For almost a hundred years, two measurements have been used to get a sense of how well a country is doing. One is GDP, or gross domestic product, the amount a country earns. The other is its unemployment rate. But when it comes to figuring out how well a country is serving its citizens, these tools might not only be incomplete: they may not in fact be that helpful at all.
On estimates of social progress, for example – which measures aspects like access to education, food and affordable housing – poorer countries often outdo their wealthier counterparts. “Broadly, richer countries have higher social progress, so getting more economic growth is not a bad idea,” says Michael Green, CEO of the Social Progress Index. “But what we also find, very clearly, is that social progress is not completely explained by economic variables. GDP is not destiny.
The Social Progress Index is one of a number of indexes that aggregate data about countries worldwide – and about how well those countries are serving their populations. If we come across them at all, we usually see them being used for the kinds of country rankings that make us daydream about a move to Denmark or New Zealand.
Behind the scenes, though, this kind of information is used for much more. It can show surprising relationships that help shape policy. It can determine which countries get help with funding. And it may even be able to help predict the future.
One of the interesting ways these kinds of indexes are used is to see how countries have improved or declined – or just stayed the same.
There are some who argue the US government is less effective than ever, for example; the US public has lower levels of trust in government since almost any time since 1958. But the World Bank’s Worldwide Governance Indicators (WGI) show that levels of government effectiveness have remained roughly the same every year since 1996. (The measurement analyses outcomes like the condition of highways, primary school quality and the amount of red tape).
Other countries have moved a fair amount. Tunisia, for example, saw a steady decline in voice and accountability, which measures aspects like confidence in elections and freedom of the press, from 1996 to 2010. Then the Arab Spring happened. In 2011, Tunisia jumped from the 9th percentile to the 36th and has grown steadily since then; in 2016, it was on par with Hungary at the 57th percentile.
For the most part, though, it’s very difficult to move from a very low position to a very high one. Aart Kraay, a World Bank economist who works on the WGI, points to one recent assessment. “One of the things that tells us is that once good governance is established, it tends to be very, very persistent,” Kraay says. “But it’s very hard to get there.”
One way that doesn’t work, at least on its own, is wealth.
The US is one example. Although it is one of the index’s top-five countries in terms of GDP per capita, it ranks 18th in social progress – closer to Estonia than to Canada. Similarly, the Netherlands has a similar GDP to Saudi Arabia; so do Chile and Kazakhstan and the Philippines and Angola. But the Netherlands, Chile and the Philippines far out-perform their peers.
When it applied the Social Progress Index framework, the European Union found the same pattern. Its highest-performing region was Upper Norrland, Sweden – which has the same GDP per capita as Bucharest, Romania, but scored far higher.
Interestingly, the EU data also showed no relationship between social progress and the unemployment rate. You’d expect that getting a job improves people’s lives. But while the UK’s unemployment rate is at historically low levels, for example, its social progress has flat-lined.
“We’ve got traditional measures of how society is doing, and one we’ve relied on for the last 80 years is the unemployment rate,” Green says. “But that may not be telling us the real story about the quality of life of citizens in the way it was 20 years ago because of the changing nature of work.” A zero-hours contract, for example, may be ‘employment’, but it may not be very good at building social progress.
On the other hand, there’s Costa Rica. “Costa Rica is a country that is no different to the rest of Latin America. It’s a relatively modest income country,” says Juan Botero, executive director of the World Justice Project. “And yet it has had, for the last 40 or 50 years, very strong institutions. And you see all of the social outcomes in Costa Rica tend to outperform their neighbours: it is a more peaceful, more prosperous society.”
So if wealth alone can’t account for how well a country serves its citizens, what can?
The top performers generally tend to be rich countries. But not all wealthy countries do well
Botero works on the World Justice Project’s Rule of Law index, which examines ‘rule of law fundamentals’ like government accountability, the protection of human rights and fair legal processes. He’s turned up at least one correlation.
“The vast majority of the literature says that for health outcomes, the main social determination is wealth,” Botero says. “We found that the rule of law is a predictor of health outcomes, but it is independent of wealth. The higher the rule of law, the more likely the country, at any level of development, will have high health outcomes in maternal mortality rate, life expectancy, catastrophic diseases – all these standard public health outcomes.”
