A new way of measuring social progress

In a 1968 speech, Robert Kennedy recognized gross national product “measures everything in short, except that which makes life worthwhile.”

Secretary General of the United Nations Ban Ki Moon agreeed in 2012 suggesting, “We need to move beyond gross domestic product as our main measure of progress, and fashion a sustainable development index that puts people first,” and Nobel Prize-winning economist Joseph Stiglitz said in 2008, “GDP tells you nothing about sustainability.”

Even Simon Kuznets, who first coined the term GDP acknowledged in his original report to the US Congress 1934 that, “The welfare of a nation can scarcely be inferred from a measurement of national income.”

Taking up the call for a better, more wholesome way to measure progress, the Social Progress Index, offers a framework for measuring the multiple aspects of social progress based on three dimensions: basic needs for survival, foundations of wellbeing, and opportunity.  It does not measure how much money is spent on policies or services that support these dimensions, but rather the experiences of citizens.

Michael Green, CEO of the Social Progress Index, gives the following Ted Talk to explain how the index measures the welfare of societies and what its policy implications are. He reveals a dramatic reordering of nations according to social progress.dramatic reordering of nations according to social progress.

While the Social Progress Index does show a positive correlation between higher GDP and better living standards, it does not confirm a direct link between a country’s GDP and its destiny. New Zealand scores the highest on the index and has a relatively high GDP per capita, while Chad, the lowest scoring country, does have a lower GDP.  This does not explain, however, why countries like Russia, which has a higher GDP than New Zealand nonetheless scores lower on the index or why Costa Rica earns a high score despite having a lower GDP.

For poor countries, Green states, the relationship between GDP and social progress is very close; demonstrating that if they can raise their GDP and reinvest their money in services, huge strides in social progress can be achieved.

Yet, the relationship between GDP and social progress flattens out as countries attain higher GDPs.  The diminishing returns demonstrate that raising GDP is an excellent goal, but is “only half a plan” as Green says.  The other half of the plan calls for prioritizing inclusivity and sustainability.

This post first appeared on the World Bank Blog

Author: Roxanne Bauer is a consultant to the World Bank’s External and Corporate Relations, Operational Communications department (ECROC). 

Image: People walk past clocks at Reuters Plaza in London. REUTERS/Jon Jones.