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For almost 100 years, two indicators have been used to measure the success of a country: the Gross Domestic Product or GDP, which refers to wealth, and the unemployment rate.
But when it comes to understanding how good a country is for the quality of life of its inhabitants, these methodologies are not only incomplete but may not help to understand the phenomenon.
When it comes to estimating “social progress”, which measures things like education, food or access to housing, countries with lower incomes usually outperform the richest.
“In general, richer countries have a higher level of social progress, therefore, having more economic growth is not a bad idea,” says Michael Green, executive director of the Social Progress Index.
“But what we have also discovered, very clearly, is that social progress can not be explained only by economic variables, GDP is not doctrine.”
The Social Progress Index is one of many indicators that compiles information from all nations and tries to determine how well a country is doing, in the sense of responding to the needs of its population.
Usually, the results of these rankings are what make us dream of moving to Denmark or New Zealand.
But beyond that, these types of alternative measurements have many other applications. They can show unexpected data connections that facilitate the creation of certain public policies.
And in practice, they can determine which countries need to receive more resources than others. And they can even help “predict the future”.
What happens with accountability
Some argue that the US government is being more inefficient than ever. The level of confidence of people in the White House has fallen to levels not seen since 1958.
However, the governance indicators of the World Bank show that the levels of effectiveness of the government have remained practically the same since 1996, understanding effectiveness as the state of the roads, the quality of the primary schools and the amount of bureaucracy.
In other countries, phenomena that account for the complexity when analyzing their performance also occur.
This is the case of Tunisia, for example, which experienced a sustained decline -between 1996 and 2010- in the issue of the accounting system, a variable that includes aspects such as confidence in elections and freedom of the media.
And what happened next? In 2011, the wave of protests known as the “Arab Spring” arrived in 2011 and that was when Tunisia substantially improved its position in terms of social progress.
But for most countries it is very difficult to jump from a low place to a high position.
“One of the conclusions we have drawn is that when good governance is created in a country, it tends to persist,” says Aart Kraay, a World Bank economist.
“But it’s very difficult to get there.”
When wealth does not work on its own
One of the things that do not work, at least by itself, is wealth, in the social progress of a country.
The United States is an example. Although it is one of the five countries with the best performance in terms of GDP, it ranks 18th in social progress, closer to Estonia than to Canada.
The Netherlands have a GDP similar to that of Saudi Arabia, as well as Chile and Kazakhstan to that of the Philippines and Angola. However, the Netherlands, Chile and the Philippines are well above in terms of progress for their citizens.
In the European Union there is a similar pattern, in which there is no direct correlation between social progress and the unemployment rate.
One would tend to think that a good job has to improve the standard of living of people. However, while the unemployment rate in the United Kingdom is at historically low levels, its level of social progress shows a flat evolution.
Michael Green, executive director of the Social Progress Index, says that the amount of employment does not necessarily speak of the quality of life of citizens, due to the changing nature of work.
A contract with zero hours of work, would be considered as a “job”, but it might not be very good at generating social progress.
In the case of Costa Rica, there is an inverse phenomenon.
“Costa Rica is not different from the rest of the Latin American countries, it is a country with a relatively modest income level,” says Juan Botero, executive director of the World Justice Project.
“And despite that, it has had very strong institutions in the last 40 or 50 years, and it can be seen that in social outcomes, this country surpasses its neighbors, being a more peaceful and prosperous society.”
Not all rich countries do it well
So, if the level of wealth is not enough to know how good a country is for its people, what is the key factor?
The countries that perform better generally tend to be rich countries. But not all the rich do it well.
Botero works on the “Empire of the Law Index ” that examines the basic aspects of the application of legal norms, such as the accountability of a government, the protection of human rights and access to a fair process.
In this field he has found at least one significant correlation. “Most of the literature says that wealth is the most important thing to improve the health indicators of a country,” says Botero.
However, the expert has found other elements.
“We have detected that respect for the law is a predictor of health outcomes , even if it does not work on its own.The higher the rule of law, the more likely it is that the country, at any level of development, will have better results in maternal mortality, life expectancy, or the care of catastrophic diseases “.
That does not mean that wealth does not matter . The countries with the best performance are usually the richest, but not all the rich countries have a good performance in social progress.
This has led some experts to conclude that economic growth is not always at the service of people, and that it is necessary to focus on the strengthening of institutions.
“If you are richer, you can pay better salaries to the police,” says Botero. “On the other hand, with a robust legal system, there is more likely to be less crime, and therefore, a country becomes richer.”
The European Union is using the Social Progress Index to contribute to the design of public policies.
And some companies, such as Disney Corporation, have incorporated the measurement criteria used in the World Bank to decide where to manufacture their products.
These types of “non-traditional” indexes are also used by organizations that donate money to support development.
The Millennium Challenge Corporation, for example, has invested US $ 11 billion in financial aid since it was created in 2004.
It has been the control of corruption, the rule of law or government efficiency.
But this approach can be controversial.
The concept of ” good governance or governance , ” which many of these indices attempt to measure, was first developed by international financial institutions, says Linda Reif, Professor of International Law at the University of Alberta, Canada.
“One of the criticisms that this measurement has had is that, to a certain extent, it has been imposed on the countries of the so-called global south,” he adds.
“Some experts say that the concept of” good governance “has its origin in colonial structures of the world.
Critical voices also suggest that measurements are based on Western values, such as tolerance towards homosexuality or religion.
Another debate is about how relevant these indicators are to women. Some researchers have found that in some countries there is no correlation between respect for the law and the situation of women.
If a country has a well-functioning legal system that ensures justice and equity, but half of the population still does not have the same access as men to work, education or health, it can be argued that the measurements have flaws or at least they are incomplete.
This adds more reasons to be cautious about this type of index.
Predict the future
Despite the criticism, the indicators serve as a good starting point. For example, they can highlight underlying trends with important consequences.
Singapore, for example, is ranked number 9 in the Empire of the Law Index, but the World Bank places it in 55th place in its report on global gender inequality.
Venezuela is another example. Although in the past he was much richer than his neighbors, today he is in a severe crisis. This could have been detected earlier, if attention had been paid to the authorities’ commitment to the legal system, says Botero.
“Venezuela had been in the last place of respect for legality for many years, even when the government maintained the appearance of respecting it,” he says.
” These trends tend to predict the future, ” Botero adds.
The opposite can also be true, as in the case of the United States.
” Republicans dominate the two chambers and, if it were a society with low respect for the law, they could do whatever they wanted, but that’s not the case.”
“Even the priorities of the ruling party have not been directly approved, because there are many controls over power .” It’s a success story so far.
What can be done to help countries become more stable, safer, and just and provide a good quality of life?
The main factors seem to be two: the commitment with the institutions and the amount of time that commitment has been maintained.
“A long-term commitment to a country’s social progress seems to be a determining factor,” says Green.
In the same way, Botero highlights the example of countries like the United States. and the United Kingdom, where that commitment has persisted for many years.
If you look for the answer to the question that makes a country great, it seems that you do not have to look at the GDP or the unemployment rate.
You have to look at the commitment that the country has with its citizens and for how long it has maintained it.