That’s not to say that wealth doesn’t matter. The top performers generally tend to be rich countries. But not all wealthy countries do well, which has led some experts to think that while economic growth doesn’t always serve its citizens, focusing on institutions and other aspects that serve citizens helps economic growth.
“When you are wealthier, you can afford better pay for the police officers,” Botero points out. “On the other hand, with a robust legal system, less crime is likely to happen. And so a country becomes more wealthy.”
Given the information these kinds of indexes provide, it’s no surprise that they’re being used in a number of ways. The EU is using the Social Progress Index to help inform policy. Even companies are taking them up: the Disney Corporation, for example, is using the World Bank’s WGI to help decide which countries it will use to manufacture its products.
They also can be used to determine how much assistance countries get. The US’s Millennium Challenge Corporation, for example, has invested $11bn (£8.1bn) in financial assistance since it was created in 2004. One of the main criteria for a project’s eligibility? The country’s performance in areas like control of corruption, rule of law or government effectiveness, with data drawn from indexes including the Rule of Law and World Bank.
But that can be controversial.
The concept of ‘good governance’, which many of these types of indexes try to measure, was developed initially by international financial institutions, says University of Alberta international law professor Linda Reif. Donor countries, like the US, then took it up as a new set of criteria for giving development assistance.
“So then one of the criticisms is that this has, to an extent, been imposed on the global south,” she says. “Some scholars… say that the ‘good governance’ approach can be traced back to the colonial structure of the world that also created international law.”
Critics also point out that many of the criteria are based on Western values: tolerance for homosexuals, for example, or religious tolerance.
Another debate is over how relevant many of the indicators are for half of the world’s population: women. Researchers found, for example, that in all countries except the wealthiest, there was no correlation between rule of law and the status of women. If a country is said to have strong legal systems that ensure fairness and equality, but half of its population still doesn’t have the same access to work, education or healthcare as men, you could argue the measurements are flawed – or at least incomplete.
That adds more reason to be cautious with these kinds of indexes, experts say. Depending on who you are, you might experience a very different version of the country than its top-line data.
See the future
Despite the criticisms, these kinds of indexes make for a good starting point. One of the biggest reasons they’re interesting is that they can point out underlying trends, some of which, left unchecked, may have serious consequences.
Tunisia was one example. If you were tracking the decline in its voice and accountability measurement, you wouldn’t be that surprised that one action – a fruit-seller setting himself on fire in protest after being abused by local officials – could set off the chain of events dubbed the Arab Spring.
Venezuela is another. Despite much being wealthier than its neighbours in the past, today, it is in severe crisis. Among other sets of data, that could have been predicted by its commitment to the rule of law, says Botero. “Venezuela has been the last in the Rule of Law ranking for several years, even when the government has preserved the appearance of rule of law. Now it seems they have simply abandoned any constraint and the situation is unravelling,” he says. “These fundamentals tend to predict the future.”
The reverse can be true, too. Botero points to the US. “The Republicans have both the House and Senate, and in a low-rule-of-law society, the government would be able to do whatever it wanted. That’s not the case in the United States,” he says. “Even priorities which are the stated priorities of the party in power have not been passing, because there are multiple checks on their power. So for the US, it is a story of success – so far.”
So what can make for these strong underpinnings – the kind that help make a country stable, safe, fair and provide its citizens with a good quality of life?
The main factors seem to be two. Whether it’s social progress or overall quality of governance that a country is after, the important things seem to be the level of commitment to those institutions… and the amount of time it’s had them.
“We measure outcomes, not inputs: you can’t change your social progress just by changing the law or spending a bit of money. So a long-term commitment to social progress seems to be one factor” of success, Green says.
Similarly, Botero points out, countries that have developed robust government institutions over a long period of time – like the US or UK – have been in less danger of losing those protections.
If you’re looking for what makes a country great, it seems, don’t look at its GDP or unemployment rate. Look at its commitment to its citizens – and how long it’s stuck to that commitment for.