WHAT MAKES A GREAT COUNTRY

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.

People celebrate the sixth anniversary of the Arab Spring in Tunisia; the country was the only one in the movement to move to parliamentary democracy (Credit: Alamy)

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.”

Cash limit

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, theEuropean 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.

Although it’s one of the world’s wealthiest countries, in terms of social progress the US ranks closer to Estonia than Canada (Credit: Alamy)

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.”

Global effects

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.