    EUR
    USD
    0.9008
    JPY
    USD
    116.30
    GBP
    USD
    0.6957
    CAD
    USD
    1.3951
    INR
    USD
    68.033

    Rates may not be current.