Money is not the root of all good

 From The Economist

How well off is humanity? Which countries’ citizens are thriving and which are languishing? Where are people making progress and where are they sliding back? Often the answers to such questions come from examining their economies. GDP per person, however, can only show so much. More important is how prosperity translates into well-being. A dataset published on May 24th by the Social Progress Imperative, a non-profit organisation, aims to show that. It ranks 170 countries on how well they have provided for their citizens, using metrics other than wealth. See how they compare in our interactive chart below.

The organisation is not alone in measuring development by methods other than money counting. The UN’s Human Development Index, for instance, combines GDP per person with measures of health and education. But the Social Progress Index (SPI) eschews GDP entirely. Instead, it tracks 52 indicators and groups them into three categories, to which it gives equal weight: basic human needs (such as food and water), the foundations for long-term development (education and health care) and “opportunity” (including personal rights and freedoms).

The results still suggest a link between wealth and well-being: the richest countries are often the ones where citizens thrive. Conditions are worst in the poorest. But the data also show that countries that have made great progress in some areas, such as meeting basic needs, let their citizens down in others, especially in protecting and expanding their freedoms.

The SPI’s findings for 2022 put Norway top, with a score of 90.7. South Sudan came last. In general wealthy European countries are among the highest-ranked whereas countries in sub-Saharan Africa are the lowest.

In a separate analysis, the SPI shows how scores have changed between 1990 and 2020 (the latest figures are omitted because of differences in its methodology). After rapid progress in the 1980s and 1990s, improvements in human welfare seem to have slowed. Progress in some regions, such as Latin America, has stalled. The United States, meanwhile, is going backwards. The covid-19 pandemic has probably hurt global progress even more since.

The region that experienced the greatest increase in well-being is East Asia and the Pacific. Taken together, countries there improved their SPI score by an average of 18 points between 1990 and 2020. Much of that was driven by the rise of China’s middle class, which showed up in higher scores on indicators for health education and provision of basic needs.

South Asia has also seen significant progress. India’s SPI score, for example, increased by 16 points over the three decades. But it is tiny Bhutan, sandwiched between India and China, that advanced the most among the 170 countries. Its score jumped by 30 points as it greatly increased its provisions for meeting basic human needs. That looks like a vindication for the country that invented “gross national happiness”, which its government prefers as a target to GDP. Venezuela, whose economy has shrunk by 75% since 2013 even as its dictator, Nicolás Maduro, tightened his grip on power, has seen the biggest drop of any country in its SPI rank between 1990 and 2020.

Paired with data on GDP, the SPI rankings show that economic growth is important, but not the sole determinant for social progress (see chart). China’s GDP per person increased 11-fold between 1990 and 2010; over the same period its SPI score increased by 45%. India achieved a similar jump in its score, from a slightly lower base, with a third of China’s economic growth.

America is another country where economic success is accompanied by deterioration in other areas. Despite having the richest citizens in the G7, a club of rich democracies, its SPI score, of 87.6, is the lowest in that group. Since 2016 America’s SPI score has gone steadily downwards even though its economy has grown faster than those of other rich countries. That is largely because of worse scores in the “opportunity” category, which includes measures of discrimination and access to advanced education. Worryingly, America’s performance reflects a trend: progress on personal rights is stalling around the world. Money, it seems, is not the root of all good.