Is the Social Progress Index the real deal?

It is heartening to see Maitreyi Bordia Das exploring with such interest the evolution of the Social Progress Index in her recent article on social inclusion.

The Social Progress Index is a framework for measuring the various dimensions of human well-being, from basic human needs to advanced education. Since early in 2014, the authors of this article have been involved in the dissemination of the index, both through academic seminars and through presenting it to public officials who may be interested in using it as an institutionalized indicator, alongside the traditional GDP and related economic indices.

In doing so, we have encountered enthusiasm from students and executives in countries as diverse as the United States, United Kingdom, France, Italy, Estonia, Poland and Thailand. It has given us the impression of an idea whose historical moment has come, and we would like to encourage not only the World Bank (where Bordia Das works) but all of the world’s public institutions to consider using this index as an official statistic.

We would also like to address a few of the points raised by Bordia Das in her piece.

Firstly, in regard to weighting: Bordia Das points out that the indices of well-being in the Social Progress Index reflect the prejudices of its constructors, but in fact the 12 key components of well-being are deliberately left un-weighted. The only place where weighting enters the index is in the factor analysis, which is carried out at the subcomponent-indicator level.

For each component of the index, a number of indicators are used in order to capture performance as accurately as possible, with the possibility of an overlap between some of them. In order to counter the overlap, the index uses the statistical technique of “principal component analysis” to assign weightings to the indicators that make up each component. These weights do not, however, reflect the subjective judgements of the constructors as to what is important; they are simple, statistically determined weightings.

The use of statistical factor analysis allows the index to address another key question raised by Bordia Das in her article: that of context specificity. When it comes to creating indexes of general worldwide well-being, context is indeed a stumbling block. In fact, the team of researchers at the Social Progress Index have regularly pointed this out. The key challenge is not so much comparability as consistency among different variants of the index.

Hence, it would be perfectly acceptable (while maintaining consistency and comparability among the 12 components of the index) to vary the indicators so that they reflect the context of different states or levels. After all, the best indicators for social inclusion in Finland, with its highly developed welfare state, may be very different from the best indicators of social inclusion in Thailand, where inclusion depends more on informal community relationships. Once we accept the diversity of each indicator, factor analysis plays a crucial role in establishing which ones are significant for our purposes.

Bordia Das writes that the Social Progress Index seems to have too many indicators and is therefore ill-defined (i.e. what are we really measuring?). But we would see this large number of indicators as a strength, not a weakness. This is for two reasons: firstly, human well-being is complex and dependent on a range of factors; and secondly, there is safety in numbers.

With 54 indicators contributing to the overall index (according to the 2014 edition), surely we can afford to get some of them wrong or have one or two that are controversial. The impact of any one indicator on the overall index (and so the potential for distortion caused by inaccuracy) is quite small. Another advantage of the large and open-ended number of indicators is it creates a sense of “something for everybody” in the index, allowing us to maintain a broad-minded conception of human well-being.

As to the key policy-maker’s question of which policies to put in place, something that is of interest to Bordia Das at the World Bank, as well as public officials everywhere, the scorecards available on the Social Progress Index website can be a rich source of inspiration. For each country in the index, the relative strengths and weaknesses (in relation to a set of countries at a similar stage of development) can be clearly identified, making it easier for policy-makers to define a path to social progress.

We, the authors of this article, see the index as the dawn of a new way of measuring, one that incorporates the lessons of previous indexes and creates something of real value for society at large.

Authors: Mark Esposito is a member of the teaching faculty at the Harvard University Extension School, an Associate Professor of Business and Economics at Grenoble Graduate School of Business, and a Senior Associate at the University of Cambridge-CISL. Patrick O’Sullivan is Professor of Business Ethics at Grenoble School of Management and University of Warsaw.

Image: Children play at the Mount Lavinia beach in Colombo October 2 , 2011. REUTERS/Dinuka Liyanawatte